Headlines about "Ret plans - design"

Gathered from the web by the editors at BenefitsLink.com.
[Guidance Overview] Department of Labor Makes Technical Corrections to QDIA Final Regulations (PDF)
3 pages. (Transamerica Center for Retirement Studies)

Prepare for a Gruesome Retirement, According to 2008 Retirement Confidence Survey
Excerpt: "According to the table above, if you are a typical 40-year-old working American, there's a nearly 50% chance that your savings and investments total less than $25,000. Let's be generous and assume that you have $20,000 socked away and that you have about 25 to 30 years until you retire. How will that money grow for you? Well, here's what happens . . . ." (Motley Fool)

Why Liability-Driven Investing? A Strategy for Balancing Asset and Liability Risk for Defined Benefit Pension Plans
Excerpt: "While the primary reason for creating a defined benefit (DB) pension plan is to help employees prepare for retirement, financial stewardship issues have recently eroded their importance as part of the employer's total rewards package to attract and retain talent. Study after study of DB plans has shown that the volatility -- rather than the absolute level -- of costs has spurred employers to act." (Sibson Consulting)

[Guidance Overview] Worker Misclassification Investigations Gain Momentum
Excerpt: "Undoubtedly, some industries are both more prone to misclassify workers and more vulnerable to challenge due to the nature of the work involved. Construction, transportation and even the medical profession have proven at risk on the issue." (Attorney Roy F Harmon III in the Health Plan Law blog)

[Opinion] New York State Attorney General's Wrong Target: Retired School Administrators Who Are Rehired
Excerpt: "As a taxpayer and the parent of two school-age children, I'm all in favor of denying state pensions to lawyers who pretended to be school employees and a superintendent who was convicted of stealing from his district. But I'm completely baffled by recent articles and editorials that attempt to compare such malfeasance with the hiring of retired school administrators - a practice that is specifically authorized by state law and one that actually reduces school taxes." (Newsday.com)

Sick-Leave Abuse by Federal Employees Prompts Calls to Compensate for Unused Time
Excerpt: "There is no limit on how much sick leave an employee can carry forward into the next year, and IRS employees had an average balance of 43 days of accumulated sick leave at the end of 2006. 'We believe that the lack of compensation for unused sick leave at retirement has contributed to the higher amount of sick leave used by FERS employees,' the report said . . . ." (Washington Post; free registration required)

[Guidance Overview] Labor Department Clarifies and Amends Guidance on Default Investments in 401(k) Plans
Excerpt: "Plan sponsors are not required to follow the QDIA rules. However, if a 401(k) plan has a default investment, we recommend reviewing the opportunity for reduced legal exposure by implementing a QDIA." (Wilson Sonsini Goodrich & Rosati)

[Opinion] New Book Explains How 'Pension Monster' of Unfunded Benefit Liabilities Guts GM, Halts NYC Subways, Bleeds San Diego
Excerpt: "Pensions resemble a reverse neutron bomb: They gut cities and factories, yet leave armies of retirees standing, unscathed and ready for that Caribbean cruise. If you don't believe me, dip into Roger Lowenstein's troubling financial fable, 'While America Aged.' The three narrative histories presented here outline how pensions drove General Motors Corp. to the brink, brought New York subways to a halt, and turned sunny San Diego into Enron-by-the-Sea." (James Pressley on Bloomberg.com)

[Opinion] Pension Gravy Train In New York State Is a Runaway Disgrace
Excerpt: "Tom DiNapoli and Andrew Cuomo are doing a long-overdue service cracking down on part-time public sector lawyers padding their time slips. Unfortunately, the savings is minimal compared with the cost of allowing part-time elected officials to claim full-time retirement credits. Elected legislators from counties, cities, towns and villages are credited with full-time work although most attend only a few monthly meetings." (Marv Cermak on TimesUnion.com)

How You Can Help Clients and Prospects Evaluate the Promises of Defined Benefit Plans
Excerpt: "How secure are the promises of DB plans on a scale of 1 to 10? . . . Now is the time to help your clients who participate in DB plans answer complex, anxiety-inducing questions. The ideas, tools and techniques in this article will help you." (Rich White on FreeERISA.com)

