Headlines about "Ret plan investments - misc"

Gathered from the web by the editors at BenefitsLink.com.
Managing Volatility in Defined Benefit Plans
12 pages. '[The paper explains why] (1) interest rates directly impact plan funding levels/contribution volatility, and (2) a declining-rate/low-rate environment can quickly lead to funding level shortfalls for plans utilizing a traditional total-return investment strategy; and [discusses] how liability-driven investing (LDI) works and why, for many DB plans, it may be a better approach than a total-return strategy." (Principal Financial Group)

[Guidance Overview] District Court Permitted to Look Beyond Charged Conduct to Calculate Restitution Amount for Theft from Plan
"A district court did not err when, to calculate a restitution amount, it considered losses stemming from an individual's nine-year pattern of theft from her employees' retirement accounts, instead of focusing solely on losses incurred in the year that encompassed the charged criminal conduct, the U.S. Court of Appeals in San Francisco (CA-9) has ruled." (Wolters Kluwer Law & Business / CCH)

Webcast and Written Testimony: Hearing Entitled 'Examining the Challenges Facing PBGC and Defined Benefit Pension Plans'
February 2, 2012. (Subcommittee on Health, Employment, Labor, and Pensions; Education and the Workforce Committee; U.S. House of Representatives)

401(k) Plan Sponsors Less Confident That Employees Will Be Financially Prepared for Retirement (PDF)
"84 percent of polled executives responsible for [401(k)] plans say only some or very few employees will be financially prepared for retirement, a new Deloitte survey reveals. . . . To encourage plan participants to make better use of their 401(k), nearly half of plan sponsors (49 percent) are offering features that automatically increase participants' contribution levels. However, nearly two-thirds (64 percent) of plan sponsors report that fewer than 10 percent of participants take advantage of this opportunity." (Deloitte; International Foundation of Employee Benefit Plans; International Society of Certified Employee Benefit Specialists)

Deloitte's 2011 401(k) Benchmarking Survey (PDF)
68 pages. 'While plan sponsors and fiduciaries are generally aware of the fees charged for the administration of their plans, the possibility exists that many will be surprised by the sum total of costs." (Deloitte)

[Opinion] A Closer Look at the Braden v. Wal-Mart Case: How Not to Run a 401(k) Plan
"The Wal-Mart case is the poster child for the way in which a 401(k) plan should not be run: plan investment options bearing excessive and entirely unnecessary costs, undisclosed conflicts of interest, lack of meaningful disclosure of costs to plan participants (which was actually part of the agreement between plan fiduciaries), and, I'd argue, an apparent absence of any serious fiduciary mindset on the part of the plan sponsor fiduciary and the trustee fiduciary." (Morningstar Advisor)

[Guidance Overview] DOL Finalizes, Delays 401(k) Fee Disclosure Rules
"The final regulations 'strongly encourage' service providers to offer plan fiduciaries a 'guide' or summary of their disclosures. The DOL included a sample guide as an appendix to the final rule. Debate about whether to require such a summary disclosure is rumored to have delayed the release of the final rules. For now, the summary is voluntary, but the DOL strongly hinted that it may make the summary mandatory in future regulations." (Benefits in Brief)

[Guidance Overview] Final ERISA Section 408(b)(2) Regulations Include Significant Differences from Interim Rules
"These regulations make several significant changes . . . including: [1] Excluding certain frozen IRC Section 403(b) plans issued before January 1, 2009 from coverage under the regulations; [2] Enhancing the information relating to 'indirect compensation' required to be disclosed; [3] Adding certain investment-related disclosures to facilitate compliance with DOL regulations under ERISA Section 404(a); [4] Extending the effective date to July 1, 2012. This has the effect of delaying the effective date of most participant-level disclosures under ERISA Section 404(a) to August 30, 2012." (Practical Law Company)

