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[Guidance Overview]
New Funding and Reporting Requirements for Florida Public Pension Plans
"HB 1309 builds on other recent legislation aimed at providing more uniformity among Florida governmental defined benefit plans. [It] will require the adoption of mortality tables used by the Florida Retirement System. It is expected that the use of the FRS mortality tables will impact contribution requirements for many plans, as will need to be calculated by the plan's actuary. In future years, as FRS amends its mortality tables, local plans will need to follow suit by using either of the two most recently published FRS tables."
(Cypen & Cypen)
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Target Date Funds: Time to Rethink How to Monitor and Communicate These Black Boxes (PDF)
11 pages. "Most participant communications are sales hype rather than materials designed to help participants develop realistic expectations for, and understand the strengths and limitations of, the investment option into which they were, more often than not, defaulted ... Both mainstream and social media continually bombard participants with coverage of the dismal retirement prospects facing the average American worker. This harsh reality is forcing 401(k) fiduciaries, consultants, and vendors to recognize that retirement outcomes, rather than participation and contribution rates, are the only realistic criteria for measuring a 401(k) plan's success."
(Investment Horizons, Inc.)
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How Behavior Shapes Retirement Planning
"One study found that 68% of respondents ... acknowledged they were saving too little; 24% said they would save in the next six months, but only 2% did ... Tiny changes can be huge ... Make investing as simple as possible for your clients, even if it means filling out forms for them to sign ... Target-date funds are going to be an increasingly critical component of effectively automating clients' retirement savings."
(On Wall Street)
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Economic Analysis in Fiduciary Monitoring Disputes Following Tibble v. Edison (PDF)
"First, [the authors] explain that an economic assessment as to whether plan fiduciaries have engaged in appropriate monitoring must be performed through a case-specific lens. [They] discuss some of the limitations of trying to use a 'one size fits all' approach to ascertain whether an investment fiduciary performed appropriate monitoring. Second, [they] discuss some of the complexities involved in calculating economic damages from allegedly imprudent monitoring."
(Pension Risk Matters)
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Ninth Circuit Again Wrestles with Fifth Third v. Dudenhoeffer, and Again Reverses Dismissal of Another Stock Drop Case
"In its amended decision, the Ninth Circuit panel again allowed the complaint to proceed where it claimed that plan fiduciaries should have removed publicly traded stock from the plans when they knew or should have known that material information was being withheld in violation of federal securities laws.... The dissent chided the panel for not paying heed to the Supreme Court's admonition that courts still need to 'weed out meritless lawsuits' under Dudenhoeffer. It expressed concern that under the panel's holding, any complaint alleging that the plan fiduciary could have withdrawn a fund or provided greater disclosure can survive a motion to dismiss, a holding that not only conflicts with Dudenhoeffer, but 'fundamentally undermines' the Supreme Court's earlier decisions establishing the pleading standard[.]" [Harris v. Amgen, No. 10-56014 (9th Cir. May 26, 2015)]
(Goodwin Procter)
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Retirement Assets Total $24.9 Trillion in First Quarter 2015
"Retirement assets accounted for 36 percent of all household financial assets in the United States at the end of the first quarter of 2015.... Assets in individual retirement accounts (IRAs) totaled $7.6 trillion at the end of the first quarter of 2015, an increase of 2.1 percent from the end of the fourth quarter. Defined contribution (DC) plan assets rose 1.8 percent in the first quarter to $6.8 trillion. Government defined benefit (DB) plans-- including federal, state, and local government plans -- held $5.1 trillion in assets as of the end of March, a 0.5 percent decrease from the end of December. Private-sector DB plans held $3.2 trillion in assets at the end of the first quarter of 2015[.]"
(Investment Company Institute [ICI])
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Public Pension Fund Assets Rise 1.6% in Quarter
"The 100 largest U.S. public employee retirement systems had $3.398 trillion in assets as of March 31, a 1.6% increase from three months earlier, said the U.S. Census Bureau's latest quarterly survey of public pension funds. The increase was due primarily to $80.2 billion in earnings on investments and $34.3 billion in contributions, partially offset by $61.8 billion in benefit payments in the first quarter."
(Pensions & Investments)
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[Opinion]
Are CalPERS' Fiduciaries Breaching Their Duties?
"It's utterly unacceptable for any limited partner (pension fund, sovereign wealth fund, insurance company, endowment, etc) not to know the fees it's doling out to private equity funds. In the case of CalPERS, the largest most followed public pension fund in the U.S., it's worse as it should publicly disclose all fees being doled out to each of their GPs (private equity and other external funds)."
(Pension Pulse)
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Benefits in General; Executive Compensation
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Employee Benefits Effects of Supreme Court Same-Sex Marriage Decision
"On June 26, 2015, the Supreme Court struck down all state bans on same-sex marriage ... For employers, this decision raises the issue of what changes must be made in employee benefits ... [This article] will look at three categories of employers: those that have already been offering benefits to same-sex spouses, those that have not previously offered benefits to same-sex spouses, and those that have been offering benefits to domestic partners." [Obergefell v. Hodges, No. 14-556 (U.S. June 26, 2015)]
(Calhoun Law Group, P.C.)
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[Opinion]
Frederick W. Cook & Co. Comment Letter to SEC on Pay-for-Performance Disclosure (PDF)
8 pages. "[T]he burden imposed by the Rule varies by company with considerably more time and effort required for companies that grant stock options and/or have pension plans.... More importantly, and based on our sample study, we do not believe the disclosure (prepared according to the Rule) will accurately portray the relationship between executive compensation actually paid and the financial performance of the registrant (which was the directive of the statute)[.]"
(Frederic W. Cook & Co., Inc.)
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Press Releases
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