Text of Study: Ownership of Individual Retirement Accounts (IRAs) and 401(k)-Type Plans (PDF)
Excerpt: "Growth in the number of 401(k)-type plans and the number of participants in those plans, which increased sharply in the 1990s, has slowed in recent years, according to a new EBRI study." (Employee Benefit Research Institute (EBRI))

Annuities in Pay Status: Rethinking the 'A Word'
Excerpt: "[Kelli] Hueler and her team are setting out on a gargantuan task -- to convince a generation of do-it-yourself investors who don't trust annuities to embrace them as a way to ensure they won't outlast their money. In recent years, annuities have only made headlines as unsuitable investments sold to the elderly." (Minneapolis - St. Paul Star Tribune)

[Guidance Overview] EBSA Clarifies Fee Disclosure, Stable Value Provisions of QDIA Regs
Excerpt: "The recently issued FAB clarifies that when a plan sponsor chooses to create and manage a QDIA using a mix of the plan's available investment alternatives, the plan sponsor will not qualify for the QDIA safe harbor unless it is a named fiduciary of the plan. The plan sponsor would remain liable for the management and monitoring of the QDIA." (Wolters Kluwer)

Women Owe It to Themselves to Save for Retirement
Excerpt: "According to the Employee Benefits Research Institute, 25 percent of women have no retirement savings. Women also are less likely than men to qualify for a pension. Because women tend to live longer, they also tend to have a longer retirement than men. Up to 90 percent of women will spend at least part of that retirement alone, either because they never marry, they divorce or they outlive their spouses." (STLtoday.com)

[Guidance Overview] IRS Issues Plan Valuation Regulations For Single-Employer Defined Benefit Plans (PDF)
6 pages. Excerpt: "This Pension Analyst discusses the new funding requirements that apply to single-employer and multiple employer defined benefit plans in an effort to help plan sponsors determine the future actions needed to keep their plans in compliance with ERISA and the Internal Revenue Code." (Prudential's Pension Analyst)

[Guidance Overview] DOL Corrects and Clarifies Qualified Default Investment Guidance; What Employers Should Do Now (PDF)
2 pages. (Milliman)

DOL FAB Addresses QDIA Issues
Excerpt: "The Department of Labor (DOL) has issued Field Assistance Bulletin (FAB) 2008-03 to respond to a number of questions practitioners have raised regarding the final regulations on qualified default investment alternatives (QDIAs) . . . . The FAB is in question and answer format, addressing 22 'most frequently asked' questions regarding the QDIA regulations. Here are highlights of the new guidance: . . . " (SunGard Relius)

Double-Dipping in New York: School Official Retires One Day, Is Rehired the Next
Excerpt: "On Jan. 2, [assistant school superintendent Ronald] Grotsky returned to the same job in the same district at the same salary he was making the day before, $174,900 annually. Coupled with his pension, Grotsky was now earning $275,582, paid by state and local taxpayers. The only difference was essentially a clerical one -- the district now classified him under the title 'interim' assistant superintendent. He said the district did not interview any other candidates for the job before approving his interim status." (Newsday.com)

Let's Make It Cool to Save
Excerpt: "A coalition of consumer advocates, public policy groups and academics wants to attack our country's dependence on debt by creating a national campaign much like the one used to curb smoking." (Michelle Singletary in the Washington Post; free registration required)

New York Sees Fraud in Some Lawyers' Pensions Granted by School Districts
Excerpt: "Hundreds of lawyers across the state have been illegally granted state pension benefits by school districts, towns and other governmental entities, according to Attorney General Andrew M. Cuomo, who has opened an investigation into the abuses." (New York Times)

Growing Deficits Threaten Public Pensions
Excerpt: "The funds that pay pension and health benefits to police officers, teachers and millions of other public employees across the country are facing a shortfall that could soon run into trillions of dollars. But the accounting techniques used by state and local governments to balance their pension books disguise the extent of the crisis . . . ." (Washington Post; free registration required)

