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News Items, by Subject

Ret plans - design

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De-Risking: Options Available to Reduce Your Pension Plan Footprint
"The least costly de-risking solutions generally start with risk retention options where the focus is more on plan design modifications. Costs escalate as one moves along the de-risking spectrum away from risk retention. A lump-sum window would generally be more costly relative to making a one-time plan design change. A third-party risk transfer such as an annuity purchase would generally require the largest cash commitment from a plan sponsor." (Milliman)
Retirement Bills in Congress Could Alter 401(k) Plans
"Lawmakers are starting with a bipartisan bill that would encourage more small employers to offer retirement savings plans and make it easier for companies to offer annuities that turn workers' savings into a guaranteed annual income. If passed, the measures would comprise the most significant alterations to 401(k) plans since 2006"[.] (The Wall Street Journal; subscription may be required)
How America Saves, 2018: Small Business Edition (PDF)
36 pages. "[S]mall businesses represent 99.7% of all employer firms, and they employ half of all private-sector employees.... On average, [the plans in this study] plans had 42 participants and plan assets of $2.6 million.... Slightly more than half of these plans automatically enroll participants at a 3% contribution rate.... Nearly all of these plans use a target-date or other balanced investment strategy as the default fund, with 97% choosing a target-date fund as the default." (Vanguard)
Legislation Introduced to Boost SIMPLE Plans for Small Businesses
"The SIMPLE Plan Modernization Act, introduced July 13 by Sens. Susan Collins (R-ME) and Mark Warner (D-VA) would increase the contribution limit for SIMPLE plans. The bill's sponsors say that increasing the limit would achieve two basic goals: encourage more small business employers to offer a retirement savings benefit to their employees; and allow small business employees to save even more each year on a tax-deferred basis." (National Association of Plan Advisors [NAPA])
New Illinois Program to Offer Retirement Savings Plan
"A new state program will automatically deduct money from the paychecks of about 1.2 million Illinois residents for retirement savings.... The state-sponsored retirement program works with certain businesses with 25 or more employees. The businesses will be connected with a financial firm that will provide ways for workers to build retirement savings with after-tax cash deducted from each paycheck for a Roth individual retirement account." (The Olympian)
Hardship Withdrawals After the Bipartisan Budget Act of 2018
"While there is no change to current rules for 2018, the rules with respect to hardship distributions are going to change significantly beginning in 2019. Beginning in 2019, participants may legally take hardship distributions from QNECs and QMACs and earnings on 401(k) contributions, QNECs and QMACs, if the plan permits them to. Sponsors will want to review their hardship distribution policy and consider whether they wish to extend it to these amounts. There will also be new rules (of some sort) for determining whether a participant has a hardship." (October Three Consulting)
Efforts to Discourage Participant Loans
"More than six in ten (63.6%) [respondents] said their retirement plan uses education or plan design features to discourage participants from taking loans, while 36.4% said it does not. More than one-quarter (27.3%) indicated their plans do not offer a loan feature ... More than four in ten (40.9%) reported that the number of loans outstanding is limited to one, 13.6% said loans are limited to only certain accounts, such as employee deferrals, and 4.5% said loans can only be taken for reasons of substantial hardship." (PLANSPONSOR)
Will Capacity Run Out in the Bulk Annuity Market?
