Throughout the year, we have followed the performance of the interest rate and securities markets, tracking their effect on retirement finance. As of mid-December, interest rates are up 30-40 basis points for plans with typical duration, and the S&P 500 is up 25% on the year.
The American Rescue Plan Act of 2021 provides significant financial assistance to struggling multiemployer pension plans. In this article, we discuss how this might affect contributing employers that choose to withdraw from those funds.
A decision is made in Bartnett v. Abbott Laboratories, dismissing plaintiff’s claims against defendant sponsor fiduciaries in a case involving the theft of $245,000 in plaintiff’s Abbott retirement plan account.
The nonenforcement policy only applies to the Department of Labor, and, theoretically, a private lawsuit could still cite the regulations in support of a fiduciary claim.
As of the end of February 2021, market interest rates are up significantly since the beginning of the year. For many plans, this will mean that 2021 lump sums are valued at interest rates that are lower than current market rates.
Even for plans not at the VRP headcount cap, with respect to (relatively) smaller benefits, annuity settlement may be an efficient strategy. For almost all pension plans, there exists a threshold, greater than zero, below which these settlements make sense.
Under the proposal, employers would generally be required to maintain an “automatic contribution plan.” Failure to comply would trigger an excise tax.
With a presidential election coming up next month, tax policy will be one of the issues on the table. And, while it seems reasonable to assume that if President Trump were to be re-elected his tax policy would not change, we also know that if former Vice President Joe Biden gets elected, there will be changes.
The Department of Labor’s regulatory agenda includes a “deregulatory” project on ERISA rules for proxy voting. In this article we review current DOL rules on proxy voting and consider some of the issues that may come up under this (de)regulation project. Background – April 2019 Executive Order In April 2019 President Trump issued an “Executive…Read More
As we have discussed, when a sponsor terminates a defined benefit plan, the cost of the plan termination will typically exceed the book value of plan liabilities by 15%-35% for non-retirees and 5%-10% for retirees. This write-up of liabilities reflects the cost of buying annuities, attributable to annuity carrier regulatory (and business) overhead and profit margin,…Read More