[Opinion] Report of the Working Group on Financial Literacy of Plan Participants and the Role of the Employer
Excerpt: "For plan sponsors who wish to craft their own program, a best practices grid would point to the core literacy skills needed for a successful retirement. The Working Group recommends that the Department of Labor determine and publish best practices for the plan sponsor and fiduciaries to consider for use in educating plan participants with a focus toward increasing financial literacy." (Employee Benefits Security Administration, U.S. Department of Labor)

Study Reveals Pre-Retirement Attitudes Reinforce Inadequate Preparation for Retirement
Excerpt: "The survey evaluated a cross-section of Americans on their awareness of potential financial risks in retirement and how the awareness impacts the management of their finances before and during retirement." (Wolters Kluwer)

Financial Engines Study Finds Self-Directed 401(k) Plan Participants Missing the Mark
Excerpt: "The analysis of nearly 1 million retirement portfolios found that 69 percent have inappropriate risk or diversification of holdings and 36 percent have worrisome concentrations of company stock. In addition, one-third of savers aren't putting enough aside to qualify for the full company matching contribution." (AP via Washington Post; free registration required)

[Opinion] Letter to 401(k) Retirement Plan Sponsors and Vendors: You're Failing (PDF)
Excerpt: "In 2006, 87% of plan sponsors said they do not believe most employees are/will be financially prepared for retirement. (Deloitte/IFEBP) Just 13% said half might be ok. If that's not a sign of failure, what is?" (Dennis Ackley)

New York Attorney General Cuomo Sees Fraud in Some Lawyers' State Pensions
Excerpt: "Over the years, Mr. Cuomo said, the benefits have become a standard and expected perk for the lawyers, who often have political ties to the officials handing out the benefit. The system has proliferated, Mr. Cuomo suggested, because of New York's profusion of state, county and local governments." (The New York Times; free registration required)

[Guidance Overview] DOL FAB Addresses QDIA Issues
Excerpt: "The Department of Labor (DOL) has issued Field Assistance Bulletin (FAB) 2008-03 to respond to a number of questions practitioners have raised regarding the final regulations on qualified default investment alternatives (QDIAs) published in October 2007 and effective last December. The DOL also issued minor modifications to the final QDIA regulations." (SunGard Corbel LLC)

[Guidance Overview] Improving Returns on 401(k) Plans
Excerpt: "[I]s your 401(k) plan as effective as it can be in helping employees save for their retirement? Does it have auto-enrollment and other useful features that are available today from providers? These features can enhance the appeal of your employee savings programs and increase usage, making them even more effective." (Towers Perrin)

Connecticut State 401(k) Plan Proposal Dies As Legislative Session Ends
Excerpt: "A bill allowing the state of Connecticut to sponsor a 401(k) plan for small businesses apparently was a casualty of the last-minute scramble by lawmakers to end their current session Wednesday night." (PLANSPONSOR.com; free registration required)

Several States Plan Cutbacks and Early Retirement Plans
Excerpt: "In Rhode Island, Gov. Donald L. Carcieri, a Republican, signed a spending plan last week that includes a provision to make state employees who retire after Sept. 1 pay more for their health insurance, a change that state officials say could prompt about 2,500 state workers to leave before the deadline." (The New York Times; free registration required)

[Guidance Overview] IRS's Plan Valuation Regulations for Single-Employer Defined Benefit Plans (PDF)
Excerpt: "These developments affect sponsors of and participants in qualified single-employer and multiple employer defined benefit plans. They do not affect multiemployer plans, governmental plans or church plans that do not elect to be covered by ERISA ('non-electing church plans')." (Prudential Retirement)

IBM to Increase Pension Payments for Some Retirees
Excerpt: "Yes, it's true IBM Corp. plans to raise certain retiree pension payments. But not all the details are worked out yet, because the raise is 'a work in progress,' said Doug Shelton, a spokesman in Armonk for IBM. The increase will affect about 42,000 retirees who retired before 1997. About half of those who retired before 1997 will be eligible. The goal is to raise payments to those who were not able to participate in the 401(k) plan." (PoughkeepsieJournal.com)

