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Stockton's Creditors Say Pension Contributions Should Be Cut
"Creditors who insured Stockton's pensions and issued bonds for downtown redevelopment projects, including a sports arena and other improvements, charged that the city should have negotiated concessions in employee pension obligations to CalPERS to meet other payments."
(Sacramento Bee)
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Income Annuity Sales Continue to Climb into Record Territory
"Industry-wide annuity sales for the fourth quarter reached nearly $50.6 billion, down 4.3 percent from $52.9 billion in the previous quarter and down 7.1 percent from $54.5 billion in the fourth quarter of 2011. For 2012, industry-wide sales totaled $211.8 billion, down 8.4 percent from $231.1 billion in 2011, but relatively close to 2010 sales of $214.7 billion."
(Insured Retirement Institute)
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The U.S. Retirement Market, Fourth Quarter 2012
This item is an Excel spreadsheet (an ".xls" file). It provides detailed current and historical data for: U.S. Total Retirement Market Assets; Equity and Bond Returns; Retirement Assets' Share of Household Financial Assets; Defined Contribution Plan Assets by Type of Plan; 403(b) Plan Assets and Share of Total 403(b) Plan Assets by Type of Institution; IRA Assets by Type of Institution and by Type of IRA; and Retirement Account Assets Invested in Mutual Funds.
(Investment Company Institute)
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The Tibble Decision: Three Valuable Lessons for Plan Sponsors and Other Plan Fiduciaries
"[T]he Court correctly pointed out that 'HFS is [the plan's] consultant, not the fiduciary'.... The Court also pointed out that when a retirement plan relies on consultants and experts to help them administer a plan, the plan has an obligation to ensure that such reliance is 'reasonably justified under the circumstances'.... The final point in the decision ... was the ongoing failure of the courts to recognize the true issue with regard to mutual fund fees."
(The Prudent Investment Adviser Rules)
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How to 'DB-ize' Your Supplemental DC Retirement Plan (PDF)
"[F]inance and human resources staff in the public sector have begun to analyze how to encourage greater participation in supplemental plans and to improve savings outcome ... Much of the effort centers around making defined contribution plans look more like defined benefit plans, referred to as 'DB-ization.' Under this approach, plan design takes into account the limited experience and interest many employees have in regards to their own retirement savings and incorporates several tools that can ease decision making for employees."
(Center for State & Local Government Excellence)
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Glide Path Pension Immunization Strategy
"Even for an underfunded plan, an immunization strategy is an option and can be implemented via a 'glide path' investment approach. This approach moves assets into fixed income in favorable market conditions and as the plan becomes better funded. A glide path maintains a good balance of retaining equity investments and lowering volatility over time as the funded status improves."
(Retirement Town Hall)
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Emerging from the Economic Storm: Retirement Plans in the United States, 2007-2012 (PDF)
"Over the past five years, throughout the Great Recession, workers have remained committed to saving for retirement -- but it is clear that they need to save more ... This report identifies compelling successes of employer-based retirement plans, including 401(k) or similar plans, in helping workers save for retirement. Moreover, the survey found many opportunities for further enhancements to retirement plans, all of which can help improve employees' retirement outlook, that are well within reach[.]"
(Transamerica Center for Retirement Studies)
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The DC Trend Towards Daily Pricing and Trading
"We believe that greater access to illiquid asset classes will offer DC members greater investment efficiency and additional sources of investment returns. While there may be communication and operational challenges that will need to be managed, we call on the DC industry -- fiduciaries, platform providers, administrators, investment managers and consultants -- to work together to devise solutions to provide better outcomes for members."
(Towers Watson)
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Your 401(k) Is Invested in What?
"If you don't know what your choices are, you better ask someone. You see, the trouble arises when the participant (that's you) isn't aware of what investment options are available, or worse, decides not to choose from among them. And unfortunately, your default investment option might be a stinker.... [N]ot all 401(k)s will default to an age appropriate target date fund. Some will default to the most conservatively allocated option. You might be 25 but the default could be an income fund which is better suited for an 80-year-old."
