Headlines about "Ret plans - design"

Gathered from the web by the editors at BenefitsLink.com.
The Cash Balance Capital Preservation Guarantee Quantitative Analysis
"For a generic 60/40 portfolio, employers have experienced one material floor risk in the past 63 years -- 1974, which cost 0.2% of total payroll for our 5% of pay plan. For more aggressive portfolios the cost can be somewhat higher -- the 'worst case' cost historically was 1.5% of total payroll in 2008 for a 100% stock portfolio. For more conservative (40/60 or less) portfolios, employers have not seen a material floor risk in any year since 1950. Interestingly, the 'least risky' portfolio is 20/80, not 100% bonds, which speaks to the benefit of asset diversification." (October Three Consulting)

District Court Rejection of Challenges to Verizon Annuity Purchase Supports Derisking Strategy (PDF)
"[T]he court simply reiterated its prior ruling that Verizon was not acting as fiduciary when it amended the plan to direct the annuity purchase because 'the disputed decisions involve Verizon's role as settlor, not Plan fiduciary' ... [T]he court rejected the claim that Verizon's decision to purchase annuities from a single provider, Prudential, the day after it amended the plan to provide for it, was a fiduciary breach.... [T]he court stated, 'at bottom, plaintiffs are disagreeing with the rights of a settlor under ERISA, and such a disagreement must be addressed to Congress through requests for legislative changes to ERISA, not through litigation that complains of the decisions that ERISA empowers a plan sponsor as settlor to make.'" [Lee v. Verizon Communications, No. 3:12-CV-4834-D (N.D. Tex. Apr. 11, 2014)] (Groom Law Group)

[Opinion] Hundreds of Thousands of Participants Could Lose Benefits If Closed DB Plan Testing Issue Is Not Fixed (PDF)
"A nondiscrimination testing rule contained in U.S. Treasury Department regulations will effectively compel many defined benefit plans across the country to completely freeze all benefits in the next few years... The American Benefits Council has for several years been proposing a very simple solution. If the grandfathered group is a nondiscriminatory group when the plan is first closed (or at a later date), then the plan is permitted to be tested with the employer's defined contribution plan on a benefits basis.... We urge Congress to move forward with that legislative proposal to prevent hundreds of thousands of participants from losing benefits." (American Benefits Council)

President Obama's 2015 Budget Proposes Changes to Employer Benefits
"The budget calls for new limits for tax-preferred retirement plans, caps on tax preferences for health and retirement benefits, and higher PBGC premiums. While the full proposal is unlikely to gain legislative traction, revenue-raising provisions could be attached to other legislative proposals. The budget would establish automatic payroll deduction IRAs -- a long-standing proposal from the administration and some lawmakers." (Towers Watson)

Retirement Security Tops List of Employee Concerns
"Older DC plan-only participants are more likely to expect most of their retirement income to come from Social Security. Almost seven in 10 workers were happy with their health plans in 2007, but satisfaction rates dropped to 59% in 2013. Sixty-two percent would give up some pay for a guaranteed retirement benefit, and more than half would sacrifice pay for a more generous benefit." (Towers Watson)

Labor-Force Participation Rates of the Population Ages 55 and Older, 2013
"The labor-force participation rate for those ages 55 and older rose throughout the 1990s and into the 2000s, when it began to level off but with a small increase following the 2007-2008 economic downturn.... [A]mong those ages 65 or older, the rate increased for both males and females over that period. This upward trend in labor-force participation by older workers is likely related to workers' current need for continued access to employment-based health insurance and for more years of earnings to accumulate savings in defined contribution (401(k)-type) plans and/or to pay down debt." (Employee Benefit Research Institute [EBRI])

Is a DB Plan Right for Your Organization?
"The decision to move away from DB plans raises two key questions: [1] Are those organizations that have abandoned their DB plans missing out on significant workforce planning opportunities? [2] If an organization that sponsors a DB plan lowers its financial risks through, for example, liability-driven investing, would it gain the workforce management advantages of a DB plan and the costs and risks similar to a DC plan? ... This paper outlines how various employees would fare based on participation in a DB plus DC versus a DC-only plan. It also provides information to address whether the workforce planning advantages of DB plans justify the cost and risk of plan sponsorship." (Towers Watson)

