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Federal District Court Dismisses City of Providence Claim That Buck Consultants Miscalculated COLA Savings

"A U.S. district court has dismissed a lawsuit in which the city of Providence, Rhode Island, claimed a miscalculation by Buck Consultants caused it to miss out on cost savings for its pension plan by leading it to settle a lawsuit with a union and retirees. The city [had alleged] that Buck overestimated the amount the city would save by suspending cost-of-living adjustments (COLAs) for the city's pension plan[.]" [City of Providence v. Buck Consultants, No. 13-131 (D.R.I. Nov. 13, 2015)]

Defined Benefit Pensions: Still the Best Bang for the Buck (PDF)

[A recent TIAA-CREF/Arnold Foundation paper] fails to offer a concrete cost analysis that supports their assertion that DC plans provide benefits at a cost equivalent to that of DB plans. NIRS stands by our research. The structural DB cost advantages quantified in [the 2008 NIRS Study] 'A Better Bang for the Buck' -- derived from well-documented research on investment returns, fees, and asset allocation -- remain valid based on current data about DB and DC plan features and performance."

Buck Consultants Comment Letter to DOL on Lifetime Income Illustration in Pension Benefit Statements (PDF)

"Congress has considered this issue of lifetime income in the past. The fact that legislation has been proposed suggests that Congress believes that the Department does not have the authority to regulate on this topic without Congressional mandate.... [We] encourage delaying this requirement until authorized by legislation.... Any mandate by the Department also will result in increased costs that will in many cases be passed along to participants -- further depleting the funds that will be available to them for retirement. Even if the employer picks up the cost, there will likely be an impact to employees because the total dollars allocated for benefits is generally limited."

City of Providence Sues Buck Consultants Over Pension Savings Calculations

"The lawsuit accuses Buck of miscalculating $700,000 of savings the city expected this year through pension reform. 'When compounded annually over the next 28 years, the error amounts to $10.8 million in today's dollars,' [Providence Mayor Angel] Taveras said ... The city alleges breach of contract, breach of fiduciary duty, negligence and violation of the Rhode Island False Claims Act. The lawsuit claims Buck admitted the mistakes and said it had made other undisclosed calculation errors that accounted for the lost savings."

Buck Consultants Comment Letter to Actuarial Standards Board on Proposed Revision of ASOP No. 6, 'Measuring Group Benefit Obligations and Determining Retiree Group Benefits Plan Costs or Contributions' (PDF)

"[I]f the commitment of employers who do not have material experience to affect the pool is only to provide what is effectively deep discounted merchandise, why should we as a profession require them to ignore that discount? If these employers can no longer reflect the community rated premiums in their obligations, the measurement of those obligations will increase significantly, while the underlying cost remains as it had been previous to the change in the ASOP. That could cause some employers to reduce or eliminate the retiree medical benefits that they currently provide. Other employers could be harmed by the unexpected huge increase in their liabilities, which could potentially cause other financial difficulties (for example, reduction in bond ratings or breach of loan covenants)."

Xerox to Buy Parent of Buck Consultants for $6.4 Billion

Excerpt: Xerox Corp. said Monday that it plans to acquire Affiliated Computer Services Inc., the parent company of Buck Consultants L.L.C., in a cash-and-stock transaction valued at $6.4 billion.

Where Does the Buck Stop? The Plan Administrator

"[E]mployers should not become complacent and assume that they have contracted out all responsibility for the administration of their ERISA plans. There are ways of mitigating some of the liability (contractually, insurance) but ultimate responsibility and liability remain with the ERISA plan administrator."

Buck Up, Boomers. You're Still Better Off Than Your Parents.

"This is a hard time to retire. The market is down 7% from last year and the rate of inflation has risen to 8.5%. Both are brutal to your bottom line when you're on a fixed income.... As bad as things seem, odds are you are in better shape than your parents or grandparents were. And if they got through retirement comfortably, so will you.... Greater access to retirement accounts means people are retiring with more money than before.... More money translates to more income in retirement."

A Better Bang for the Buck: Post-Retirement Experience Drives Cost Advantage for DB Plans Over DC Plans (PDF)

31 pages. "A typical DB plan has a 49 percent cost advantage compared to a typical individually directed DC plan because of longevity risk pooling, asset allocation, low fees and professional management.... A DB pension plan costs 27 percent less than an 'ideal' DC plan, with below-average fees and no individual investor deficiencies.... In other words, a typical DC plan costs nearly twice as much to provide the same level of retirement benefit as a DB plan, with four-fifths of the difference occurring post-retirement."

Getting the Most Bang for Your Buck Out of a Severance Release

"In a recent Iowa case, an employee who signed a release in connection with a severance agreement later attempted to bring an ERISA claim for breach of fiduciary duty against the employer's ESOP plan.... Because the employee's acceptance of the release was knowing and voluntary, and because it was broad enough to cover the trustee as a fiduciary of the ESOP and to cover ERISA claims for breach of fiduciary duty, the court granted summary judgment in favor of the trustee." [Innis v. Bankers Trust Co. of South Dakota, No. 16-650, (S.D. Ia. Apr. 30, 2019)]