News Archive

"[P]articipants enrolled in retirement plans for a minimum of five years saw balances grow by 2.1 times compared to figures in 2020.... The average participation rate for plans utilizing auto features was 86%, compared to 36% for plans who go without such benefits. Further, plans with auto-enrollment default rates of 7% or more had the highest participation rates at 90%, as well as leading savings rates at 9.6%."  MORE >>

"[B]ecause, practically, unexpected inflation risk is always on the participant, the most robust solution to these challenges is to leave this bundle of risks with the participant. Doing so allows the participant to exploit key correlations to actually reduce volatility in his long-term project of producing adequate income in retirement.... [T]hat sounds counterintuitive, especially for sponsors that live in an all account-based (401(k)/DC or market cash balance) world. Why that is the case is what the rest of this article is about."  MORE >>

"Under the new law, employers that decide to create a [phased retirement plan (PRP)] shall pay the full amount of the TRSL Optional Retirement Plan (ORP) administrative fee. They also will pay a higher employer contribution to an individual's ORP account; the act increases that contribution from 6.2% to 8.0% of pay, subject to appropriations. The employer of any participant in a PRP will be required to notify the TRS of the terms of the participant's phased retirement[.]"  MORE >>

"In rejecting a motion to dismiss the suit, a federal judge noted 'The fact that the Committee might lawfully have used forfeitures to reduce UnitedHealth's contributions does not answer whether the Committee's decision to do that complied with its duty of prudence.'... [The judge] noted (and listed) 51 [similar cases] and wrote that he had carefully reviewed them all. Only to conclude that 'I identified no clear trend or consensus in these decisions that might justify a particular outcome on this motion.' " [In re: UnitedHealth ERISA 401(k) Litigation, No. 25-1751 (D. Minn. Jun. 9, 2026)]  MORE >>

"A combination of stronger education and tools, along with accessibility to lifetime income options, could help workers better prepare for a successful retirement. Employees surveyed reported wanting 'structured, meaningful guidance' from employers, with almost all (94%) emphasizing that companies should provide resources on how to make retirement withdrawals. Nearly half (49%) even say it's the employer's responsibility to provide guidance."  MORE >>

22 pages. "About 70% of 401(k) participants report they have thought about, at least to some degree, how to convert their retirement savings to retirement income. Among these retirement withdrawal planners, 94% think it's important for employers to provide resources to help employees determine how best to make retirement withdrawals ... Retirement withdrawal planners can be divided into those who've thought a lot about how they'll convert their 401(k) savings into retirement income (30%) and those who've thought about it some (70%).... 77% of those who've thought a lot about making retirement withdrawals used plan-provided resources."  MORE >>

"The salary scale factor need not be the same as the 8.5% rate applied to the contribution since then we would be back to an allocation based on current compensation as the factors in the numerator and denominator would cancel out. But when salary scales were prevalent in funding defined benefit plans they were lower than the rates used to project earnings so there would still be some level of favoritism towards older participants (i.e., those who decide whether to set up a plan in the first place)."  MORE >>

"In-plan annuities present a classic case of informational asymmetry. The plan sponsor, fiduciary committee, consultants, insurers, and recordkeepers generally possess sophisticated actuarial, financial, and mortality information that the average participant neither possesses nor can independently obtain. Participants frequently hear only the appealing phrase: 'Guaranteed income for life.' "  MORE >>

"The three-judge appellate panel found that although ERISA lacks an explicit reasonableness requirement, the 'plain meaning of the words in 'actuarial equivalence' suggests reasonable, realistic actuarial assumptions.' The decision cited professional standards requiring actuaries to use reasonable assumptions and produce reasonable results, as well as literature suggesting that in many circumstances actuaries must ensure that previously selected assumptions remain reasonable." [Drummond v. Southern Company, No. 24-12773 (11th Cir. May 26, 2026)]  MORE >>

"But if one had either the inclination or the incentive to think about what is going on here they would notice that HCE is getting his money in 2031 while NHCE is getting his in 2056 with that time value of money difference ignored. In any case, these age weighted Profit Sharing plans are not going away even if younger lower-paid employees were ever to wise up.... [B]ased on 2024 5500-SF filings, 30% of all Defined Contribution plans (212,662 out of 720,335) use age weighting in their allocations."  MORE >>

"[A] healthy 65-year-old couple retiring this year will need to save on average: [1] $418,000 under Original Medicare with Medigap Plan G plus Part D coverage, an increase of $30,000 (+7.7%) from 2025. The couple is projected to spend an average of $637,000 on healthcare expenses over the course of their remaining lifetime. [2] $211,000 with Medicare Advantage plus Part D (MAPD), an increase of $28,000 (+15.3%) from 2025. The couple is projected to spend an average of $320,000 on healthcare expenses over the course of their remaining lifetime."  MORE >>