Why Plan Participants Change Their Planned Retirement Date (PDF)
"Workers who report a change in their expected retirement age in 2014 most often cite the poor economy (25 percent)... Other reasons cited included the inability to afford retirement (18 percent), a change in their employment situation (17 percent) and health care costs (12 percent)[.]" (Employee Benefit Research Institute [EBRI])

The Risks of Derisking DB Plans
"Assets that left the plan early in 2012 and 2013 missed out on the double-digit return potential of those years. When participants are offered a lump sum election opportunity, those in poor health are more likely to accept the offer ... Thus, the plan may be subject to more unfavorable mortality experience ... [A] lump sum transaction is likely to decrease a plan's funded status ... and will have to maintain a certain funding level in order to avoid lump sum restrictions. The lower funded status will generally result in higher plan sponsor contribution costs. It may also result in a higher PBGC variable-rate premium." (Milliman, via Actuarial Digest)

Knowing Your Account Value Isn't Enough
"The rule of thumb in the retirement industry is that, assuming you remain well invested, you can withdraw about 4%-5% of your initial savings each year and have a good chance that the money will last for the rest of your life.... But only 27% of our survey participants got that right ... More than one-fourth said they didn't know, and about half guessed too high.... More than one-third of our respondents said you could withdraw 10% or more." (Alliance Bernstein)

Rhode Island Loses Bid to Have Pension Reform Lawsuit Tossed
"A lawsuit by retired Rhode Island public employees over the state's sweeping 2011 pension system overhaul will continue after a judge on Wednesday rejected a move by state officials to have the case thrown out. Superior Court Associate Justice Sarah Taft-Carter found that the retirees' pension benefits, for which they had previously bargained, suggested enough of a contractual relationship with the state for their claims to continue." (Reuters)

Program Audio and Presentations from 2014 ICI Retirement Summit: 'A Close Look at Retirement Preparedness in America'
Includes links to audio recordings (mp3) and PDF of presentations titled: [1] Americans' Retirement Resources; [2] Consumption During Retirement; [3] Social Security Financial Status: Benefit Options; [4] Medical Spending in Later Life; [5] A New World of Retirement Risks; [6] Raising Retirement Security in a Heterogeneous Population; [7] Are Retirees Falling Short? Reconciling the Conflicting Evidence; [8] A Close Look at Retirement Preparedness in America; [9] Measuring Optimal Savings Using a Life-Cycle Model of Consumption; [10] Economic Preparation for Retirement; and [11] Four Views of Retirement Preparation. (Investment Company Institute [ICI])

PBGC Secures $208M for Saint-Gobain Retirees
"Under a settlement with the [PBGC], Saint-Gobain Containers, Inc., has made $207.5 million of additional contributions to its pension plan.... The settlement will help preserve the plan and resolves PBGC's concerns about the plan's sponsor being sold to a company with fewer financial resources.... PBGC pressed the parties for better funding because the sale put retirement benefits at risk by moving the plan from a financially strong sponsor to Ardagh [(a Luxembourg-based glass and metal packaging company)], which carries a high level of debt. When the parties [had] declined to provide financial protection for the plan, PBGC took steps to terminate the plan to protect retirement benefits." (Pension Benefit Guaranty Corporation [PBGC])

BrightScope Goes on Hiring Spree to Capture Revenues from Hot New Market
"[T]he ultimate proof that BrightScope may finally have gotten on track to a bright future as a data company are late developments about who is seeking the better data that it sells -- the 401(k) providers and recordkeepers themselves. The firm has 25 enterprise clients described as recordkeepers and asset managers who want BrightScope, Inc. to clean up their fragmented data making it cleaner and easier to read. They also want BrightScope to help them use the data to increase sales. By the end of the year, BrightScope hopes to have 40 of these big clients[.]" (RIABiz)

[Opinion] Wall Street Journal is Wrong About Public Pensions
"[CalPERS] relied on IMPLAN, the most widely employed and accepted regional economic analysis software for predicting economic impacts.... [They input] total benefits paid in California (more than $12.7 billion) into IMPLAN to arrive at a 2.39 economic multiplier and the 113,664 jobs created.... CalPERS benefits (retirees spending their pensions) returned $10.85 in economic activity to California for each taxpayer dollar (public funds) contributed to the system. The total economic revenue generated by CalPERS benefits was more than $30.4 billion." (CalPERS)

