“Industry Trends and Research” covers significant research and trends impacting ASPPA members' practices.
The Great Recession wrought a lot of havoc — and 401(k)s did not escape the maelstrom. Many consider the recovery of the U.S. economy to be very gradual; a recent report by Gallup indicates that the same may be said for that of confidence of those not yet retired in 401(k)s as a primary source of retirement income.
The Moving Ahead for the 21st Century Act (MAP-21) pension-funding stabilization provisions, which have been in effect for two years, are most likely to be applied to the determination of funding requirements of larger plans, those with lower funding ratios and plans with a higher number of inactive participants, a new Society of Actuaries (SOA) study shows. The SOA based its research on the data that defined benefit plans reported on their 2012 Form 5500 filings, the most recent the federal government has made publicly available.
Target date funds play an increasingly important role in retirement plans, and monitoring a plan’s TDF options is fast becoming one of the most important fiduciary obligations plan sponsors face in managing their retirement plan investment lineup. According to a white paper by Cammack Retirement Group, TDFs hold more than half a trillion dollars, including DC plan assets, and there’s no end in sight.
Pension funding status slipped in March and liabilities grew, says a report by consulting and actuarial firm Milliman, Inc. Milliman reports that for 100 of the largest U.S. DB plans, pension liabilities grew to the tune of a collective $5 billion. Milliman blamed a drop in the monthly discount rate to 4.30 percent, down 0.08 from February’s 4.32 percent.
The funding ratio of DB benefit plans sponsored by employers in the S&P 1500 offer fell slightly in March. Mercer found that the funding ratios of those companies’ DB plans slipped to 85 percent; it had been 87 percent in February.
Target date funds reflect that flexibility and engagement have become firmly entrenched aspects of retirement plan management for both participants and plan sponsors. In a NAPA webinar, “Target Date Trends and Evaluation,” T. Rowe Price’s Jerome A. Clark discussed how TDFs reflect greater discretion over how funds are managed.
Research released by EBRI March 18 shows that a sizable portion of the population has saved very little. That’s sobering by itself, but a closer look reveals more regarding what that means for retirement plan participants and sponsors.
The words have barely faded from the teleprompter, but retirement experts have wasted no time in expressing caution regarding the “myRA” retirement accounts President Obama unveiled in his State of the Union Address. Chris Carosa of Fiduciary News provides a comprehensive list of 10 reasons to be cautious about myRAs.
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