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Benefits in the News > By Subject >

Ret plans - policy


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Economic Loss: The Hidden Cost of Prevailing Public Pension Plan Reforms (PDF)
28 pages. "76% of the money coming into public pensions comes from investment earnings. The same figure in 1940 was only 22%. The 2015 Census data show that state pensions are funded at a level of 76.3%... Using models and parameters developed through our 2015 analysis of empirical data, we estimate that if dismantling of pensions continues, the economy will suffer $3.3 trillion in damage in 2025.... Our analysis shows that in 2025 the economy is likely to grow at 4.00%, the same rate predicted by the Congressional Budget Office. 6 This rate, we project, will be dragged down to 3.29% if the dismantling of public pensions continues." (National Conference on Public Employee Retirement Systems [NCPERS])
[Opinion] Trump Leads Attack on Retirement Security
"Trump's 2018 budget would make federal employees pay more for their pensions, while simultaneously cutting their retirement benefits. His proposal: [1] Increases employee contributions to FERS by 1 percent per year for 5 or 6 years. [2] Calculates pension benefits based on the highest five years of salary rather than the highest three years. [3] Eliminates cost of living adjustments (COLA) for current and future FERS employees." (National Public Pension Coalition)
Trump's Budget Raises PBGC Multiemployer Premiums, Affects Federal Employee Benefits
"President Donald Trump's proposed budget for fiscal year 2018 ... calls for additional premiums paid to the [PBGC] by underfunded multiemployer pension plans by adding a variable rate premium and exit premiums similar to existing rates for single-employer plans. The changes are projected to raise an additional $16 billion to keep the multiemployer program solvent for the next 20 years, plus another $5 billion that would come from having multiemployer plans pay premiums faster, so that they fall within the 10-year federal budget window." (Pensions & Investments)
[Opinion] Acosta's Letter to WSJ Contains Double Message and One Long-Term Objective: Gut the Fiduciary Rule
"The [DOL] is allowing its fiduciary rule to go into effect with no further meddling -- but with a big wink-wink to Wall Street.... Labor Secretary Alexander Acosta delivered this bifurcated message to the nation's insurers and brokers via a carefully worded op-ed piece ... Though the essay's immediate takeaway is that the rule will be implemented June 9, Acosta let the financial industry know that the rule is only being kept alive to more effectively replace it." (Brooke Southall, via RIABiz)
Borzi: Fiduciary Rule Will Prevail Even If Repeal Is Attempted
"If the rule is repealed, consumer groups will challenge the action in court, [according to] Phyllis Borzi, the former assistant Secretary of Labor of [EBSA] ... Borzi maintained that the regulation's opponents 'have no new evidence' ... and won't be able to meet the court's high standards for repeal.... 'We were extremely meticulous in the way we approached the evidence,' she said ... '[The rule's opponents] need to create a record that is as strong as the record we created over six years.' " (Financial Planning)
Former EBSA Secretary Phyllis Borzi Talks About Fiduciary, Fees, Fears
"Borzi began by noting there's no Consumer Reports for achieving a sustainable amount of retirement income, and she decried the plethora of industry designations that too often confuse and confound the general investing public.... One thing she and the department did not do wrong, she emphasized, 'was that we never stopped talking to the public,' throughout the period of the rule's development, both when the first proposed-rule was pulled, and when it was eventually reintroduced." (401K Specialist)
Vermont Poised to Become Latest State to Set Up Retirement Program for Small Businesses
"The Vermont legislature passed an economic-development bill, S.135, establishing the Green Mountain Secure Retirement Plan, a multiple employer plan available on a voluntary basis to employers with 50 employees or fewer. Vermont intends to implement the program starting in January 2019[.]" (InvestmentNews)
Trump's 'Lawless' Behavior with Fiduciary Rule Undermines Process, Bullard Says
"[University of Mississippi law professor and founder of Fund Democracy] Mercer Bullard, a strong advocate of the [DOL's] fiduciary rule, argues such a standard should have been adopted 'decades ago' and the department's current 60-day delay could hurt future rulemaking. Bullard ... is puzzled by the delay, arguing the rule had one of the most thorough vettings.... 'Half-a-dozen court rulings have found that the rule is well-justified,' he recently [said].... 'No agency will ever again allow for a compliance period that runs into another administration if it knows this type of lawless behavior will lead to a rule being rejected by the new administration without any analysis.' " (LegalNewsLine.com)
