Retirement Planning
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Retirement Showdown
Experts are looking to educate lawmakers about the benefits of protecting the existing tax treatment of retirement plans.
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Employers Taking Charge of Their Retirement Plans
New federal rules released last year made clear that defined contribution plan sponsors needed to get a better handle on investment and other provider fees. A new survey shows that they have.
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Much 'To Do' to Keep Retirement Running Smoothly
Revisiting the company's investment plan statement should be the first order of business, and then start building your paper trail to ward off IRS inquiries.
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No-Strings-Attached Roth 401(k) Conversion Is Good Deal—for Select Few
Until now, to make such a distribution without incurring a 10 percent penalty, workers must either have been retiring, terminating their job with their employer or turning 59½.
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Tax Bill Will Reduce 401(k) Taxes, Ease Fund Transfers
A provision tucked into the American Taxpayer Relief Act will expand the opportunities for employees to transfer funds from traditional 401(k) plans to Roth 401(k)s. Employees who are in lower tax brackets now compared with when they retire will reap big tax savings from such transfers.
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The 401(k) Consolidation Conundrum
Consolidating retirement accounts is typically a worker's responsibility, but employers can offer guidance to make the process easier.
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Clients Kind of Blue Over IBM's 401(k) Surprise
Starting next year, Big Blue's match will be contributed as a lump sum on Dec. 31.
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Pension Envy for Employees Not On the Government's Dime
A recent analysis by Hearts & Wallets of individuals who are near or in retirement showed that those with a public pension are happier in retirement and have higher income than those who don't have a defined-benefit plan.
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Year-End Pension Funding Gaps Could be Largest on Record: Mercer
The aggregate funding deficit in pension plans sponsored by S&P 1500 employers narrowed to $607 billion in November, down $12 billion from the $619 billion deficit recorded in October.
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Employee Opinion of Health Care Benefits Value Drops: Mercer
Thirty-six percent of employees polled in Mercer's annual Workplace Survey indicated that their out-of-pocket costs were 'definitely' commensurate with the health benefits they receive through their employer, down from 44 percent in 2011 and 38 percent in 2010.
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Fiscal Cliff Talks Target Retirement Plans
Retirement plans are in congressional crosshairs for one basic reason: the tax-deductible contributions made to the plans cost the government tens of billions of dollars a year in reduced tax revenues.
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Mercer to Launch Health Insurance Exchange for Medicare-Eligible Employees
The exchange, which Mercer is offering along with Connextions Inc., a technology solutions company, will provide assistance to retirees during enrollment periods and throughout the year.
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AMR Seeks Court Approval to Remove Lump-Sum Benefit Option in Pilots' Pension Plan
American Airlines Inc. parent AMR Corp. has asked a federal bankruptcy court in New York for permission to allow the airline to amend its frozen pilots' pension plan so that retiring pilots cannot receive their accrued benefits as a lump-sum.
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Hostess Brands to Terminate Pension Plan as Part of Liquidation
Hostess suspended payments to the 42 multiemployer pension plans to which it contributes in August 2011. The company's IBC Defined Benefit Plan had about $56 million in assets and $111 million in liabilities as of April 30, according to the PBGC.
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The (Employer) Match Is Back
Recent data show that employers have not only restored the matching 401(k), but also that employees are contributing more to their retirement plans as well.
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PBGC Deficit Hits Record $34 billion in 2012 Fiscal Year
The deficit in the PBGC's insurance program for single-employer plans climbed to $29.1 billion in fiscal 2012, up from $23.3 billion the previous year. The deficit in the agency's insurance program that covers multiemployer pension plans climbed to about $5.2 billion, up from $2.
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401(k) Plan Balances Hit Record High for 2012: Fidelity
For the three-month period ending Sept. 30, employees' average account balances jumped 4.2 percent from the prior quarter, and 18 percent compared with the end of the third quarter of 2011 when account balances averaged $64,300, according to Fidelity Investments.
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States Up the Pressure on Retirement Plans for Private Workers
California's new state-administered retirement savings program for certain private-sector workers could serve as a model for other states.
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American Airlines Freezes Its Pension Plans
In January, American said it would seek bankruptcy court approval to terminate the plans, which have about 130,000 participants.
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Thirty Percent of Eligible Employees Take GM Lump-Sum Offer
GM announced on June 1 it would offer 42,000 salaried retirees a lump-sum offer. Another 76,000 salaried retirees, along with those who declined the lump sum, will receive annuity payments from Prudential.
