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Between the Ant and the Grasshopper: It's the Ant Every Time
Common sense tells us that those willing to make short term sacrifices for long term benefits make better employees than those who live for the moment. They are more likely to recognize that their hard work and initiative improves their opportunities for promotion, increases company profitability (and their annual profit sharing bonus), and helps... Read More >>
"They" Just Don't Get It
In places far far away discussions focus on how not every 401(k) account is invested as “they” would invest it, how not every 401(k) participant saves what “they” define as enough, and how the 401(k) system does not deliver for every American an amount “they” define as adequate. These faraway places where “they” are are nothing like the America... Read More >>
The Prudent Process - A Beautiful Thing
Many dissatisfied with the private employer defined contribution system are destined to be permanently frustrated. That's because addressing their concerns requires changing the system fundamentally. One concern expressed by critics is that plan assets are not managed lockstep across the system using someone's idea of best practice. For example,... Read More >>
Financial Education - Employers Stepping It Up As They Step Into the Gap
Everyone agrees: financial literacy matters. Everyone agrees: the financial skills of those entering the workforce are limited. Over the last 20 years Employers, because of their commitment to their employees and to their defined contribution programs, have responded by directing a massive adult education effort explaining the benefits of long-... Read More >>
First Thoughts About the Effect of Healthcare Reform on Retirement Plans
The ink is barely dry on the massive health care reform legislation. Employers are busy evaluating how their health plans will be impacted. While health care is not a core PSCA issue, here are some very preliminary observations on how retirement plans might be impacted: The employer provided benefit system is no longer voluntary. Most employers... Read More >>
Company Plan Comparisons - Not a Service to Participants, or Anyone Else For That Matter
Ever since 401(k) came onto the scene, attempts have been made to set templates by which to judge which company plans were better than others. While benchmarking plan practices is helpful for plan decisions makers, it is generally not useful when third parties make judgments about which companies have the better plans. In fact, such judgments,... Read More >>
DOL and Treasury Issue Annuity RFI
The percentage of plans with an annuity as a retirement distribution option continues to decline. According to PSCA survey data, 37.4% of defined contribution plans had an annuity retirement distribution option in 1999. 10 years later, in 2008, the percentage had declined to 21%. Even when an annuity is offered nearly all participants select other... Read More >>
Participant Direction - An Evolution
401(k) participant direction was introduced because in the 1980s many believed workers would not participate in 401(k) programs if employers managed the plan's investments. Trust of employers at this time was at an all time low because millions of workers in their 40s and 50s were being laid off, thus losing their promised pension benefit, as... Read More >>
Setting the Plan Access Record Straight
The Administration in its preface to its Automatic IRA proposal indicated that 78 million working Americans - half the workforce- lack access to employer provided retirement plans. This is misleading. We know that number is derived by multiplying the civilian labor force (155 million) by the often stated 50% coverage statistic. However, the BLS... Read More >>
Be Prepared for the New Form 5500--More Sponsor Involvement Will Be Required
There is a big change coming and plan sponsors need to be ready. When ERISA was passed it included a requirement that those who sponsor ERISA regulated plans must file a form, the Form 5500, with the government containing plan related information. Since its initial inception, the Department of Labor and the Internal Revenue Service, who have joint... Read More >>