August 2017 Archive

August 2017 Pension Finance Update

August 30, 2017

Pension funded status slipped in August, due to flat stock markets and remorselessly lower long-term interest rates. Both model plans we track1 saw modest declines last month – traditional Plan A dropped more than 1% but is still up 1% for the year, while the more conservative Plan B lost less than 1% in August but also remains 1% ahead so far in 2017. Read More

Current outlook – August 2017

August 29, 2017

In this Current outlook we discuss: legislation introduced in Congress that would reduce Pension Benefit Guaranty Corporation premiums and take premium decreases/increases off-budget; the re-classification of IRS’s mortality table update as “Economically Significant;” the wind-up of the myRA program (and its policy significance); and (very briefly) the effect of possible tax reform legislation on retirement savings tax incentives. Read More

Distributed ledger technology and retirement savings infrastructure – part 2

August 22, 2017

In a previous article, Distributed ledger technology and retirement savings infrastructure – part 1 – the basics, we set out to define distributed ledger technologies (DLT). In this article we discuss some of the practical effects on retirement plan administration that may result from the adoption of distributed ledger technologies (DLT) by the financial services industry as a whole and by retirement plan sponsors and service providers. We then consider the policy implications of some of these changes. We conclude with a brief discussion of some legal/ERISA issues that DLT may raise. Read More

Fiduciary rule update – August 2017

August 17, 2017

In this article we briefly discuss three recent developments with respect to the Department of Labor’s controversial 2016 Fiduciary Rule: DOL’s proposed further extension of the full applicability date of the Best Interest Contract (BIC) Exemption; recently issued FAQs clarifying that, generally, a person may encourage a participant to save without triggering fiduciary status; and oral arguments in the appeal of the district court’s decision (in favor of DOL) in litigation challenging the rule. Read More

Distributed ledger technology and retirement savings infrastructure – part 1

August 15, 2017

Retirement plan sponsors are under constant pressure to reduce costs. In an era of decreasing investment returns and limited budgets, investment and administrative overhead is a target of management, policymakers, regulators and litigators. The bleeding edge of all this is the near-tsunami of 401(k) plan fee cases brought against plan fiduciaries over the last 10 years. Read More

July 2017 Pension Finance Update

August 01, 2017

Strong stock markets have buoyed pension sponsors this year, overcoming lower interest rates to produce improvements in pension funded status, and July saw a continuation of this trend. Both model plans we track enjoyed modest (less than 1%) improvement last month and remain in the black for the year so far. Traditional Plan A is now up more than 2% this year, while the more conservative Plan B is ahead 1% through the first seven months of 2017. Read More

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