Marching to Retirement Without a Plan
"The [National Compensation Survey (NCS)] shows that 78 percent of full-time workers, ages 25 through 64, have some type of defined benefit or defined contribution plan available to them at work. But that's the rosiest way to slice the data. The share of employees who are covered slides to 48 percent when public-sector, often unionized, workers are stripped out of the NCS; when part-time, private-sector workers are added in; and when one counts only the share who actually participate in an employer plan when it's offered to them." (Center for Retirement Research at Boston College)

Detroit Makes Deal on Pensions with Retired Police, Firefighters
"The city retreated from an earlier proposed 6 percent cut in pensions and the elimination of the 2.25 percent cost-of-living payment. Leaders of the Retired Detroit Police and Fire Fighters Association, which has more than 6,000 members, endorsed the deal along with creation of a health plan. Bill Nowling, a spokesman for emergency manager Kevyn Orr ... said Detroit believes it can afford the compromise partly because the pension fund's financial performance has improved along with Wall Street markets." (The Washington Post; subscription may be required)

Nonprofits Caught in Pension Crossfire Between Arnold Foundation, Public Employee Unions
"[I]rate public-employee unions are pressing nonprofits such as public television, the Pew Charitable Trusts and the Brookings Institution to stop taking money from the Houston-based organization. The unions argue that the Arnold Foundation is trying to sway public opinion to support replacing public pensions -- which give workers including police, firefighters and teachers guaranteed benefits at retirement -- with defined-contribution accounts similar to 401(k)s, or hybrid approaches." (The Wall Street Journal; subscription may be required)

Gen Y Workers Are Optimistic But Realistic About Their Financial Future
"Gen Y says their American Dream will cost $3.1 million in today's dollars.... Saving for retirement tops their list of financial goals, followed by paying off student loans and paying down credit card debt.... Almost two-thirds started saving for retirement at 25. Two-thirds plan to retire after age 65. Nearly half have not calculated the amount of money needed to retire or have a set goal." (The Principal Financial Group)

Why Don't Lower Income Individuals Have Pensions?
"Obtaining an employer pension involves four steps: [1] having a job; [2] working for a firm with a plan; [3] being eligible for the plan; and [4] taking up the plan. For lower-income individuals, the weakest links in this chain are a lack of employment and employment with firms that do not offer a plan. Take-up rates are less of a factor, but will become increasingly important as voluntary 401(k)s continue to replace mandatory defined benefit plans. The most effective policy solution for boosting pension participation would be to provide all workers with access to a plan and automatically enroll them." (Center for Retirement Research at Boston College)

Pace of Pension Reform Ebbs After 49 States Change Laws
"While the sense of urgency has diminished, reform attempts have become a legislative staple, as public retirement systems continue to grapple with unfunded liabilities and political pressure to change. The financial crisis and its aftermath sparked some kind of pension reform in every state except Idaho.... [Most] have taken steps to reduce future pension costs by some combination of increasing employee contributions, raising age and tenure requirements, trimming salary calculation formulas used to set pension levels and shrinking or stopping cost-of-living increases." (Pensions & Investments)

[Opinion] ASPPA Head Brian Graff Blasts Retirement Suggestions from Capitol Hill (and Others)
"[E]veryone talks about tax reform and fiduciary regulations, but ... the bigger threat is a failure of policy makers in DC to understand that retirement policy needs to be looked at from a holistic perspective and not from a parochial view within their own committees. For example, a tax committee will look at retirement policy as a pure tax policy analysis and fail to reflect any thinking on what it means for retirement.... There's no committee with the singular responsibility to look at how to focus on pure retirement policy." (Fiduciary News)

How Much Income Will You Need in Retirement?
"[W]hen viewed in terms of consumption rather than income replacement ... about 70% of individuals age 66 to 69 in the mid-2000s were adequately financially prepared for retirement. But some individuals, given their by education, sex, and marital status, were not financially prepared, most notably single females who lack a high school education. Just 29% of that group is adequately prepared[.]" (USA TODAY)

'Before It's Too Late: A Retirement Security Newsletter from Phyllis Borzi', April 14, 2014
"The Employee Benefits Security Administration and the Certified Financial Planner Board of Standards, Inc. (CFP Board) have some new online tools that can help you get organized, make informed decisions, and plan for a more secure financial future, including a secure retirement." (U.S. Department of Labor)

