Tag: defined contribution plans
Willis Towers Watson believes plan-wide statistics on mean or median participation rates, balances or contribution rates measure aggregate data on all participants but offer little in the way of insight into retirement adequacy and meaningful benchmarks for individuals or segments of the population.
ICI finds that two factors appear to influence DC plan participants’ loan activity: reaction to financial stresses and a seasonal pattern.
An Insights article from Cammack Retirement notes how different fixed income vehicles perform under a rising interest rate environment and suggests DC plan sponsors offer a diverse menu of options for participants.
Many Gen Xers and Gen Yers deferred 90% or more of the Internal Revenue Service (IRS) maximum allowance for contributions to their retirement accounts, according to research by Principal Financial Group, and they are sacrificing other expenses to do so.
A new law would raise the contribution limit for SIMPLE plans from $12,500 to $15,500 for the smallest businesses and give businesses with 26 to 100 employees the option of the higher limits.
The new law extends the time a participant has to repay loans from 60 days after an offset to the date their tax return is due.
An institutional investment approach uses outcome-oriented investments, broad asset class diversification, best-of-breed investment management, a thoughtful mix of active and passive strategies and are vehicle agnostic, a report notes.
Current regulations requiring paper delivery of participant DC plan information can cost investors between $350 to $500 million per year, which can reduce the average account balance by 2.4% over a 40-year work life, the study found.
DC plan consultants surveyed by PIMCO offer suggestions for helping retirees with income, core investment menu design and other DC plan features.
For example, the Council proposes to develop an alternative means of compliance by which the introductory portion of the SPD–referred to as the “Quick Reference Guide”–would be delivered annually to participants automatically, and the entire SPD or any full part of the SPD would be made available upon request.
“Consequently, any policy that alters this system could have consequences–either positive or negative–for Americans’ ability to fund a comfortable retirement,” says Craig Copeland, with EBRI.
The Department of Labor (DOL) has paved the ways for inclusion of environmental, social and governance (ESG)-screened investments to be included in defined contribution (DC) plan menus.
Many may need to set up an emergency fund or pay off debt first.
The number of 401(k) savers with at least $1 million in their 401(k) increased to 150,000 at the end of 2017, up from 93,000 a year ago.