September 2018

21Sep

US. Lawsuit against Brown University retirement plan proceeds

Three former and current University employees can move forward with some of the claims in a class action lawsuit alleging that the University mishandled their retirement funds, according to Chief Judge William Smith in a July order from the U.S. District Court for the District of Rhode Island. “Our clients (stepped) forward to file suit because they thought it would advance the interests of their fellow employees who participate in the retirement plan,” said Todd Collins, one of the lawyers...

September 21, 2018
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18Sep

US 401(k) Plan Quality Correlates With Company Profits

Study finds companies with highly rated plans have gross profit margins well above average Companies with top-rated 401(k) retirement plans tend to be more profitable than those with low-rated plans. That is the conclusion of a new study from T. Rowe Price Group Inc., which found there is “a strong correlation between corporate financial performance and overall 401(k) plan quality,” said Joshua Dietch, head of the asset management firm’s retirement and financial education team. Read more WSJ

September 18, 2018
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17Sep

The Crisis in Public Sector Pension Plans: A Blueprint for Reform in New Jersey

By Eileen Norcross (George Mason University - Mercatus Center) & Andrew G. Biggs (American Enterprise Institute) In this study, we consider the case of New Jersey, which operates five defined benefit pension plans for state employees. The New Jersey Senate unanimously passed legislation in February 2010 that would put a question on the November ballot to constitutionally require the state to begin to make its full annual payment to the state’s pension system. The bill requires the state to catch...

September 17, 2018
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14Sep

US. NYC doubling pension fund dollars in ‘climate solutions’

New York City plans to double the share of its pension fund invested in renewable energy, energy efficiency and other industries that aim to combat global warming. Mayor Bill de Blasio and city Comptroller Scott Stringer announced the new goal Thursday. Now, about $2 billion of the city's $195 billion in pension funds is invested in what are sometimes called climate solutions. The new plan would raise that investment to $4 billion over the next three years. The mayor and comptroller, both...

September 14, 2018
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12Sep

US. Trump takes a first step to boost retirement security

President Donald Trump recently issued an executive order aimed at strengthening retirement security in America. It's a step in the right direction, but tackling two additional issues would truly address the pressing needs of working Americans who want to save for retirement. Mr. Trump's Aug. 31 order directs the Department of Labor and the Department of Treasury to encourage the adoption of multiple employer plans (MEPs), which allow small employers to pool resources and costs to offer retirement plans to...

September 12, 2018
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11Sep

US. Another Hit to Retirement Plan Investors: Financial Transaction Tax

An analysis shows a new bill introduced in the Senate would result in a significant financial hit to retirement plan investors. Modern Markets Initiative is pushing back on a tax provision in the bill. The Inclusive Prosperity Act of 2017 has been introduced in the Senate and includes a financial transaction tax (FTT). According to Modern Markets Initiative (MMI), the FTT would be applied to every stock traded, including a 0.5% rate on equity, a 0.1% rate on debt and a...

September 11, 2018
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08Sep

2018 Retirement preparedness survey: A Generational Challenge

By Prudential The U.S. retirement landscape has changed dramatically over the past few decades. Fewer workers today are eligible to receive a pension and instead must save for their own retirements, typically through workplace savings plans. Replacement rates for Social Security are declining due to the increase in the “full retirement age.”1 Income is becoming less predictable, thanks in part to new employment models. Health care costs are increasing, and so is longevity—which means workers today don’t just have more...

September 8, 2018
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06Sep

What are the retirement ages around the world?

Retirement ages, or the age when some sort of government pension can be received, varies around the world. The OECD average for a normal pension age is currently 64.3 years for men and 63.7 years for women. While life expectancy has risen in many countries and governments grapple with ageing populations, any attempts to make people wait longer to collect benefits are usually met with fierce opposition, as Russia and Australia found out recently. Read more sbs

September 6, 2018
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03Sep

US. Retirement plans see rise in cyberattacks

While we may have hoped that employer-sponsored retirement plans would escape the types of cyberattacks plaguing financial service providers and dominating headlines, service providers to employee benefit plans have experienced a substantial increase in cyberattacks over the past few years. One plan record keeper noted the number of these attacks have more than doubled since 2016. Cybersecurity threats present new risks for fiduciaries of employer-sponsored retirement plans, as well as for advisers and other providers who serve them. However, these...

September 3, 2018
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03Sep

State Pension Accounting Estimates and Strong Public Unions

By Samuel B. Bonsall (Pennsylvania State University - Department of Accounting), Joseph Comprix (Syracuse University) & Karl A. Muller (Pennsylvania State University - Department of Accounting) Concerns are commonly raised that strong public unions extract generous pension benefits from state governments and are the cause of states’ burdensome pension obligations. Prior research (Anzia and Moe 2015) finds evidence supporting such concerns. Consistent with incentives to minimize such perceptions, our findings suggest that state pension plans with stronger public unions select...

September 3, 2018
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