Alternatives for Severance Payments After Supreme Court Nixes FICA Tax Break for Downsizing Firms (PDF)
"A company with a defined benefit pension plan may be able to amend the plan to increase the benefits of laid-off workers, then give them the option of receiving the increase as a lump sum or in installments over a relatively short period. Distributions from qualified plans are exempted from FICA wages by section 3121(a)(5). The need for care arises from a variety of obstacles, including nondiscrimination requirements, restrictions on lump sum and installment payments by underfunded pension plans and penalty taxes on participants who receive distributions before age 55. The possible savings for both companies and workers may nonetheless make this alternative attractive where it is feasible." (Steptoe & Johnson LLP)

Rhode Island's Deal on Pension Overhaul Falls Apart
"After mediation, the state and unions in February agreed to ease the impact of the overhaul by rolling back the retirement age for many current workers to 65 from 67, increasing the frequency of cost-of-living adjustments and restoring a traditional defined-benefit retirement plan for more-veteran employees.... Eligible police officers rejected the deal, prompting a state-court judge to send the two sides back to mediation this past week ... Rhode Island's governor and treasurer announced Friday that mediation talks had broken down and the dispute was headed to court." (The Wall Street Journal; subscription may be required)

[Guidance Overview] Filling in the Retirement Plan Gaps for Same-Sex Couples: What It Means for Your Retirement Plan
"While the IRS guidance is certainly welcome and provides clarity on amendment and retroactive application, this only applies to plan qualification and not claims under Title I of ERISA. The [DOL] has not yet provided similar guidance on applying the Windsor decision. In the interim, there is uncertainty regarding whether a participant or beneficiary (such as a same-sex spouse) can make a benefit claim for a retroactive application of Windsor. Further, due to the gap period from June 26, 2013 to September 15, 2013, plan sponsors must carefully consider whether to apply the state of domicile rule or the state of celebration rule." (Ogletree Deakins)

Fourth Circuit Finds Use of Age-Based Contributions to Public Pension Plan Causes Discrimination Under ADEA
"[T]he Fourth Circuit ruled that a Maryland public employee retirement plan violated the Age Discrimination in Employment Act (ADEA) by requiring greater contributions for participants that enrolled at later ages.... Because much of the opinion was grounded in the fact that employees could retire after a stated number of years of service that did not depend on age, the court's decision may not apply to a situation where employees can retire only after attaining a certain age." [EEOC v. Baltimore County, No. 13-1106 (4th Cir. Mar. 31, 2014)] (Cheiron)

Chart of Rollover-Eligible Retirement Plans and IRA Combinations (PDF)
BenefitsLink came across this handy unofficial chart on the IRS web site. It is a one-page summary in the form of a table, listing the eight kinds of plans and IRAs that can make rollover-eligible distributions, and the corresponding eight kinds of plans and IRAs into which those distributions can (or cannot) be rolled over. (Internal Revenue Service [IRS])

[Guidance Overview] Multiemployer Pension Plans May Need Amendments to Comply with IRS Guidance on Same-Sex Marriage Provisions
"The Notice requires that amendments be adopted by a multiemployer pension plan as follows: [1] If the plan's terms with respect to the requirements of section 401(a) define a marital relationship by reference to section 3 of DOMA or are otherwise inconsistent with the outcome of Windsor or the guidance in Rev. Rul. 2013-17 or the Notice, then an amendment to the plan that reflects such outcome or guidance must be adopted. [2] An amendment is required if a plan sponsor chooses to apply the rules with respect to married participants in a manner that reflects the outcome of Windsor for a period before June 26, 2013. The amendment must specify the date as of which, and the purposes for which, the rules are applied in this manner.... For a multiemployer pension plan, an amendment required in [1] is not subject to the requirements of section 432 of the Code ... while an amendment required in [2] is subject to those requirements." (Cary Kane ERISA Lawyer Blog)

Most People Still Haven't Estimated Their Retirement Income Needs (PDF)
"Less than half (44 percent) of workers responding to the 2014 Retirement Confidence Survey (RCS) report they and/or their spouse have ever tried to calculate how much money they will need to have saved for retirement. That's comparable to the findings measured over the last decade by the RCS ... Workers with higher income are significantly more likely to complete the needs calculation than their counterparts." (Employee Benefit Research Institute [EBRI])