"[T]here are three different aspects of the longer-term capacity question: [1] Will the insurers have the manpower to price and execute the transactions in the market? [2] Will the insurers have access to sufficient, suitable high-yielding assets so that attractive pricing can continue? ... [3] [W]ill there be enough capacity in the longevity reinsurance market?" (Willis Towers Watson)
Boeing Loses $150M Fight With Spirit Over Pension Benefit Costs
"Boeing Co. couldn't persuade the Delaware Supreme Court to reverse a ruling that left it on the hook for about $150 million in employee benefit costs in a long-running dispute with Spirit Aerosystems Inc. Under the parties' purchase agreement, Spirit never agreed to assume Boeing's liability for pension and retiree medical benefits, a three-justice panel held July 12. Spirit agreed only to credit the Boeing employees' past service with Boeing for the purpose of determining their eligibility for benefits under Spirit's own benefit plans, the justices said in affirming a lower court ruling." [The Boeing Co. v. Spirit Aerosystems, Inc., No. 5, 2018 (Del. July 12, 2018)] (Bloomberg BNA)
[Guidance Overview] Tax Code Changes Require Examination of Hardship Withdrawal Provisions
"[P]lan sponsors that have limited their hardship distributions to the safe harbors now must change their hardship distribution processes for casualty-related home repair expenses, due to an indirect change in Code section 165. These hardship distributions are now limited to home repair expenses caused by presidentially declared disasters only." (Kilpatrick Townsend)
Millennials Enjoy Fruits of Auto-Enrollment, Auto-Escalation
"Millennials are the first generation to fully benefit from improvements made to retirement plans over the last decade, according to a survey from the Empower Institute. They are on track to replace 75% of their income in retirement, compared to 64% for Americans overall, 61% for Gen Xers and 58% for Baby Boomers.... Forty-one percent of Millennials are automatically enrolled in a defined contribution (DC) plan, compared to 38% of Gen Xers and 33% of Boomers. In addition, 38% of Millennials are in a plan with automatic escalation features." (planadviser)
Best Practices of Financial Wellness Programs
"Before launching an employee financial education program, plan sponsors must identify appropriate goals for their plan. Financial wellness can mean a variety of things and not all financial education tools make sense for every plan. Identifying the specific circumstances of the plan and its participants can help narrow the program to focus on relevant tools." (Bronfman Rothschild)
Consumers in Asia Are More Confident in Retirement Prospects Than Their U.S. Counterparts
"In the U.S., the average age consumers started saving for retirement is 35 while in Asia the average age was five years older at 40. Even though they started saving later in life, consumers in Asia expected to retire at age 60, six years earlier than U.S. consumers.... Sixty-nine percent of consumers in Asia expressed confidence in being able to retire and live the lifestyle they wanted, while only 50 percent of American consumers had that level of confidence." (LIMRA)
[Opinion] Plan Sponsors Should Protect 401(k) Participant Loans from Default
"The problem is not loans per se, the real risk is when loans default. Yet many plan sponsors remain unaware of the size and scope of loan defaults each year (over $6 billion a year and counting) or, even more worrisome, their fiduciary obligation to address them.... Some plan sponsors are beginning to experiment with post-separation repayments, but so far employees without a job aren't rushing to sign up." (Employee Benefit Adviser)
[Opinion] Yesterday's 401(k) Is Not the Same as Tomorrow's 401(k)
"[T]here is no solution for workers who do not have retirement preparation as a priority. There is no retirement preparation solution for those who suffer repeated employment, financial, medical or other setbacks throughout their working careers.... [T]he 401(k)'s past is not its future [and] most of the academic and media criticism of individual account retirement savings plans is based on what retirement professionals see in their rear view mirror." (Plan Sponsor Council of America [PSCA])
[Guidance Overview] 401(k) Plan Sponsors: Time to Revisit Your Hardship Withdrawal Provisions
"Will a plan be treated as satisfying the regulatory safe harbor if it retains the 6-month suspension period for purposes of making elective deferrals and employee contributions? What happens to participants whose 6-month suspension period has not yet expired when the change to eliminate the suspension period becomes effective? Will a plan be treated as satisfying the regulatory safe harbor if it retains the requirement that a participant must first obtain any available plan loan before taking a hardship withdrawal?" (Verrill Dana LLP)
Retire Early or Keep on Working? How to Prepare for Either Choice
"When it comes to the decision of when to retire, there's no one rule of thumb for everyone. In fact, depending on your health care options and savings, you might not be able to retire.... 'Overall, 255,000 Americans, 85 years old and over, were working over the past 12 months,' The Washington Post's Andrew Van Dam reported. 'That's 4.4 percent of Americans that age, up from 2.6 percent in 2006, before the recession. It's the highest number on record.' " (The Washington Post; subscription may be required)
