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PLANSPONSOR BLINESs LOGO
week ending March 13th, 2020
Contrary to what media reports may have us think, many defined benefit (DB) plan sponsors remain committed to maintaining their plans. Plan sponsors may have a perception that the cost and burden of maintaining their plans is too much, but DB plan administration requires fewer touchpoints than defined contribution (DC) plan administration, and sources argue that the cost to offload a pension is greater than the cost to maintain it. A survey of PLANSPONSOR NEWSDash readers found the vast majority think DB plans are the best source for guaranteed income in retirement. Some plan sponsors have turned to cash balance plans to satisfy the desire for DB plan income. The Pension Protection Act offered a way to convert to one without repercussions, and a cash balance plan design exists to ease asset/liability matching. The edition of PLANSPONSOR Weekend will offer a new way of looking at DB plans.
Editor's Choice
Administration
What to Know About DB Plan Administration
Plan sponsors should understand the components of administration, the interplay of providers and on what duties sources say sponsors are falling behind.
Administration
Is DB Plan Annuitization More Costly Than Maintaining the Plan?
SEI contends most companies can handle maintaining a DB plan for less than the cost of offloading it, but there are individual factors to consider.
Reader Responses
SURVEY SAYS: Do You Have Guaranteed Retirement Income?
NEWSDash readers share what source of guaranteed income in retirement they think is best.
Data and Research
Cash Balance Plans Particularly Appealing to Small Businesses
Kravitz research found that 92% of cash balance plans are in firms with fewer than 100 employees.
Compliance
PPA Reduced Lawsuits Against Cash Balance Plans
It also provided guidance about how to convert a traditional pension to a cash balance plan.
Opinions
Solving the Cash Balance Investment Problem
John Lowell, with October Three Consulting, discusses how a market-based cash balance plan design provides for a less complicated way to hedge liabilities.
Popular Reads
2021 Health Savings Account Survey
Data and Research
Health Care Costs in Retirement Remain a Top Stressor
Fidelity’s latest analysis shows people often underestimate the potential cost of health care in retirement, even after two decades of watching health care costs increase year-over-year.
2020 Recordkeeping Survey
Compliance
SECURE Act 2.0 Passed Unanimously by Ways and Means Committee
A rare unanimous affirmative voice vote by the Ways and Means Committee allows the SECURE Act 2.0 to be considered by the full House of Representatives.
Compliance
403(b) Plan Sponsor Sued Over Excessive Fees and Underperforming Investments
The lawsuit calls out the use of the active suite of the Fidelity Freedom target-date funds, among other things.
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