Treasury Eases Rules on Annuities in Retirement Plans
"Employers have been reluctant to adopt annuities in retirement plans they sponsor because of concern that fees are too high and that they would be held liable for their choice of insurers. Americans have resisted buying the insurance because they don't want to lock up their assets." (Bloomberg)

Who's on The Hook for Decisions Made in Your 401(k)?
"If you are a business owner, on the Board of Directors or serve on the Plan Investment Committee, follow the line of questions from a 'hypothetical deposition' directed to you and picture how you would answer the questions." (Forbes)

New 401(k) Policies Are a Mixed Bag
"Most workers won't see their companies offering annuities anytime soon, concedes David Wray of the Plan Sponsor Council of America, an employer group. He said employers would be concerned about choosing solid insurance companies and reasonably priced annuities for their workers." (Reuters)

Underfunded Pensions: The Looming Crisis Facing Investors
"It's no secret that the financial crisis and resulting malaise has taken its toll on bank stocks, commodities and Treasury yields. But it may be have triggered another ripple ? one that has gone somewhat unnoticed. Pension funds have become seriously underfunded." (CNBC)

[Official Guidance] Text of Final 408(b)(2) Regs on Fee Disclosures to Plan Fiduciaries by Covered Service Providers (PDF)
109 pages. 'This document contains a final regulation under the Employee Retirement Income Security Act of 1974 (ERISA or the Act) requiring that certain service providers to pension plans disclose information about the service providers' compensation and potential conflicts of interest. These disclosure requirements are established as part of a statutory exemption from ERISA's prohibited transaction provisions. This regulation will affect pension plan sponsors and fiduciaries and certain service providers to such plans." (U.S. Employee Benefits Security Administration)

[Guidance Overview] Second DOL 'Fact Sheet'; Description of Major Changes to Final Fee Disclosure Rule
"The final rule's effective date has been extended to July 1, 2012, to allow additional time for compliance." (U.S. Employee Benefits Security Administration)

[Official Guidance] DOL 'Fact Sheet' on Final Regs on Service Provider Disclosures Under ERISA Section 408(b)(2)
"The final rule reflects a number of technical and other changes . . . including the following: . . . Expansion of the information that must be disclosed concerning a [Covered Service Provider's] receipt of indirect compensation to include a description of the arrangement between the payer and the CSP pursuant to which indirect compensation will be paid; Conformance of investment-related disclosures for covered plans' designated investment alternatives to the requirements of the Department's participant-level disclosure regulation; and A separate provision for the disclosure of changes to investment-related information, which must be updated at least annually." (U.S. Employee Benefits Security Administration)

[Guidance Overview] DOL Publishes Final 408(b)(2) Fee Disclosure Regs; Treasury Publishes Regs on 'Lifetime Income' Options
"[T]he U.S. Departments of Labor and the Treasury today announced two executive actions designed to help enhance security for millions of Americans saving for retirement. The measures will expand transparency in the 401(k) plan marketplace and broaden the availability of retirement plan options so that Americans can maximize their ability to save responsibly and securely." (U.S. Employee Benefits Security Administration)

Interview With Prof. Ron Rhoades on Revenue Sharing
"I would advise plan sponsors to avoid any revenue-sharing arrangements, of any type, between the advisors and other vendors of the plan. This includes not only payment for shelf space, but also soft dollar compensation and other 'back-channel' payments. Establish the compensation of the investment adviser in advance -- before any investment recommendations are made -- either as a flat fee, hourly fee, or percentage of assets (or some combination thereof)." (Fiduciary News)

Kodak Employee Sues Company Directors Over Stock
"[The plaintiff, an Eastman Kodak employee,] said in the lawsuit, which seeks class-action status, that the directors and officials did not disclose to stock-plan participants complete information about Kodak's dire financial condition and kept its investments in the company's equity when it was no longer prudent." (Reuters via the New York Times; free registration required)

