Key Considerations for ERISA Investors in Private Investment Funds
"[R]eviewing the terms of the fund documents is a critical aspect to a fiduciary's satisfaction of its fiduciary duties with respect to such investment.... [T]he terms of the fund documents may dictate whether an investment in the fund is an appropriate one for a particular ERISA investor, or whether it is flat out prohibited, or maybe just likely to result in a potential issue, such as a non-exempt prohibited transaction. Similarly, if the ERISA related terms of the fund documents are completely off market in a negative way, then that might make it more difficult for a plan fiduciary to make the case that investing in such a fund is prudent."
Proskauer's ERISA Practice Center
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Workers Rely Heavily on Equity Compensation to Build Wealth, but Hold Too Much Company Stock
"[P]articipants who receive stock options or restricted stock awards and/or participate in employee stock purchase plans (ESPPs), equity compensation accounts on average for nearly 30 percent of employees' net worth. Millennial employees have a greater share of their net worth in equity compensation than do their Gen X and Boomer counterparts (42%, compared to 24% and 19%, respectively). Almost three-quarters (73%) of employees surveyed also own company stock outside of their equity compensation plan, most (44%) in their workplace retirement plans."
Charles Schwab
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Pension Investing: The Next Generation of Glide Paths
"[W]hile hitting a trigger lowers portfolio risk by moving assets from growth to hedging, it doesn't help to protect the amount of assets still in the growth portfolio from a market downturn.... [At] the later stages of a glide path, many glide paths don't provide enough growth allocation to allow a plan to reach a higher funded status in a relatively short period of time without future cash contributions from the plan sponsor.... [H]ow can we better control downside risk as well as maintain a higher greater allocation to the growth portfolio throughout the glide path in order to reduce expected contributions?"
River and Mercantile Solutions
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SEC Investor Advisory Committee Calls for Stronger Best Interest Regulations
"The IAC says there are some actions that the SEC should take to ensure that this goal is put into action, starting with clarifying that the standard for broker/dealers and investment advisers should always be to act in their customers' best interests. The IAC would also like the SEC to expand the best interest obligation to dual registrant firms with respect to rollover and account recommendations."
planadviser
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Advisors and 3(16) Fiduciary Outsourcing
"Nearly all (over 80 percent) of advisors surveyed are familiar with 3(16) outsourcing. 84 percent of advisors surveyed are considering recommending 3(16) administrative services. Just over half (56 percent) of advisors' clients are receptive to 3(16) outsourcing services. When asked what makes outsourcing services most attractive to clients, the number one answer was that it 'mitigates retirement plan risks.' 75 percent of advisors surveyed are actively discussing 3(16) fiduciary outsourcing with their clients."
Pentegra
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Funded Status Declines by $13 Billion in October (PDF)
"As of October 31, the funded ratio moved to 93.4% from 94.4% reported at the end of September. October's significant investment loss brings the year-to-date investment performance to a loss of 1.99%. Pension liabilities have fallen by 7.28% year-to-date as discount rates have risen, resulting in an overall funded status improvement of $117 billion so far in 2018."
Milliman
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Tracking Down an Unpaid Pension or 401(k) Can Be Tough
"It is estimated that there are $156 billion in unclaimed pension benefits owed to retirees in the United States. What if the company insists they can't find you in the system and claims you're not owed a pension? Or the plan administrator swears that you were already paid a lump sum years ago?"
Detroit Free Press
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Benefits in General
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Public-Sector Employees Want Customized Benefits
"Millennials ... currently comprise only 25% of [the public sector] workforce.... 80% of Millennials find career development, advancement opportunities and on-the-job training important and say these factors would increase their loyalty towards their employer. Only 29% of public-sector Millennial employees have access to financial planning tools, whereas 42% of total Millennials employees have such access."
PLANSPONSOR
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Executive Compensation and Nonqualified Plans
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Long-Term Incentives a Major Driver of S&P 1500 CEO Compensation
"[T]otal direct compensation is approaching $11 million at the median for S&P 500 companies, $6 million for S&P 400 companies and $3.5 million for S&P 600 companies.... S&P 1500 CEO salaries rose 2.1% in 2017 and 40% of CEOs receive a salary of over $1 million compared with 26% five years ago. But the real compensation boost came from earned pay, which rose 17.8% at the median for S&P 1500 CEOs compared with a 2.2% increase in 2016."
Willis Towers Watson
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Selected Discussions on the BenefitsLink Message Boards
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OK for Investment Menu to Include a Non-Diversified Alternative?
A 401(k) plan provides participant-directed investments (with daily instructions). The plan's menu is filled with a broad range of diversified SEC-registered mutual funds. and includes an account that invests in the publicly-traded stock of an operating business. The stock is NOT employer securities. Assume the plan's administrator furnishes to participants every securities law report and other disclosure the stock's issuer has filed. (The administrator sends these to participants' work e-mail addresses and the plan's website a few minutes after the document is filed with the SEC or the stock exchange.) Is it enough that a participant can decide for himself or herself to invest in (or avoid) this stock?
BenefitsLink Message Boards
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Pre-Tax or Roth Deferrals But Not Both?
Has anyone ever had a plan sponsor do this? Our standard document doesn't have this option but has a write in section where we could add language. I've never seen it before but I don't see it being an issue compliance wise. The plan sponsor can't figure out how to get their payroll system to do both so this was their solution.
BenefitsLink Message Boards
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409A Plan for Payout to Former Employees?
Client sold assets of his business earlier this year. As part of asset sale, all employees were terminated and were hired by asset purchaser. Client wants to use the installment payment he will receive in 2020 as part of the asset sale to provide a bonus to his former employees based on performance criteria (i.e., their services to their new employer). I am having trouble wrapping my head around how Client can do this in the form of a nonqualified deferred comp plan. Any ideas?
BenefitsLink Message Boards
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