Retirement/Pensions
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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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Law Firm Ordered to Restore Retirement, Pension Plan Assets
Eichholz Law Firm P.C. and former Managing Partner Benjamin Eichholz breached their fiduciary responsibilities under the Employee Retirement Income Security Act by improperly transferring and lending plan assets to prohibited recipients.
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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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NHL Players Score New Pension Plan
The defined contribution plans, created during the last league lockout in 2005, will be restructured into voluntary contribution plans and neither plan will be terminated.
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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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Lockheed Martin Offers Lump-Sum Option to Some Former Employees
When participants take lump sums and move out of a pension plan, employers can reduce certain fixed costs, such as the payment of sharply rising premiums to the Pension Benefit Guaranty Corp.
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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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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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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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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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Mercer Analysis Explores Funded Status of Pension Plans in Several Countries
In the United States, plans sponsored by employers in the S&P 1500 were on average 73 percent funded as of Sept. 30, down from 75 percent as of Dec. 31, while funding for plans sponsored by Canadian employers in the S&P/TSX fell to 83 percent, down from 87 percent as of the end of 2011.
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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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Illinois Pension Plans on Road to Ruin: Report
Pension costs are projected to take up 25 percent of the state's budget in fiscal year 2015, up from 8 percent in 2008 and 20 percent in 2012.
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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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Verizon Buys Group Annuity and Sheds $7.5 Billion in Pension Liabilities
New York-based Verizon became the second major employer in recent months to announce such a pension plan risk-reduction strategy.
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PBGC Names Richmond Pension Fund Chief to Lead Benefits Unit
Philip R. Langham was named director of the Pension Benefit Guaranty Corp.'s benefits and payments department.
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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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Verizon to Transfer $7.5B in Pension Benefits Through Annuity Purchase
Under the arrangement, Verizon will transfer about $7.5 billion in pension plan obligations to Prudential Insurance Co. of America by purchasing the annuity. The agreement covers plan participants who retired and began receiving pension benefits before Jan. 1, 2010.
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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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NFL to Freeze Referees' Pension Plan Under Labor Agreement
Retirement benefits will be provided through a defined contribution plan to new referees immediately and for all officials beginning in 2017.
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American Airlines to Freeze Pension Plans in November
To be frozen on Nov. 1 are pension plans for flight attendants, ground crews and mechanics, as well as the pilots' A plan. The pilots' B plan, which is a defined contribution plan, will be terminated Nov. 30.
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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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Bill Seeks Government Sale of GM Stock to Fund Delphi Pension Benefits
The legislation, which will be introduced next week when the Senate reconvenes, is intended to cover all benefits lost to hourly and salaried retirees when the Pension Benefit Guaranty Corp. took over the Delphi's six defined benefit plans in 2009.
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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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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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Michigan Teacher Funding of Retiree Health Benefits Violates Employment Rights: Court
The law ran afoul of protections against impairment of government contracts because teachers received three percent less in pay by paying into a fund than the amount the teachers and their employers agreed upon as part of teachers' contracts.
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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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Funding Levels for Biggest Employer Pension Plans Plunge in July: Milliman
In all, the funding deficit jumped by a record $120 billion last month.
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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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Law Will Cut Defined Benefit Pension Contributions, but Increase PBGC Premiums
Employers will continue to value plan liabilities based on interest rates on top-rated corporate bonds for three different segments, averaged over 24 months. Segments refer to when benefits are paid to participants.
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American Airlines Asks to End Retiree Health, Life Benefit Coverage
The airline and parent company AMR said they never promised to provide benefits for life and reserved their rights to modify the plans.
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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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General Motors Co. Offers Pension Buyout to Salaried Workers
General Motors Co., in a statement, said the moves should reduce its U.S. pension liability by about $26 billion, a major step in its bid to reduce the $134 billion pension obligation on its books, which GM says is the largest pension liability for any U.S. corporation.
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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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Most Firms With DB Plans to Keep Them Open to New Hires
Among defined benefit plans offered to new hires, 54 percent are hybrid plans such as cash balance plans, which combine elements of defined benefit and defined contribution plans, but legally are defined benefit plans.
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Departing Employees Often Neglect to Take One Thing: Retirement Cash
Retirement accounts that remain after a worker leaves are an annoyance to plan sponsors and a burden for company administrators.
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Employers Urge Congress to Pass Pension Funding Relief Legislation
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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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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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Ford to Offer Lump-Sum Pension Payouts to Ex-Workers
When individuals take a lump-sum payment rather than continued monthly benefits, Ford no longer will face such risks as paying more than expected if the individuals live longer than expected.
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Illinois' Pension Fix: Workers to Pay More, Retire Later
Workers would keep their defined benefit contributions, something that has largely disappeared from the private sector.
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In an Apparent First, a Public Pension Plan Files for Bankruptcy
The development of the restructuring will set a precedent, particularly at a time when local government budgets and defined benefit plans are under strain.
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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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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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Judge Rules Law Mandating State Employee Contributions Is Unconstitutional
the law constitutes 'an unconstitutional impairment of plaintiffs' contract with the State of Florida, an unconstitutional taking of private property.'
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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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GM Pension Plan Underfunding Rises in 2011
To reduce liability growth, GM will completely freeze defined benefit plans covering salaried employees, effective Oct. 1, completing a process it began several years ago.
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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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Data Bank Focus: Who Takes Advantage of Retirement Benefits?
Not surprisingly, union employees have greater access to retirement benefits than nonunion employees and take greater advantage of them, with fully 94 percent of union workers who are offered these benefits participating in the programs.
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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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Data Bank Focus: Retirement Benefit Participation Rates Drop
As more employees are offered retirement benefits, fewer are taking advantage of them. Data from the U.S. Bureau of Labor Statistics show that 68 percent of all workers had access to retirement benefits in March 2011, which was up from 66 percent in March 2008.
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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.