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New Research Shows Retirees Are Bailing on 401(k)s Earlier
The data suggest that more retirees are taking their money and bailing from their plan even sooner after they stop working than used to be the case.
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Kimberly-Clark Offers Lump-Sum Pension Benefits
Participants will have until Nov. 21 to make the election. The lump sum payments will be funded from plan assets and will be made by the end of 2012.
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Employer-Sponsored Health Benefits for Retirees Dying Out
Data from the Employee Benefits Research Institute showed that in 1997, 10.2 percent of private-sector employers provided health insurance to Medicare-eligible retirees and that 11.3 percent provided such coverage to early retirees. As of last year, those numbers fell to 6.1 percent and 6.
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401(k) Plan Contribution, Other Retirement Plan Limits Upped for 2013
The maximum contribution that can be made to 401(k) plans will increase next year, as will the maximum benefit that can be funded through defined benefit plans, the Internal Revenue Service announced Oct. 18.
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Pension Payouts
When defined benefit plan participants take a lump sum, they move out of the plan. That means plan sponsors that cash out participants have a smaller plan with tighter variables—including contribution rates.
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More Employers Adding Automatic Enrollment to Defined Contribution Plans: Survey
In 2012, 65 percent of employers surveyed by Towers Watson & Co. offered an automatic enrollment feature, up from 57 percent in 2011 and 51 percent in 2010.
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Fewer Employers Offering Defined Benefit Pension Plans to New Salaried Employees
Just 11 Fortune 100 companies offered a traditional defined benefit plan to new salaried employees as of June 30, down from 14 in 2011, 17 in 2010 and 19 in 2009.
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Equifax to Offer Lump-Sum Pension Conversions to Eligible Former Employees
The offer is being extended to those individuals who terminated employment prior to Jan. 1, 2012, but have not yet started to receive benefits.
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Pension Plans' Funded Status Up on Stronger Equity Market: Mercer
The average funding level of pension plans sponsored by companies in the S&P 1500 rose to 73 percent in September, up from 72 percent in August and the record-low funded ratio of 70 percent set in July.
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Health of Long-Term-Care Business Questionable: Report
The field of long-term-care insurance providers is shrinking as companies exit the business or limit their sales. Of the 15 companies that generated the most statutory earned premiums for long term care insurance in 2010, five either no longer sell the product or have curbed sales.
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Middle-Income Americans Wing It on Financial Decisions
About 67 percent of people with household annual income between $30,000 and $100,000 have made at least one 'really bad financial decision.' Those stumbles cost families an average $23,000.
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Boeing Proposes Ending Defined Benefit Plan for New Employees
Boeing's proposal would amount to a 40 percent reduction in benefits from current levels. The union's contract with Boeing expires Oct. 6.
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Pension Plan Funding Levels Up Slightly in August: Study
Defined benefit plans offered by the 100 U.S. employers with the largest pension programs were an average of 72.4 percent funded as of Aug. 31, up from 70.9 percent as of July 31, but sharply lower compared with the 78.7 percent funded ratio at the end of 2011.
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National 401(k) Day Brings Retirement Planning Problems to Light
This year's Sept. 7 kickoff date for National 401(k) Day "is a great trigger event for plan sponsors to have the conversation of how to get the most out of your 401(k)," says Chris Augelli, vice president of sales operations at ADP Retirement Services. "But it's not a one-time event.
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Too Much Company Stock Can Be Hazardous to a 401(k) Account
'Companies that look great today may not look great tomorrow. It is better for participants not to be overexposed in their retirement plans to company stock,' BrightScope founder Dan Weeks says.
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Reform Law is Biggest Threat to Medicare: Paul Ryan
As chairman of the House Budget Committee, Ryan drafted budgets for fiscal years 2012 and 2013 that include plans to overhaul the nation's federal healthcare entitlement programs through a premium-support model for Medicare and block grant payments to states for Medicaid.
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Working Longer No Lock for Comfortable Retirement
In the past, most workers figured they'd be able to retire at the age of 65. But following 2008's financial crisis, the idea of working a few more years to recoup lost savings became commonplace.
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Employee Retirement Statements Get a Fee Makeover
Participants in defined contribution plans should receive the first of two fee-disclosure notices by Aug. 30. This notice should include a listing of all the investments available in the plan as well as the options' fees and historical performance.
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Employers Resolve Retirement Stress With Investment Options Shift
Target date funds and professional investment management services help employers and employees transition from outdated attitudes and methods to fund retirement.
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Women Facing 'Retirement Income Glass Ceiling'
Savings totals are being crimped by lower wages and the time they've spent outside the workforce.
