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Our Perspective

2019 Increases for Retirement Plans, Social Security

The Social Security Administration just announced benefit increases effective in 2019. Current retirees will receive a cost-of-living increase, beginning in January 2019, of 2.8%, reflecting the increase in CPI-W between the 3rd quarter of 2017 and the 3rd quarter of 2018. In addition, the maximum amount of earnings subject to Social Security tax will increase in 2019…Read More

Legislative update — October 2018

Possible retirement savings legislation in lame duck session On September 27, 2018, the House passed the Family Savings Act (FSA) (part of House Republicans’ Tax Reform 2.0 proposal), after making two significant retirement policy related changes to the bill approved by the Ways and Means Committee. There are several other significant retirement savings policy initiatives in…Read More

Reidt v. Frontier legacy stock suit

On September 11, 2018, a participant in the Frontier Communications 401(k) Savings Plan filed a class action suit against Frontier Communications (the plan’s sponsor) and plan fiduciaries, claiming that they breached their ERISA duties of loyalty and prudence and their duty to diversify plan investments by retaining stock in Verizon and AT&T (both former owners…Read More

September 2018 Pension Finance Update

September was another month of modest improvement in pension finance, due to higher interest rates. Our traditional Plan A[1] improved for the sixth straight month – up less than 1% in September and now ahead almost 9% for the year, while the more conservative Plan B was flat last month but remains up almost 2% year-to-date:…Read More

Advantages to a Market Return Cash Balance Plan Design

As discussed in our Cash Balance (CB) Survey on “Cash Balance Plans – 2018 Survey and Trends”, professional service firms have significantly increased their adoption of Market Return Cash Balance plans over the past twelve years. In addition to the conversion of existing Fixed Rate plans, virtually every new Cash Balance Plan is incorporating the…Read More

Plan reformation litigation — Pearce v. Chrysler

On June 20, 2018, the Sixth Circuit Court of Appeals, in Pearce v. Chrysler, reversed a lower court decision in favor of the plan sponsor (Chrysler) on the issue of whether a participant may bring an equitable claim for plan reformation based on a conflict between the terms of a summary plan description (SPD) and…Read More

August 2018 Pension Finance Update

Pension sponsors enjoyed more good news in August, marking five consecutive months of improvement for pension finances. Both model plans we track[1]gained ground last month – traditional Plan A improved almost 1% while the more conservative Plan B gained less than 1%. For the year, Plan A is more than 8% ahead, while Plan B…Read More

Executive Order on Strengthening Retirement Security in America

On August 31, 2018, President Trump signed an Executive Order on Strengthening Retirement Security in America. Summarizing, the order does three things: Agencies to consider authorization of Open MEPs: It instructs the Secretary of Labor to “examine policies” that would eliminate ERISA regulatory obstacles to the creation of Open MEPs; and it instructs the Secretary…Read More

Top ways your traditional administration platform could be costing you

As companies grow and pension benefit needs evolve, technology must adapt to serve any new conditions that may arise. When it comes to managing defined benefit (DB) plans, however, many administration platforms continue to operate with dated, inflexible systems. Such models can create extra workload, generate unnecessary expense, and cause frustration among sponsors and participants…Read More