Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 11th, 2015
Benefits & Administration
Public Policy, Individual Action
Can public policy and the private sector come together to build a better retirement for American workers? As part of the CEO Speaker Series from the Council on Foreign Relations, Roger W. Ferguson Jr., President and CEO of TIAA-CREF, responded to questions about the adequacy of the retirement system today. For one thing, within the next 20 years, the Trustees expect that Social Security will be unable to cover roughly 25% of expected payouts. “The good news is most economists would share a consensus about how to fix Social Security,” Ferguson said. The bad news: “Our politicians are having trouble reaching that consensus.”Read more >
Just over one in 10 401(k) plan sponsors (11%) plan to replace their recordkeeper over the next 12 months, on par with the 11% who had the same strategy in 2014, according to Cogent Reports. The primary reasons why they plan on making a recordkeeping change are plan fees and investment options.Read more >
Sponsors Appear Eager to Tackle Plan Problems
The 2015 edition of Vanguard’s “How America Saves” study shows retirement plan sponsors continue to aggressively evolve and refine the defined contribution (DC) workplace savings model. At year-end 2014, 36% of Vanguard plans had implemented auto-enrollment, a 50% increase since 2009. Today, approximately 60% of newly hired employees participating in Vanguard 401(k) plans were automatically enrolled. “Moreover, although this feature was traditionally used only with newly hired employees, sponsors of half of Vanguard plans have now chosen to apply it to eligible nonparticipants,” the firm explains. “In addition, seven in 10 auto-enrollment plans have implemented automatic annual deferral-rate increases.”Read more >
A proposed settlement to resolve litigation over Rhode Island’s public pension system reform was approved by a judge. The Associated Press reports that Superior Court Judge Sarah Taft-Carter overruled objections to the settlement, putting an end to nearly all the lawsuits by public-sector unions and retirees against the state over the 2011 reform. Lawmakers must also approve the settlement.Read more >
Products, Deals & People
Franklin Templeton Investments has expanded its retirement target fund lineup for U.S. investors with the introduction of Franklin LifeSmart 2055 Retirement Target Fund.Read more >