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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
Compliance
Lawsuit Says Plan Fiduciaries Should Have Chosen Less Expensive CITs
Though the majority of investment options for Estee Lauder’s 401(k) are CITs, the lawsuit argues the TDFs are more expensive private label CITs.
Compliance
DOL ESG Proposal Throws a Cloud Over Prior Guidance
The proposed regulation seems to create stricter limits for ESG investing in retirement plans, but experts say it is not all doom and gloom for plan sponsors and participants who want these investments.
Administration
Another Risk for Retirement Savings: Divorce
Divorced women are especially vulnerable, but targeted messages not just focused on retirement can help.
Opinions
COVID-19 Compliance Corner: IRS Expands CRD Eligibility and Clarifies Loan Rules
Each week, Carol Buckmann, with Cohen & Buckmann P.C., will explain legislative provisions or official guidance related to the COVID-19 pandemic that affect retirement and health plan sponsors.
Compliance
Heroes Act Now In the Hands of a Skeptical Senate
The Heroes Act, passed by a narrow majority in the House, includes union pension partition relief and a waiver for the reinvestment of 2019 and 2020 RMDs.
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