Search the News Archive

Another Freedom Endangered: Threat of Pension Mandate Looms with Proposed 'USA Retirement Funds Act' (PDF)

"The life insurance companies and the Federal Government would control asset management, benefit payments, and other plan functions traditionally under the control of the private pension system.... The proposed USA Funds would continue to deplete employers' ability to control their compensation and benefits programs at a very high cost to both employers and their employees.... Some private pension plans are not cost effective because the employer's management ceded its investment and administrative responsibilities to Third Party Administrators and insurance companies that portend the inefficiencies of the proposed USA Funds ... . [The author believes] the ultimate effect of a USA Funds would be a 3.0% to 6.0% in crease in employers' direct compensation costs to maintain employee relationships. Once in place, Congress could easily make employer contributions to the USA Funds mandatory."

A Retiree’s Quandary: How to Effectively Invest Retiree Savings (PDF)

"[I]investment returns from [single premium life annuity] contracts fall short of the returns IRS mandates for [lump sum distribution] present values, and only recently have barely exceeded 30-Year Treasury Rates.... A rational investor can tolerate a fair amount of default risk to obtain higher investment returns and retain control of his retirement assets.... A retiree's best option may be to diversify his investments through a discount broker or through equity purchases directly from multiple public companies to minimize purchase costs."

Basics of Small-Employer Retirement Plan Design (PDF)

"What is the single largest advantage of an employer sponsored, self-administered retirement plan that avoids the retail market? ... Can we have a tax qualified retirement plan without the support of an insurance company or investment broker? ... What about annual administration? ... Can we transfer our Simple IRA accounts to the new plan?"

Many Face Gloomy Retirement Prospects (PDF)

"In 2017 about 6.7 million persons age 60 and over qualified for Food Stamps ... [The author estimates] an additional 25 million or more private sector employees will enter the over age 50 population during the next generation with insufficient retirement income prospects.... The split between public and private retirees is not clearly defined, but we know public employee plans are rarely terminated or curtailed. Private sector workers are the most affected."

Deadline Approaches for Termination of SIMPLE IRA Plans for 2022 (PDF)

"SIMPLE [IRA] Plans include all the administrative and fiduciary disadvantages of tax qualified retirement plans with none of the advantages of a self-administered tax qualified retirement plan the employer sponsors and controls. Employees and the investment source must be notified in writing before November 2, 2021 to terminate a SIMPLE Plan for 2022."

Capital Markets and Pension Funding Forecasts (PDF)

"[A] negative economic outlook for the next ten years ... bodes badly for underfunded pension plans and retirees.... [T]he American Recovery Plan Act of 2021 (ARPA) ... further weakens the minimum funding requirements: ARPA replaces the 7-year amortizations of each year's loss or gain in the unfunded liability with a single 15-year amortization requirement.... ARPA sets a grandiose scheme for interest rate manipulation through 2030[.]"

Retirement Plan Trends from a Recovering Economy (PDF)

"Employers and employees realizing the disadvantages of savings account plans will welcome the efficiency of bona fide pension plans that benefit the older, longer-service employees who have contributed the most to building a business."

Multiple Factors in Defined Benefit Plan 'Pandemic' (PDF)

"Beginning in the late 1980s and early 1990s, employers' rights to select single employer DB Plan assumptions were gradually confiscated through a series of Pension Acts in the name of employee protections.... This, and the complexity of the PPA '06 requirements discourages new DB Plan formations.... Current monetary policies and economic conditions do not imply stable investment return rates that will lower unfunded pension liabilities in the absence of other changes."

Defined Benefit Plans Excel in Depressed Financial Markets (PDF)

"Although the Fair Market Value (FMV) of a plan's assets may have decreased by 25% or more, there may be little or no impact on DB plans' funding costs: [1] Unfunded liabilities are at their least for valuation dates on or before February 1, 2020.... [2] Life annuity payments directly from DB Plan assets smooth the effects of market fluctuations.... [3] Lump Sum Distributions and single premium life annuity purchases amplify market losses.... [4] DB Plan investments are outside the reach of panicky participant investment churning.... [5] DB Plans usually limit participant withdrawal rights before retirement age."

How Political Correctness Affects Retirement Plan Design (PDF)

"[P]rivate sector employers are losing the freedom to sponsor individually designed pension programs that meet their specific objectives at the least cost. PC-ers do not understand that IRS regulations permitting greater benefits for higher-paid employees with less IRS meddling enable greater benefits for all employees."