“Plan sponsors should review their risk management toolkit to consider whether their investment policy is aligned with the current market environment and to explore potential risk transfer activity,” suggests Scott Jarboe, with Mercer.
Tag: defined benefit plan
Elliot Health System made the statement that “financial challenges in health care have led the vast majority of health care employers to make this decision years before we are doing so.”
A company executive says Club Vita’s analysis will lead to material savings and less risk for defined benefit (DB) plan sponsors.
Sixty-seven percent of defined benefit (DB) plan sponsors polled say they will conduct an annuity buyout to de-risk, and the majority of them have already taken actions to prepare.
There are goals and deadlines during the termination process, so a plan sponsor doesn’t want to hit a roadblock and have to start the process all over again.
Larger DB plans have access to liability hedging, overlay managers and derivatives to manage interest rate risk, and small plans want these capabilities but cannot afford the expense, says James Tamposi with Cerulli Associates.
If there are missing participants that plan sponsors have not made a genuine effort to find, “the entire plan could be disqualified under the tax code and the plan fiduciaries may be found to have breached their ERISA duties,” says Norma Sharara, a partner with Mercer.
Kravitz research found that 92% of cash balance plans are in firms with fewer than 100 employees.
Nearly two-thirds (62%) of respondents to a survey say they are "very likely" to transfer some or all of their pension obligations to an insurance company once their DB plan becomes well-funded.
"Having a plan in place to manage their finances can help retirees feel confident about spending their assets and address the fears that may be holding them back,” says Marcy Keckler, vice president of financial advice strategy at Ameriprise Financial.
The blueprint calls for nine design features of the new contract.
Those who are contributing less than 3% to a retirement plan are on track to replace 59% of their income in retirement, whereas those who contribute 10% or more are on track to replace 128% of their income, an analysis from Empower found.
This enables corporations to expense their contributions at a higher tax rate, according to Cerulli.
Nearly half would like a digital retirement coach, an Accenture survey found.
Northern Trust amended its benefit formula in 2012 and provided a transitional benefit that assumed salary increases of 1.5% per year, and the court found expectations of higher salary increases was not part of an “accrued benefit.”
This is a pre-approved plan that meets IRS requirements.
Facing several uncertainties in the health care industry, organizations are looking to revamp their retirement plans to attract talent.
The consultancy identifies 10 investment-related terms rendered outdated by change.
According to a Sears announcement, following the making of a $407 million contribution, it will be nearly relieved of the obligation to make further contributions to the pension plans for approximately two years.