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Transitioning from Balance Forward to Daily Recordkeeping: A Guide for Retirement Plans

"When managing retirement plans, the choice between daily and balance forward recordkeeping is an important consideration. Both methods have their advantages, but many modern-day plans are shifting towards daily recordkeeping for its distinct benefits. Here we look at the differences between the two, the potential advantages of daily recordkeeping, and what a transition process might look like."

Florida Republicans Look at Closing Public DB System to New Members

"Florida Republicans once again are taking aim at the Florida Retirement System, arguing taxpayers can save billions of dollars by closing the huge public employee pension program to new members and offering them a 401k-style investment plan. The proposal, which is expected to be offered by House members in the coming legislative session, would preserve line-of-duty death benefits for law enforcement officers and firefighters, a move designed to appease lawmakers from both sides of the political aisle who have opposed the idea in the past."

Florida's Pension System: A 'Ticking Time Bomb' As New Governor Says, or Rock Solid?

'Florida is not California. Florida is not Illinois,' said Doug Martin, legislative director for the American Federation of State, County and Municipal Employees (AFSCME) union. 'Florida has one of the best retirement systems in the country.'

Daily Valuation of Alternative Assets in DC Plans a Framework for Plan Sponsors and Industry Stakeholders (PDF)

12 pages. "[T]his paper sets out a detailed operational framework for the daily valuation of private assets. Using an existing approach, [the authors] describe a robust and scalable daily valuation procedure that can help meet both legal and operational requirements of plan sponsors."

New, Free Daily Publication: The Message Boards Digest

Subscribe to the new, free Message Boards Digest, sent daily by email. You'll get a summary of all new topics on the BenefitsLink message boards, including the number of times each topic has been viewed, and how many replies it has received. (Some topics are included in the BenefitsLink newsletters, but many are not.) Subscribe now!

Start Spreadin' the News: Time to Defuse NYC's Pension Bomb

"New York City's pension costs will soon displace social services as the second-biggest spending category in the city budget, consuming the equivalent of more than 80 cents out of every dollar raised by the city's personal income tax. But even with annual contributions approaching the once-unimaginable level of $10 billion a year -- more than the entire budgets of all but a handful of large cities -- the city remains vulnerable to a pension funding crisis within the next few years."

The News Media Failed on Health Care Reform

Excerpt: In the 2009 debate over health care reform, it can be argued that there was one particular factor that contributed to the current situation. It was not conservative opposition to liberal legislation or complex health-policy questions. In any substantive debate those problems would have existed, no matter which way the sides or issues were rotated. Rather, what failed in one of the first significant policy debates of the 21st century was the news media. Between the weblogs, television and newspapers, the amount of disinformation and gossip that was produced swallowed any substantive discussion that could have taken place.

Daily Employer-Provided Meals: As Taxable as They Are Delicious?

"The IRS's guidance plan suggests that the agency is considering issuing guidance clarifying whether these employers should be including these meals in their employees' gross incomes, and paying employment taxes (that is, FICA, FUTA and federal income tax withholding) for them. Many taxpayers, not surprisingly, do not think that such benefits are taxable. So what is the right answer? Are such meals taxable fringe benefits? The answer to this question, as is so often the case to the frustration of clients everywhere, is 'it depends.' "

The Trend Towards Daily Pricing and Trading in Defined Contribution Plans

"We believe that greater access to illiquid asset classes will offer DC members greater investment efficiency and additional sources of investment returns. While there may be communication and operational challenges that will need to be managed, we call on the DC industry -- fiduciaries, platform providers, administrators, investment managers and consultants -- to work together to devise solutions to provide better outcomes for members."

Failed Daily Valuation System at Thrift Savings Plan Cost Taxpayers Millions, Senators Say

Excerpt: A failed computer project at the Thrift Savings Plan wasted $36 million in federal retirement assets and cost government employees an additional $33 million in developmental costs for a replacement system, a Senate investigation found.

Agency, Contractor Defend Thrift Savings Plan's Online Daily Val System

Excerpt: Federal officials testifying at a congressional hearing Thursday stood behind prime contractor Matcom International Corp. and the new computer system it developed for managing the government's retirement plan. The officials said glitches in the system are being corrected, and a massive paperwork backlog that arose with conversion to the new system is being eliminated.

Daily Val System for Federal Thrift Savings Plan Scheduled to Debut in June

Excerpt: Participants in the 401k-style Thrift Savings Plan should be able to access their balances and other information online by mid-June, according to TSP officials. Testing to verify that the much-delayed new system can handle large numbers of TSP transactions simultaneously is complete ...

New Daily Val Recordkeeping System for Federal Employees' Thrift Savings Plan Still Not Ready

Excerpt: The launch date for a long-awaited computer system that would give federal employees more control over their 401k-style Thrift Savings Plan accounts is still up in the air, according to TSP officials.

Harder Than It Looks: Daily Valuation System Delayed Again for Federal Thrift Savings Plan

Excerpt: A new computer system that would give federal employees more control over their 401k-style Thrift Savings Plan account won't be ready until November, the TSP board announced Tuesday. The announcement marked the fifth time in two years that the computer modernization schedule has slipped.

Justice Department, Federal TSP Board In Turf Battle Over Failed Daily Val Software Lawsuit

Excerpt: In 1997, the TSP board awarded AMS a $30 million contract to install a new system that would have managed TSP investments and allowed employees to more easily control their accounts. But the contract ran into frequent delays; costs had ballooned to an estimated $87 million with no completion date in sight when the board fired AMS and filed suit seeking $350 million in damages.

Judge Rules Against Suit by Thrift Savings Plan Against Contractor Hired to Provide Daily Val System

"In a Nov. 30 decision, Judge James Robertson of the U.S. District Court for the District of Columbia threw out the Federal Retirement Thrift Investment Board's $350 million lawsuit against American Management Systems of Fairfax, Va. The judge ruled that Federal Retirement Thrift Investment Board Executive Director Roger Mehle, who runs the TSP, is not permitted to file suit independent of the Justice Department."

Federal Thrift Savings Plan Daily Valuation Upgrade Might Have to Start Over

"Nearly four years of work to modernize the Thrift Savings Plan's computer system may have to be scrapped, TSP Executive Director Roger Mehle said Monday. The TSP board is trying to regroup and push forward with an ambitious schedule after last month's firing of American Management Systems. The Fairfax, Va.-based contractor was hired in 1997 to modernize TSP's 15-year old record-keeping system."

Software Bugs Stall Thrift Savings Plan Move to Daily Valuation

"Federal workers will have to wait until at least next spring before they have access to new investment options through the government's retirement savings plan."

Daily Momentum and Contrarian Behavior of Index Fund Investors

"We use a two-year panel of individual accounts in an S&P 500 index mutual fund to examine the trading and investment behavior of more than 91 thousand investors who have chosen a low-cost, passively managed vehicle for savings.... We find that more frequent traders are typically contrarians, while infrequent traders are more typically momentum investors.... We find that the behavior of momentum investors is typically more correlated to changes in the S&P 500 and we trace its dynamics over time."

Health Reform News: Final Regs on Summary of Benefits and Coverage Try to Eliminate Redundancy with SPD

Responding to concerns that the new 'summary of benefits and coverage' (SBC) mandated by the health reform law is redundant, HHS, DOL and Treasury/IRS quickly turned around a final rule that eases some SBC requirements.