[Opinion] American Academy of Actuaries Letter to Congress Suggesting Improvements to the Proposed 'Lifetime Income Disclosure Act' (PDF)
"[S]hould Congress take up the Lifetime Income Disclosure Act (S.868, H.R.2055), it could be improved in the following ways: [1] Provide more guidance to the [DOL] with respect to the lifetime income disclosure provisions ... [2] Exempt small employers from providing the income disclosure statement; however, require that they furnish employees with information regarding the DOL website tool and how to access it ... [3] Require that the DOL update its website to align with the legislation.... [4] Direct the DOL to create a better safe harbor that would relieve employers from fiduciary liability for providing retiree income options." (American Academy of Actuaries)
Creating the Ideal 401(k) Plan, Part 1
"Deferrals would start at 5% and escalate to 10% automatically over 5 years.... As plans become 'healthier,' employers get greater safe harbor protection and lower liability. Measures could include participation and deferral rates -- and ultimately, income replacement ratios.... Default would be TDFs with risk based and managed accounts for those willing to fill out online surveys, along with do-it-yourself options.... Transparent, unbundled pricing with level comp paid by participants paid using flat, fee-per-head charges for participants with account balances over a certain size; ... Focus on financial literacy," (National Association of Plan Advisors [NAPA])
One Year In, Assessing the Progress of OregonSaves
"In a broad statement marking the first anniversary of the OregonSaves program, State Treasurer Tobias Read suggests the pace of signups is advancing, with an average of more than a thousand people now being registered a week to start contributing." (PLANSPONSOR)
Is It Time to Address Benefits for Alternative Work Arrangements?
"[T]he percentage of individuals providing services via an alternative work arrangement in the United States rose from 10.7% in February 2005 to 15.9% in late 2015.... 94% of the net job growth in the United States during this time period was attributable to the independent workforce.... As Congress crafts long-term solutions for these issues, it may be that companies that reduced employee benefit costs in the short run via outsourcing and the use of independent workers will have merely traded one set of costs for another." (Thompson Coburn)
401(k) Plan and Participant Outcomes Improved Again in 2017 (PDF)
55 pages. "The 6% default deferral rate for auto-enrollment plans surpassed the 3% industry standard for the first time by a small amount: 32.4% of plans had a 6% default deferral compared with 31.9% with a 3% default.... The average employee pretax deferral rate reaches 8.3% -- the highest in 10 years ... [T]arget date products now account for the largest percentage of plan assets under management, surpassing all other investment types in nearly every category.... Loan usage decreased to 23.4%, but a greater number of participants age 50+ have outstanding loans." (T. Rowe Price)
Global Investor Study: Saving for a Comfortable Retirement (PDF)
22 pages. "People aged 55+ expect to need more income to live comfortably in retirement than retirees actually receive.... The cost of living in retirement takes up more income than expected.... The majority of retired people consider their income to be sufficient, but most could do with more.... On retirement, people allocated more of their financial resources to investments than non-retired people expect to.... Globally, people feel they should be saving more of their income for retirement." (Schroders)
Less Is Not More: Information Presentation Complexity and 401(k) Planning Choices (PDF)
40 pages. "The hypothesis is that providing concise information with helpful recommendations would improve choices over providing lengthy and detailed information.... [C]ontrolling for demographic and other factors, this hypothesis was not supported by the data, for either the new employees or the business school students.... [S]implifying the presentation of retirement-plan information to employees is unlikely to result in vastly improved retirement-planning choices." (Eric Cardella, Charlene M. Kalenkoski, and Michael Parent, for IZA Institute of Labor Economics)
DB Endgame Strategies
"A number of factors are resulting in improved defined benefit plan funding. And as plans approach 'full funding,' some sponsors are considering plan termination as an option.... [This article reviews]: [1] the factors/moving parts affecting funded status; [2] (very generally) the effect of recent trends in those factors on plan funded status; [3] and the issues presented by different endgame strategies." (October Three Consulting)
The Hierarchy of Tax-Preferenced Savings Vehicles
"[T]here is still the foundational tier of savings to provide an emergency fund ... but the key point is to acknowledge that there is a hierarchy of tax-preferenced accounts -- ranging from triple-tax-preferenced accounts to accounts with no tax preferences -- and high-income earners can better limit their tax liabilities and maximize their growth by adhering to this hierarchy!" (Nerd's Eye View)