Long Term Outlook of Stock Market Likely Attractive
"The long-run outlook for the global stock market is likely to be attractive despite a backdrop of elevated market volatility, below-average growth expectations, and near-0% short-term interest rates, according to Vanguard's Long-Term Economic and Capital Markets Outlook." (PLANADVISER.com)

Guide to the 404a5 Opportunity for Retirement Advisors, Part I: Counseling Plan Participants
"Mark down May 31, 2012 in your calendar. That's the date by which 483,000 U.S. retirement plans must send to their participants the initial disclosures required by new Department of Labor rules under Section 404a5 of ERISA. . . . DOL estimates that the rule will affect 72 million active participants who hold $3 trillion of plan assets. . . . It is your job, and opportunity, to help them anticipate, interpret and act on information contained in 404a5 disclosures." (Benefits Pro)

[Opinion] Setting Interest Rates Too Low: The Fed's New Tax on Retirees
"Last week, the Federal Reserve rolled out their inflation forecast and interest rate intentions through 2014 . . . . This financial repression will result in a trillion dollar transfer of real wealth from fixed income investors to the persons, businesses and governments borrowing at below free-market rates." (Forbes)

How Index Trading Increases Market Vulnerability
"The popularity of index funds and ETFs . . . comes at the cost of 'trading commonality,' or 'basket trading,' across the market. Many stocks within an index being traded are simultaneously bought and sold. As a consequence, the stocks in an index tend to move together throughout the trading day." (Morningstar Advisor)

[Guidance Overview] What Is a Fiduciary (and Why Should We Care)?
"Advisers, as fiduciaries, have a legal mandate to place client interests first. Advisors, on the other hand, must only provide 'suitable' investments to clients while placing their firm's interests first. This means a lot of those 'self-dealing' types of transactions." (BenefitsPro)

IRIC Provides Product Fact Sheets for Several of the Retirement Income Solutions Offered in the Marketplace
"These reference documents will allow plan sponsors, advisors, and consultants to engage in an objective analysis based on a consistent approach to comparing retirement income products." (Institutional Retirement Income Council)

[Guidance Overview] Final 'Business Conduct Rules' for Swap Dealers Include Safe Harbor for ERISA Plans
"The Commodity Futures Trading Commission (CFTC) included a safe-harbor for ERISA plans under the 'business conduct standards' for swap dealers under the Dodd-Frank Act . . . . In a letter to the CFTC, [DOL] affirmed that the final rule will not require swap dealers to engage in conduct that will cause them to become ERISA fiduciaries." (Deloitte via BenefitsLink.com)

Target-Date Funds Get Customized as Plan Sponsors Take Charge
"Custom target-date funds are beginning to proliferate at the expense of their off-the-shelf counterparts. That's due to plan sponsors wanting to have greater control over what's in a fund and have access to a wider array of investments to put in them." (On Wall Street and SourceMedia, Inc.)

[Opinion] Are Company Pension Fund Return Forecasts Way Too Sunny?
"Judging by many companies' recent financial statements, they must believe their pension plans are run by . . . unheralded baby Buffetts." (The Wall Street Journal)

California Public Pension Funds' Earnings Dip Amid Gloomy Forecasts
"The nation's two largest public pension funds last week reported slim annual investment earnings, CalPERS 1.1 percent and CalSTRS 2.3 percent, as experts continue to say hitting their long-term earnings target, 7.75 percent, will be difficult." (Calpensions)

Global Pensions Asset Study, 2012 (PDF)
"This is a study of the 13 largest pension markets in the world and accounts for more than 85% of global pension assets. The countries included are Australia, Canada, Brazil, France, Germany, Hong Kong, Ireland, Japan, Netherlands, South Africa, Switzerland, the UK and the US." (Towers Watson)

Global Pension Fund Assets Hit Record High in 2011
"Global institutional pension fund assets in the 13 major markets grew by 4% during 2011 to reach a new high of US$28 trillion, up from US$26 trillion in 2010 according to Towers Watson's Global Pension Assets Study released today." (Towers Watson)

