20 09, 2019

The Rise, Fall, and Complexities of the Defined-Benefit Plan

2019-09-20T16:45:34-07:00September 20th, 2019|Categories: Defined Benefit Plans|Tags: |

Over the past 25 to 30 years there has been a major shift in retirement plan schemes offered by private-sector employers, from the traditional defined-benefit plan (DB plan) to the more contemporary defined-contribution plan (DC plan). Traditional DB plans, commonly referred to as pensions, typically provide a guaranteed monthly income to employees when they retire and place the burden of funding and choosing investments on the employer. DC plans, such as a 401(k), are primarily funded by employees who [...]

6 09, 2018

Some U.K. DC plan trustees think their investment strategies will never catch up to DB plans

2018-09-06T15:41:57-07:00September 6th, 2018|Categories: Retirement|Tags: , |

Forty percent of U.K. defined contribution plan trustees who believe that DC investment strategies lack sophistication of defined benefit funds feel they will never catch up, according to a survey by consultant Hymans Robertson. In the 2018 edition of the survey, 42% of U.K. defined contribution plan trustees said DC investment strategies lack the sophistication of those used by defined benefit funds, compared to 58% who felt DC strategies were on par with DB, according to the survey. Half [...]

2 02, 2018

Tax Reform Fuels DB Plan Accelerated Funding

2018-02-02T09:49:41-08:00February 2nd, 2018|Categories: Pension Funding|Tags: , |

Since, under tax reform, the corporate tax rate will be lower in the future than what had previously been in effect, more voluntary defined benefit (DB) plan contribution activity is expected, according to Michael A. Moran, managing director and chief pension strategist with Goldman Sachs Asset Management (GSAM). In a Q&A on GSAM’s website, Moran explains that contributions to corporate DB plans are generally tax deductible up to certain limits. For plan sponsors that were contemplating making a contribution in [...]

8 06, 2015

California pension initiative requires public vote on retirement benefits

2015-06-08T20:16:49-07:00June 8th, 2015|Categories: Pension Reform|Tags: , , , |

For the third time in four years, advocates for altering public pensions have a plan they want to put to a statewide vote. But this time the proposal by pension-change advocates Chuck Reed and Carl DeMaio has a new twist: Pensions and other retirement benefits would automatically become a matter of ballot-box politics by requiring voter approval any time government officials sought to upgrade benefits. It also would make “defined-contribution” plans the default retirement program for state and local [...]

25 02, 2015

The side effects of ‘pension envy’

2015-02-25T18:30:13-08:00February 25th, 2015|Categories: Retirement|Tags: , , |

In working with retired parents and their adult children, I’ve grown used to the comment that children have about how they “wished they had a pension like Mom or Dad had.” This condition that I call “pension envy” is due to the perception of having the “safety net” of a pension, or defined-benefit retirement plan, rather than a 401(k)-based retirement plan that provides no “defined benefit” and takes that plan participant on a roller-coaster ride of market fluctuations. The [...]

19 02, 2015

The Economics of Retirement

2015-02-19T23:16:04-08:00February 19th, 2015|Categories: Retirement|Tags: , , |

When James M. Poterba started studying retirement finance, he knew he was venturing into fraught territory. Tens of millions of Americans compulsively check their 401(k) retirement accounts online and lie awake wondering how much they can save or, if they are already retired, how they can stretch fixed incomes. Even so, Poterba could not have known how readily people would share their anxieties. […]

11 02, 2015

Half of California workers are heading for retirement struggles

2015-02-11T18:54:13-08:00February 11th, 2015|Categories: Retirement|Tags: , , |

Wanda McGuire describes herself as a “people person.” She spent years working in the fashion industry, and flew around the country as a flight attendant for Continental Airlines. She also worked in what she refers to as “corporate America” — obscure law firms, property management companies and long-gone venture capital startups. She exudes an enthusiasm and upbeat energy that she confidently outlines as major job assets. “I was good at what I did,” she says. It is clear that [...]

5 02, 2015

Simple Steps to Avoid Outliving Your Money in Retirement

2015-02-05T18:54:47-08:00February 5th, 2015|Categories: Retirement|Tags: , , |

Nearly all workers say guaranteed lifetime income is important in retirement. Yet few are doing anything about it. The slow switch from defined-benefit to defined-contribution retirement plans has been under way for three decades. But only now are workers starting to fully appreciate the impact. The vast majority of Americans say that having a guaranteed monthly check for the rest of their lives is important, according to a TIAA-CREF lifetime income survey. Nearly half say securing enough guaranteed income to [...]

3 02, 2015

How labour is trying to save your pension

2015-02-03T21:56:02-08:00February 3rd, 2015|Categories: Retirement|Tags: , , |

Municipal employees in the Town of Happy Valley-Goose Bay, Labrador have been locked out by their employees for almost three weeks in a fight that’s become all too familiar in recent years. Like unionized municipal workers in Quebec, transit workers in Saskatchewan and Bombardier workers in Thunder Bay, the sticking point in the Labrador municipal workers dispute is pension reform.  […]

30 01, 2015

‘Minimal’ Boeing pension contributions expected this year despite 64% liability increase

2015-01-30T23:52:33-08:00January 30th, 2015|Categories: Pension Funding|Tags: , |

Boeing Co.’s unfunded defined benefit plan liabilities jumped 64% to $17.1 billion as of Dec. 31, compared with $10.4 billion a year earlier, the Chicago-based company reported in a filing Wednesday with the Securities and Exchange Commission. In a conference call with analysts Wednesday, W. James “Jim” McNerney Jr., chairman and CEO, addressed what he called “the threat to our balance sheet from defined benefit pensions.” […]

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