Tag: Retirement New Legislation

Murray and Wyden’s letter to the IRS and Treasury asks why employers will be permitted to offload pension liabilities and transfer risk to retirees.

The legislation would strengthen consumer protections, improve access to retirement savings plans for part-time workers, help increase women’s financial literacy, and give specific support to low-income women and survivors of domestic abuse.

The Butch Lewis Act offers a way to preserve union retiree pension benefits through an emergency loan program funded with proceeds from Treasury bonds; the legislation this week received a 10-year CBO cost assessment of $34 billion.

One of three bills introduced this week as part of “Tax Reform 2.0,” the Family Savings Act includes many of the provisions written into the popular RESA legislation.

If plan sponsors have suggestions and or would like to express support for health savings accounts, now is a good time to let members of Congress know, or to work through employer advocacy groups in Washington.

The trust and expectation that employees place in their employers to help them prepare effectively for retirement is stronger than ever, and this is both a burden and an opportunity for DC plan sponsors.

Prudential Financial experts anticipate Social Security’s funding shortfall will likely result in program changes over time, such as reducing cost-of-living adjustments, raising the full retirement age beyond 67 or cutting benefits.

According to the Social Security Board of Trustees, the total annual cost of the federal benefits program is projected to exceed total annual income in 2018 for the first time since 1982, and remain higher throughout the 75-year projection period.

According to the text of the complaint, the act that created the California Secure Choice program “violates the Supremacy Clause of the United States Constitution because it is expressly preempted by the Employee Retirement Income Security Act of 1974.”

Tens of thousands of employers in the U.S. contribute to multiemployer pension funds that are in critical and declining status, collectively facing an unfunded liability well above $100 billion; Society of Actuary researchers warn of potential ripple effects should many of their plans fail at once.

Willis Towers Watson researchers present various opportunities “outside of traditional hedging assets other than long corporate credit that may be added to [pension funds'] hedging portfolios to help provide a diversifying source of long-term credit premia.”

U.S. Senators Orrin Hatch and Sherrod Brown are seeking public and industry input on ways to improve the solvency of multiemployer pension plans and the Pension Benefit Guarantee Corporation.

Peg Knox, chief operating officer of DCIIA, points to both the coverage gap and retirement income adequacy as being top of mind; there is also a strong fee litigation focus, given how near and dear this topic is to both plan sponsors and service providers.

The fact that two U.S. Circuit Courts of Appeals, the Fifth and the Tenth, have issued conflicting rulings about the propriety of the DOL’s process in creating and implementing a stricter fiduciary standard, leaves the retirement plan industry with a number of challenging questions.

“I really like the idea of promoting default-driven plans, and the evidence is abundantly clear that automatic retirement plans can be very effective,” says Jeff Kletti at Wells Fargo. “However, my experience has been that the pendulum can swing too far in terms of mandates.”

Following the GOP tax cuts, plan sponsors may wish to coordinate administration of their loan offset rollover rules with their TPA, attorneys suggest, in order to avoid inadvertently defaulting participants' plan loans.

Alongside numerous changes, the bill seeks to eliminate the current 10% cap on automatically-increased deferral rates of employees who are automatically enrolled in a plan.

The debate started when the American Council for Capital Formation published a sharply written report alleging that, as the group puts it, “CalPERS has prioritized relatively poor performing environmental, social and governance [ESG] investments at the expense of other investments more likely to optimize returns.”