Most (Still) Haven't Estimated Retirement Income Needs (PDF)
"Less than half (44 percent) of workers responding to the 2014 Retirement Confidence Survey (RCS) report they and/or their spouse have ever tried to calculate how much money they will need to have saved for retirement. That's comparable to the findings measured over the last decade by the RCS.... Workers with higher income are significantly more likely to complete the needs calculation than their counterparts." (Employee Benefit Research Institute [EBRI])

Four in Ten Employers Believe ACA Has Impacted Their Retirement Savings Plans
"43 percent of employers report the [ACA] has affected their current retirement benefits strategy and spending, and 45 percent believe ACA will change their retirement plans in the future. Of those who believed the ACA has changed their retirement benefits strategy, 55 percent said they are spending less money on retirement benefits and shifting costs to employees and 42 percent said they are spending less time evaluating their retirement benefits[.]" (LIMRA)

[Guidance Overview] IRS Releases Guidance for Effective Date of Same-Sex Spousal Retirement Rights
"[T]he limits on retroactivity described in IRS Notice 2014-19 only apply for tax qualification purposes. As such, the IRS guidance does not provide relief from any individual claims that a same-sex spouse may seek to bring asserting spousal rights for retirement plan benefits accruing before the Windsor decision. Absent any subsequent administrative relief (which is not expected), it appears that any such claims must be handled through a plan's claim and appeals procedures and, perhaps ultimately, the courts." (Morgan Lewis)

[Guidance Overview] New IRS DOMA Guidance for Retirement Plans (PDF)
"[P]lan sponsors can elect to extend the retroactive effective date of the Windsor decision to any date earlier than June 26, 2013 (but presumably no earlier than 1996). Such a retroactive amendment can be limited to certain purposes, provided that the amendment complies with applicable qualification requirements (e.g., it must be nondiscriminatory). For example, the plan sponsor can elect to apply the Windsor decision earlier solely for purposes of the QJSA and QPSA requirements, and only for annuity starting dates (or dates of death) on or after a specified date." (Groom Law Group)

[Guidance Overview] IRS Issues New Guidance for Qualified Retirement Plan Sponsors on Treatment of Same-Sex Couples Post-Windsor
"FAQ-4 permits a plan amendment providing certain special rights or benefits to participants with same-sex spouses to make up for benefits not previously available to those participants, such as a new opportunity to elect a distribution in the form of a qualified joint and survivor annuity." (Jackson Lewis LLP)

Public Pensions and the Lessons of Success
"Given all the headlines about Illinois' seemingly endless struggle to reform its pensions ... the Illinois Municipal Retirement Fund (IMRF), the state's second-largest public pension, is a model of fiscal responsibility. What distinguishes the IMRF from Illinois' other three statewide plans, which are struggling, is that all 2,969 governments that participate in it are required to pay 100 percent of their annual required contribution. As a result, the IMRF has remained more than 80 percent funded, even after the investment losses that public and private plans suffered from the 2008 recession." (Governing)

No FTSE 100 Company Offers a DB Plan for New Employees
"In 2005, one in every five employers in the FTSE 100 had an open defined benefit pension fund. Today, however, no employer offers this to new employees.... In 2005, one in every five employers in the FTSE 100 had an open defined benefit pension fund. Today, however, no employer offers this to new employees.... 'This is the first year that no final salary schemes (are being offered) in the FTSE 100,' said Will Aitken, senior defined contribution consultant at Towers Watson[.]" [The FTSE 100 is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization.] (Pensions & Investments)

Critical Mass: Defined Contribution Can Transcend State of Crisis
"[J]ust a few key variables drive a DC plan participant's ability to achieve a comfortable retirement: the asset-allocation mix of the glide path, the savings rate before retirement, the spending rate after retirement, and age at retirement. When plan sponsors and participants make relatively small changes at the same time to the settings of these variables, retirement outcomes can improve dramatically. But under current capital-market conditions, without altering these variables, participants are losing ground -- fast." (Alliance Bernstein)