Trump Signs Measure Ending Safe Harbor for State-Run Private-Sector Plans
"Legislation removing safe harbors for states to implement private-sector retirement programs was signed [May 17] by President Donald Trump, who signed a similar measure against cities and large political subdivisions on April 13. Rep. Tim Walberg, R-Mich., chairman of the Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions, in a statement called the safe harbors 'a misguided regulatory loophole that would discourage small businesses from providing retirement benefits and put the hard-earned savings of workers at risk.' " (Pensions & Investments)
House Committee: 401(k) Fiduciary Rule 'Hurts Those Intended to Help'
"The House subcommittee on Health, Employment, Labor, and Pensions held a hearing [May 18] to 'examine regulatory barriers facing workers and families saving for retirement.' Members discussed the need to protect workers and small businesses from what they see as a flawed fiduciary rule, which they claim would restrict access to affordable retirement advice. Members also discussed bipartisan solutions to make it easier for small businesses to provide retirement benefits to their employees." (401K Specialist)
Interesting Angles on the DOL's Fiduciary Rule, Part 47
"[M]ost of the objections are to the Best Interest Contract Exemption and not to the rule.... [T]he main issue is the prohibited transaction rules, which are statutory, rather than regulatory. Neither the SEC, nor FINRA nor the DOL, can issue regulations that conflict with a statute. As a result, even if the standard of care is changed, the prohibited transaction exemptions will continue to be written by the [DOL]. In other words, the SEC does not have the statutory authority to create exemptions from the prohibited transaction rules." (FredReish.com)
The First 100 Days Are Done. Now What?
"While Trump is expected to sign into law a roll-back of the DOL regulatory exemption for state-run auto-IRA programs (and has already signed a similar provision for state and county auto-IRAs), the effect may be minimal.... it is clear that Trump's tax reform proposal would protect retirement plan tax deductions [and] there are several House proposals that would impact the taxation of retirement savings." (Cammack Retirement Group)
Why Most Teachers Get a Bad Deal on Pensions
"States and school districts spend more than $50 billion each year on teacher pensions.... Despite the widely held belief that pensions entice teachers to stay on the job ... states base the financial health of their plans on the opposite assumption. State projections, based on historical data of teacher behavior, assume that pension eligibility does not encourage early-career teachers to stay on the job, and that pension rules push most veterans to leave as soon as they reach retirement age." (EducationNext)
Fiduciary Rule Debate Impacts State-Run Plans for Private Sector
"A new bill introduced by Senate minority Democrats, seeking to protect ERISA exemptions for state- and city-run retirement plans for the private sector, would likely be made redundant with the removal of the Obama-era fiduciary rules." (planadviser)
Regulatory Barriers Facing Workers and Families Saving for Retirement
Hearing held May 18, 2017; includes video and links to testimony submitted by Bradford P. Campbell of Drinker Biddle & Reath; Jason Furman, Ph.D. of Peterson Institute for International Economics; James Kais of Transamerica; and Erik Sossa of PepsiCo, Inc. (Subcommittee on Health, Employment, Labor, and Pensions [HELP], Committee on Education and the Workforce, U.S. House of Representatives)
Lessons for Private Sector Retirement Security from Australia, Canada, and the Netherlands (PDF)
"This paper ... [outlines] social security and universal, quasi-universal, and voluntary employer-provided retirement plans in Australia, Canada, and the Netherlands.... [W]hile the level of risk borne by employees varies across the three countries' retirement income systems, risks are pooled among workers or offset by employers and government to a greater extent than in the U.S." (National Institute on Retirement Security [NIRS])
ERISA Advisory Council to Meet June 6-8
