Upward Cost-of-Living-Adjustment Expected for 2012
"Federal retirees will know on Oct. 19 the cost-of-living adjustment they will receive beginning in their January paychecks. . . . Based on the latest statistics, the COLA is expected to be about 3.6 percent. . . . There hasn't been a COLA increase since 2008, when it rose 5.8 percent."
(Government Executive)
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Retirement Plan Trends Report
"This report is based on an analysis of proprietary data of The Principal . . . across four core retirement plan designs: defined contribution, including 401(k) and 403(b), defined benefit, nonqualified and employee stock ownership plans (ESOP), in addition to third-party research."
(Principal Financial Services, Inc.)
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Payout or Drawdown Options for Retirement Savings
"[With the hybrid-annuity concept, a] participant receives a steady income—an income that is guaranteed to never be less than the total contributions (employee and matched) that were made to the plan, regardless of the actual market value should the stock market drop. At the same time, it allows the plan funds to stay invested after retirement so a participant will see gains if the market rises."
(Human Resource Executive Online)
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MassMutual’s Award-Winning ERISA Advisory Services [Advert.]
MassMutual’s ERISA Advisory Services can help plan fiduciaries and other professionals by providing up-to-date information and easy-to-use tools that help simplify the process of maintaining the compliance health of your retirement plan.
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Tips 401k Plan Sponsors Can Use to Help Employees Avoid Risk Aversion
"Make the first and most emphasized data that of the entire portfolio, not its underlying components; Use the performance measure with the lower absolute magnitude or at least be aware of its effect; and, Take the time to choose your default or ‘easiest chosen’ plan with much care because many may use it and a considered decision update lowers the opportunity (and real) costs down the road."
(Fiduciary News)
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Rhode Island Pension Overhaul Won't Cut Existing Benefits
"Even as they try to rein in the exploding cost of public pensions in Rhode Island, the [governor and treasurer] told state employees their proposal will not raise the retirement age for those already eligible to retire, nor will it propose incentives to retire. They said it will not reduce benefits already accrued by current employees and retirees."
(Bloomberg L.P.)
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If You've Moved IRA Money into a Roth, You Can Move It Back
"In 2010, the federal government permanently dropped the income limit for moving savings to a Roth IRA from a traditional individual retirement account. Once you have met certain holding requirements, future withdrawals from a Roth are income-tax free—even for your heirs. But to get that future tax break, you have to pay income tax upfront on the value of the pretax assets you move into a Roth. With market volatility denting many investors' returns, they could get stuck paying tax on investment value that no longer exists."
(The Wall Street Journal)
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Advisors Set to Capitalize on 403(b) Market's Growth, Cerulli Says
"New regulations that are shifting the 403(b) market from highly individualized and retail-focused to one that is more efficient and institutionalized present new opportunities for advisors, third-party administrators (TPAs), and investment-only asset managers. . . ."
(AdvisorOne)
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Ameriprise Sued by Employees over 401(k) Losses
"'Defendants failed to engage in a prudent process for the selection of plan investment options,' the complaint said. 'Instead, defendants chose more expensive funds with inferior performance histories in order to generate revenue for RiverSource and ATC and ultimately to benefit Ameriprise.'"
(AdvisorOne)
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Retirement Rules for Small Business Clients
"66% of small business owners now say retirement benefits are important to attracting new talent, and 58% say they are important to driving loyalty."
(On Wall Street and SourceMedia, Inc.)
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Foes and Backers Weigh in on Fiduciary Rule Delay
"'Everybody has asked to look more deeply at the costs and benefits of the proposal, and that's what we're going to do,' Phyllis C. Borzi, assistant labor secretary for the EBSA, told reporters on a conference call Sept. 19 to announce the decision. 'We weren't as clear as we could have been and so we're trying to fix that.'"
(Pensions & Investments; free registration required)
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Federal Cuts Might Affect State Pension Plans
"Last summer's downgrade of the U.S. government's credit rating and the potential for large cuts in federal funding to states could have a trickle-down effect on the public pension plans of states that are depending on federal spending."
(Pensions & Investments; free registration required)
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[Opinion]
The Next Five Years' Retirement Industry Trends
"The reality is that a voluntary savings system needs goals, and I think participants would save better if they understood more. It also seems to me that plan sponsors who know more about what is going on in their plan might do a better job as well."
