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Benefits & Administration |
Report Shows State Shifts from DB to DC Are Costly |
A report from the National Institute on
Retirement Security suggests that states that shifted retirement plans from
defined benefit (DB) pension plans to defined contribution (DC) plans
experienced higher costs. “Case Studies of State Pension Plans that Switched to
Defined Contribution Plans” presents summaries of changes in three
states—Alaska, Michigan, and West Virginia—that made the switch from a DB
pension to DC accounts. The Institute says the case studies indicate that the
best way for a state to address any pension underfunding issue is to implement
a responsible funding policy with full annual required contributions—and for
states to evaluate assumptions and funding policies over time, making any
appropriate adjustments.Read more > |
Most DC Plan Participants Leave Balances Untouched |
A report of defined contribution (DC) plan
participant activity from the Investment Company Institute (ICI) shows
withdrawal and account transfer activity was low in 2014. Between January and
September 2014, 8.1% of DC plan participants changed the asset allocation of
their account balances. This level of reallocation activity was slightly lower
than the reallocation activity observed during the comparable periods from 2009
through 2013, according to ICI. Reallocation of participants’ contributions
also was lower than rates observed in earlier periods. Read more > |
Women Have Confidence Gap in Financial Matters |
The most surprising result of the Money Fit
Women Study from Fidelity was the overwhelming majority of women (92%) who said
they want to learn more about financial planning, says Alexandra Taussig,
senior vice president for marketing and business strategy at Fidelity
Investments. A major finding of the study is that women greatly lack confidence
in their own financial ability. They’re concerned they won’t have enough money
to live on in retirement, but they want to learn, Taussig says. “They want to
take action and start taking control of their finances.” Since most women will
be solely responsible for their finances at some point in their lives, Taussig
notes, their willingness to step up engagement in active learning about finance
is positive.Read more > |