[Guidance Overview] IRS Windsor Guidance Limits Retroactivity for Retirement Plan (PDF)
"Any action taken on or after June 26, 2013 must comply with the Windsor decision and any failure after that date must be corrected in accordance with the IRS published correction procedures (EPCRS). For example, a plan subject to the survivor annuity rules that failed to obtain spousal consent from a same-sex spouse to pay benefits in a form other than a qualified joint and survivor annuity must go back to the same-sex couple and get the spouse's consent. If the spouse does not consent, then the benefit must be paid as a qualified joint and survivor annuity." (Buck Consultants)

Best Practices in Design for 401(k) and 403(b) Plans
"A progressive plan design supports plan objectives which the plan sponsor regularly communicates. Employer profit sharing contributions are less valuable in terms of motivating participants to contribute than employer matching contributions.... Many larger plan sponsors re-enroll all participants in the QDIA option (usually target date funds) every year. This practice increases plan participation while ensuring that participants are invested appropriately for their age." (Lawton Retirement Plan Consultants)

[Guidance Overview] New Same-Gender Marriage Guidance; Part 2: Amendment Need and Deadlines
"Some employers may wish recognize same gender marriage, at least for some purposes, prior to June 26, 2013, the date of the Windsor decision. Those employers must amend their plans to accomplish this. The amendment should specify an effective date and should list the specific purposes for which same gender marriages are recognized. Adoption after Windsor. For other employers, an amendment may or may not be required. The key issue is whether the existing terms of the plan are inconsistent with the Windsor decision and subsequent IRS guidance." (SunGard Relius)

Retirement Tax Considerations for Middle-Income Americans
"More Americans have an accurate understanding of how lottery winnings are taxed (94%) than the mainstays of their retirement income: Social Security benefits (39%), traditional IRAs (35%), Roth IRAs (31%) and 401(k) plans (29%). When asked to choose which activity they dislike the most, respondents say that doing taxes (23%) is almost equally as disliked as the unpleasant experience of going through airport security (29%). In fact, getting a flu shot is preferable to doing taxes for many middle-income Americans over age 50. Only 6% ranked flu shots as their most disliked task." (Bankers Life Center for a Secure Retirement)

Aging Workforce Requires New Strategies for Employee Retention
"In a case study of the state of Missouri's Deferred Retirement Option Provision (BackDROP), [Angela Curl, assistant professor in the University of Missouri School of Social Work] concluded that states may need to restructure deferred retirement incentives to encourage more employees to remain on the job longer and minimize the disruption to government operations." (News Bureau, University of Missouri)

The President's 2015 Budget and Retirement Benefits
"On March 4, 2014 the Obama Administration released its 2015 fiscal year budget. The retirement benefits-related provisions of the 2015 budget are generally similar to those in the 2014 budget.... Increase PBGC premiums... Prohibit individuals from accumulating over $3.2 million in tax-preferred retirement accounts... Reduce the value of itemized deductions and other tax preferences to 28 percent... Automatic workplace pensions... Repeal the deduction for dividends paid with respect to employer stock held by an ESOP that is sponsored by a publicly traded corporation. Eliminate stretch-IRA treatment (including 'stretch' payments under defined benefit plans).... Eliminate age 70-1/2 required minimum distributions for balances of $100,000 or less.... Give IRS authority to require electronic filing of certain employee benefit plan tax information." (October Three Consulting)

The Emerging Role of Defined Contribution Plans for California Public Employees (PDF)
"This paper uses hypothetical CalPERS member scenarios to: [1] Estimate Public Employees' Pension Reform Act (PEPRA) of 2013] impacts to DB plan retirement benefits; [2] Estimate target replacement savings to offset the PEPRA impact; [3] Estimate monthly DC plan contributions to achieve target replacement savings; [4] Estimate the number of additional years of service needed to offset PEPRA impacts; and [5] Demonstrate the benefits of sustained long-term saving." (CalPERS)

[Guidance Overview] The Honeymoon Is Over: IRS Says It Is Time to Amend Plans to Cover Same-Sex Spouses
"The Notice focuses solely on the tax qualification rules of IRC section 401(a), and does not address any claims participants or their same-sex spouses may have under [ERISA]. For example, the Notice does not address whether a participant or a same-sex spouse may argue that same-sex spouses should have been recognized prior to the Windsor decision, especially since the Notice explicitly permits a plan to do so without adversely affecting its tax qualified status." [Article includes a chart listing plan provisions potentially impacted by the Windsor decision.] (Sutherland)