"[T]the 186th open meeting of the Advisory Council on Employee Welfare and Pension Benefit Plans (also known as the ERISA Advisory Council) will be held on June 6-8, 2017.... The Advisory Council will study the following topics: [1] Reducing the burden and increasing the effectiveness of mandated disclosures with respect to employment-based health benefit plans in the private sector, and [2] Mandated disclosure for retirement plans -- enhancing effectiveness for participants and sponsors." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
[Opinion] Five Ways to Fix the Saver's Credit
"[1] Update the messaging and positioning.... [2] Implement an ongoing educational campaign to promote the Saver's Credit and how to claim it.... [3] Encourage employers to promote the Saver's Credit among their employees.... [4] Add the ability to claim the credit on Form 1040EZ ... [5] Facilitate the depositing of the amount that a tax filer receives from the Saver's Credit into a retirement account." (National Association of Plan Advisors [NAPA])
Fee Litigation 2016 Round-Up: Mitigating Risk in the Face of Expanding Targets and Theories of Fiduciary Liability (PDF)
17 pages. "Employees, not employers, bear the risk of investment performance in defined contribution plans, and they also pay the cost of investment management and administrative fees for the plans. The enhanced role of 401(k) plans has thus put increased pressure on plan performance and, since 2006, has led to multiple waves of [ERISA] litigation challenging the fees and the selection of mutual fund and other investments offered in the plans. The latest wave of litigation began in late 2015 and continued throughout 2016 and also introduced the first large wave of cases challenging the fees and investment offerings in 403(b) plans." (Robert Rachal, Myron D. Rumeld, and Tulio Chirinos, via Benefits Law Journal)
Could a Switch to Roth Be Good for Retirement Security?
"[T]he break-even point in terms of where the tax advantages of Roth at the back end in retirement largely equal out the advantages of deferral at the front end lies at a 9.1% reduction in contributions. Beyond that point, the Roth option (and the assumed reduction in retirement savings) worsens the retirement savings shortfall -- though even assuming a 25% reduction, the shortfall deepens by a mere 2.6%." (American Society of Pension Professionals & Actuaries [ASPPA])
All Eyes on Acosta as DOL Rule Clock Winds Down
"The main thrust of the rule -- that anyone working with retirement dollars adhere to a fiduciary standard -- is scheduled to take effect June 9. Industry representatives are furiously lobbying the DOL for another delay. Opponents are pinning their hopes for an 11th hour reprieve from new Labor Secretary Alexander Acosta ... While he hasn't spoken publicly on the fiduciary rule, Acosta wants to freeze the rule permanently, according to an email a Senate aide sent to rule opponents[.]" (InsuranceNewsNet.com)
Enforceability of Arbitration Agreements with Class Action Waivers Becoming Hot Topic in ERISA Litigation
"Recent Supreme Court decisions permitting class action waivers in arbitration agreements opened the door to the question of whether such an agreement would be enforceable under [ERISA].... The wave of class action litigation over 401(k) and 403(b) fees has created a forum for addressing this question, and courts are beginning to provide an answer." (Greensfelder)
An Overview of Current Retirement Policy Legislation
"[T]his article [reviews] several bipartisan retirement policy initiatives being considered by Congress.... [1] [T]hree bills introduced in 2017, in the 115th Congress, addressing the issues of lifetime income disclosure, leakage and plans with closed groups.... [2] [P]roposals from the 114th Congress that may come up again in the 115th Congress -- legislation addressing the issue of 'lost' benefits and Senator Hatch's (R-UT) Retirement Enhancement and Savings Act of 2016." (October Three Consulting)
California Officials Move Forward with New Private-Sector Retirement Plan
"California leaders say they will push ahead with their plan for a state-run retirement program -- a move that sets the stage for a legal battle with businesses, trade groups and possibly federal regulators.... One of the key points of contention could be over whether employees who enroll in the California Secure Choice program and similar plans are doing so on a 'completely voluntary' basis." (Los Angeles Times)
DOL Chief Looks to Deep Freeze Fiduciary Rule
"Labor Secretary Alexander Acosta wants to freeze the fiduciary rule in a way that will 'stick' ... Acosta told Sen. Tim Scott, R-S.C., that the rule is his No. 1 priority and that he recognized the urgency of the situation, according to an email from Scott's aide. Acosta has not spoken publicly about the rule since his confirmation hearing in March." (InsuranceNewsNet.com)
