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Retirement plan risk

Retirement income, inflation, and retirement finance

The Consumer Price Index (CPI) has steadily risen throughout the year, with prices in September 2021 5.4% higher than the beginning of the year. This represents, fundamentally, a reduction in the buying power of a (nominal) dollar since the beginning of the year. How does this affect retirees and those saving for retirement? The effect…Read More

HEROES Act Includes Significant Relief Provisions for Multiemployer Pension Funds

On May 15, in a nearly party-line vote, the House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act). The bill now goes to the Senate. While Senate Majority Leader Mitch McConnell described the bill as “dead on arrival,” it likely gives direction on a potential bipartisan rescue of the…Read More

Interest rates 2019 – measuring UVBs for variable-rate premiums

In this article we discuss a key election a sponsor may make as to how plan underfunding is measured – whether to use end-of-2018 spot rates or a 24-month average – that may have a material effect on how much PBGC variable-rate premiums the sponsor must pay in 2019. This is an issue for DB…Read More

DB funding: pay now or pay later

It looks like many sponsors that are currently taking advantage of defined benefit plan minimum funding relief will, beginning in the next five years (or so), have to start paying down plan underfunding. In the interim, the primary incentive for plan funding is Pension Benefit Guaranty Corporation variable-rate premiums. In this article we review, first,…Read More

What to Look For in an Annuity Search Firm

As a fiduciary, there is a lot to consider when selecting an Annuity Search Firm. More than ever, informed decisions require diligent research to ensure a respondent’s suitability. Unfortunately, standard RFP/RFI responses will not always include certain key factors. To make the right choice, here’s what you need to know: Due Diligence Find the right…Read More

More 401(k) Bashing, And a Fix (reprinted from HRE)

I posted here earlier this month about a provocative Wall Street Journal piece in which the creators and early adopters of the 401(k) retirement-savings vehicle lament the revolution they started. Their point: They had no intention of watching the concept turn into the sole — and highly inadequate — savings receptacle for employees. Now, on…Read More

Let the Retirement Pendulum Swing Freely to a Better Place for All

The movement to a DC-oriented private retirement system has raised concerns by policymakers, employees and even some of the employers who have embraced this trend. The chief concern can be summed up as the total shifting of risks to employees – the risks that they won’t save enough, the risk that they will use the…Read More

How partners upgraded their cash balance plans

Partners of a specialized medical practice were faced with an expensive dilemma when the yearly return on their cash balance plan investments fell quite a bit short of the annual 4% fixed- return target. Not only would partners be required to make up the difference by increasing the current annual contribution by 25%, but the…Read More