"President Trump signed an executive order this spring designed to enhance the options for workers who don't have access to an employer-provided retirement plan ... The White House initiative coincides with a government matching-contribution program that also starts next year, known as the Saver's Match ... Some states are also taking measures to help workers who lack access to employer-sponsored retirement plans by providing automatic IRAs."  MORE >>

"In a combo design the employer's defined benefit and profit sharing contributions are aggregated and tested on a benefits basis ... The idea is for the owner/key employees to receive more of their retirement value in a DB plan, while rank-and-file employees receive more through a DC plan ... For 2023, Form 5500-SF included a new compliance question: [14a] Does the plan satisfy the coverage and nondiscrimination tests of Code sections 410(b) and 401(a)(4) by combining this plan with any other plans under the permissive aggregation rules? So how prevalent is a design that warrants this question?"  MORE >>

"[OPM] is providing notice of adjusted present value factors applicable to certain retirees under the Civil Service Retirement System (CSRS): [1] Retirees who elect to provide survivor annuity benefits to a spouse based on a post-retirement marriage; [2] retiring employees who elect the alternative form of annuity, owe certain redeposits based on refunds of contributions for service ending before March 1, 1991, or elect to credit certain service with nonappropriated fund instrumentalities; or [3] for retirees with certain types of retirement coverage errors who can elect to receive credit for service by taking an actuarial reduction ... This notice is necessary to conform the present value factors to changes in the economic and demographic assumptions adopted by the Board of Actuaries of the Civil Service Retirement System."  MORE >>

"All employers with 100+ covered employees must set up a Minnesota Secure Choice Employer Account by June 30, 2026, and either enroll their workers in the state's payroll‑deduction IRA program or certify their exemption by the required date. Noncompliant employers face graduated fines of up to $500 per employee after an initial warning period."  MORE >>

Topics include: [1] Important terminology for reference on key topics; [2]  Stock purchase plan options and amendments; [3]  Asset purchase plan options and amendments; [4] CG/ASG transition period for coverage testing under IRC 410(b)(6)(C); [5] Comparing and unifying plan designs.  MORE >>

"In the current environment, the focus for many plan sponsors is on the considerations and implications related to guaranteed lifetime income because this is still new territory for them, and many also will want to consider at least one other non-guaranteed option for their plan lineups. At a high level, the [steps] explained in [this article] can help identify the plan's specific goals and needs and guide the design of an effective program[.]"  MORE >>

"An annuity buyout for active participants that will remain employed is not the type of event that the statute or regulation were designed to capture. Though the annuitized individuals will cease to be participants in the Plan, the change in status does not result because of a workforce reduction event of the type contemplated by PBGC's regulations, such as 'a reorganization or restructuring, the discontinuance of an operation or business, a natural disaster, a mass layoff, or an early retirement incentive program.' "  MORE >>

"This article summarizes the statutory provisions on qualified long-term care distributions and notes where Notice 2026-33 provides clarifying guidance for sponsors, plan administrators, and insurers."  MORE >>

40 pages. "This issue brief provides an analysis of how lifetime retirement income features are currently used in public sector DC plans and identifies the rationale for why providing these features is an advantageous policy. It outlines a best-practices framework for public sector DC plan sponsors to evaluate and select annuity options.... The framework addresses common objections, compares product types, and provides a structured due-diligence process to prioritize adequate lifetime income while considering costs, participant needs, and administrative feasibility. "  MORE >>

"State retirement mandates are a growing trend across the country ... If you're a business owner, that means the rules may not be optional anymore -- and the deadlines are coming fast.... This article provides a state-by-state breakdown of the current landscape, covering states with active mandates, pending legislation, and those with no mandates at all."  MORE >>

"[A recent NBER working paper] points to a lack of institutional guidance for investors who are overwhelmed by the volume and diversity of annuity products, as well as the way they are framed.... protection, payout rates, fees, survivor benefits, liquidity, and other issues. When an annuity is a default option, or even just made available within a plan, that provides a framework for an interested investor."  MORE >>

"Most automatic enrollment plans do not currently allow participants to change their mind and receive their deferrals back within a set timeframe - but that may be changing as new plans are now mandated to have such a provision."  MORE >>

"[A] child welfare agency of a state, territorial, or tribal government that is the legal guardian of an eligible child who has a Social Security number and does not already have an account may elect to open an initial Trump Account for that child.... States are strongly encouraged to adopt policies that explicitly authorize child welfare agencies, or their designees, to act on behalf of children in their care in establishing and managing these accounts."  MORE >>

"DINKS (dual income, no kids) have no adult children on the horizon to help with trips to the doctor, meal deliveries, or activities of daily living as needed. Thus, the surviving spouse is potentially more likely to have to pay out of pocket for support services as they age. Similarly, seniors with no immediate family to provide room and board during their twilight years may move into an assisted living facility or nursing home sooner than their peers who are parents. Paying those bills for even a few extra months can take its toll on their budget."  MORE >>