DOL Interest in Brokerage Window-Only Plans May Depend on Election Results
"If President Obama wins a second term, Department of Labor officials will address their concerns about brokerage windows, at least with respect to Section 401(k) plans that offer a brokerage window and no other selected investments ... 'They appear to be questioning whether it is a violation of fiduciary duty to offer a brokerage window-only plan,' said Bradford P. Campbell, counsel at Drinker Biddle & Reath in Washington. Campbell was DOL assistant secretary at the Employee Benefits Security Administration under President George W. Bush."
(Bloomberg BNA)
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Financial Advisors Offend Women, Survey Finds
"According to a [recent] survey, 73 percent of women say that they are dissatisfied with the financial services industry. Women claim they are overlooked, excluded, receive contradictory or poor advice and get worse deal terms than men."
(InsuranceNewsNet)
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Retirement Plans for the Self-Employed
"It is no secret that being your own boss has its advantages, but what often gets overlooked is that the self-employed have more retirement plan options than regular employees."
(Chicago Tribune; free registration required)
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Los Angeles City Council Considers Two Tax Increases and a Pension Change
"For months, analysts and elected officials have been signaling that both tax increases and an overhaul of the employee pension system will be needed to keep the city afloat. On Tuesday, faced with the latest deficit forecasts, the City Council moved toward putting two tax increases on the March ballot and raising the retirement age for new employees, among other changes to the pension formula."
(Los Angeles Times)
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New 401(k) Fee Disclosure Rules Now in Effect
"Despite major investment scandals over the last decade that depleted thousands of 401(k) type savings plans, it's alarming how many investors remain in the dark when it comes to the management of their savings plans and the multiple, often hidden, fees charged to maintain their accounts."
(Savannah Morning News)
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Sixth Circuit Declines to Apply Presumption of Prudence at Pleadings Stage
"The presumption of prudence generally applicable to investments in employer stock could not be applied at the pleadings stage to dismiss a claim for fiduciary breach, the [Sixth Circuit Court of Appeals] has ruled. In addition, the court found that the factual allegations in the participants' complaint went beyond documenting a simple drop in stock price to establish a plausible claim for fiduciary breach." [Griffin v. Flagstar Bancorp, Inc. (CA-6)]
(Wolters Kluwer Law & Business / CCH)
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Should You Take Monthly Payments or a Lump Sum?
"Only large, old-line companies offer traditional pensions as a choice. But even at companies without pensions, you face a similar decision about the payout from your 401(k) or other retirement accounts: Should you invest the entire sum in mutual funds and other assets, or use part of it to buy a pension, in the form of a commercial annuity?"
(AARP)
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Public Pension Funds Named to Lead J.P. Morgan Lawsuit Over Alleged Fraud
"Public pension funds from Arkansas, Ohio, Oregon and Sweden will be lead plaintiffs in a group lawsuit against JPMorgan Chase & Co. ... U.S. District Judge George Daniels in Manhattan ruled today that lawsuits against the New York-based bank should be consolidated into a class action. The pension funds allege they lost as much as $52 mil.lion because of fraudulent activities by JPMorgan's London chief investment office."
(Bloomberg)
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Critics Say Floating NAV Would Sink Money Funds As Retirement Vehicles
"In a letter to the SEC on Tuesday, a dozen organizations argued that the potential changes—which could include allowing a funds' net asset value to fluctuate beyond the traditional $1 or setting capital requirements with redemption restrictions—would erode money funds' role as a conservative and liquid part of a retirement portfolio.... The SEC could be poised to issue a money-fund reform proposal as soon as Aug. 29."
(Investment News; free registration required)
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2010 Survey of Consumer Finances Suggests Even Greater Retirement Risks
"The brief's key findings are: The wealth-to-income ratio for current workers is a good way to gauge their retirement preparedness. During 1983-2007, these ratios were remarkably stable, which should never have been a source for comfort as the need for wealth increased due to: rising life expectancy; the shift to 401(k) plans; increasing health care costs; and lower real interest rates. In 2010, the ratios dropped substantially, signaling even more serious problems ahead for future retirees."
