October 2016 Archive

Update: stock drop litigation and inside information

October 12, 2016

“Stock drop” cases involve company stock held in a defined contribution plan that has lost significant value (hence, “drop”), in which the plaintiff argues that the plan’s fiduciaries had an obligation to sell plan stock, or at least discontinue buying it, before or during the “drop.” In what follows we review where the courts are coming out on this issue. Read More

Current outlook – October 2016

October 07, 2016

In this Current outlook we discuss three issues raised in the recent complaint filed against fiduciaries of the Northrop Grumman DC plan that are atypical of 401(k) fee litigation – reimbursement of sponsor direct expenses, use of a flat recordkeeping fee and Financial Engines payments. We then review the recent GAO report 401(K) PLANS: DOL Could Take Steps to Improve Retirement Income Options for Plan Participants. We conclude with a brief note on two recent IRS Notices, extending temporary closed group nondiscrimination relief and publishing mortality tables for 2017. Read More

New York City private sector retirement plan proposal

October 20, 2016

The New York City Comptroller has proposed a program (the “New York City Nest Egg”) that would default every New York City worker into either a qualified plan or an IRA. In what follows, we begin with some background on state private sector employer savings programs and on the issues presented by similar programs for “political subdivisions” of states, e.g., a city or county. Read More

Senate Finance Committee approves bipartisan retirement savings legislation

October 04, 2016

On September 21, 2016, the Senate Finance Committee unanimously approved the Retirement Enhancement and Savings Act of 2016. The bill includes a number of provisions affecting both defined contribution and defined benefit plans. In this article, we begin with some background on the bill’s genesis and prospects and then focus on four of the more significant proposals in it. Read More

John Lowell appointed President Elect of the Conference of Consulting Actuaries

October 26, 2016

Las Vegas - Today, John Lowell, Consultant at U.S. actuarial firm October Three Consulting, has been appointed President Elect of the Conference of Consulting Actuaries (CCA). As President Elect, Lowell will take on responsibility for strategic planning for the CCA and will be a member of its Leadership Team as well as representing the organization in the U.S. and internationally. Download

2017 Increases for Retirement Plans, Social Security

October 19, 2016

The Social Security Administration just announced benefit increases effective in 2017. These changes will affect benefits for currently retired individuals, as well as those contemplating retirement. Employers who sponsor retirement plans that are ‘coordinated’ with Social Security in some fashion will also see an impact on benefits earned and payable under such plans. Read More

IRS finalizes partial annuity regulation

October 05, 2016

On September 9, 2016 IRS published final regulations providing rules for “partial annuity distributions” in defined benefit plans, e.g., distribution of part of a participant’s benefit as a lump sum and part as an annuity. In this article we discuss the final regulation. Read More

September 2016 Pension Finance Update

October 03, 2016

Pensions enjoyed modest improvement in funded status last month, but remain underwater during 2016 through three quarters. Both model pension plans we track improved by less than 1% in September. For the year, Plan A is down 5% and the more conservative Plan B is down less than 1%. Read More

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