December 2020

30Dec

US. Multiemployer Pensions Update: A Lump Of Coal In Their Christmas Stockings

How do you write about something that didn’t happen? On Sunday night, President Trump, after much delay, signed the combo Covid-relief and omnibus appropriations bill. Since I had been bookmarking a variety of articles that anticipated the inclusion of retirement related provisions in that bill, and even more voices calling for the need to resolve the multiemployer pension crisis (which I myself last addressed in October), I looked at the text as soon as it was made available, went...

December 30, 2020
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29Dec

US. Pensions Swamped in a Sea of Negative Real Rates

Defined-benefit pension plans were already barely treading water heading into 2020. In the years ahead, the risk is as great as ever that a large swath of them will drown. As the name implies, defined-benefit pensions promise to pay a set amount to retirees. While corporate America has largely moved away from this structure in favor of 401(k) options (or “defined contribution” plans), virtually all state and local governments still offer these reliable retirement payouts. And they’ve been falling...

December 29, 2020
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28Dec

Companies end year by shipping off pension liabilities

Pension funds on both sides of the Atlantic offloaded $14.5 billion in liabilities through pension risk transfer deals this month alone, including two huge longevity swap announcements. Most of the action took place with U.K.-based plans, but in the U.S., General Electric Co., Boston, announced it transferred $1.7 billion of its U.S. GE Pension Plan obligations to retirement services firm Athene Holding Ltd. through an annuity buyout. As part of the transfer, Athene will provide payments to roughly 70,000...

December 28, 2020
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24Dec

US. Sustainability movements with staying power

It took the coronavirus pandemic and the death of George Floyd to convince Americans that racial inequality is a part of every facet of our economy. The awakening lifted several sustainability movements that will carry into 2021. Corporate America slowly is making progress on diversity. Environmental justice advocates have gained a foothold in Washington politics at the highest levels, underscored by President-elect Joe Biden’s Cabinet nominees. Wall Street had its own epiphany. Asset managers, insurers, pension funds and foundations...

December 24, 2020
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23Dec

How an ERISA Fiduciary May Try to Save the World

By Albert Feuer On November 13, 2020, the U.S. Department of Labor (DOL) promulgated a final regulation regarding the investment duties of an ERISA fiduciary in selecting either direct plan investments or investment alternatives to make available to participants and beneficiaries of self-directed plans (the “Investment Duties Regulation”). The Regulation, like the proposed form of the Regulation, which provoked more than 8,000 public comments which were overwhelming critical, was intended to discourage what the DOL called ESG or sustainable...

December 23, 2020
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23Dec

US. Saving at Work for Retirement: A Perk Coming to More States in 2021

Denise Geske panicked two years ago when her accountant told her about a new Illinois law that would require her to enroll her employees in a retirement savings program. “As a small-business owner, I felt it was overwhelming,” she said. “I was terrified that I was going to be mandated to do one more thing.” Ms. Geske, co-owner of Fox & Hounds Salon and Day Spa in Bloomington, Ill., is close with her staff of 32 massage therapists, aestheticians...

December 23, 2020
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22Dec

US. Calpers Seeking an Investment Chief With Staying Power

The nation’s largest public pension fund has a retention problem, an especially pressing issue given the deep hole it and other retirement plans are in. The California Public Employees’ Retirement System has burned through six chief investment officers over the past two decades. Its most recent investment chief, Ben Meng, lasted just 19 months. His tenure ended this summer in the midst of questions about whether his personal investments created a conflict of interest. Elsewhere, investment chiefs stay for...

December 22, 2020
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21Dec

US. Annuities vs. Pensions: What Retirement Plan Advisors Should Know About ‘De-Risking’

Pension obligations are a major liability on many corporate balance sheets. Retirees are living longer than ever, sometimes claiming pension payments for decades. Advisors to pension plans may be called upon for suggestions of how to de-risk employer-sponsored benefit plans. Weighing available options is crucial. Read also US. Retirement taxes are not more tolerable One idea that’s gaining traction: annuities. In recent years, Lockheed Martin, FedEx, Raytheon, Alcoa and others have transferred billions of dollars worth of pension liabilities to...

December 21, 2020
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21Dec

US. Retirement taxes are not more tolerable

By Helen Hills I was happy to see Charles Lane’s commentary on Bob Dylan’s tax-privileged windfall upon the sale of his vast musical intellectual property [“Bob Dylan’s financial dream,” op-ed, Dec. 15]. Mr. Lane did not mention, in his otherwise-thorough critique of the disparate tax treatment of income and capital gains, the “wool-over-the-eyes” deception that was mounted in the form of 401(k), individual retirement accounts and other market-based employee retirement accounts. Corporate interests benefited when the responsibility and risk...

December 21, 2020
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18Dec

US. Workers Tap Retirement Savings as a Last Resort

About a month into the pandemic, Tyler Mathiesen lost his position at a tech company, his first full-time job out of college. For several months, everything was fine: Payments on his $75,000 in student loans were paused, and the extra $600 weekly federal unemployment benefit helped pay the rest. He even managed to save some money. But as the summer ended, the added benefit expired and his regular state unemployment benefits were close to running out. He needed a...

December 18, 2020
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