(Center for Retirement Research at Boston College)
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Sixth Circuit Finds Company Officials Aren't Plan Fiduciaries, Not Liable
"This decision supports the premise that individual company officials who serve only as conduits for employees' payments to retirement plans are not ERISA fiduciaries and, as such, are not personally liable for unpaid plan contributions." [Sheet Metal Local 98 Pension Fund v. AirTab Inc., Case No. 09-3121 (May 29, 2012)]
(Thompson SmartHR Manager)
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Americans Clueless About Life Expectancy, Bungling Retirement Planning
"By age 65, U.S. males in average health have a 40% chance of living to age 85 and females have a 53% chance of living to age 85. If the couple is married, there's a 72% chance that at least one of them will live until age 85. But if these same folks are 'healthier' (25% healthier than the average person), then their chances of living to age 85 bump up to 50% for the ma.le, 62% for the female and 81% for at least one of them."
(Forbes)
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[Opinion]
(Can.ada)'s Pension Plan Straitjacket?
"[P]ensions can potentially deliver a crushing blow to Canadian corporations. This isn't an easy issue to solve and the drop in long-term rates is only part of the problem. The reality is that for years, many corporate defined-benefit plans were completely mismanaged. Contribution holidays, poor investment decisions and outright theft on pensions all contributed to the dismal state of corporate pension plans."
(Pension Pulse)
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[Opinion]
Another California Brainstorm: Extending Public Plans to Private Employees
"The sages of Sacramento have done such a splendid job of not adequately funding California's public pensions that now they want to do the same for non-government workers. Their latest brainstorm is to establish state-administered retirement plans for workers in the private economy. This is not a joke."
(The Wall Street Journal)
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[Opinion]
How Bad Pension Accounting Sunk Stockton
"This summer's bankrup.tcy filing by Stockton is a lesson that fiscal problems have to be dealt with; they don't just fade away. Why would any government think otherwise? Blame flawed assumptions about public pensions: The nationwide use of erroneous standards has papered over the truth about the size of the pension obligations of many states and municipalities."
(Silicon Valley MercuryNews)
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[Opinion]
Don't Mess with Texas' 403(b)s (PDF)
"[Earlier] this year, California assembly member Gil Cedillo introduced Assembly Bill 1949, legislation that would limit the choice of teachers and public employees to just a few selected choices. The circumstances leading to AB 1949 in California seem eerily the same as ... practitioners experienced in Texas in 2001."
(403bWise.com)
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[Opinion]
Comments to SEC on Regulation of Money Market Funds
"Together, we wish to register our strong concerns about the proposals for money market funds under consideration at the Commission and the risks these proposals pose to Americans preparing for retirement. In our view, these proposals, taken alone or in tandem, would fundamentally alter the structure of money market funds, rendering them far less desirable—if not unusable—for retirement savers and the plans they participate in. Respectfully, we urge the Commission not to pursue these proposals."
(American Society of Pension Professionals & Actuaries and National Tax Sheltered Accounts Association)
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Benefits in General; Executive Compensation
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Short-Term Incentives for CEOs Declined in 2011
"Despite strong performance in 2011, new analysis by Mercer indicates that annual bonuses for CEOs of S&P 500 companies were lower than the prior year. After hitting an all-time high in 2010, median short-term incentive payouts declined 0.9% in 2011 to $1.705 mil.lion. The pullback was more severe for those companies in the S&P 100, where median short-term incentive payouts decreased 3.3% from the prior year."
(Mercer)
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Financial Security and Health Benefits Go Together for Top Employers
"[T]he 10 best small and mid-size companies for employee financial security also have a commitment to health care, bankrolling at least 75 percent of coverage premiums in the Principal Financial Group's annual measure of employee financial security. The contest winners ... were more likely to cover routine health care coverage costs for both employees and their families, provide disability insur.ance, and contribute to 401k retirement plans. They were also more likely to incentivize employee participation in wellness programs."
(The Des Moines Register)
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Press Releases
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