Financial reporting and benchmarking firm FRA PlanTools
released an iPad app aimed at providing a fast and cost-effective way for plan
advisers and sponsors to access and compare retirement plan costs and fee data.
The app provides subscribers with a single page,
multi-category benchmarking report that captures a list of documents
and reports needed to assess fee reasonableness. Users can also employ the app
to support Employee Retirement Income Security Act (ERISA) 408(b)(2) compliance efforts and establish a procedurally
prudent fee assessment process, designers said.
App users must complete a brief input survey to generate the
customized reporting.
Current FRA PlanTools subscribers are eligible for a free
report through October 18. The reporting tool can also be purchased through Apple’s App
Store.
The
United States’ pension system has fallen outside of the top 10 in the world for
the first time in the five years the Melbourne Mercer Global Pension Index has been released. The overall U.S. score fell slightly from 59 in 2012
to 58.2 in 2013, which resulted in the American pension system being overtaken
by Singapore and Germany and falling to 11th spot.
The U.S. score fell primarily due to a reduction in the net
replacement rate, a measure of the percentage of an individual’s pre-retirement
income paid in retirement, as well as a measure of pension adequacy, according
to Mercer.
The index showed five ways the U.S. can improve its
ranking such as:
Raising the minimum pension for low-income retirees;
Adjusting the level of mandatory contributions for
median income earners;
Improving the vesting benefits for all plan members;
Reducing pre-retirement leakage by further limiting the
access to funds prior to retirement; and
Requiring that part of the retirement benefit be taken
as an income stream, not as a lump sum.
Denmark, the Netherlands and Australia held onto the top three
positions in the index. Denmark’s well-funded pension system with its high
level of assets and contributions, the provision of adequate benefits and a
private pension system with developed regulations are the primary reasons for
its top spot.
The index looks objectively at both the publicly
funded and private components of a system, as well as personal assets and savings
outside the pension system, and measures the adequacy, sustainability and
integrity of a country’s pension system. The index is produced by consulting
firm Mercer and the Australian Centre for Financial Studies. The index also identifies
possible areas of reform for each country that would provide more adequate
retirement benefits, increased sustainability and greater trust in the pension
system.
The top 20 retirement systems in the world, according to the
Index, are:
Denmark
Netherlands
Australia
Switzerland
Sweden
Canada
Singapore
Chile
UK
Germany
USA
Poland
France
Brazil
Mexico
China
Japan
South Korea
India
Indonesia
David Knox, senior partner at Mercer and author of the
research, said, “As countries grapple with rising life expectancies, increased
government debt, uncertain economic conditions and a global shift to defined
contribution (DC) plans, there are still many lessons to be learned and new
solutions to be found, particularly for the post-retirement years.”
He pointed out that a DC system is well established in many
countries and it is heading this way in many others. However, he said, the
problem of converting DC benefits into adequate and sustainable retirement
incomes remains in many countries. “Developing effective and sustainable
post-retirement solutions has to be one of the most critical challenges for
policy makers and retirement industries around the globe. There has to be
fundamental change in the focus from wealth accumulation to the provision of
retirement income. This income must be delivered from an efficient and fair
framework that is sufficiently robust to cope with the changing conditions that
lie ahead,” Knox added.