What If Global Aging Isn't the Crisis We Think It Will Be?
"[University of Edinburgh Professor John MacInnes] has argued that the [UK] government's 'age dependency ratio' needs to be discarded in favor of other measurements that take into account how the composition of UK population has changed in the last generation. Specifically, the introduction of more female workers, how fertility rates have impacted the ratio of workers to dependent citizens, and how a more highly educated workforce shortened the length of time many had to (and therefore chose to) work. Once these factors are taken into account, Professor MacInnes' analysis shows that the aged dependency ratio ... has actually improved in the UK in recent years, and will continue to do so for some time." (Forbes)

Boomer Expectations for Retirement 2014
"The number of Boomers who are confident in their efforts to prepare financially for retirement has dropped nine percentage points, from 44% in 2011 to 35% in 2014. The percentage of Boomers who are confident they will enough money to live comfortably throughout their retirement years has dropped from 37% in 2011 to 33% in 2014.... Boomers are beginning to show tempered optimism regarding their longer-term financial futures, with 42% expecting their financial outlook to improve in five years." (Insured Retirement Institute [IRI])

Reforming Public Pensions
"[P]ension reform raises new constitutional questions that are challenging courts to arrive at an acceptable conceptual framework for consistent interpretation and application. With ... financial, political, and legal considerations in mind, [the authors] suggest a comprehensive set of reform measures along with a managerial paradigm for political action.... [They] conclude that a comprehensive response to the public pension crisis is necessary to avert disaster and maintain plan solvency both now and in the future." (T. Leigh Anenson, Alex Slabaugh, Karen Eilers Lahey, in Yale Law & Policy Review, via SSRN)

Employer-Sponsored Benefits Extended to Domestic Partners: Beyond the Numbers
"In March 2013, 72 percent of civilian workers had access to employment-based health benefits, and nearly all had such benefits extended to married spouses and children.... 32 percent of workers had access to health benefits that could be extended to unmarried same-sex partners and 26 percent had access that could be extended to opposite-sex partners.... In March 2013, 28 percent of civilian workers had access to a defined-benefit pension plan. All of these workers could extend survivor benefits to a spouse. In contrast, 15 percent of workers had access to a defined-benefit plan that allowed the employee to designate a same-sex domestic partner as the beneficiary of survivor benefits. Similarly, 14 percent of workers had access to a plan that provided survivor benefits to opposite-sex unmarried employees." (U.S. Bureau of Labor Statistics)

[Official Guidance] Text of IRS Notice 2014-19: Application of the Windsor Decision and Rev. Rul. 2013-17 to Qualified Retirement Plans (PDF)
7 pages. Excerpt: "Whether a plan must be amended to reflect the outcome of Windsor and the guidance in Rev. Rul. 2013-17 and this notice depends on the terms of the specific plan ... If a plan's terms with respect to the requirements of section 401(a) define a marital relationship by reference to section 3 of DOMA or are otherwise inconsistent with the outcome of Windsor or the guidance in Rev. Rul. 2013-17 or this notice, then an amendment to the plan that reflects the outcome of Windsor and the guidance in Rev. Rul. 2013-17 and this notice is required by the date specified in Q&A-8 of this notice... If a plan's terms are not inconsistent with the outcome of Windsor and the guidance in Rev. Rul. 2013- 17 and this notice, an amendment generally would not be required. If no amendment to such a plan is made, the plan nonetheless must be operated in accordance with the provisions of Q&A-2 of this notice.... [If] a plan sponsor chooses to apply the rules in a manner that reflects the outcome of Windsor for a period before June 26, 2013, an amendment to the plan that specifies the date as of which, and the purposes for which, the rules are applied in this manner is required.... The deadline to adopt a plan amendment pursuant to this notice is the later of (i) the otherwise applicable deadline under section 5.05 of Rev. Proc. 2007-44, or its successor, or (ii) December 31, 2014." (Internal Revenue Service [IRS])

Cypen & Cypen Newsletter, April 3, 2014
Article titles include: [1] Total holdings and investments of major public pension systems rise to over $3 trillion, reaching highest level in forty-five years; [2] Pension funds join in fee resistance; [3] Lower-income individuals without pensions miss out; and [4] Using automatic escalation in public sector retirement plans to increase savings. (Cypen & Cypen)