Why Your 401(k) Is Vulnerable as Tax Reform Plays Out in Washington
"[A]lthough getting rid of retirement saving deductions could instantly give the government a huge new revenue source, there could be costly consequences for taxpayers. Already the nation is facing a looming retirement crisis because millions of workers aren't saving enough to cover basic needs like food and housing when they can no longer work. Ultimately, if these people need welfare, Medicaid or other aid, taxpayers could be asked to pick up the burden." (Chicago Tribune; subscription may be required)
Potential Impact of Trump Tax Reform Plan on Retirement Plans: What's Old Could Be New Again
"While the Trump Administration has stated that the current version of its 2017 Tax Proposal does not reduce pre-tax contributions to 401(k) plans, speculation continues that a later draft may include curtailment of these contributions or other changes with a similar impact.... [T]he 2014 Tax Proposal provides some insight into the types of provisions that ultimately could be included." (Epstein Becker Green, via National Law Review)
Retiree-Employee Ratios Are Dooming the Multiemployer Pension
"Even as Congress has taken steps to solve the multiemployer pension problem, the plans continue to face a death spiral. In fiscal year 2016, 10 multiemployer plans went insolvent and requested financial assistance from the PBGC. The federal agency is now giving financial assistance to a record-high 71 multiemployer plans." (Bloomberg BNA)
[Opinion] State IRA Plans Are Deeply Flawed
"There's no sense in addressing a national issue with state-by-state solutions.... State IRAs also carry unavoidable design defects.... State IRAs are inferior to 401(k)s.... Writing 50 rulebooks to do one book's work makes little sense. Also, the U.S. retirement system needs less fragmentation and more portability, not the reverse. But ignoring the problem simply won't do." (John Rekenthaler, in Morningstar Advisor)
[Opinion] Could Small Plan Formation Be a First Casualty of Tax Reform?
"[U]nder President Trump's draft proposal, these small business owners -- partnerships, S Corporations, REITs, RICs and small business limited liability corporations -- would only be subject to a 15% maximum tax on pass-through income. On the other hand, if they invest that money in a retirement plan, when withdrawn it would be taxed at the maximum ordinary income rate, which could be in the neighborhood of 35%." (Nevin Adams, for National Association of Plan Advisors [NAPA])
[Opinion] Oregon Treasurer Says State Will Move Forward with Retirement Savings Plan Despite Impending DOL Safe Harbor Repeal
"The status quo is not working and we must be part of the solution.... OregonSaves will continue to move forward with our pilot program that is launching on July 1 this year. The need to address the oncoming retirement crisis is too great. This action will not halt our commitment to working Oregonians." (Oregon State Treasury)
Senate Halts Rule on State-Run IRAs
"The blocked rule allowed states and their subdivisions to design and operate retirement savings programs that would be exempt from certain [ERISA] provisions -- granting them a safe harbor from ERISA reporting and disclosure requirements that employers, as retirement plan fiduciaries, must abide by." (Society for Human Resource Management [SHRM])
[Official Guidance] Text of EBSA Information Request Submitted to OMB: 'On the Road to Retirement Surveys'
"[DOL] is submitting the [EBSA] sponsored information collection request (ICR) proposal titled, On the Road to Retirement Surveys, to [OMB] for review and approval ... Public comments on the ICR are invited.... The Department is planning to undertake a long-term research study to develop a panel that will track U.S. households over several years in order to collect data and answer important research questions on how retirement planning strategies and decisions evolve over time." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
Senate Repeals Safe Harbors for State-Run IRA Programs
"The Senate narrowly approved a resolution Wednesday to rescind federal safe harbors for states to set up private-sector retirement programs for small businesses.... It mirrors a resolution passed by the House on Feb. 15. A similar resolution that rescinded safe harbors for cities and other large political subdivisions was passed by both chambers and signed on April 13 by President Donald Trump, who is expected to sign the state version shortly." (Pensions & Investments)
Puerto Rico Declares a Form of Bankruptcy