[Opinion] The Striking Impact of Transparency, the Prohibited Transaction Rules and the Exclusive Benefit Rule
"If we step back for a minute, we can see the extraordinary policy underlying 408(b)(2), the prohibited transaction rules and the exclusive benefit rules (which apply even to non-ERISA plans). These rules seek to set aside and protect from others the individual wealth of those who accumulate benefits under these plans." (Robert J. Toth, Jr., Business of Benefits)

[Guidance Overview] Practitioners' Forum Discussion: Loomis v. Exelon Corp.
"[T]he Seventh Circuit affirmed a lower court's holding that the plan fiduciary did not breach its duties under ERISA . . . by offering retail mutual funds as part of the investment options in a participant-directed defined contribution plan." (Compensation Planning Journal via The Bureau of National Affairs, Inc.)

[Opinion] Comments to DOL on Disclosure of Compensation Arrangements to Plan Fiduciaries by Broker-Dealers (PDF)
"[I]f broker-dealers feel the need to disclose every potential compensation arrangement for a brokerage account, plan fiduciaries will likely be overwhelmed by such information, rendering it virtually useless. . . . One possible way to eliminate this burdensome disclosure is to limit the 408b-2 compensation disclosures for brokerage accounts to the disclosures required under applicable securities laws." (Drinkle Biddle & Reath)

Readers Rate Their 401(k) Plans
"In assessing the quality of their plans, the investment lineup was the biggest determinant of participant satisfaction." (Morningstar, Inc.)

Boomer Retirements Likely to Boost IRA Share of Retirement Market
"Total IRA assets represent 29.7% of total retirement market assets currently, and as large defined contribution (DC) plan rollovers continue to fuel asset levels, IRAs will encompass 33% of the total retirement market by 2016." (PLANSPONSOR.COM)

Pension Accounting Changes Negatively Affecting Earnings Statements
"The Boeing Company, AT&T, UPS, Windstream Corp. and FirstEnergy Corp. all announced that lower discount rates and a change to recognizing pension gains and losses in the year in which they occur, rather than amortizing them over time, has resulted in a charge for pensions." (PLANSPONSOR.COM)

Ann Combs Previews Retirement and Investment Issues Facing Washington This Year
"From congressional initiatives such as the debt ceiling and tax reform to the 2012 regulatory agenda, Ms. Combs discusses many topics vital to retirement plan sponsors -- and how you can benefit from Vanguard's voice in Washington." (The Vanguard Group, Inc.)

Romney May Cost Private Equity as Pensions Warn of Backlash
"Mitt Romney's campaign for the Republican presidential nomination may be costing his private- equity backers a lot more than they bargained for. Attacks by opponents portraying Bain Capital LLC, Romney and other buyout managers as corporate looters who enrich themselves at the expense of ordinary workers have put a spotlight on the industry that will affect negotiations about future investments, according to officials and trustees at public pensions." (Bloomberg L.P.)

[Guidance Overview] Reminder of Annual Requirements for Investment Managers (PDF)
"There are . . . changes on the horizon under [ERISA] and related[DOL] regulations that are important to Investment Managers that accept clients who are ERISA plans or that manage private funds that are subject to ERISA." (Winston & Strawn LLP)

DOL's Lehman Brothers Amicus Brief, in Support of Plaintiffs-Appellants Requesting Reversal
"'ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans.' . . . . The statute promotes these interests primarily by imposing several stringent duties on plan fiduciaries, including a duty of care grounded in trust law's prudent man standard. . . . Although the Secretary has authority to enforce these standards, participants and beneficiaries play a primary role in policing ERISA plan fiduciaries. Thus, ERISA gives participants standing to bring private actions to remedy losses caused by fiduciary breaches and to obtain appropriate equitable relief." (U.S. Department of Labor)