[Official Guidance] Text of SEC Comment Request on Investment Company Advertising: Target Date Retirement Fund Names and Marketing (PDF)
"The [SEC] is reopening the period for public comment on rule amendments it proposed in 2010 ... Among other things, the proposed amendments would, if adopted, require marketing materials for target date retirement funds ... to include a table, chart, or graph depicting the fund's asset allocation over time, i.e., an illustration of the fund's so-called 'asset allocation glide path.' In 2013, the Commission's Investor Advisory Committee recommended that the Commission develop a glide path illustration for target date funds that is based on a standardized measure of fund risk as a replacement for, or supplement to, the proposed asset allocation glide path illustration. The Commission is reopening the comment period to seek public comment on this recommendation." [Includes extensive and specific questions on which the SEC is requesting comments.] (U.S. Securities and Exchange Commission)

[Official Guidance] Text of SEC Proposed Rule on Investment Company Advertising: Target Date Retirement Fund Names and Marketing (PDF)
"The [SEC] is proposing amendments to rule 482 under the Securities Act of 1933 and rule 34b-1 under the Investment Company Act of 1940 that, if adopted, would require a target date retirement fund that includes the target date in its name to disclose the fund's asset allocation at the target date immediately adjacent to the first use of the fund's name in marketing materials. The Commission is also proposing amendments to rule 482 and rule 34b-1 that, if adopted, would require marketing materials for target date retirement funds to include a table, chart, or graph depicting the fund's asset allocation over time, together with a statement that would highlight the fund's final asset allocation. In addition, the Commission is proposing to amend rule 482 and rule 34b-1 to require a statement in marketing materials to the effect that a target date retirement fund should not be selected based solely on age or retirement date, is not a guaranteed investment, and the stated asset allocations may be subject to change." (U.S. Securities and Exchange Commission)

Don't Let 2014 DB Opportunities Pass You By
"Because of the large average funding increases that occurred in 2013, sponsors should take action to retain their robust funding, while at the same time recognizing that funded status is a key influencer in decision-making going forward.... Know your plan's maximum funding level... Consider a glide path to help achieve your maximum funding level... Reduce execution risk with a dynamic investment policy statement... Consider immunization or termination... Offer a lump-sum option." (Vanguard)

Let the Questions Begin: Preparing for Automation in Your DC Plan
"When you've decided to tackle automation, be it auto enroll, auto escalation or even default investments, it's helpful to get prepared before you call the consultants, lawyers, and your service providers. While each plan's process for implementing automation varies, there are some key process concepts and questions to consider. Let's split them into the plan sponsor 'settlor' side activities and the fiduciary activities." (David N. Levine, for Defined Contribution Institutional Investment Association [DCIIA])

[Guidance Overview] Implementing Automatic Features in Defined Contribution Plans (PDF)
"Are there any maximum limitations or requirements that plan sponsors should consider when implementing an automatic contribution escalation program? ... Is there a required initial default contribution rate for automatic contribution escalation programs? ... Must automatic contribution escalation programs have a 1 percent step-up auto escalation rate? ... Are plan sponsors required to tie the initial default contribution rate under an auto enrollment program to the plan's maximum matching contribution percentage?" (Defined Contribution Institutional Investment Association [DCIIA])

[Opinion] ERISA Section 404(c) Turns Forty This Year; Here's a Proposal for Meaningful Reform
"Two issues -- What is a 'prudent' standard for investment selection? When is the ability to diversify deemed to be met? Regulators have no definitive answers. The result is a cacophony of well-intentioned opinions on how to comply. It is a confusing issue for some of the largest employers. And it is an absolute mental quagmire for small business 401(k) plans. Here is [a] proposal to answer both questions." (Employee Fiduciary)

[Opinion] Retirement Class Warfare Is Coming to America
"Companies and politicians know a problem, of biblical proportions, is brewing in America when tens of millions of Americans cannot afford to retire and their companies want to replace them with younger, cheaper employees. Who is to blame? Start with Wall Street that convinced thousands of companies to dump their defined [benefit] plans and transfer investment risk to their employees. You could blame the companies that went along with Wall Street. You could blame the politicians who let this happen, but most of them are retired. Or, you could blame Americans who do not have the income and discipline to save on their own. The only practical solutions are deferred retirement dates and part-time jobs. The war is coming and 78 million baby boomers will light the fire." (Paladin Research & Registry)


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