February 2025
13Feb

US. DOL Finalizes Update to Voluntary Fiduciary Correction Program

On January 15, 2025, the Department of Labor (“DOL”) issued notice amending its Voluntary Fiduciary Correction Program (“VFCP”), along with related final amendments to Prohibited Transaction Exemption 2002-51 (“PTE 2002-51”), which provides exemptive relief for certain transactions identified in VFCP.  Most notably, the final amendments allow plan fiduciaries to self-correct late-deposited participant contributions or loan repayments, as well as certain other participant loan errors by filing a notice of correction with DOL, in lieu of filing a full VFCP...

February 13, 2025
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12Feb

Blue state US pension funds ‘lack consistency’ on climate voting

The Sierra Club has warned of “problems with consistency” at US public pension funds in its latest analysis of sustainability-related voting, with differences in support across resolutions and a reluctance to oppose directors at climate laggards. The group last year analysed a number of pension funds in Democrat-leaning states, and has now expanded to include large funds in Republican-leaning and swing states, meaning the latest edition covers more than 30 of the “largest and most influential public pension funds in...

February 12, 2025
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07Feb

2025 Asset Allocation Return & Risk Assumptions

By Wilshire Wilshire’s long-term inflation forecast is 2.35%, which is up 10 basis points from last year’s assumption. Our practice since 2003 has been to derive our inflation forecast by observing the market’s breakeven inflation rate – the spread between the yield on a 10-year Treasury and the real yield on a similar maturity Treasury Inflation Protected Security (TIPS). During periods of market stress, TIPS pricing may be affected by liquidity demands or a high level of inflation uncertainty, as...

February 7, 2025
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07Feb

Places versus People: The Ins and Outs of Labor Market Adjustment to Globalization

By David Autor, David Dorn, Gordon H. Hanson, Maggie R. Jones & Bradley Setzler This chapter analyzes the distinct adjustment paths of U.S. labor markets (places) and U.S. workers (people) to increased Chinese import competition during the 2000s. Using comprehensive register data for 2000–2019, we document that employment levels more than fully rebound in trade-exposed places after 2010, while employment-to-population ratios remain depressed and manufacturing employment further atrophies. The adjustment of places to trade shocks is generational: affected areas recover primarily by adding workers to...

February 7, 2025
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07Feb

Smaller than We Thought? The Effect of Automatic Savings Policies

By James J. Choi, David Laibson, Jordan Cammarota, Richard Lombardo & John Beshears Medium- and long-run dynamics undermine the effect of automatic enrollment and default savings-rate auto-escalation on retirement savings. Our analysis of nine 401(k) plans incorporates the facts that employees frequently leave firms (often before matching contributions from their employer have fully vested), a large percentage of 401(k) balances are withdrawn upon employment separation, and many employees opt out of auto-escalation. Steady-state saving rates increase by 0.6% of income due to automatic enrollment and...

February 7, 2025
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07Feb

U.S. corporate funding surpluses rise in January — Wilshire and LGIMA

U.S. corporate pension funding surpluses vaulted higher in January, thanks to a strong month of returns across global equities, according to estimates from Wilshire Advisors and Legal & General Investment Management America. First, Wilshire estimated the aggregate funding ratio of U.S. corporate plans reached 105.4% as of Jan. 31, an increase of 1.8 percentage points from the firm's updated 103.6% funding ratio as of Dec. 31. Ned McGuire, managing director at Wilshire, said in a news release Feb. 5 that the...

February 7, 2025
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06Feb

US. DOL’s New Retirement Savings Lost and Found Database Goes Live

The U.S. Department of Labor (DOL) has officially launched its Retirement Savings Lost and Found database. Although the database is not complete, DOL will continue to make improvements over the next several months. DOL needs ongoing assistance and participation from plan administrators to get information on plan participants who have left their places of employment. While submission of this information by plan administrators is voluntary, DOL hopes to receive sufficient information to create the most effective database possible. Plan administrators...

February 6, 2025
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06Feb

US. Illinois’ economic future pressured by worst pension crisis in nation

The urgency and severity of Illinois’ pension crisis is undeniable when compared to the rest of the nation. Reports from the Equable Institute found Illinois lags in both pension funding and performance compared to other states at the end of fiscal year 2024. If the state fails to fix its pension issues, the budget will continue to be strained, people will continue leaving the state and future pension benefits could be at risk. Preserving the cost savings of Tier 2, offering retirement choice...

February 6, 2025
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January 2025
31Jan

NIRS’ Pensionomics 2025 Report

By Andrew Clark Earlier this month, the National Institute on Retirement Security (NIRS) released its bi-annual Pensionomics report, which details how spending from defined-benefit pensions boosts economies in communities nationwide and continues to be a reliable economic driver for millions of people. The report examines the impact of pensions on local economies nationwide by calculating the benefits paid to retirees and the subsequent spending generated by these benefits. This analysis includes tax revenue and local expenditures, which stimulate the broader economy, leading...

January 31, 2025
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31Jan

Financial Inclusion Across the United States

By Motohiro Yogo, Andrew Whitten & Natalie Cox We study retirement and bank account participation for the universe of U.S. households with a member aged 50 to 59 in the administrative tax data. ZCTA-level average income, income inequality, and racial composition predict retirement account participation for low-income households, conditional on household income and regional price parities. Income inequality also predicts bank account participation for low-income households. We estimate the causal effect of access to an employer retirement plan on participation. Recent policy proposals...

January 31, 2025
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