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S&P 500 Companies' Pension Funding Ratio Drops in 2011
Only 18 of the 338 S&P 500 firms with pension plans were fully funded, according to the Standard & Poor's report.
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Financial Advisers Reject NBA Retirement Plan
Some believe the league is tossing up a brick with reliance on annuities, calling it a 'solution of last resort.'
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For Some Workers, the Piggy Bank Is Fat for Retirement
Although financial stress exists for a large number of employees, a recent survey indicates that more people are stashing away enough for life after work.
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Ford Retirees Criticize Lump-Sum Payment Offer Vs. Monthly Pension Checks
The Ford Actions Impacting Retirees Alliance hired a team of lawyers, consultants and accountants to review the proposal Ford made this month, and in a letter to its members, advised against accepting the buyout, the Detroit News reported.
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Democrats Razz Labor Department's Fiduciary Proposal
The U.S. Labor Department first proposed an enhanced fiduciary-duty rule in October 2010, citing the need to update federal retirement law to improve the protection of millions of 401(k) and individual retirement account investors from tainted advice.
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Fewer Employers Match Defined Contribution Plan Deposits: SHRM Analysis
Of 550 employers surveyed in SHRM's study of employee benefits programs, slightly more than two-thirds indicated that they currently match their employees’ contributions, down from 75 percent five years ago.
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Bankrolling Adult Kids Imperils Boomer Retirement
Financial advisers worry that families don't realize how much they're spending on their grown children.
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Savers Credit Plan Is an Underutilized Aid for Employee Retirement Funds
Although the plan is a separate program from company retirement plans, sponsors often aren't telling their workers about it as a way to improve their benefits.
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Health Care Provider Hopes 'Girls Just Want to Have Funds'
BayCare Health System of Florida has geared a new retirement savings push toward women after realizing that more than three-quarters of its workforce were female, generic savings seminars were not well attended, and women historically haven't been good savers.
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General Motors Retiree Group Rips Plan to Unload Pension Plan
The General Motors Retirees Association, in a June 13 letter addressed to GM CEO Dan Akerson and posted on the organization’s website, says it’s concerned that GM’s plan to shift the pension plan for white-collar retirees to Prudential Insurance Co.
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GM CEO: We're Tackling Biggest Problems—Europe, Pension Obligations
General Motors Corp. CEO Dan Akerson also said he would consider offering a pension buyout to GM's more than 400,000 hourly retirees and dependents as a way to reduce the $134 billion pension obligation on its books, which Akerson said is the largest of any U.S. company.
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Transamerica Survey Points Out Need to Redefine ‘Retirement Readiness'
More than half of Transamerica Retirement Survey respondents say they don't think they are building a sufficient nest egg—a percentage consistent for all ages of workers.
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LGBT Adults Better Prepared for Retirement, Survey Finds
The median amount that LGBT survey participants have saved is $150,000, 17 percent, of the $900,000 they expect to need. The average American has saved about 13 percent of the anticipated needed amount, according to the Wells Fargo study.
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Young Workers on 401(k) Offerings: We Want Sure Things
Gun-shy employees are keen on investments that provide guaranteed income, though there is little interest in diversification.
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Investment Executive Aims to Put Retirement Security on Election Agenda
Putnam Investments' Robert Reynolds laid out a three-point plan—making Social Security solvent, providing employer savings programs to everyone who pays Social Security taxes and raising workplace savings rates to 10 percent—that he said should be addressed in every federal campaign.
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Study: Couple Retiring in 2012 Needs $240K to Cover Medical Expenses
Of the $240,000 needed to cover a retired couple's health care expenses, Fidelity estimates 32 percent will go toward paying Medicare Part B and Part D premiums; 45 percent will be consumed by expenses not covered by Medicare; and 23 percent will be spent on out-of-pocket prescription drug expenses.
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Ending a Defined Benefit Plan Takes Shutdown Strategy, Experts Say
Before a plan can be terminated, it needs to have all the funds necessary to pay benefits to employees. Once that happens, plan sponsors can start the process of shutting down the plan.
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Auto Enrollment in Place? Good, but Without Auto Increase, Disaster Lies in Wait
Even with employer matches, automatically enrolled workers' annual savings doesn't hit the recommended minimum 10 percent of pay.
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Fidelity-ABB Ruling First in What Could Be String of Excessive-Plan-Fee Cases
The case is significant because new federal rules that go into effect this summer will require 401(k) plan service providers—such as record keepers and investment managers—to report detailed fee information to plan sponsors.
