Recently in Retirement Category

Source: National Institute on Retirement Security, February 2, 2010

The National Institute on Retirement Security held its inaugural policy conference, Raising the Bar: Policy Solutions for Improving Retirement Security, on February 2, 2010, in Washington, DC. The conference convened thought leaders from across the retirement industry and policy spectrum--retirement plan service providers, regulators and policymakers, plan sponsors and administrators, representatives of employees and retirees, academics and policy experts. The goal of the conference was to identify policy solutions aimed at improving Americans' retirement prospects that have 1) broad support, 2) practical appeal, and 3) a good chance to be taken up by policymakers in Washington. The expert speakers did not disappoint, offering up a wide range of proposals that touched on virtually every aspect of the United States retirement system: pension plans, individual retirement savings, Social Security, and retiree healthcare. Moreover, many of the policy proposals at the center of discussion have since been enacted.

Source: Nadia Karamcheva and Geoffrey Sanzenbacher, Center for Retirement Research at Boston College, Issue Brief, IB#10-13, August 2010

From the abstract:
In 2008, the Obama campaign proposed a "Plan to Strengthen Retirement Security." This plan consisted of items ranging from increasing the threshold of the Social Security payroll tax to expanding the Saver's Credit for families earning under $75,000. One of the more far-reaching proposals would require employers with 10 or more employees to automatically enroll their employees in Individual Retirement Accounts (IRAs). As a default, 3 percent of each worker's earnings would be invested in a low-risk portfolio, but workers could choose to change the defaults or opt out of the plan. Employers would not be required to make a matching contribution, but employees who participate would be eligible for the expanded Saver's Credit.

Source: Jenna Amato Moran, Buffalo Law Review, Vol. 58 no. 3, May 2010

There is a tsunami coming. Not convinced? You may have missed the 800-pound gorilla or the elephant in the room, but there's no way around the trillion-dollar pothole. What does this ominous language signify? Our nation is drowning in the midst of an amassed unfunded liability of public sector "other postemployment benefits" (OPEB). Though the OPEB category covers medical, dental, vision, life insurance, and legal services, it is most often used in reference to retirement health benefits. While the funding of these benefits has long been swept under the rug by employers in the public sector, new accounting standards have mandated governmental recognition of this liability. If this predicament sounds familiar, it is because the private sector was forced into recognizing its own liability nearly twenty years ago. Shortly after being confronted with the intimidating financial reality of promises made, private employers began a determined course of reducing the liabilities they owed by cutting retiree health benefits. Now, fast forward twenty years: if government employers follow the same course as the private sector, our nation is likely to see major changes in the retirement health benefits provided to public sector workers and retirees, as governments attempt to control their unfunded liabilities. These changes will surely result in legal challenges. While there are few definitive rules governing public sector retiree benefits across the nation, several important lessons can be learned by studying the private sector's reduction in benefits.

Source: The Editors, New York Times, May 31, 2010

Social welfare systems are under pressure everywhere in the developed world. But it's all relative.

How high can or should the retirement age go, and should it be tied to increases in life expectancy? What will changes in retirement patterns mean for the United States, compared with Western Europe?

Contributors include:
* Tom Geoghegan, labor lawyer and author
* Alicia H. Munnell, Center for Retirement Research, Boston College
* Peter Baldwin, U.C.L.A. historian and author
* Beth Almeida, National Institute on Retirement Security
* Ken Dychtwald, gerontologist and author of "Age Wave"
* Veronique de Rugy, George Mason University
* Donald R. Grimes, labor research analyst

Source: U.S. Department of Labor and Securities and Exchange Commission, 2010

The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) and the U.S. Securities and Exchange Commission (SEC) today announced guidance to help investors and plan participants better understand the operations and risks of target date fund investments.

Target date funds, also known as life cycle funds, are designed to provide a convenient way to invest for retirement by automatically changing their mix of investments in a way that is intended to become more conservative as the fund's target date approaches. There can be significant differences among target date funds in how they invest and how they reallocate assets between equity and fixed income investments up to and after the target date of the fund. The guidance will assist investors and participants in assessing the benefits and risks associated with target date funds and the appropriateness of including such an investment as part of their retirement portfolios.

The guidance describes some basics features of target date funds, including the investment mix of such funds, the risks associated with the investments, how target date funds operate, and ways to evaluate a target date retirement fund that will help increase awareness of both the value and risks associated with these types of investments.

Source: Employee Benefit Research Institute, Vol. 31, No. 4, April 2010

From the press release:
Health savings accounts (HSAs) are likely to play a minor part in savings for health care costs in retirement, according to a report issued today by the nonpartisan Employee Benefit Research Institute.

That's because both statutory contribution limits and currently low interest rates constrain the amount HSAs are able to generate, compared with the large amount needed to pay for retiree health expenses.

Source:MetLife Mature Market Institute and the American Society on Aging, March 2010

From the summary:
- 60% of LGBT Boomers fear being unable to care for themselves as they age; 35% fear becoming dependent on others
- Nearly two-thirds of LGBT Boomers say they have a "chosen family," a group of people they consider family, even though they are not legally or biologically related
- Nearly half of the LGBT Boomers and four in ten Boomers from the general population say they don't expect to retire until age 70 or older
- Men in both the LGBT and general population are nearly as likely as women to be giving care to another adult

Source: Hofstra Labor and Employment Law Journal, Volume 26, No. 2, Spring 2009

Articles include:
- The Paternalistic Ideology of ERISA and Unforgiving Courts: Restoring Balance Through a Grand Bargain - Edward A. Zelinsky
- The Next Generation of Preemption Cases: State Regulation of 401(K) Plans - Debra A. Davis
- ERISA Remedies, Welfare Benefits, and Bad Faith: Losing Sight of the Cathedral - Peter K. Stris
- A Regulatory Vacuum Leaves Gaping Wounds--Can Common Sense Offer a Better Way to Address the Pain of ERISA Preemption? - Andrew L. Oringer
- Leaving Well Enough Alone: Reflections on the Current State of ERISA Remedial Law - Thomas P. Gies & Jane R. Foster
- Where Are We Going, and Where Should We Be in Ten Years? - Jonathan Barry Forman
- ERISA Misrepresentation and Nondisclosure Claims: Securities Litigation Under the Guise of ERISA? - Clovis Trevino Bravo
- Safeguarding Employee Stock Ownership Plans: Insurance as Assurance - Lauren E. Berson & Nicholas L. Cushing

Source: Steven A. Sass, Courtney Monk, and Kelly Haverstick, Center for Retirement Research at Boston College, IB#10-3, February 2010

From the summary:
The stock market crash of 2008 significantly dimmed the retirement prospects of workers approaching retirement. These workers are heavily dependent on 401(k) plans, as opposed to traditional defined benefit pensions, as a source of retirement income. During the economic downturn, these plans lost about one-third of their value. Even before the crash, many older workers lacked the assets needed to enjoy a comfortable retirement.

Source: Sally Hass, Steve Vernon, Benefits and Compensation Digest, Vol. 47 no. 1, January 2010
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Letting employees "downshift" toward retirement can help them improve work-life balance, while allowing employers to retain valuable skills longer.