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DOL Rule Could Halt 401(k) Plan Social Investing in Its Tracks

"[T]he proposed rule does not recognize that the current generation of socially conscious funds can deliver top-notch performance along with a dose of social progress. And importantly, the rule takes square aim at the best chance for ESG funds to take root in 401(k) plans by making it impossible for plan sponsors to offer them as the default investment option in plans -- most of which use a target-date fund that automatically reduces exposure to stocks as retirement approaches."

Why the President's Proposal for Social Security Disability Insurance Makes Sense

"The budget calls for a five-year reallocation of payroll taxes from the Old-Age and Survivors Insurance (OASI) trust fund to the disability fund (DI), starting in January 2016 and ending in December 2020. The plan would increase the payroll tax allocated to DI by 0.9 percentage point, with a corresponding decrease in funds received by OASI. The change would have no overall effect on the longevity of the combined trust funds, which are expected to be exhausted in 2033."

Threatened Pensions Safe -- for Now

"The Central States decision forestalls pension cuts that would have taken effect this summer, but it does not resolve the problem. Plan administrators say it could be insolvent within a decade.... But the Treasury decision does not settle the matter. The plan could still refile its application to make cuts.... The Obama administration's 2017 budget proposes to solve the problem by raising $15 billion in higher [PBGC] premiums for multiemployer plans, and by giving PBGC the power to set rates without congressional approval."

Congress' No-Bailout Pension Plan Is No Solution for Retirees

"The $1.1 trillion omnibus spending bill moving through Congress this week adopts 'Solutions Not Bailouts,' a plan to shore up struggling multiemployer pension funds -- traditional defined benefit plans jointly funded by groups of employers in industries like construction, trucking, mining and food retailing. A bailout, it is not. The centerpiece is a provision that would open the door to cutting current beneficiaries' benefits, a retirement policy taboo and a potential disaster for retirees on fixed incomes."

Five Takeaways on Retirement from the Midterm Elections

"With Republicans in full control of Congress, expect efforts to cut Social Security and Medicare benefits. And more Republican-controlled statehouses mean more efforts to curtail state and local workers' pension plans. One positive note: Congress and the White House could find common ground on some promising ideas to encourage retirement saving."

Five Things to Consider Before Cutting Public Employee Pension Benefits

"The message from voters about public pension plans is clear: They're ready to cut the retirement benefits of police, firefighters, teachers and other state and municipal workers.... But -- before we continue swinging the axe -- here are five things to keep in mind about public sector pensions ... Pensions aren't simply a gift from taxpayers ... Many workers don't get Social Security ... Pension underfunding isn't as bad as you think ... Pensions are more efficient than 401(k)s ... The retirement crisis is real."

Why Congress Needs to Reform Multiemployer Pension Plans Now

"Policymakers, legislators, business and labor groups have debated the issue for two years. Now we're at a key turning point, argues Josh Gotbaum, the PBGC's director. 'If Congress doesn't act this year, it is very likely that major plans will fail and the multi-employer system will collapse,' he [said] ... It's not that plans will run out of money this year or next, Gotbaum says. Instead, he says employers could start scrambling off a sinking ship, accelerating pressures on the system."

When Your Pension Sponsor Talks 'De-Risking' -- Watch Out

"A growing number of employers are making plans to 'de-risk' their pension plans. That's jargon for reducing the financial risk posed to corporate balance sheets by pension plans -- but if you have a defined-benefit pension and you start hearing that term tossed around, pay careful attention. Less risk for employers can mean more risk for you.... A lump sum may sound attractive, especially if it's a sizable amount, but determining whether it's a good deal depends on these factors: Life expectancy.... Other income sources.... Size of the lump sum.... Interest rates."