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Our Perspective

Annuity Purchase Update: January 2020 Interest Rates

January 2020 Duration: 7 Years 15 Years   7 Years 15 Years Range Rate: 2.12% – 2.45% 2.34% – 2.63% Average Rate: 2.27% 2.49% As mentioned in our December 2019 Pension Finance Update, pension plans continued to see an increase in funded status during this last quarter of 2019. Also, the equity market has experienced…Read More

SECURE implementation: effective dates of key provisions

Changes to current rules applicable to retirement plans made by the Setting Every Community Up for Retirement Enhancement (SECURE) Act (signed into law by President Trump on December 20, 2019) are (in most cases) already effective. In this article we review, very briefly, the effective dates of some of the key provisions of SECURE and sponsor…Read More

December 2019 Pension Finance Update

2019 was the best of times, then the worst of times, then the best of times again for pension finance. Overall assessment: meh. During December, both model plans we track[1] gained ground for the fourth consecutive month: Plan A improved 2% and finished 2019 even, while Plan B gained less than 1%, ending 2019 up less…Read More

President signs spending legislation including SECURE Act

On December 20, 2019, President Trump signed appropriations legislation that included the Setting Every Community Up for Retirement Enhancement (SECURE) Act. Highlights of the new legislation include: A DC annuity fiduciary safe harbor Mandatory lifetime income disclosure Closed group nondiscrimination relief Authorization of DC Open MEPs Required coverage of long-term part-time employees Increase the cap…Read More

2019 year in review

In this article we review some of the significant retirement policy developments of 2019, including Congress’s consideration of broad bipartisan legislation (the SECURE Act), DOL’s electronic participant communications proposal, and the Supreme Court putting three ERISA retirement plan cases on its docket. Legislation Retirement policy-related legislative activity focused on passage of the Setting Every Community Up…Read More

Annuity Purchase Update: December 2019 Interest Rates

December 2019 Duration: 7 Years 15 Years   7 Years 15 Years Range Rate: 2.00% – 2.45% 2.25% – 2.64% Average Rate: 2.21% 2.44% As mentioned in our November 2019 Pension Finance Update, pension plans continued to see an increase in funded status during this last quarter of 2019. Also, the equity market has experienced…Read More

Current legislative outlook – beyond SECURE – the next round of (possible) bipartisan retirement legislation

The Setting Every Community Up for Retirement Enhancement (SECURE) Act – which includes (among other things) a defined contribution plan annuity fiduciary safe harbor, closed group relief, authorization of DC Open multiple employer plans (MEPs), mandatory lifetime income disclosure, and mandatory coverage of long-term part-time employees – remains stalled in the Senate. There is broad…Read More

November 2019 Pension Finance Update

Pension finances enjoyed their third consecutive month of improvement in November, mostly due to rising stock markets. Both model plans we track[1] gained ground last month: Plan A improved more than 1% in November but remains down 2% for the year, while Plan B gained less than 1% and is now even through the first eleven…Read More

Interest rates 2019 – the effect of recent declines on DC plans

Medium- and long-term interest rates have declined 75-100 basis points since the beginning of the year. That decline, if it persists, will significantly increase the “cost of retirement,” not just for defined benefit plan sponsors (see our recent article Interest rates 2019 – DB funding strategy) but also for defined contribution plan participants.  In this article…Read More

Interest rates 2019 — signal or noise?

Medium- and long-term interest rates have declined 75-100 basis points since the beginning of the year. We have published a series of articles on measuring UVBs for variable-rate premiums, managing funding and PBGC variable-rate premiums in a volatile interest rate environment, DB funding strategy, and the effect of interest rate declines on DC plans. In this article we very briefly…Read More