DOL's Citigroup Amicus Brief, in Support of Appellants' Petition for Panel Rehearing
"The Secretary of Labor, who has primary authority for enforcing and administering Title I of ERISA, . . . agrees with the dissent that the panel's holdings represent 'both an alarming dilution' of ERISA 'and a windfall for fiduciaries, who may now avail themselves of the corporate benefits of [ESOPs] without the costs of complying with the statutorily mandated obligations of prudence.' . . . The issues are of exceptional importance under Federal Rules of Appellate Procedure . . . because they put hundreds of billions of dollars in pension plan assets at undue risk." (U.S. Department of Labor)

6 Critical Trends for Retirement Plans in 2012
"The six megatrends Lincoln Trust sees in 2012: New 401(k) Fee Disclosure Rules by DOL . . . 'C Suite' Sticker Shock' . . . A Refined Fiduciary Standard . . . Models vs. Target-Date Funds . . . The Rise of 401(k) Evaluation Services . . . A Call for Investment Expense Transparency." (AdvisorOne)

408(b)(2) and the 401(k) Group Annuity/Insurance Company General Account, in More Detail
"[R]egardless of what you may think about 408b2 and the requirements now imposed by the rules, this reg has been craftfully drafted. The pieces fit together nicely, and complex issues with regard to investment products have been meaningfully addressed in as simple and direct manner as possible.There may be a few interpretaive issues that need to be resolved (which is to be expected), and 403(b) issues continue to be a serious challenge, but this is a fine piece of technical writing." (Robert J. Toth, Jr., Business of Benefits)

Pension Funds Hit By Weak Returns in 2011
"The average U.S. pension fund grew an estimated 1.4% in 2011, compared to 12.9% the previous year, according to BNY Mellon Asset Servicing, which combined actual returns data for the first 11 months of the year with a December estimate. In Japan, which is the second-largest pension fund market, the average pension fund lost 2.7% in 2011, compared to a gain of 1.6% the previous year . . . . (Pensions & Investments)

[Opinion] Legislation Would Patch Montana's Broken Retirement System Fund
"Association of Montana Retired Public Employees intends to request that HB632 be again introduced in the 2013 session. While not a perfect solution, this proposal and the changes made by the 2011 Legislature would significantly reduce the 'unfunded liability' of the retirement systems, making them healthy again without radical changes to those pensions already promised public employees." (www.greatfallstribune.com)

New Pension Forecasts: What If Earnings Falter?
"For the first time, the annual California Public Employees Retirement System actuarial report last fall on state and non-teaching school pensions included a sensitivity analysis." (Calpensions)

Pension Funds Hit by Weak Returns in 2011
"Average investment returns in 2011 for pension funds in major markets globally were anemic at best, ranging between -3% and 3%, according to estimates by consultants and global custodians." (Pensions & Investments; free registration required)

A 401k Menu for Today's Investing Reality
"In the following Q&A, Mr. Dunteman outlines how 'globalizing' a portfolio by including investments such as foreign bonds can help investors reduce risk and reach their retirement goals." (401khelpcenter.com, LLC)

[Official Guidance] SEC Request for Comment on Study Regarding Financial Literacy Among Investors (PDF)
"[The SEC] is requesting public comment on the following: methods to improve the timing, content, and format of disclosures to investors with respect to financial intermediaries, investment products, and investment services; the most useful and understandable relevant information that retail investors need to make informed financial decisions before engaging a financial intermediary or purchasing an investment product or service that is typically sold to retail investors, including shares of registered open-end investment companies; and methods to increase the transparency of expenses and conflicts of interests in transactions involving investment services and products, including shares of registered open-end investment companies." (U.S. Securities & Exchange Commission)

[Official Guidance] EBSA Letter Regarding CFTC Final Business Conduct Standards Rules (PDF)
"[DOL] has reviewed these final business conduct standards and concluded that they do not require swap dealers or major swap participants to engage in activities that would make them fiduciaries . . . ." (U.S. Employee Benefits Security Administration)