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Rules for Retirement-Plan Fees Have Some Companies Scrambling to Comply
Plan sponsors need provider fee information so they can give participants data on fees. This regulation comes in two waves: the first requiring plan sponsors to give participants plan and investment information due Aug.
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Retirement Savings Tax Breaks Safe—for Now
At a House hearing, neither Dems nor Republicans seemed eager to tinker with main selling point of 401(k)s and IRAs.
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Young Workers as Lifers? Millennials Push Employers on Retirement Benefits
After seeing parents struggle through the Great Recession, a survey reveals that for many younger workers, financial security later in life is growing more important.
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Home Depot Renovates 401(k) Plans to Add Value, Cut Costs
The plans offer a core lineup of 12 options, in addition to the target-date series and a self-directed brokerage window to accommodate participants who want greater access to mutual funds, exchange-traded funds and stocks.
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PBGC Director Gotbaum Discusses New Retirement Plan Options
'What we need to do is provide options so that, case by case—employer and employee—they have choices. … And I think that, actually, is an important part of the future,' Joshua Gotbaum told the National Press Club on April 3.
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Racial Disparities in 401(k) Accounts Found: Aon
Among the employees who reported pulling money out of their retirement savings, two-thirds indicated they needed the cash for an emergency, debt or day-to-day living expenses.
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Self-Thought: Companies Ponder Bringing Insurance In-House
The most significant advantage that self-funded plans offer to employers is access to medical claims data, something insurance companies typically do not share with employers, says George Pantos, executive director of the Healthcare Performance Management Institute in Bethesda, Maryland.
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You, Too, Can Be a Member of the ‘Millionaires Club'
Despite the dour results of a recent survey, experts say employers can boost workers' retirement confidence. A Texas credit union is doing exactly that with its 'millionaires club:' Its HR department set up the club to encourage high savings rates among its employees.
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Pension Plan Funding Levels Hit Record Low in 2011: Milliman
The market value of pension plan assets increased by about $37 billion to about $1.246 trillion in 2011. But the value of plan liabilities leaped by about $133 billion to about $1.573 trillion.
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Early Retiree Health Care Plan Sponsors Have to Dec. 31, 2014, to Use ERRP Funds
Under the ERRP, early retiree health care sponsors are reimbursed for 80 percent of claims—up to $90,000—after a participant incurs $15,000 in expenses.
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For 401(k) Advisers, Time to Shelve Old Retirement Dogmas
Plan participation, investment options are not always true measures of a plan's performance.
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U.S. Senate Passes Pension Funding Relief in Highway Bill
The U.S. Senate on March 14 approved allowing corporate defined benefit pension plans to base their contribution calculations on interest rates over a 25-year average rather than current interest rates, which have sent contribution payments soaring.
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Dreams of Comfortable Retirement Ebb Among Americans: EBRI
Thirty percent of those surveyed have virtually no savings or investments, and 60 percent reported less than $25,000 in savings, excluding the value of their home or any defined benefit plans.
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Fortune 1000 Firms' Pension Plan Funding Falls to 78% in 2011
The aggregate funding level of 422 pension plans offered by Fortune 1000 companies fell to 78 percent in 2011, down from 84 percent in 2010 and 81 percent in 2009, according to Towers Watson & Co. analysis.
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Study: Younger Workers Worried About Retirement
While older workers tend to be more concerned about retirement than their younger colleagues, the survey found that the most dramatic shift in attitudes toward retirement security has been among the under-40 set.
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Data Bank Focus: Retirement Becomes More Elusive
The percentage of workers who expect to retire early—before 65—has declined since 1991 as the number of those who expect to retire late—after 65—has increased.
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Personal Finance: Cure the Worry Bug With a Dose of Education
Financial stress and uncertainty are serious workplace issues, a study by MetLife Inc. shows. Seventy-eight percent of employers said concerns over financial problems could have a negative effect on productivity.
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Biggest Expense for Americans Over 50? Not Health Care
Out-of-pocket costs on drugs and medical insurance are the second most costly item for older folks.
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Michigan Unions Sue to Halt Mandated DB-or-DC Choice
A Michigan law requiring state employees to either contribute 4% of pay to the $9.
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Getting Minorities to Buy In on Retirement
Experts agree that automatically enrolling all participants and annually increasing the pretax employee salary contribution is crucial for getting minorities to participate in retirement plans.
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The Last Word: Backyard Retirement Plan
'I would like to believe, three years past the depths of the worst economic time since the Great Depression, there are lessons learned.'
