December 2017

28Dec

Only 13% of Retirement Plan Participants Seek Out Advice

TIAA Institute analyzed the use of advice in 23 plans for which it was the sole recordkeeper between 2009 and 2014 and found that a mere 13% of participants seek out advice. However, interest in advice increases with age, account balance and annual contribution level, according to TIAA’s report, “New Evidence on the Demand for Advice Within Retirement Plans.” For example, among those in the lowest five deciles with regards to their account balance, only 8% seek out advice. In deciles...

December 28, 2017
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18Dec

Comparison of Psychosocial Factors Affecting the Demands for Pension Plans Between American and Chinese Residents

By Ruiqi Tian (Southwest Jiao Tong University - Psychological Research and Counseling Center) & Ruilin Tian (North Dakota State University - Department of Accounting, Finance, and Information Systems) Pension becomes more and more important as people are living longer and pursuing higher living quality after retirement. This paper is to analyze the psychosocial factors that affect people’s pension demands in the US as well as in China. As two representative countries that have different pension systems, cultures, value systems, family...

December 18, 2017
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15Dec

US. Fees Rise for Underfunded Pensions

The largest pension plans held by S&P 500 companies face a $348 billion funding gap. As a result, they’re paying higher annual fees to the U.S. Pension Benefit Guaranty Corp., the government agency that backstops plans. “There’s increased awareness that an underfunded plan imposes risk on employees, it imposes risk on shareholders, and it’s getting more expensive,” says Olivia Mitchell, a professor at the University of Pennsylvania’s Wharton School and executive director of the Pension Research Council. The fees, called variable-rate...

December 15, 2017
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06Dec

US. Public Pension Funds’ Anti-Fossil Fuel Activism Raises Risks For Beneficiaries

By David Blackmon In a recent piece, I wrote about the fact that the Divestment movement is now running into headwinds, as federal public policy under the Trump Administration moves further away from the movement’s goal of artificially limiting the production of oil and gas domestically, and as it is becoming increasingly clear that some major public pension funds are finding themselves severely underfunded after years of heavy focus on the movement’s investing priorities. As it has become increasingly obvious over...

December 6, 2017
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04Dec

Pension funds, sell your oil & gas stock

Last month, Norway’s $1 trillion pension fund announced plans to drop oil and gas stocks from its core benchmark stock portfolio. The move was of note because it served as an important acknowledgement by a major institutional investor that such holdings have lost their status as mainstream, blue-chip investments and are now considered speculative. It carries special significance too because the Norwegians really know the oil and gas market. The country owns vast oil reserves and the government — and...

December 4, 2017
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November 2017

29Nov

US. Retirement plans expected to be untouched in Senate tax reform bill

The full Senate is expected vote on its version of the tax reform bill as early as this week, and so far, it leaves 401(k) plans and IRAs untouched. That can always change, however, says Erik Carter, senior financial planner at financial wellness company Financial Finesse, so it is important for employers to keep an ear to the ground as the bill makes its way through debate on the floor. Currently, “retirement provisions in the bill are not intended to raise...

November 29, 2017
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28Nov

US. Changes, trends and best practices for 401k administration in 2018

Whe new year won’t bring significant changes to 401k plans, experts say, which means it’s the perfect time for employers to boost their financial education efforts. Employees who are stressed about finances have lower productivity. And, when workers don't retire because they can't afford to, employers are faced with a talent logjam that creates high healthcare costs and a brain drain when those workers leave. These phenomenons have, in recent years, led employers to take various actions, from offering flexible...

November 28, 2017
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22Nov

US. Pension Funds Would Be Well-Advised to Reduce Risk

Municipal pension plans are in a tough spot. They have trillions of dollars in unfunded liabilities, interest rates are low, and we’re coming up on the ninth consecutive year of stock market gains in the U.S. Municipalities are going to have a hard time balancing their need to take risk against their reluctance to do so in this environment. The largest U.S. pension fund is considering making a change by reducing equity risk in its portfolio. The California Public Employees’...

November 22, 2017
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16Nov

One unexpected problem with retirement savings: knowing how to spend it

Not only do Americans need to save more for their retirement but they need to learn how to spend that money wisely when they get there. Spending down retirement assets is one of the many challenges Americans face when it comes to retirement planning, according to the Government Accountability Office’s recent report on the state of American’s retirement savings — along with actively putting away money, which influences how much they can put towards other financial goals and lifestyle choices,...

November 16, 2017
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15Nov

Largest U.S. pension fund may slash exposure to stocks

The California Public Employees' Retirement System, the largest U.S. pension fund, is considering more than doubling its bond allocation to reduce risk and volatility as the stock bull market approaches nine years. Calpers is looking at a menu of options for its fixed-income target ranging from the current 19 percent to as much as 44 percent, according to a presentation for a board workshop in Sacramento coming up Monday. Equities could be cut to as little as 34 percent from...

November 15, 2017
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