(PLANSPONSOR.COM)
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[Opinion]
Saving Kansas City's Costly Pensions Requires Sacrifices
"Any plan the task force sends the council should contain the following cost-saving moves that reflect longer lives of retirees: Lower annual cost-of-living increases for current and future retirees, down from the usual average of 3 percent a year closer to 2 percent or less. A new formula that slightly reduces final pension payments, meaning it would take longer for some current and all future workers to get larger retirement payouts. Increased ages for employees to get full retirement benefits. Higher city and employee contributions. Finally, as Schulte has requested, some kind of 401(k)-style plan for many if not all current city employees."
(The Kansas City Star)
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[Opinion]
Latest Public Pension Report Means Taxpayers Still on Hook for Trillions
"Write a check for more than $1 tril.lion today, taxpayers, to pay for state and local government pension shortages. Prepare to write another bigger one every year for the next 30 years, even if public pension fund investments match historic indexes of the past 30 years—which would put the Dow above 65,000—and managers actually earn what they promise."
(The Franklin Center for Government and Public Integrity)
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[Opinion]
DOD Leaders Mull Retirement Change Sleight of Hand
"The real near-term impact of the proposed reforms would be to make the coming drawdown cheaper and easier to manage. Budget cuts mean all the services will have to shrink, because personnel are expensive."
(AOL Inc.)
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[Opinion]
Letter to the Editor: Sound Funding Backs Federal Benefits
"USA TODAY's analysis of the fiscal sustainability of the federal workforce's retirement program does not match the reality that has been reported by the Office of Management and Budget . . . and the Office of Personnel Management . . . ."
(USA TODAY)
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Benefits in General; Executive Compensation
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[Guidance Overview]
IRS Updates and Clarifies Travel Allowances and Reinstates High-Low Method
"The IRS issued an update and new guidance Friday (Revenue Procedure 2011–47) for use of a federal per diem rate to substantiate the amount of ordinary and necessary expenses for lodging, meals and incidental costs paid or incurred for business-related travel away from home. The IRS stated that this revenue procedure would be the last annual update of these substantiation rules and procedures, and that going forward it only will publish a new revenue procedure as necessary."
(American Institute of Certified Public Accountants)
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Stock Options vs. Restricted Stock vs. RSUs
"For stock options, the wild volatility of the past 3 years may mean a higher FAS/ASC compensation expense than in previous years, thus decreasing their attractiveness to the company."
(Michael S. Melbinger via Winston & Strawn LLP)
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Say-on-Pay Lawsuit Survives Motion to Dismiss
"A lawsuit alleging breach of fiduciary duty by Cincinnati Bell's directors, one of about 40 companies that did not receive majority support for its pay program, survived a motion to dismiss in US district court. The decision surprised many who thought say-on-pay lawsuits would be only a frivolous distraction."
(Mercer LLC)
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Federal Contractors' Executive Pay Targeted in Obama Deficit Proposal
"President Obama's proposed deficit reduction plan would lower the cap on the maximum executive pay reimbursable to certain federal contractors. The plan, unveiled on Sept. 19, would not limit the amount contractors may pay their executives but would cap the reimbursable amount of the top five executives' pay at the $200,000 level earned by senior federal government executives."
(Mercer LLC)
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Lighten Benefits Communications
"Effective benefits communications doesn't have to be big. Generally, smaller, concentrated messages distributed on a more frequent basis are better absorbed than large amounts of information provided once or twice a year."
(Employee Benefit News)
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Employee Ownership Update for October 3, 2011
NCEO Executive Director Loren Rodgers discusses the DOL's decision to re-propose the regulation making ESOP appraisers fiduciaries; acquisitions at an employee-owned loss-adjusting firm; a documentary film that will highlight employee ownership; a survey on which equity Webinars the NCEO should offer; and a free tryout of the NCEO's ESOP Webinar replays.
(National Center for Employee Ownership)
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Critics Question Perry's Handling of Pension and Health Care Funds in Texas
"Those public pensions have a combined unfunded liability of $41 bil.lion, and a half-dozen funds, including the state's two largest, have promised benefits that they will never be able to pay under current financing models, according to records compiled by the Texas Pension Review Board. What's more, the $1 bil.lion supplemental healthcare fund for Texas teachers is predicted to go bankrupt by 2014."
(Star-Telegram)
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Press Releases
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