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Wisconsin's Tough Choice
Facing a $3.6 billion deficit for the state's 2011-13 budget, Wisconsin Gov. Scott Walker says he knew he had to do something and didn't really like the choices. The budget shortfall was the largest the state had ever seen, and Walker says he didn't want to raise taxes, fire anybody or cut services.
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State Public Sector Retirement Plan Roundup
Here are some of the more noteworthy 2011 reforms from across the country, which were compiled from various sources.
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States Taking a Hard Look at Pensions
Considering that state and local pension systems are staring at $4 trillion in unfunded liabilities, it's no wonder that pension reform is on the minds of legislators across the country.
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Data Bank Focus: Retirement Benefit Costs
According to data from the U.S. Bureau of Labor Statistics, an employer's total cost for employee compensation increased by 2.5 percent from 2009 to 2011.
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Employers Eye Revamping Retirement Plans
With the continued downward spiral of the number of defined benefit plans, employers are becoming more concerned about workers having enough money to sustain their retirement.
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PBGC Updates Estimate of Funding Relief for American Airlines
According to the Pension Benefit Guaranty Corp., American Airlines received specific funding relief in the Pension Protection Act of 2006 and an Iraq War spending bill in 2007 that allowed airlines to spread their unfunded liability in 2008 over 10 years instead of seven.
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Cracking Open Today's Retirement Strategies
Today's workers aren't guaranteed the comfortable post-workforce lives that their predecessors had, so companies are looking for ways to help by unscrambling the current retirement puzzle.
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Treasury's Lifetime-Income Proposals Lean Heavily on Education
Observers find proposals to be well intended, but add that workers have a lot to learn on annuities.
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A Third of New Yorkers Say They Can't Retire
About 40 percent of New York workers had access to an employer-sponsored retirement plan in 2009, compared with the national average of 53 percent, according to the report by the New School's Bernard Schwartz Center for Economic Policy Analysis.
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Plan Sponsors Plot Their ‘De-Risking' of Defined Benefits
According to a December 2011 study by Mercer and CFO Research Services, 59 percent of 192 senior-level financial executives surveyed say their defined benefit pension plan poses at least a moderate risk to their companies' short-term financial performance.
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Employers Adding Automatic Enrollment to DC Plans: Aon Hewitt
Under automatic enrollment, employees who don't respond to participation notices are enrolled automatically in a plan unless they notify their employers that they want to opt out.
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Raytheon, Lockheed Martin to Add Billions to Pension Plans
Raytheon Co. expects to contribute a combined $4.2 billion to its pension plans over the next three years, while Lockheed Martin Corp. foresees a $1.1 billion contribution to its pension trust, according to fourth-quarter earnings statements from both firms.
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Worker Optimism About Retirement Security Grows: Towers Watson
One factor boosting employees' confidence level is the growth in many employees' 401(k) account balances, according to the study.
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Southwest Soars in BrightScope Inc.'s 2011 List of Top 401(k) Plans
Southwest Airlines took the No. 1 spot on BrightScope Inc.'s third annual year-end list of top 30 401(k) plans in 2011. Companies making the list are continuing the trends of improving participation rates, increasing employer matches and lowering total plan costs.
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Will Labor Department's Request Slow Fiduciary Proposal?
In its latest timetable for implementing the Dodd-Frank financial reform law, the commission put fiduciary duty on the list of rules labeled 'dates still to be determined.' Many other rules are designated for release during specific time periods.
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Funded Status of Pension Plans Falls for Second Year: Mercer
In the aggregate, the plans' funding deficit hit $484 billion as of Dec. 31, 2011, up from $315 billion a year earlier and $229 billion as of Dec. 31, 2009.
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Aon Hewitt: 401(k) Participants Keep Moving Away From Equities
401(k) plan participants last November maintained a now six-month trend in moving money to fixed income from equities, according to Aon Hewitt's November 401(k) Index.
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Retiring Minds Want to Know: Technology Helps Assess Retirement Benefits
Interactive online tools such as videos, chats and blogs designed to encourage employees to invest more than the default minimum in their 401(k) plans have become increasingly common.
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DC Assets Eyed By Investment Giants
With their sights set firmly on the trillions of defined contribution plan assets expected to move into customized target-date funds before the end of the decade, Bridgewater Associates LP and AQR Capital Management LLC are looking to make sure their risk-parity and hedge fund strategies are...
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Several States' Residents Show Their Financial Savvy
The Employee Benefit Research Institute did a state-by-state analysis to see whether it was possible to pinpoint financially savvy states and ranked them in two categories: financial literacy and financial behavior.
