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An Unintended Consequence of Fee Disclosure
Currently private employer-sponsored defined contricution plan participants who have changed jobs, or who are no longer employed but not retired, have chosen to leave approximately 15 million account balances with their previous employer(s). In 2009, more than 1 million retirees were receiving installment payments from an employer sponsored plan... Read More >>
Form 5500 and Participation
?I recently had a reporter ask about defined contribution plan participation. I directed her to the Form 5500 data, which is totaled and reported in the Department of Labor’s Private Pension Plan Bulletin series. Private-employer plan sponsors collectively reported on their Form 5500s for 2009 that there were 63,570,000 participants with “an... Read More >>
150 Years Wow
Since 1900 we’ve added 30 years to the typical lifespan. A recent study suggests that the normal life span may be as long as 150 years. This is a gift, and those of us living today should be grateful. At the same time this change in the human condition is one of the most significant in human history. To take advantage of this abundance of life we... Read More >>
Annuities and the New Regulations
Beginning in 2010 the Departments of Treasury and Labor jointly initiated a project to identify regulatory changes that would result in greater use of income annuities by participants in employer sponsor defined contribution plans. PSCA was active in providing input and I testified at a joint Department of Labor Department of Treasury hearing on... Read More >>
408(b)(2) - Let's Use the Roadmap Until There's Something Better
The final 408(b)(2) regulation is out. Because of the regulation many sponsors will receive more information in more detail about fees than in the past. Sponsors also will receive a new compliance obligation. They are responsible for insuring that plan providers have appropriately delivered the required information. These are significant changes... Read More >>
408(b)(2): Let's Use the Roadmap
The final 408(b)(2) regulation is out. Because of the regulation many sponsors will receive more information in more detail about fees than in the past. Sponsors also will receive a new compliance obligation. They are responsible for insuring that plan providers have appropriately delivered the required information. These are significant changes.... Read More >>
Interest Rates and Retirement
It will have been over five years of abnormally low interest rates by the end of 2014. This means that interest paid on high quality bonds and principle-secure investments will continue be virtually zero. In addition, with interest rates now so low there can be no capital gains on bonds unless interest rates go negative. Some say this is critical... Read More >>
Yesterday Explains Today's 401(k)
To understand today you have you know about yesterday. When 401(k) plans were introduced in the early and mid 80s, American employers were in the process of laying off millions of workers in their late 40s and 50s. Distrust of employers was at an all-time high. To overcome this, 401(k) plans were designed so that participants had control, and... Read More >>
Time for Balance
The December 14 edition of USA Today included a letter headlined, “Stay Away From 401(k),” written by Gerald W. McEntee, president of the American Federation of State, County and Municipal Employees. On December 12, Thomas DiNapoli, New York state comptroller and sole trustee of the New York State Common Retirement Fund, in a speech at the New... Read More >>
Government Workers Underreport Retirement Plan Availability in the Current Population Survey
Push will come to shove when whoever is elected in the 2012 election is forced to tackle our federal fiscal problems. The tax deferral provided to the employer-sponsored retirement system will get intense scrutiny as part of this process. Thus, it is critical that decision makers have the best possible information as they apportion the pain among... Read More >>