"Puerto Rico has roughly $120 billion of bond debt and unfunded pension obligations to restructure, which dwarfs the second-largest similar episode. When Detroit went bankrupt in 2013, it set the previous record, with about $18 billion of bond debt and retirement obligations.... [T]he governor of Puerto Rico ... petitioned for relief under Title III of a new federal law for insolvent territorial governments, called Promesa. It contains some bankruptcy provisions and has never been used before, so there is no road map to follow." (The New York Times; subscription may be required)
[Opinion] Letter from U.S. Representatives to DOL Secretary Acosta Urging Further Delay of Fiduciary Rule
"The delay that appeared in the Federal Register on April 7, 2017, contravenes the presidential memorandum which directed a new economic analysis of the Rule and the impact it is having on the marketplace. Rather than facilitating an orderly review period, the preamble illogically concludes that the record supports applying major aspects of the Rule before the President's review and updated economic analysis are complete. This is nonsensical. Again, we strongly urge you to delay this rule in its entirety." (124 Members of U.S. House of Representatives, via American Benefits Council)
[Opinion] ERIC Letter to DOL Supporting Protection of Employer-Sponsored Retirement Plans from State-Mandated Programs
"If states continue implementing their own mandatory auto-IRA programs, ERIC requests that the [DOL] use any and all enforcement actions at its disposal to protect plan sponsors -- that already provide an ERISA-qualified retirement plan to employees -- from burdensome compliance activities that states may impose.... We urge the [DOL] to support the preemption clauses of ERISA and ensure that states do not infringe on employers already providing a quality retirement plan to their employees." (The ERISA Industry Committee [ERIC])
Senate Slated to Vote on Rolling Back State-Run Auto-IRA Safe Harbor
"Senate Republicans feel they have the votes to undo the [DOL's] rules crafting a safe harbor that exempted states' auto-IRA programs from ERISA. The vote on H.J.Res. 66, a Congressional Review Act (CRA) resolution cancelling the Obama administration's regulation on state government-run retirement plans, is expected to occur today [May 3]. It would be the 14th CRA resolution of disapproval sent to the president's desk this year." (National Association of Plan Advisors [NAPA])
Trump's First 100 Days: A Retirement Policy Perspective (PDF)
"The sentiment in DC is that the proposed individual/corporate rate cuts and deductions will require new revenue to offset the loss. That requirement will likely lead Trump, the GOP, and the Freedom Caucus to the employee benefits exclusions in some way.... [T]he GOP tax plan would reduce the federal government's revenue intake by lowering corporate and individual tax rates.... The exclusion of employer contributions for medical insurance premiums and medical care results in $2.7 trillion in lost revenue from 2016 to 2025, and the combination of defined contribution/defined benefit plans is $1.5 trillion[.]" (Lockton)
Retirement Benefits and Executive Compensation Under the New Administration (PDF)
"At best, a reduction in individual tax rates could result in increased contributions to health savings accounts and 401(k) retirement savings plans.... The new fiduciary rule was one of the Trump Administration's first targets.... Because of its popularity with institutional investors, 'Say on Pay' may be phased out over time, but for now it is still firmly in place." (Bryan, Pendleton, Swats and McAllister, LLC)
State Fiscal Savings Fact Sheets
"When individuals save for retirement they are less likely to rely on public assistance programs later in life. These fact sheets show the fiscal savings to state governments that could result from lower-income retirees having saved through Work and Save programs during their working years." (AARP)
Social Security Retirement Benefits and Private Annuities: A Comparative Analysis
"This issue paper explains some key features of Social Security retirement benefits, focusing on program funding; benefit payments to retired workers, their spouses, and survivors; and benefit taxation. It then discusses key features of private annuities, including funding and payments, types and features, and taxation. In addition, this paper gives examples of the premiums needed to replicate Social Security retirement benefits and discusses the variables that affect the amount of annuity income. Lastly, this issue paper explains some of the risks of both the Social Security program and the private annuity industry." (U.S. Social Security Administration [SSA])
When All Is Said and Done, Will Tax Reform Spare Employee Benefits?