Growing Disparities in Life Expectancy - Effects on Social Security and Private Retirement Plans
Excerpt: "Aside from the obvious individual detrimental effects of the longevity gap, CBO's 'Growing Disparities in Life Expectancy' study found this gap could have considerable adverse effects on the solvency of Social Security and Medicare. CBO's study notes that increasing longevity has clear effects on Social Security and Medicare expenditures by increasing their costs." (Deloitte via BenefitsLink.com)

[Guidance Overview] DOL Clarifies 'Qualified Default Investment Alternative' Requirements
Excerpt: "The Department of Labor has modified the final qualified default investment alternative (QDIA) regulations to: (1) expand the definition of 'stable value funds' which are entitled to grandfathered fiduciary relief, (2) explicitly allow a committee of the plan sponsor to manage the investment of a QDIA, and (3) delete the 'round trip' restriction from those prohibited under the regulations." (Deloitte via BenefitsLink.com)

New York State Pension Abuse Issue Draws Legislation
Excerpt: "As Attorney General Andrew Cuomo and Comptroller Thomas DiNapoli continue their crackdowns on alleged abuses of the state pension system, lawmakers are starting to take action with proposed legislation. The bills come in the wake of recent media reports of school lawyers and other educational administrators accruing benefits from the state pension system they may not have been entitled to." (nypolitics.com)

[Guidance Overview] Benefits Quiz from the April 2008 Trucker Huss Benefits Report (PDF)
Pages 1-2 of 10 pages. Excerpt: "The . . . questions are designed to refresh, and to fine tune, your benefits expertise. Some of the answers (which are found on page 8 of this Newsletter) may surprise you." (Trucker Huss)

One-Fourth of Participants Have Taken Premature Plan Distributions, Poll Finds
Excerpt: "According to the survey, the most common reasons for premature withdrawals include a family member losing a job and the cost of a down payment on a home." (Wolters Kluwer)

Australia's Superannuation Changes to Go Into Effect
Excerpt: "As of July 1, 2008, all employers must provide superannuation support of at least 9 percent per employee's 'notional earnings base.' In addition, all superannuation funds must provide a minimum level of death insurance to members who have joined it by default. Although employers have been preparing to meet these requirements for some time, many are taking another look at their plans now that the deadline is drawing near." (Watson Wyatt Worldwide)

Implementation of 'ad hoc COLA' Aids in Shortfall Reduction for Fort Worth Pension Fund
Excerpt: "The long-troubled Fort Worth city employees' pension fund isn't so troubled anymore. A new report by the Gabriel Roeder Smith & Co. actuarial firm shows that the fund's long-term funding shortfall has decreased from $410.7 million to $237.5 million -- a pleasing 42.7 percent drop. As of Jan. 1, it is estimated that the shortfall will be eliminated in slightly less than 14 years. The fund no longer is projected to have a perpetual shortfall, as was the case in recent years." (Star-Telegram.com)

[Guidance Overview] DOL Corrects and Supplements Final Regulations on QDIAs
Excerpt: "EBIA Comment: The technical corrections to the final regulations and the FAB clarify many issues that the regulations raised. The FAB's references to future guidance, though, remind us that these rules may evolve further as plan sponsors and the DOL acquire more experience with their operation. That evolution, and the close connection between the DOL's QDIA rules and the IRS's rules on automatic contribution arrangements, will require plan sponsors to continue monitoring developments in this area in order to maximize the available fiduciary relief." (Employee Benefits Institute of America)

May 5 Was 'Retirement Plan Selection Day' for W.Va. School Employees
Excerpt: "Members of the state's Teachers' Defined Contribution Retirement System have been receiving information booklets and personal retirement reports to estimate retirement benefits under the plan, as well as information on the State Teachers Retirement System. This information has been provided to members so they can make an informed choice on continuing with the Teachers' Defined Contribution (TDC) or requesting a transfer to the Teacher's Retirement Systsem." (The Herald-Dispatch)

