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Debt Commission DC Limits-Policy Change, Not Deficit Reduction
Last week, a USA Today reporter asked me about the impact of the Presidential Debt Commission recommendation to reduce the current $49,000 combined contribution limit for employer-sponsored defined contribution plans to the lower of 20 percent of pay or $20,000. My comment was that such a change would be devastating. I believe it would... Read More >>
Annuities - An IRA Solution
The 401(k) system has passed its stress test. Plan sponsors have continued to offer and even improve their programs through a most difficult economic period. Participants have continued to save and invest in their 401(k) plans for the long-term. According to the Employee Benefits Research Institute (EBRI) “91% of 401(k) participants with account... Read More >>
Non-Qualified Plans A New Survey
Plan Sponsors responsible for designing and managing a company's compensation and benefits programs are particularly challenged at this time when non-line expense at companies has been cut to the bone in response to current economic times. For those currently spending significant time designing and managing nonqualified deferred compensation... Read More >>
Getting a Handle on 403(b)
The 403(b) system is coming under increased scrutiny. The Los Angeles Times recently wrote an article about flaws in the public employee 403(b) programs in California. 403(b) plans, an important part of the defined contribution plan system, are a lot like 401(k) plans. Participants reduce their paycheck, defer taxation, and invest in a mutual fund... Read More >>
The Wall Street Journal-What Happened to Editorial Oversight
As a long time reader and subscriber of The Wall Street Journal I was stunned to read the 401(k) piece on the front page of the February 19th Saturday edition. The article included inaccuracies, misrepresentations, straw-man analogies and inappropriate examples with no balancing views. To add to the outrage none of the letters to the editor... Read More >>
PSCA Supports Clarifying the Definition of Fiduciary Advisor
Plan sponsors hiring advisors to help with the selection and monitoring of plan investments believe that the advisor’s interest is the same as theirs—what’s best for plan participants. Under changes proposed by the Department of Labor, any confusion about whether or not a recommendation concerning the investment of plan assets is a fiduciary... Read More >>
Retirement Income: A Congressional Briefing
I was honored to be a panelist at the January 25, 2011 Aspen Institute Initiative on Financial Security’s Congressional Briefing, MAKING IT LAST: WORKABLE SOLUTIONS FOR LIFELONG RETIREMENT POLICY. The Briefing was held in the Dirksen Senate Office Building and was attended by a diverse group of Hill staffers and others interested in the topic. I... Read More >>
The Focus on the Fiduciary is Increasing
As the 401(k) system moves from implementation to oversight, the focus on the fiduciary is increasing. The early decades of the 401(k) age were focused on plan design, administrative infrastructure and education. The fiduciary function, while important, received less attention until the late 1990s. This was due to low average account balances and... Read More >>
Retirees Under Consume Their Assets
It is important to understand how current retirees drawdown their retirement assets as we think about how to help new retirees with their financial decision-making. In “The Drawdown of Personal Retirement Assets” NBER Working Paper No. 16675, Professors James M. Poterba, Steven F. Venti, David A. Wise report their study which shows how current... Read More >>
401(k) Fee Disclosure, I Can Hardly Wait
Negative 401(k) fee article articles continue to appear. The most recent suggests that the fees in 401(k) target date funds (TDFs) are too high and it is unfortunate that plan sponsors have been given the ability to default 401(k) participants into these TDFs, or any other investment for that matter. There are fees for investing whether in an IRA... Read More >>