(The Street)
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DOL Amicus Brief in Fuller v. SunTrust Banks, Inc. Case Involving Proprietary Mutual Funds in a 401(k) Plan
"In this brief the Acting Secretary of Labor addresses the following questions: [1] Whether the district court erred by dismissing Plaintiff's claims as outside ERISA's three-year statute of limitations ... when the 'actual knowledge' standard is not met by a finding of mere 'constructive knowledge,' and there is no basis to conclude that the documents containing the facts relied upon by the court were ever in Plaintiff's possession or read by Plaintiff. [2] Whether the district court erred by holding that Plaintiff's knowledge of general facts about the nature and goals of the mutual funds, the fees paid to advisors of the mutual funds and the historic and current performance of the mutual funds was sufficient to establish Plaintiff's actual knowledge ... of all the relevant facts of her claims of disloyalty, imprudence and prohibited conduct."
(Employee Benefits Security Administration)
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Canadian Companies and Governments Brace for the Pension Time Bomb
"Experts say there are three key areas general counsel and their legal teams need to consider when it comes to pensions: tackling solvency issues around DB plans, keeping abreast of pension law reform, and helping their company de-risk its pension obligations and mind its fiduciary duties. The biggest challenge organizations are grappling with is the growing deficits in their DB plans."
(Thomson Reuters Canada)
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Golden Age for Pension Lawyers? Public Keen to Protect Benefits After Economic Crisis
"It is suddenly cool to be a pension lawyer [in Canada]. 'When you told someone you were a pension lawyer, you were the most popular person in the room for people over 50 and people under 50 would try to dodge you,' said Mitch Frazer, chair of the pensions and employment practice at Torys LLP. 'Suddenly it's a topic of interest for a much wider group of people'[.]"
(Financial Post)
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[Opinion]
CalPERS Played a Role in Stockton's Bankruptcy
"CalPERS has represented itself as a defender of Stockton and its workers, an artful marketing ploy. Stockton officials had asked CalPERS for a hardship funding extension to reduce current payments, easing the strain on its general fund and allowing the city to maintain vital services. CalPERS denied the request. The city then asked if it could reduce the extraordinary 5 percent annual cost-of-living increases contained in its pension contracts. CalPERS again said no."
(Merced Sun-Star)
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[Opinion]
Text of Letter to EBSA on Survey Regarding Pension Benefit Statements (PDF)
"[The Pension Rights Center is] concerned that the proposed survey appears to emphasize electronic communication by using an Internet panel and by encouraging respondents to submit responses electronically. We urge the Department to assure the survey is designed to give appropriate weight to communication by paper by including a sufficient number of participants who do not have computers or Internet access."
(Pension Rights Center)
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Benefits in General; Executive Compensation
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Attorney Q&A on Executive Compensation Proxy Disclosure Litigation
"companies should consider taking a few proactive steps before filing their proxy statements. First, the company's legal, human resources, compensation and shareholder relations professionals should understand exactly what compensation disclosures the plaintiffs' strike suit lawyers are targeting. The plaintiffs' lawyers have filed at least 22 lawsuits with very similar allegations. The lawsuits have generally targeted two areas of executive compensation disclosure."
(Michael S. Melbinger via Practical Law Company)
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If You Think the IRS Won't Punish a 409A Foot Fault, Think Again
"What is alarming ... is that the IRS chose to enforce the penalty tax of 409A under the facts of this case in the first place.... Unfortunately, the case before the court was not whether the IRS had shown an ounce of common sense in the Sutardja matter, but only whether a stock option could be subject to 409A as deferred compensation when granted with an exercise price below the company's then-market value."
(Winston & Strawn LLP)
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Nice Work If You Can Get It, and You Can Get It (Easily) If You Try: Actuaries in China
"In the U.S., the actuarial profession is consistently voted one of the top three careers for stability, compensation and prospects. In China, actuaries are not 'white collar' workers, they're 'gold collar' workers. And with Asia's fast-growing middle class demanding a growing range of insurance products, prospects for qualified actuaries in the region are incredibly bright."
(Classified Post)
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[Opinion]
Text of Letter to EBSA on Retention of Historical Summary Plan Descriptions (PDF)
"The [Pension Rights] Center believes that the SPD collection is still of great value for pension plan participants and beneficiaries and, for that reason EBSA should continue to maintain as much of the collection as possible. However because it appears EBSA is proceeding with its plan to dispose of the [existing SPD collection, which covers plan years from 1975 through 1997], we also ask that EBSA ... [issue] guidance clarifying the remedies available when plans fail to retain plan documents as required [by ERISA]."
(Pension Rights Center)
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Press Releases
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