Revisiting the Business Owner's Traditional Retirement Formula with a Cash Balance Plan
"A cash balance plan needs to be under constant management and monitoring and requires an actuary to determine contribution levels. These plans must follow the fiduciary, funding and permanence rules of ERISA and the tax code, just like profit-sharing and other qualified plans. The plan trustees need to make sure they are acting with prudence and for the exclusive benefit of participants in decisions regarding the plan." (Forbes)
Do Young Adults with Student Debt Save Less for Retirement? (PDF)
"On the participation side, student debt appears to have little effect ... On the accumulation side, ... student debt does appear to affect the graduate group -- those with debt have much lower 401(k) assets by age 30 than those without debt. This result holds whether the loans are large or small, suggesting that the presence of the loan may be more important than the size of the payments." (Center for Retirement Research at Boston College)
SCOTUS Decision on Stock Options at Railroad Companies: Do the Justices Understand Stock Compensation?
"For Justice Gorsuch, the author of the majority opinion, it didn't seem to matter as much that stock options can be easily exercised and the shares sold for money. Yet in the minority opinion, Justice Breyer elucidates in detail the procedure for cashless exercises and provides data on how a large percentage of employees at railroad companies use this exercise method." [Wisconsin Central Ltd. v. U.S., No. 17-530 (U.S. June 21, 2018)] (
What's Hindering Millennials' Retirement Savings?
"Lack of 'traditional' employment.... Lack of access to retirement plan at work.... Lack of eligibility for a retirement plan at work.... Job turnover.... Other priorities." (Data 'Points')
The Multiemployer Pension System: An Analysis of Cohort Equity (PDF)
10 pages. "Cohorts that retired before 2003 will experience, or have already experienced, an average [internal rate of return (IRR)] in excess of 9%. As a result of contribution increases without commensurate benefit increases, a dramatic decline in IRR began in 2003. For a typical plan, the marginal IRR ... declined from over 6% in 2002 to about 2% in 2015.... A plan that avoids insolvency and manages to gradually pay-down its funding deficit could, in the long run, reduce its contributions or raise its benefits, leading to a rebound in the marginal IRR." (The Pension Analytics Group)
Is Arbitration the Future for ERISA Claims?
"Absent further legislation by Congress amending the Federal Arbitration Act or state legislation permitting private attorney general actions such as California's Private Attorneys General Act, the enforceability of mandatory arbitration programs with class waivers can be assured. Employers and plan sponsors who do not have such arbitration programs need to be aware of this significant development and at least consider whether an arbitration program with a class waiver is appropriate for them" (Seyfarth Shaw, via Lexology)
Reaching New Markets: Cash Balance Strategic Plan Terminations
"[T]he new cash balance plan must look at least a little different from the old plan.... [C]hanging the crediting rate or altering the group of employees covered should do the trick, and there needs to be one or multiple clear business necessities that are cited for making the change." (planadviser)
Optimizing Your Company's Retirement Plan
"[F]ocus on four key elements: [1] getting employees into the plan; [2] getting them to save an adequate amount of money toward their retirement goals; [3] getting them invested appropriately based upon their specific circumstances; and [4] getting plan participants engaged in the saving, investing, and, ultimately, retirement planning process." (CAPTRUST Financial Advisors)
Cash Balance Plans: 2018 Survey and Trends (PDF)
40 pages. "Cash Balance plans are prevalent among employers across many industries ... More than 90% of 'pure' cash balance plans -- i.e., plans with no legacy traditional annuity benefits -- continue to provide ongoing benefit accruals. Close to 60% of 'mixed' cash balance plans -- i.e., plans which arose due to the conversion from a traditional annuity plan -- continue to provide benefit accruals.... Plans that credit a market interest crediting rate enjoy the best and most stable funded status among cash balance plans, with more than 90% of such plans being fully funded." (October Three Consulting)
[Opinion] It's Time for 401(k) Plans to Become Part of the Sharing Economy
"The better way is through the aggregation of the plans of unrelated 401(k) plan sponsors into single plans called multiple employer plans.... This better way has the following objectives: [1] Reduce the employer's exposure to fiduciary liability as much as possible; [2] Put plan administration burdens entirely on a professional administrator with benefit plan expertise; [3] Keep the expenses of the arrangements at economical levels through the aggregation of the plans of unrelated employers." (Fiduciary Plan Governance, LLC)
Are Roths the Future of 401(k)s?
