Tag: defined benefit plans

Actions taken by defined benefit (DB) plan sponsors helped them reduce Pension Benefit Guaranty Corporation (PBGC) premiums, according to a J.P. Morgan analysis.

The agency previously announced it would amend required minimum distribution regulations in a way that would prohibit the offering of lump-sum windows to defined benefit (DB) plan participants already retired and in pay status.

They also believe that pensions do a better job than 401(k)s in terms of ensuring retirement security.

According to a study from the National Institute on Retirement Security, in 2016, each dollar paid out in pension benefits supported $2.13 in total economic output nationally.

“Looking forward to 2019, we think many plan sponsors will continue to explore risk transfer activities as well as review their investment policies to ensure they are aligned with an evolving market environment,” says Scott Jarboe, a partner in Mercer’s Wealth business.

According to Mercer, developing a “journey plan” that outlines the strategic policy choices to move a plan to its ultimate destination is a step many plan sponsors have undertaken.

As cases against MetLife, Pepsi and American Airlines have been filed, Groom Law Group questions whether these cases may present a new area of potential legal exposure.

The agency has included revised instructions regarding disaster relief to reflect recent changes made to PBGC’s practice.

The table is needed to compute the value of early retirement benefits and, thus, the total value of benefits under a plan.

The complaint suggests MetLife is failing to meet its obligations to ensure different annuity options offered to pension plan participants are actuarially equivalent default benefit, as required under ERISA.

An increase in liability values was offset by an increase in asset values.

Willis Towers Watson offers investment considerations for sponsors of defined benefit plans.

A new Accounting Standards Board Standard of Practice requires actuaries to identify risks that, in the actuary’s professional judgment, may reasonably be anticipated to significantly affect the defined benefit plan’s future financial condition.

According to Brian Donohue, with October Three Consulting, the master strategy to get to full-funding-but-no-surplus on termination is to reduce plan risk by gradually changing the plan’s asset strategy as the plan approaches full funding—the “glide path” strategy that some sponsors have adopted.

Amendments in the update are effective for fiscal years ending after December 15, 2020, for public business entities and for fiscal years ending after December 15, 2021, for all other entities.

The agency says the additional information is needed to help it determine a defined benefit (DB) plan sponsor’s ability to continue to maintain its DB plan.

DB plan sponsors are using a variety of strategies to manage increasing PBGC premiums, including accelerating funding and implementing pension risk transfer strategies.

MassMutual has issued a white paper outlining all considerations for defined benefit plan sponsors considering a pension risk transfer.

The 6th Circuit said a district court rejected case law when it reasoned that the cases relied on by the Pension Benefit Guaranty Corporation (PBGC) arose under the Multiemployer Pension Plan Amendment Act (MPPAA) and did not address single-employer plans.