PLANADVISER Weekend Newsdash
Week ending March 30th, 2018

Happy Friday, readers! Last night we celebrated the annual Excellence in Retirement Awards Dinner in New York, where we announced the winners of both the 2018 Plan Sponsor and Plan Adviser of the Year designations. Visit the www.planadviser.com homepage for more information. While the event was, we hope, a lot of fun for all the attendees, we were very pleased to see so much technical and constructive discussion of the pressing issues facing defined contribution and defined benefit retirement plans. In particular, we noticed the “decumulation challenge” was talked about with much greater frequency than in previous years—and it seems clear that the topic will only increase in importance as the Baby Boomer population exits the workforce. 

Retirement Income and Rollovers
Measuring Retirement Income Adequacy Not An Exact Science
Researchers have developed diverse approaches for quantifying the adequacy of retirement income, focusing on different groups of retirees and employing different definitions of income and adequacy, a CBO report notes. Read more >
As Participant Sentiments Improve, Sponsor Decumulation Concerns Increase
Anne Ackerley, head of BlackRock’s defined contribution business, sat down last week with PLANADVISER to offer a sneak peek at the DCIO provider’s latest DC Pulse Survey; the data shows increased confidence among plan participants, while sponsors have emerging decumulation concerns. Read more >
LPL Researchers Perspectives on Managing Interest Rate Risks
The researchers expect yields to grind gradually higher during the year, but not in a straight line. As such, they continue to recommend portfolio positioning with a duration (a measure of interest rate sensitivity) lower than the Bloomberg Barclays U.S. Aggregate Index, along with additional diversification across sectors, maturities, and credit ratings (for suitable investors), which may potentially help mitigate the impact of rising interest rates on investors’ portfolios. Read more >
Negative Tax Consequences Often Result from Poor Rollover Knowledge
Unforeseen negative tax consequences often hit job changers when they decide to move money from their previous employers’ retirement plans without sufficient know-how; in an extensive new report, the GAO recommends employers and regulators provide far more support for plan participants. Read more >
Nearly Three-Quarters of Americans Value Guaranteed Income
The survey found that two primary reasons why people value guaranteed income are to cover health care costs (cited by 54%) and to prevent running out of money (46%). Fifty-two percent said they view guaranteed income as a hedge against a market downturn. Read more >
Social Security Optimization Can Extend Retirement Portfolios by a Decade
In an exclusive interview with Bill Meyer, founder and managing principal of Social Security Solutions in Leawood, Kansas, PLANADVISER hears about some serious shortcomings in the conventional thinking on Social Security claiming strategies—and a failure to coordinate these effectively with the drawdown of DC plan assets. Read more >
Social Security Can Be Understood, Maximized
Despite the 2,800 rules, benefits can be amped up with the right Social Security planning, says Financial Engines, which rolled out a planning service to help near-retirees maximize household income in retirement. Read more >
MOST POPULAR STORIES
TIAA Faces New Managed Account Rollover Complaint Months After Settling SEC Charges

A new lawsuit suggests the individual advisory program TIAA clients were rolled into was significantly more expensive and generated hundreds of millions of dollars in fees for TIAA—without providing commensurate performance benefits.

DOL Announces Anticipated ESG Fiduciary Investing Rule

Agency leaders say the principal idea of the new proposal is that climate change and other ESG factors can be financially material and, when they are, considering them will inevitably lead to better long-term risk-adjusted returns.

Plaintiffs Claim Deloitte Breached ERISA Prudence Duties

Arguments in the new case closely resemble previous lawsuits filed against other firms citing the ERISA fiduciary duties of prudence and of monitoring fiduciaries.

Social Security Benefits Will Grow 5.9% in 2022 Amid Renewed Inflation Concerns

The important federal benefit increases when the cost of living rises, as measured by the Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers, or the ‘CPI-W.’

Only 31% of Hispanic Workers Participate in a Workplace Retirement Plan

Morningstar says there are several factors besides lower income that could contribute to the lower savings relative to other demographic groups.

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