"Under tax reform, most Americans now pay lower marginal rates. But those rates are scheduled to sunset at the end of 2026 ... Intentionally or not, the TCJA has made a Roth savings strategy more valuable than traditional pre-tax contributions for most savers, if the increased tax rate barometer is applied." (ThinkAdvisor)
Will You Be Able to Retire From Your Small Business?
"Only 31% of small business owners are confident they will be able to retire by 65.... Small business owners have built up so much equity in the company that there may not be an easy way to hand the company over to someone else. The company may fill a niche market and not have a ready buyer to pay fair market value.... In these situations, an [ESOP] could be an ideal option[.]" (Butterfield Schechter LLP)
A Retirement Perk for Deeply in Debt Millennials
"More than 100 companies put some money toward employees' student loans ... So far, companies have been offering anywhere between $500 and a few thousand dollars a year toward student loan payments. That money is treated as taxable income, a drawback for all parties that may explain why more employers aren't adding the benefit.... Abbott's twist works around the tax penalty, because 401k payments are tax-free." (Bloomberg)
Top Ten Reasons Not to Save Now for Retirement
"[10] We'll sell our home and move somewhere cheaper when we retire.... [9] I'll work forever.... [8] I'll rely on Social Security or other government programs.... [7] I'm going to receive a large inheritance.... [6] My kids will take care of me.... [5] Saving reduces how much I can spend currently.... [4] I'm too young to save for retirement.... [3] We won't live that long.... [2] I'll win the Lottery.... [1] It will somehow all work out." (Ken Steiner, FSA Retired)
Summary of Enrolled Actuaries Meeting Discussion of the Pension Protection Act: Successes, Shortcomings, and Opportunities for Improvement (PDF)
"PPA assaulted pension funding at the worst possible time ... Funding Relief delayed a return to historical funded status standards ... PPA added several administrative requirements creating time consuming computations with little added value and increased exposure to errors and missed deadlines.... Employer defaults to Section 401(k) and IRA-type arrangements as the path of least resistance these past few years is producing massive waives of retirees with little retirement income security." (H. C. Foster and Company)
Current Population Survey: Issues Continue for Retirement Plan Participation and Retiree Income Estimates
"Compared with the 2013 estimate before the questionnaire redesign, the 2016 estimate shows a reduction of 13.5 percentage points in the percentage of full-time, full-year wage and salary workers ages 21-64 participating in a retirement plan ... Since the redesign, the survey has shown ongoing, substantial declines among full-time, full-year wage and salary workers with the highest likelihoods of participating in each of four important demographic groups.... Discrepancy in the participation trend relative to another government survey ... A higher percentage reporting pension income ... Generally, higher overall reported income." (Employee Benefit Research Institute [EBRI])
Rethinking Millennial Retirement: Policy Recommendations for a Gig Economy (PDF)
43 pages. "Millennials face a myriad of challenges in saving for retirement.... In response to the lack of accessibility and portability in retirement plans for workers in the gig economy, an ever-growing sector, we propose the creation of a 'MEP IRA'.... For those who participate in the gig economy and are in or near poverty, a reformed Saver's Credit can help them start to save for retirement.... The last element of our policy proposal is an expansion of financial literacy courses and resources for college students." [This paper is the winner of WISER's 2018 iOme Challenge.] (Evan Avila, in conjunction with Women's Institute for a Secure Retirement [WISER])
Indexed Annuity Issuers Seek 401(k) Plan Default Investment Role
"QDIA regulations prevent employers from using many kinds of annuities, including indexed annuities, as QDIAs in 401(k) plans and other retirement plans governed by ERISA ... Indexed annuities protect holders against market downturns and but offer the holders a chance to share in investment market growth... [M]any experts believe that the typical indeed annuity would not qualify as a QDIA ... [R]egulators could add consumer protection requirements to make an indexed annuity suitable as a QDIA, such as new disclosure and surrender charge requirements." (ThinkAdvisor)
UPS, Teamsters Reach Tentative Deal on Master Contract
"The union said it 'negotiated substantial increases to the employer contributions to the various benefit funds, and increased pension benefits under the part-time UPS Pension Plan and the full-time UPS/IBT Pension Plan.' It's not yet clear what those contributions will look like." (Bloomberg BNA)
Could an Early Retirement Help You Live Longer?