"While the president's plan is silent on the tax treatment of health care premiums, it does call for ... the elimination of the ACA's 3.8 percent net income investment tax, which applies to taxpayers with a modified adjusted gross income of more than $200,000 for single filers and $250,000 for married couples filing jointly.... [That] tax hits small business owners hard, since their business earnings are often treated as personal income, and is a drag on economic growth." (Society for Human Resource Management [SHRM])
Despite Fiduciary Rule's Delay, DOL's Measure Has Spurred Changes
"More than six years have passed since the [DOL] first rolled out its fiduciary rule for the retirement industry ... [T]he mere threat of the federal rule going live -- along with a decade of class action litigation -- already has wrought changes to an industry more in the public view than ever before.... [S]ome observers predict many companies will adopt stricter standards for a simpler reason: good business." (Victoria Finkle, in The National Law Journal; free registration required)
Impact of Mortality Change on U.S. Single-Employer Pension Plan Funding (PDF)
"In December 2016, the [IRS] issued proposed updated mortality tables starting in 2018 for minimum funding requirements for single employer defined benefit pension plans. This study estimates the impact of the proposed change on the single employer pension system as a whole.... On a funding basis, estimated aggregate 2018 Funding Target liabilities increase 2.9% from $2.278 trillion to $2.343 trillion, and the estimated cost of current year benefit accruals (normal cost) increases 1.6%, from $49.6 billion to $50.4 billion.... For PBGC premiums, estimated aggregate 2018 Premium Funding Target liabilities would increase 3.1%, from $2.679 trillion to $2.763 trillion." (Society of Actuaries)
How Lavish Benefit Promises Are Coming Back to Haunt Public Sector Workers
"Benefits are taking a big bite out of school budgets in a number of states that have made lavish pension and retiree health care promises to workers. Connecticut, with one of the worst-funded state pension systems, has seen the cost of supplying benefits to its school employees rocket by 123% over 10 years, so that benefits alone now consume 27% of its public education budgets, up from 18% a decade ago.... In many states, there's little hope that this pressure will end soon." (Investor's Business Daily)
[Opinion] 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." (New York Daily News)
Why Pensions Matter: The History of Defined Benefit Pension Plans in the U.S. (PDF)
10 pages. "Pensions, in the broadest sense of the term, have existed since ancient Rome.... Governments began offering pensions because they are the most effective and cost-efficient way for working families to prepare for retirement.... This report will explore the history of defined benefit public pensions in the United States, why they were implemented in the first place, and why they continue to remain today." (National Public Pension Coalition)
Retirement Savings Still a Potential Target in Tax Reform Negotiations
"According to estimates from the Joint Committee on Taxation published in January, defined-contribution plans will cost the federal government nearly $584 billion in lost tax revenue over 2016-20.... Of course, this supposed 'lost' revenue only appears lost due to a budgeting gimmick, observers said. The government eventually recoups tax revenue from these pre-tax deferrals decades in the future when individuals retire, but the revenue falls outside the 10-year budget window Congress uses for tax scoring." (InvestmentNews)
Investing Is Out of the Comfort Zone for Many Americans (PDF)
"Seven in 10 Americans (71%) consider themselves to be prepared to make wise financial decisions, but over four in 10 do not know how their assets are allocated (42%) or what products they are currently invested in (43%). This lack of knowledge of their own investment products is even more pronounced for investors who are Millennials (55%), female (56%), or less affluent (59%), compared to their respective counterparts." (Prudential)
Alex Acosta Becomes Secretary of Labor
"Secretary Acosta will face an entrenched bureaucracy at the labor department that may resist his efforts to undo many of the regulations they helped draft over the past eight years ... Among the sub-regulatory challenges will likely be restoring agency-binding, case-by-case 'opinion letters' in place of administrative interpretations, which replaced opinion letters in the previous administration[.]" (Ogletree Deakins)
Colorado Senate Panel Rejects Democratic Plan for State-Sponsored Retirement Accounts
"46 percent of all Coloradans don't have access to a plan through their employer. And that number rises to 8 in 10 for those who work at the smallest businesses, according to an AARP study. But ideological differences -- coupled with heavy lobbying by the financial industry to preserve the status quo -- have combined to make any attempts to find a solution at the Colorado Statehouse elusive." (The Denver Post)
One Small State, One Giant Perspective for the Nation