Is Your Pension Secure? Probably, But It Could Be Smaller Than You Expect
Excerpt: "Even with . . . safeguards, your expectations for retirement income can still be upset mightily. Here's what can go wrong if you work in the private sector, and how you can protect yourself. Also check our steps you can take to protect your retirement income." (ConsumerReports.org)

[Opinion] America's Empty Nest Eggs
Excerpt: "[A]s Roger Lowenstein nicely illustrates in 'While America Aged,' the country 'is sitting on a retirement time bomb.' He is not talking about Social Security, which, he writes, is among the more manageable of future concerns. He is addressing the large-scale failure of America's once-enviable private pension system." (The New York Times; free registration required)

[Guidance Overview] Additional Qualified Default Investment Alternatives Guidance from DOL
Excerpt: "On April 29, 2008, the DOL released Field Assistance Bulletin No. 2008-03, which provides plan sponsors with additional guidance on the QDIA final regulations. This bulletin provides answers to some of the most frequently asked questions about the QDIA regulations in areas such as the scope of the regulations, notice requirements, limitation on fees and restrictions, management and asset allocation, capital preservation, and 'grandfather' relief." (Aiken and Aiken)

L.A. City Unions Push Retirement Incentives Over Layoffs
Excerpt: "Six Los Angeles city employee unions have asked Mayor Antonio Villaraigosa to offer early retirement to thousands of senior city workers, saying such a program could save $177 million annually and avert layoffs over the next year." (Los Angeles Times)

[Opinion] A Different Kind of Universal Coverage
Excerpt: "A bill recently introduced in Sacramento, and supported by Governor Schwarzenegger, has the potential to cover almost every California worker. No longer will those unlucky enough to work for an employer who doesn't provide coverage be left vulnerable. No longer will those who seek to buy coverage on their own be priced out of the market. And best of all, it will cost virtually nothing. Interested? Good. But we aren't talking healthcare-we're talking retirement." (New America Foundation)

[Guidance Overview] Converting Retirement Plan Funds to a Roth IRA
Excerpt: "If your client wants to convert employer plan funds directly to a Roth IRA, there are some new Internal Revenue Service (IRS) rules you should be aware of. The Pension Protection Act of 2006 (PPA) allows such conversions beginning in 2008. In some cases, after-tax plan funds can be converted to a Roth IRA tax-free, if only those funds are converted and the remaining plan funds are rolled to a traditional IRA. Notice 2008-30 confirms that Roth conversions can be done from employer plans such as 401(k)s, 403(b)s and 457s." (Financial Planning)

Pennsylvania State Employees' Pension Hikes Could Cost Taxpayers $10 Billion
Excerpt: "A multibillion-dollar bill to increase pension benefits for some 250,000 retired state workers and teachers advanced out of a Pennsylvania House committee on Tuesday. The State Government Committee voted unanimously to send to the floor a bill that would provide increases ranging from about 2.7 percent for the most recently retired to 25 percent for those who retired before July 1990. The estimated cost is $10.4 billion over 20 years, but an actuarial analysis should produce a more precise figure." (AP via Pittsburgh Tribune-Review)

Text of ''Incentives for Older Workers Act'' (PDF)
14 pages. Excerpt: "To improve the employability of older Americans." (U.S. Senate via American Benefits Council)

Official Summary of 'Incentives for Older Workers Act' (PDF)
2 pages. Excerpt: "Under this proposal, the average compensation taken into account under a defined benefit plan may not be reduced by reason of a participant's phased retirement. More specifically, the proposal would apply to any participant in a defined benefit plan (1) who has attained age 50 or 30 years of service, (2) who begins working on a reduced schedule or with modified responsibilities, and (3) whose compensation is reduced by reason of such reduced schedule or modified responsibilities." (U.S. Senate via American Benefits Council)

Federal Thift Savings Plan Wants Agencies to Automatically Enroll New Employees
Excerpt: "The board, which oversees the TSP, is proposing legislation that would permit the automatic enrollment of new employees, with 3 percent of their basic pay deducted for investment in the savings program." (The Washington Post; free registration required)

