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Browsing Defined Benefit

New Administration, new Congress

With the focus currently on how President-Elect Biden will staff his new Administration and on the change in control of the Senate, we provide a brief review of the key Administration jobs that President Biden will have to fill, and the key Congressional leadership, that directly affect retirement savings policy, and some of the issues they will be considering.

December 2020 Pension Finance Update

December gave us one more turn of the screw from extraordinary 2020 stock markets, pushing pension sponsors into the black for the year.

Annuity Purchase Update: December 2020 Interest Rates

Pensions experienced their strongest month of the year in November. The average duration 7 annuity purchase interest rates increased 4 basis points and average duration 15 rates increased 1 basis point since last month as seen in the below graph titled Annuity Purchase Interest Rates.

DOL finalizes new rules on proxy voting

On December 11, 2020, the Department of Labor released a final regulation revising DOL’s rules for the voting (or not voting) of proxies by ERISA plan fiduciaries.

November 2020 Pension Finance Update

Stocks enjoyed their strongest month of the year in November, propelling pensions toward positive territory for the year. Both model plans we track gained ground last month, with Plan A adding close to 5% and Plan B close to 2% during the month. For the year, Plan A is down less than 1% and Plan B is even through the first eleven months of 2020.

Annuity Purchase Update: November 2020 Interest Rates

Pension plans have experienced unprecedented volatility in 2020. While the market volatility has caused the treasury rates to drop dramatically, the spread between treasury bonds and the bonds insurance companies invest in have widened. The widening of this spread typically tells us that now would be a good time for pension plans to purchase annuities.

SECURE 2.0 – the Securing a Strong Retirement Act

On October 27, 2020, House Ways and Means Committee Chairman Neal (D-MA) and Ranking Member Brady (R-TX) released the Securing a Strong Retirement Act – a set of retirement savings policy changes with bi-partisan support. The bill builds on changes made by 2019’s Setting Every Community Up for Retirement Enhancement (SECURE) Act and may provide a template for further improvement of our current retirement savings system.

October 2020 Pension Finance Update

Stocks slipped again in October, producing modest declines for pensions. Both model plans we track lost less than 1% during the month. For the year, Plan A is down more than 5% and Plan B is down almost 2% through the first ten months of 2020.