"There's conflicting research on the connection between retirement and life expectancy.... The drawbacks of early retirement.... Finding a purpose in retirement is paramount for health and happiness." (U.S. News & World Report)
Most Retirees Only Withdrawing Required Minimum Distribution
"Sixty-eight percent of retirees are only taking the required minimum distributions (RMDs) from their retirement accounts, [according to] a survey of more than 1,000 retirees with at least $100,000 in investable assets. Only 21% feel confident about taking money out of these accounts.... The survey also found that the median savings these retirees have is $839,000.... 25% said they were not sure if their retirement savings will last throughout their lifetime.... 25% fell short of their retirement savings goal by $250,000 or more." (planadviser)
Qualified Plan Loans -- Evil or Essential?
"Done right, plan loans should always be preferred over taxable payments -- including a hardship withdrawal while working or a pre-retirement, post-separation distribution. As a plan sponsor, your focus should be on ensuring: [1] Participants are well informed about plan loans -- con's and pro's, and [2] Plan provisions and service provider processes use current, 21st Century functionality, to do everything possible to ensure repayment." (Plan Sponsor Council of America [PSCA])
[Opinion] ARA Calls for Electronic Delivery Update to 401(k) Disclosure Default
"Current regulations requiring paper delivery of participant 401(k) information can cost investors between $350-500 million per year, which can reduce the average account balance by 2.4% over a 40-year work life.... E-delivery improves access for the visually impaired and others with disabilities.... E-delivery improves access and the quality of information for those who speak English as a second language.... Internet access -- especially among DC account holders -- is nearly universal." (American Retirement Association)
Judge Strikes Down Kentucky's New Pension Reform as Unconstitutional
"[The judge] ruled that the General Assembly didn't follow Kentucky law by giving the bill three readings on three separate days in each chamber.... The controversial bill ... created [a] 401(k)/pension hybrid, which would decrease the cost of living pay increases for state employees, including teachers. It would have required teachers who were hired after Jan. 1, 2019, to work longer before being eligible for retirement." [Commonwealth of Kentucky v. Bevin, Nos. 18-CI-379 and 18-CI-414 (Cir. Ct. Franklin Cty., June 20, 2018)] (The Hill)
[Opinion] Groom Law Group Urges IRS to Expand Determination Letter Program
"[Groom Law Group submitted letters] recommending consideration of the following plans as applicants for updated determination letters: [1] Plans with a cash balance or similar benefit formula whose last determination letter was before the effective date of the final IRS hybrid plan regulations. [2] Plans that address income replacement and inflationary pressures through adoption of a variable annuity feature. [3] Traditional pension plans that convert to a cash balance-type formula. [4] Plans that undergo major changes that otherwise make certain compliance testing unnecessary -- such as safe harbor 401(k) plans. [5] Plan changes accompanying significant workforce adjustments, such as downsizings or corporate separations. [6] Corrective plan amendments submitted as part of an EPCRS submission. [7] Governmental plans where there has been a significant change in the governing state or local law." (Groom Law Group)
[Opinion] DCIIA Testimony Before the ERISA Advisory Council: Lifetime Income Solutions as a QDIA -- Focus on Decumulation and Rollovers (PDF)
24 pages. "Those in QDIAs near retirement are more likely to have shorter tenures, lower balances and potentially lower salaries ... The idea of long-tenured participants retiring and utilizing the LTI features in a QDIA may be less common than initially anticipated. As LTI solutions continue to develop, it is important to consider these demographics when assessing their effectiveness." (Defined Contribution Institutional Investment Association [DCIIA])
Who Is Eligible to Make 401(k) Plan Catch-Up Contributions?