New Hampshire Retirement Rescue Plan Fast-Tracked
Excerpt: "The Senate version of the House's reform bill will give annual 2.5 percent cost-of-living adjustments (COLAs) to all New Hampshire Retirement System retirees on July 1. The increase would apply only to their first $30,000 in annual pension payments. Retired workers who make more than $30,000, about one third of all NHRS pensioners, would see a $750 increase next year." (Union Leader)

West Virginia Teacher and School Employee Groups Want Extension on Pension Change
Excerpt: "Judy Hale, president of the West Virginia Federation of Teachers, said the groups need additional time to counter confusion and misinformation about the transfer election. 'We wanted to impress upon the governor all the issues that are out there, which are why people are so hesitant and reluctant to go ahead,' she said. Her group and the West Virginia School Service Personnel Association asked Manchin for a two-week extension on the May 12 deadline for Teachers Defined Contribution participants to decide whether to switch to the Teachers Retirement System." (The Charleston Gazette)

[Guidance Overview] Use of Credit Balance to Satisfy Quarterly Contribution Requirements May Have Unintended Consequences
Excerpt: "The IRS's proposed regulations require the plan sponsor to elect to use the credit balance to satisfy a quarterly contribution requirement. The preamble to the proposed regulations asks for comments on whether rules should be provided under which a plan sponsor is deemed to make an election to use a credit balance to the extent available to avoid a failure to make a required quarterly contribution." (Deloitte via BenefitsLink.com)

Boeing's Labor Talks May Include DC Plan for New Employees
Excerpt: "Boeing Co. could drop defined benefit plan coverage for new employees represented by the International Association of Machinists and Aerospace Workers and possibly other unions, said Todd Blecher, a Boeing spokesman. The new IAMAW employees would be placed into a 401(k) or other type of defined contribution plan under a proposal that Boeing executives are considering in contract talks with the union." (Pensions & Investments)

[Guidance Overview] In the Qualified Plan Industry, What Is a QOSA?
Excerpt: "Effective for plan years starting on January 1, 2008 and thereafter, the Pension Protection Act of 2006 has amended the joint and survivor annuity rules to require that a plan subject to such annuity requirements also offer a qualified optional survivor annuity (QOSA) to participants. The plan must also provide participants with a written explanation of the terms and conditions of the QOSA." (McKay Hochman Co., Inc.)

[Opinion] Financial Literacy and Post-Retirement Risks: An Actuary Speaks Out (PDF)
3 pages. Excerpt: "I hope that the readers of this article will work to bring stakeholders together to improve the post-retirement system. I would love to see workers improve their awareness of the variability of life spans and gain a general understanding of the options for timing of retirement and the implications." (Anna M. Rappaport via Contingencies)

[Opinion] The Real Truth About Defined Benefit Plans (PDF)
3 pages. Excerpt: "Consider, for example, the following 'surprising' statements: First, DB plans are more efficient (and, therefore, less costly) than DC plans in providing covered employees with comparable levels of retirement income. There are two components to the cost of any benefit program. By far, the largest component is the cost of the benefits themselves. The other is the cost of administration." (Eric Cerling via Contingencies)

Lousy 401(k)? Lousy Economy? Get a Roth!
Excerpt: "From a pure tax standpoint, a Roth IRA is usually a better choice if you expect to be in a higher tax bracket when the time comes to make withdrawals. A pretax vehicle like a 401(k) or traditional IRA is a better option if you expect to be in a lower tax bracket when you retire.But if you've got a lousy 401(k) plan, the Roth IRA wins hands down, no matter how your tax situation is likely to shake out." (Money via CNNMoney.com)

[Guidance Overview] Guidance and Technical Corrections to the Default Investment Alternatives Regulations
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration today announced publication of technical corrections to the final regulation on qualified default investment alternatives along with guidance to clarify the scope and meaning of the final rule." (ERISA Rules and Regulations)

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