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Prof. Jonathan Forman Dies

BenefitsLink is saddened to learn of the Aug. 16 death of Prof. Jonathan ("Jon") Forman of the University of Oklahoma College of Law. He was a member of the American College of Employee Benefits Counsel, and a prolific author on numerous tax and ERISA issues. "He will be greatly missed in our academic community," said Prof. Donald T. Bogan, also of the University of Oklahoma College of Law.  MORE >>

Oklahoma Law Professor to Tackle Tax Issues for IRS; Has Employee Benefits Experience

Excerpt: [Jon] Forman was picked by Clarissa Potter, IRS acting chief counsel. 'I am grateful for this opportunity to help IRS attorneys write regulations, rulings and briefs,' he said after learning of his selection April 7. 'In addition, I will help the chief counsel with efforts to reform and simplify our tax system.' Forman has taught at the OU College of Law since 1985 and is vice chairman of the Oklahoma Public Employees Retirement System's board of trustees.  MORE >>

Law Professor Writes about an Improved American Retirement System

Excerpt: Jon Forman (Oklahoma) has written an interesting op-ed in the Journal Record about how he believes America is in the process of building a better retirement system. [This blog relates some of his thoughts.]  MORE >>

Do Cash Balance Pension Plan Conversions Violate ERISA or ADEA? (PDF)

56 pages. Excerpt: This Article considers the various legal issues that are raised by cash balance conversions. In particular, this Article considers whether these conversions violate the Employee Retirement Income Security Act (ERISA) or the Age Discrimination in Employment Act (ADEA). The Article concludes that the typical cash balance conversion will not violate these laws.

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How and Why to Design Pensions for Full Funding in the Real Word

109 pages. "[F]inancial planners often suggest that retiring workers should aim to replace 70 to 80% of their annual preretirement earnings. Social Security benefits typically replace around 35% of the typical worker's preretirement earnings, and the purpose of this Article is to show how pensions could and should be designed to replace, say, 40% of the typical worker's preretirement earnings throughout her retirement years. In particular, because so many public and private pension plans are underfunded, this Article focuses on how to fully fund those pensions."  MORE >>

Retirement Readiness: What Does Full Funding Look Like?

79 pages. "[F]inancial planners often suggest that retiring workers should aim to replace 70 to 80 percent of their annual preretirement earnings. Social Security benefits typically replace around 35 percent of the typical worker's preretirement earnings ... [T]he purpose of this Article is to show how pensions could and should be designed to replace ... 40 percent of the typical worker's preretirement earnings ... [B]ecause so many public and private pension plans are underfunded, this Article is focuses on how to fully fund those pensions."  MORE >>

How to Create 'Survivor Funds'

"This Article explains how to create 'survivor funds' -- short-term investment funds that would pay more to those investors who live until the end of the fund's term than to those who die before then. For example ... a survivor fund would invest in [a] ten-year bond but divide the proceeds only among those who survived the full ten years.... Survivor funds would work like short-term tontines."  MORE >>

Removing the Legal Impediments to Offering Lifetime Annuities in Individual Account Plans (PDF)

112 pages. "This Article considers how changes in the laws and regulations governing pensions and annuities could help promote secure, lifetime income streams [from 401(k) and other defined contribution plans, called 'individual account plans' in ERISA]. More specifically, this Article explores how the laws governing annuities could be changed to make voluntary annuitization more attractive and how pension laws could be changed to incentivize plan sponsors to offer more lifetime income options and to encourage plan participants to select those options."  MORE >>

Modeling a 'Tontine' Pension Plan to Provide Reliable Income for Retirees (PDF)

77 pages. "A tontine is a financial product that combines the features of an annuity and a lottery. In a simple tontine, a group of investors pool their money together to buy a portfolio of investments and, as investors die, their shares are forfeited, with the entire fund going to the last surviving investor.... [V]ariations on the tontine principle ... could be used to create 'tontine pensions' through which large employers could provide retirement income for their employees. These tontine pensions would have several major advantages over most of today's pensions, annuities, and other retirement income products."  MORE >>

'Tontine' Pensions: A Solution to the State and Local Pension Underfunding Crisis

"[U]nlike traditional pensions ... tontine pensions would always be fully funded. Second, unlike a traditional pension -- where the pension plan sponsor must bear all the investment and actuarial risks, with a tontine pension, the plan sponsor bears neither of those risks.... [T]ontine pensions would provide significantly higher retirement benefits than commercial annuities.... [This article] ... shows how such a model tontine pension could be used to replace a typical, large traditional pension plan like [CalSTRS]."

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