"[T]he plan document is not required to allow catch-up contributions; however, if catch up contributions are permitted, it must be so stated.... A plan participant is deemed to be age 50 any time during the calendar year in which he turns 50. Thus, in a non-calendar year plan, a participant is permitted to make catch-up contributions even if he will not turn age 50 until the next plan year." (EisnerAmper)
Planning for Health Care Costs in Retirement (PDF)
24 pages. "Some research on health care costs in retirement estimates these expenses as a lifetime lump sum.... [A] better planning framework considers these costs as annual expenses personalized to an individual's health status, coverage choices, retirement age, and loss of any employer subsidies. For a typical 65-year-old woman, the Mercer-Vanguard model predicts an annual health care expense of $5,200 in 2018.... Half of individuals will incur no long-term care costs -- but there is a small but meaningful risk that costly care will be required for multiple years[.]" (Vanguard)
Work-Life Balance and Labor Force Attachment at Older Ages
"Workers who report higher levels of work-to-life interference are significantly more likely to reduce their labor supply in the next two periods following a spouse's health shock, and this effect is once more heterogeneous. The moderating effect of [work-life balance (WLB)] is stronger for women than men. Among female workers, it is stronger for those employed part-time at baseline." (Michigan Retirement Research Center [MRRC])
One Retirement Question People Aren't Considering But Should
"Much of the path toward retirement is focused on reaching the retirement date, but many people could actually be in retirement for twenty to thirty years. How do you want to spend that time? What will your days look like? And do you have enough money saved and/or enough income streams to fulfill those goals? This also taps into the emotional side of retirement that people need to prepare themselves for, which can be just as important as the financial side." (Fiduciary News)
New Hardship Withdrawal Rules Effective in 2019
"The new rules ... seem intended to make it easier for participants to take premature distributions from plan while eliminating some of the consequences.... Increased distributions mean more money will be subject to full taxation and the 10% early distribution penalty. Also, increased hardship distributions do nothing to help you accumulate the cash you need to fund your retirement income which, after all, is what these plans are all about." (Frenkel Benefits)
[Opinion] The Pension Train Has No Seat Belts
"This is the base challenge: How can a shrinking group of working-age people support a growing number of retirement-age people? The easy and quick illustration to this question is to talk about the number of workers supporting each Social Security recipient. In 1940, it was 160. By 1950 it was 16.5. By 1960 it was 5.1.... [It] will be 2.3 by 2030." (Mauldin Economics)
[Opinion] Should We Continue to Count on Employers to Meet Society's Need for Secure Retirement?
"Employees are a captive audience.... Employers are also able, if they're large enough ... to select low-fee fund options for their employees ... [But] an employer-based system misses those without conventional employment (part-timers, freelancers, contractors, small business employees or owners) ... The very employer match that serves as an incentive to make a contribution, can act as a ceiling, in which employees take the match as the recommended maximum contribution level." (Elizabeth Bauer, in Forbes)
The Pension Plan is Paid in 35 Years, but the Lawyers are Paid in 2 Years?
"The class action plaintiffs are paid $150 million in 35 years, if at all. The plaintiffs' lawyers are paid fees of $5 million in 2 years.... The case was settled with an experienced and respected mediator. Yet the Fifth Circuit was quite concerned about the payment of legal fees and sent the case back to the District Court ... The Fifth's concern about payment of class counsel's fees may have been misplaced." [Jones v. Singing River Health Services Foundation, No. 16-60550 (5th Cir., revised July 27, 2017)] (Bob Blum Mediation)
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