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Second Quarter 2015 Pension Buy-Outs Set Sales Records
"Sales of group pension buy-outs reached $3.8 billion in the second quarter 2015 -- a record for second quarter sales dating back to the early 1990's ... For the last five years, the first two quarters of the year have seen an upward trend of pension buy-out activity. In the first half of 2015, 107 plan sponsors have converted their defined benefit pension plans into group annuity contracts. That tops the previous number of 95 contracts in the first half of 2012."
(LIMRA)
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[Advert.]
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Plan Sponsors Who Have Made Significant Changes to Their Defined Benefit Plans: A List
Updated August 2015. "[This] is a list of employers that have announced significant changes to their defined benefit pension plans since December 2005. Changes include plan terminations, plan freezes for new and/or current employees, and changes to the formula by which pension benefits are calculated. For specifics, click on the employer's name to see the company's press release, SEC filing or news story announcing the change."
(Pension Rights Center)
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Funding Impact of Changes in Interest Rate and Mortality Assumptions
"For funding, we now have some certainty about what will be two major drivers of increases in minimum funding requirements for most plans: [1] the phase out of interest rate relief under the Highway and Transportation Funding Act of 2014 (HATFA) and [2] the new Society of Actuaries mortality table. Against that background, changes in Federal Reserve interest rate policy and market interest rates ... are likely to be less significant."
(October Three Consulting)
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And Then Came ERISA: Protecting the Employer, Part 1
"In order to better understand the distinction between the role of the settlor of a retirement plan and the role of a fiduciary of a retirement plan, it is important to first answer the following question: Who is the Settlor of the Plan? ... This question ... gets more complicated when you ask, who is the Employer? Is it the Board of Directors? What about Officers of the company like the CEO and CFO? Are these individuals considered the 'Employer,' and thus the Settlor of the retirement plan? The answer unsurprisingly is not totally clear."
(Pension Consultants, Inc.)
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Seeking Guidance: Sponsors of 403(b)s Navigate Plan Nuances
"[M]any 403(b) plan sponsors have tried to freeze flows to their legacy annuity providers and designate just one or two providers moving forward. If the plan sponsor hopes to map legacy 403(b) assets into a new lineup of mutual funds, the process can be especially challenging, as that move has to be directed by the participant. Participants invested in these assets often have full discretion over their money, meaning that plan sponsors cannot force them to move their funds."
(PLANSPONSOR)
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How Should a Fiduciary Treat Social Security in Retirement Planning? A Generational Overview
"In assessing the relevance of Social Security to any particular retirement plan, the adviser must include not only the numbers, but also the politics, into the equation. It turns out those equations change as we look at the different generations.... Generation X suffers from the greatest challenge when it comes to determining how Social Security will play out in their retirements. Too young to be protected by age, they're also too old to take advantage of long-term growth in their retirement plan."
(Fiduciary News)
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As Markets Go Haywire, Remember Your Retirement Plan Goals
"The purpose of a retirement plan is to replace income in retirement. If you're still thinking about your retirement plan in terms of accumulated assets you might be more likely to have a negative reaction to market declines.... However, if you're thinking about your retirement plan in terms of the monthly income you'll receive in retirement, then market corrections are going to seem less impactful. The effect of even a large market move on your monthly paycheck in retirement is going to seem insignificant if you're planning for the long term."
(Empower Retirement)
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The Real Reasons Americans Aren't Saving Enough for Retirement
"[R]esearchers found that how much subjects had the first year their assets were measured showed the strongest determinant of the amount of the wealth they had at the end of life.... Only 22% understand that savings growth is exponential: as your savings compound, you earn interest on interest, which enables your savings to grow faster and faster."
(TIME)
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Benefits in General; Executive Compensation
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Third Circuit Opinion: District Court's Order Remanding to Plan Administrator Was Not Appealable (PDF)
"Santander and Liberty Mutual appealed to this Court, but Stevens moved to dismiss the appeal for lack of jurisdiction, arguing that the District Court's remand order to the plan administrator was not a 'final decision' appealable pursuant to 28 U.S.C. Section 1291 at that time. Before reaching the merits of this appeal, we must determine whether the District Court's remand order is presently final and appealable under Section 1291 or is otherwise appealable. Upon review, we hold that the District Court has retained jurisdiction over the case and that the order from which appellants have appealed is not yet appealable. We therefore will dismiss this appeal for lack of jurisdiction." [Stevens v. Santander Holdings USA Inc. Self Insured Short Term Disability Plan, No. 14-1481 (3d Cir. Aug. 24, 2015)]
(U.S. Court of Appeals for the Third Circuit)
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Performing Quality ERISA Employee Benefit Plan Audits: Firm Best Practices (PDF)
32 pages. "This tool is designed to be used by all firms that perform EBP audits, whether your firm performs just a few EBP audits or has (or is considering developing) a specialized EBP audit practice. This tool provides tips for establishing effective quality control policies and procedures specific to your EBP audit practice; provides examples of best practices for each phase of the audit engagement, including a suggested timeline for implementation; and provides links to useful tools and resources[.]"
(American Institute of Certified Public Accountants [AICPA])
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No Social Security COLA Causes Medicare Flap
"In 2016, for only the third time in 40 years, Social Security beneficiaries are not expected to receive a cost-of-living adjustment (COLA). No COLA means that Medicare Part B premiums cannot increase for most beneficiaries, so a minority has to bear the full burden of rising costs. Beyond this immediate flap, a broader issue is that Medicare premium growth is not fully captured by the inflation measure used to set the COLA. As a result, when Medicare premiums rise rapidly, older Americans cannot maintain their non-Medicare spending. In short, even the Social Security COLA does not fully insulate older households from the erosive impact of inflation."
(Center for Retirement Research at Boston College)
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