First it was pensions and now it‘s health coverage! Are employees going to take it on the chin again? Defined Benefit Pension Plans: Years ago, Wall Street pressures forced many CFOs and HR professionals in public companies to switch from traditional defined benefit pension (“DB”) plans to 401(k) plans. Wall Street wanted to see companies cap [...]
Chuck Yanikoski, President, RetirementWorks, Inc. has published 42 free, monthly Retirement Readiness reports. They are all well written and can be found at: http://www.retirementworks2.com/support.asp?id=newsletter. Chuck has, gratefully, given me permission to use material from his reports to supplement information in my blog. I have done so below using Chuck’s report number 42: The economy has [...]
How Funding Relief (MAP-21) Affects Your Plan Financially Date: August 21, 2012 at 11:00 am – 12:00 pm Pacific time The Moving Ahead for Progress in the 21st Century (MAP-21) Act was signed into law on Friday, July 6, 2012. In general, this Act affects the interest rates used to calculate the Funding Target (Liability) [...]
When you terminate your employment from a company that has a defined benefit (“DB”) plan, you usually have an option to take a lump-sum payment or to leave the assets in the company’s plan and receive monthly payments for your lifetime (and your spouse.) More than 90% of employees opt for a lump-sum payout from [...]
New legislation, Moving Ahead for Progress in the 21st Century Act ("MAP-21"), has provisions affecting defined benefit (“DB”) pension plans. Plan sponsors who want to terminate their DB plans want their plan assets to be about equal to their plan liabilities on a termination basis (e.g. insurance company annuity or PGC lump sum). This way [...]
Even more than money, family relationships are fundamental to a successful (i.e., enjoyable, fulfilling) retirement. Think about it: would you rather spend your older years pinching pennies but enjoying a great marriage, with loving and mutually supporting relationships with your children, frequent interactions with grandchildren, and happy connections with extended family – or would you [...]
Most companies want to see a predictable and stable retirement of their older employees in order to facilitate growth opportunities for younger and more technologically advanced employees. That is one of the main reasons why companies sponsor 401(k) plans. But, based on the findings below, this is not going to happen. If employees can't afford [...]
Without a defined benefit pension plan (DB plan) employers don’t have control over the timing of their employee’s retirements. Older employees may not be able to afford to retire, will remain on the payroll and may never retire. If they don’t save enough to retire, they can block upward mobility and not allow employers to [...]
Well, if the stock market caught you off guard again … “fool me once, shame on you! But, fool me twice, shame on me!” Do your company and your employees want to continue on a stock market roller coaster? What do you think will happen to the stock market if, for example, Israel strikes Iran [...]
You know you’re not getting the value you deserve when your actuary: 1. Is not available immediately when you need them. If the person that you report to wants an answer now, you need an actuary who will give you advice immediately. If you are in union negotiations, you need answers immediately. 2. Doesn't give [...]