"While reactions were mixed among the small-business owners regarding the new [Connecticut state-run retirement plan], there was also some confusion about the state-run retirement plan and how it would affect their businesses.... Some of the negative perceptions of the state-run plan comes from unsatisfactory experiences with health exchanges. In other cases, participants conflate the state managing the new state-run retirement plan with the already established state teachers' and employees' pension programs. Both have faced well-publicized funding and liability challenges." (LIMRA)
[Opinion] Tax Reform Can Both Improve the Economy and Protect Employer-Sponsored Benefits
"Taxing employer-sponsored health insurance will not raise revenue, but instead will force employers to curtail their health benefits in order to avoid the tax.... A drastic shift to Roth contributions could undermine the entire retirement system in this country and undo the progress that has been made through widely favored pre-tax 401(k) plans." (The ERISA Industry Committee [ERIC])
Chief Human Resource Officers on Trends Shaping the Workplace, Outdated Policies Governing It, and the Way Forward (PDF)
86 pages. "[Recommendations] of the most senior HR executives working for America's largest employers on ... what can be done from a policy perspective to make the workplace work [include] ... [1] Increased portability of employee benefits that are not tied to tenure with a single employer.... [2] A tax-preferred system in the mold of a 401(k) that would help employees to save and pay off student loan debt sooner.... [3] Companies already providing generous paid leave benefits should have a federal safe harbor from being hampered by the varying requirements of state and local leave mandates.... [4] Protect the Tax Exemption of employer-sponsored health insurance (ESI).... [5] Federal legislation enabling employees to collect defined benefit plan retirement income earlier while permitting them to continue to work for their employer[.]" (HR Policy Association)
[Opinion] The Invisible Hand Did Wonders for 401(k) Plans, but Now Washington Should Lend a Hand
"The process that has successfully guided the growth of the 401(k) system appears to have run its course.... The 401(k) industry now faces three challenges that are unlikely to be resolved without Washington's assistance. One is the difficulty of signing up smaller companies.... Another snag is the high costs paid by smaller companies that do adopt a plan.... The third problem lies with larger companies. They are beset by class-action lawsuits from legal firms seeking to profit from the settlements." (John Rekenthaler, in Morningstar)
[Guidance Overview] Oregon Moves Ahead with State-Run IRA Program
"Starting Nov. 15, 2017, Oregon employers with 100 or more employees must begin to register with the program, either certifying that they already offer their workers access to a qualified retirement plan or automatically enrolling them into OregonSaves, the state-run auto-IRA program for private sector workers.... [By] May 15, 2020, all employers that either: [1] employ one or more individuals 18 years or older for 18 separate weeks during the year; or [2] whose quarterly payroll is $1,000 or more, will have to register with the program." [See also the text of the Permanent Rules approved by the Oregon Retirement Savings Board, Apr. 18, 2017.] (National Tax-Deferred Savings Association [NTSA])
Financial Adviser Alert: Pension Insurer Wants Your Expertise (PDF)
"[PBGC] says it's likely to need outside help to tackle large and complex cases, and it's looking for financial advisers to step up. To find qualified advisory firms -- those with specialized knowledge but without conflicts of interest -- the federal pension insurer says it's renewing a program in which it constructs a list of pre-vetted, go-to financial firms for bids on future contracts." (Bloomberg BNA Pension & Benefits Daily)
The Effects of Means-Tested Noncontributory Pensions on Poverty and Well-Being: Evidence from the Chilean Pension Reforms
"This paper examines the impact of the 2008 Chilean pension on labor supply and well-being... [P]reliminary estimates suggest that the pension reforms induced an increase in the probability of working formally, but at least among females, they reduced labor market participation.... Besides some improvements in aggregate household expenditures and in measures of subjective well-being measures among males, [the authors] do not detect robust changes in health and well-being among individuals near retirement." (Michigan Retirement Research Center [MRRC])
Understanding Public Pensions: A Guide for Elected Officials
"Since 2009, all states have made modifications to their retirement plans to help ensure their long-term sustainability.... [T]here are no one-size-fits-all solutions from state to state or even from plan to plan to ensure that pension plans are properly financed and effectively managed to pay benefits for the long-term.... Any modifications should be carefully considered to avoid unintended consequences or costs." (Center for State & Local Government Excellence)

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