Will Congress Slash Your 401(k) Tax Break?
"President Obama's National Commission on Fiscal Responsibility and Reform recommended capping combined employee/employer pre-tax contributions to 401(k)s at $20,000 or 20 percent of income, whichever is lower. . . . Meanwhile, the House Subcommittee on Health, Employment, Labor and Pensions heard testimony earlier this week on limiting the retirement deduction."
(Reuters)
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Many Companies Facing Tougher Pension Funding Disclosure Rules
"The International Accounting Standards Board (IASB), whose IAS rules are used in more than 100 countries, including the European Union, said defined benefit pension schemes represent the biggest single financial liability for many companies."
(Business Insurance)
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The Good News About Public Pensions
"[W]ith public pension funds healthier and costs moderating, the pension foes' argument seems to be switching from comparative costs to comparative misery. They say it is unfair for public workers to continue to have livable pensions when workers in the private sector have seen their pension savings and opportunities shrink alarmingly."
(Manteca Bulletin)
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Trading in 401(k) Plans During the Financial Crisis
"Most 401(k) participants did not trade much in their retirement accounts during the recent financial crisis. Yet the proportion of plan participants trading did rise by almost a quarter and the mean portfolio fraction shifted away from equities rose almost eightfold during the crisis."
(Pension Research Council of the Wharton School of the University of Pennsylvania)
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Public Pension Funding in Practice
"[T]he paper examines how well plans are meeting their Annual Required Contributions and what factors influence whether they make them. The paper also addresses the controversy over what discount rate to use for valuing liabilities, concluding that using a riskless rate of return could help improve funding discipline but would need to be implemented in a manageable way."
(Journal of Pension Economics and Finance)
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Portfolio Allocation for Public Pension Funds
"[F]unds chose greater overall asset/liability portfolio risk following periods of relatively poor investment performance. In addition, pension plans that select a relatively high rate with which to discount their liabilities tend to choose riskier portfolios. Moreover, consistent with a desire to gamble for higher benefits, pension plans take more risk when they have greater representation by plan participants on their Boards of Trustees."
(Journal of Pension Economics and Finance)
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Should Public Retirement Plans Be Fully Funded?
"In a model where most taxpayers hold debt and face intermediation costs, returns on pension assets are less than taxpayers' costs of borrowing. Hence, zero pension funding is optimal."
(Journal of Pension Economics and Finance)
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Policy Options for State Pension Systems and Their Impact on Plan Liabilities
"Dramatic policy changes, such as the elimination of COLAs or the implementation of Social Security retirement age parameters, would leave liabilities around $1.5 tril.lion more than plan assets. This suggests that taxpayers will bear the lion's share of the costs associated with the legacy liabilities of state DB pension plans."
(Journal of Pension Economics and Finance)
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PBGC Unveils Preliminary Plan for Regulatory Review
"Taking into account public comments on its April 1 comment request and internal feedback, the PBGC intends to review the following regulations: ERISA §4062(e) rules. . . Voluntary Correction Program . . . Premiums [for small plans] . . . Annual financial and actuarial information reporting rules . . . ."
(Wolters Kluwer Law & Business)
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Clarifying The View of Public Pension Retirement Debt
"Perhaps the best single objective data source on this issue now is last month's municipal bond research report by Barclay's Capital, entitled State's Pensions: A Manageable Long-term Challenge. As the title suggests, the Barclay's team concluded that the world will not come to an end but that some serious headwinds lie ahead."
(Governing.com, authored by Girard Miller)
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The Retirement Landscape: Hazardous And Challenging Terrain
"Whether from the perspective of employers, insurers, healthcare organizations, or present and future retirees, the retirement landscape presents a tangle of risks, uncertainties, and challenges . . . To show the complexity of the problem, this article focuses on one: record low interest rates."
(Milliman)
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Benefits in General; Executive Compensation
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Investor Say on Pay Is a Bust
"[T]hrough June 14, shareholders by a majority vote objected to executive comp at just 32 of the 1,998 companies that have convened annual meetings this year. 'Say-on-pay is at best a diversion and at worst a deception,' says Robert A.G. Monks, the veteran corporate governance activist . . . ."
(BusinessWeek)
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Google 'Les Paul' Doodle Costs $268 Mil.lion
"Running the math — 740 mil.lion times 26 seconds over two days — brings the total to nearly 10.7 mil.lion hours spent playing [according to a report on ExtremeTech.com]."
(PLANSPONSOR.com)
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Healthcare Sways Retirement Decisions
"Most non-retired U.S. investors -- people with $10,000 or more to invest -- say healthcare cost is a major determinant of when to retire, a survey says."
(United Press International)
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The Temp/Contract Conundrum
"They're often cheaper. They give companies the flexibility to hire for specific projects without taking on full-timers. Companies can seek out specialized skills, avoid payroll taxes and bring retirees back into the mix. . . . And, oftentimes, companies don't have to pay them benefits or overtime."
(Human Resource Executive Online)
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New Jersey State Workers Swarm Trenton to Oppose Increases in Health and Pension Employee Contributions
"For a typical worker making $65,000 a year, the cost of full-family coverage would rise to about $3,600 a year, from about $1,000. Employees' pension contributions would rise immediately from 5.5 percent of their salary to 6.5 percent, and then, in stages, to 7.5 percent. On a $65,000 salary, the increase would come to $1,300 a year.
(New York Times)
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The Hidden Cost of Letting Workers Telecommute
"[C]ompanies have been found liable for state corporate tax 'when the only connection to that state was that they had an employee telecommuting in that state.'"
(The Wall Street Journal)
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Press Releases
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