A Closer Look at How 'Interest Follows Principal' in Pension Funds
"For the employees who invest in their own deferred compensation accounts, they can invest in retail stock and bond mutual funds, closer to what a pension fund can purchase, but typically at higher fees and with no access to private equity markets, institutional investments and such. So, there is indeed a certain amount of pension investment income that can rightfully be claimed by the pension funds as unique to their enterprise." (Governing)

Fiduciary Proposal Puts CFOs' Liability in Question
"Specifically, if consultants providing outside investment advice were required to be treated as fiduciaries, held to a higher fiduciary standard, and required to disclose to the CFO any potential conflicts of interest the consultant had in selecting funds, this could have made the CFO's job easier." (CFO Publishing LLC)

Pension Risk Transfer Offers Another Alternative for DB Sponsors
"A pension plan can be banished completely by terminating the plan -- engaging an insurance company to create annuities for each participant, but at a cost of 120% to 130% of liabilities -- far too expensive at today's low funding rates. More feasible and economical is the transfer of portions of a plan's liabilities. Those with the shortest duration -- say, five to eight years, versus 15 or 20 for active employees -- and therefore the most stable and least expensive, are those already in retirement." (PLANSPONSOR.COM)

Financial Industry Groups Glad to Help DOL with New Fiduciary Rule
"In the joint letter, representatives from the Financial Services Institute, the Financial Services Roundtable, the Securities Industry and Financial Markets Association and the American Council of Life Insurers thanked the Labor Department for asking the groups for help in developing a regulatory impact analysis of a proposed change to the way the department has long defined the term fiduciary." (Employee Benefit Advisor)

Five Areas 401k Plan Sponsors Must Address to Reduce Fiduciary Liability
"5. Trustee and Employee Education ? A well rounded plan with the perfect array of investment choices will die on the vine if the plan sponsor fails to provide adequate education for employees." (Fiduciary News)

[Guidance Overview] Gearing Up for Another Significant ERISA Decision from the Fourth Circuit
"On December 21, 2011, in David v. Alphin, . . . plaintiffs, participants of Bank of America's 401(k) Plan and Pension Plan, appealed to the Fourth Circuit after the district court partially dismissed and later entered summary judgment for the defendants on their claims that the defendants engaged in imprudence and self-dealing by offering Bank of America-affiliated mutual funds as plan investments." (Seyfarth Shaw LLP)

The New Retirement Rulebook
"[One retirement industry worker] advocates an approach that takes into account an 'individualized inflation rate' based upon standard of living. A laddered annuity approach can cover baseline expenses to 'give peace of mind for lifetime income that they can never outlive.' 'In theory, they can spend the rest of their money and never run out of income,' he says." (Forbes.com LLC)

Treasury's Thrift Savings Plan Maneuver Aims to Keep Government under Debt Cap
"The federal government resorted to a favorite accounting maneuver Tuesday to stay under its debt limit, suspending the issuance of securities in a retirement savings program for federal and postal employees." (The Washington Post; free registration required)

Class Certification Requirements in 401k Fee Litigation (PDF)
"The basis for granting certification has frequently been the offhand observation that the class was complaining of the plan's structure as a whole. [The Spano and Kraft cases] indicate that, while class certification remains possible in cases involving 401k plans, the potential conflict between various categories of plan participants requires narrower definitions of the class that align." (401(k) Advisor via The Wagner Law Group)

[Opinion] The Perfect Storm is Brewing for 401(k) Fiduciaries (PDF)
"A perfect storm is brewing in the world of 401(k) fiduciary risk management, and fiduciaries and plan sponsors who do not carefully plot a course forward now risk being sunk. The elements of this storm are: [1.] The evolving standard for measuring whether or not fiduciaries are fulfilling their duties is how well the plan is helping participants make progress toward achieving a financially secure retirement." (Investment Horizons, Inc.)

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