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Retirement Plans Newsletter

April 22, 2022

3 New Job Opportunities 3 New Job Opportunities


The Effect of Inflation on Retirement Savings/Income: Conceptual Issues, First Quarter 2022 Update

"Increases in the CPI (inflation that has already happened) have no direct effect on defined benefit plan sponsors. Increases in the CPI will, however, decrease the value (buying power) of participant/retiree annuities. To the extent expected future inflation increases interest rates, liability valuations will go down.... In a defined contribution plan, all risk, including inflation risk, is held by the participant. Sponsors will want to consider [1] communicating with participants about the effects of inflation on asset allocation decisions and retirement income targets and [2] reviewing the fund menu with a view to making inflation hedges available. Annuitization adds a unique inflation exposure -- increases in the CPI directly reduce the value of a fixed dollar annuity."  MORE >>

October Three Consulting

The New Pace of Pension Risk Transfers

"9 in 10 plan sponsors are weighing the economic carrying cost of pension obligations against the risks these plans expose their organizations to ... The current interest rate environment is a tailwind for pension risk transfer ... Another biggie making PRTs more attractive? Pension plan participants living longer.... And don't forget the historically favorable annuity buyout market ... [S]maller plan sponsors are finding validation in the actions of larger corporations[.]"  MORE >>


Retirement Income and Inflation, April 2022 Update

"In DB plans: Inflation does not directly affect sponsor finance, but expected future inflation will increase interest rates, reducing liability valuations.... For participants, increases in the CPI directly reduce the value/buying power of participant/retiree annuities. In DC plans: Increases in the CPI directly reduce the value of a fixed dollar annuity, making the annuitization decision (when and whether to annuitize) especially consequential and sensitive to inflation volatility/risk."  MORE >>

October Three Consulting

District Court Dismisses ERISA Excessive Fee Lawsuit Against Service-Provider

" '[T]he service codes in the 2018 Form 5500 filings of [10 other employers' 401(k) plans, produced by the plaintiffs,] indicate that the services provided are different or more limited than those the plan participants receive. Most notably, none of these 10 purportedly 'comparable' plans offer participants the pension consulting or valuation services [USI Consulting Group] offers to the plan participants,' according to the order." [Cunningham v. USI Ins. Servs., LLC, No. 21-1819 (S.D.N.Y. Mar. 25, 2022)]  MORE >>


Pathways to Retirement Among Dual Earning Couples

"This paper addresses this gap in the literature and provides a more robust understanding of retirement behavior by examining the transition from full-time work to fully retired among dual earning couples ... [T]he consistent finding is variation across couples in the length, sequence, leader, concordance, and labor supply in the move from full-time work to fully retired. Using simple heuristics to classify joint retirement trajectories allows us to gain perspective in the rarity of full simultaneous retirement and motivates future research into the joint use of partial retirement by couples."  MORE >>

RAND Corporation

Help Clients Achieve Flexible Spending in Retirement

"While the 4% rule recommends clients withdraw the same amount each year (adjusted for inflation), it's important to recognize that spending needs vary throughout retirement.... The first phase is typically the most active, when retirees are embracing things like travel and the hobbies ... The second phase is when their pace declines, and the third is when their medical expenses outpace money spent at restaurants or the country club[.]"  MORE >>

Journal of Accountancy

The FIRE Movement: Can You Invest in Your Values and Retire Early?

"For most [Financial Independence, Retire Early (FIRE)] followers, the investment strategy tends to rely on low-fee traditional index funds and exchange-traded funds (ETFs) that offer a safer and more affordable return on your investment. Unfortunately, this means that for FIRE, most people shy away from a sustainable investment strategy due to fears of sacrificing financial returns. But sustainable investing does not always require a performance tradeoff[.]"  MORE >>

J.P.Morgan Wealth Management

Employee Benefits Jobs

View job as Retirement Plan Administrator
          for Hessel & Associates, LLC Retirement Plan Administrator

Hessel & Associates, LLC

Remote / IL

View job as Retirement Plan Administrator
          for Hessel & Associates, LLC

View job as Compliance Consultant
          for Alliant Insurance Services, Inc. Compliance Consultant

Alliant Insurance Services, Inc.


View job as Compliance Consultant
          for Alliant Insurance Services, Inc.

View job as Retirement Plan Recordkeeper - 401k
          for The Trust Company of Tennessee Retirement Plan Recordkeeper - 401k

The Trust Company of Tennessee

Remote / Knoxville TN

View job as Retirement Plan Recordkeeper - 401k
          for The Trust Company of Tennessee

Selected New Discussions

Can a §401(a) Prototype Governmental Plan Document Provide a Match Based on §457(b) Deferrals?

"Some governmental employers allocate a matching contribution under a Section 401(a) plan on a participant's deferral under a Section 457(b) plan. Does any provider's IRS-preapproved document allow a user to specify this within the adoption agreement's check-the-boxes (or allowed fill-in) choices? If not, how would the IRS respond to a Form 5307 application if that provision were the only variation from the preapproved document?"

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Press Releases

TRI-AD Partners with GoodCell for FSA- and HSA-eligible Genomic Testing and Biobanking


PBI Research Services Announces Expanded Capabilities for CertiCensus® – The First Single-Source Pension Plan Population Management Solution

PBI Research Services

Buck's Chief Actuary Tonya Manning appointed to U.S. Department of Labor ERISA Advisory Council


Secretary Walsh to Visit New York to Kick-Off Series of Stakeholder Roundtables on Retirement Security Policy Reform

U.S. Department of Labor [DOL]

Last Issue's Most Popular Items

401(k) Compliance Check: Required Participant Notices

Foley & Lardner LLP

Cybersecurity Risks for Employee Benefit Plans


Ninth Circuit Revives Two 401(k) Fee Cases, Potentially Making It More Difficult for Plan Fiduciaries to Obtain Early Dismissal

Trucker Huss

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587.

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