On May 26, 2022, Senator Murray (D-WA) and Senator Burr (R-NC) Chair and Ranking Member (respectively) of the Senate Health, Education, Labor, and Pensions (HELP) Committee released a discussion draft of the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg Act (the RISE & SHINE Act). The HELP Committee proposal… Read More
We are (concurrently) publishing an update to our article analyzing the effect of inflation on retirement income to include data through the first quarter 2022. This is an update to our more technical article, discussing, generally and theoretically, the issues of increased inflation/inflation risk present for both DB and DC plans.
Until 2021, the main drivers of retirement finance/retirement income were interest rates and asset performance. The other variable affecting nominal performance, mortality, has been (and is expected to continue to be) relatively stable.
The DOL released Compliance Assistance Release No. 2022-01 401(k) “Plan Investments in ‘Cryptocurrencies.” which generally cautions against 401(k) plans including crypto and other digital assets in a 401(k) plan.
Market volatility doesn’t deter Plan Sponsors from derisking as the PRT market remains very active.
On February 18, 2022, Senator Kaine (D-VA) (in the Senate) and Representative Manning (D-NC) (in the House) introduced the Auto Reenroll Act of 2022, a bill that would require 401(k) plans taking effect in 2025 or after to provide for a 3-year reenrollment of non-contributing participants in order to take advantage of the automatic enrollment testing safe harbor, allow certain “permissible withdrawals,” or assert state preemption for default contributions.
Executive Summary The cost to maintain a defined benefit pension plan has skyrocketed. The primary reason is the premiums paid to the Pension Benefit Guaranty Corporation (PBGC). Most plan sponsors have reduced their headcounts in recent years to effectively manage these premium overhead costs. The first wave focused on lump-sum windows for terminated vested participants…. Read More
plan sponsors are paying PBGC Variable Rate Premiums and of those that still are, fewer sponsors are leaving money on the table than at any previous year since we began publishing the PBGC premium report
The Social Security Administration just announced benefit increases effective in 2022. Current retirees will receive a cost-of-living increase, beginning in January 2022, of 5.9%, reflecting the increase in CPI-W between the 3rd quarter of 2020 and the 3rd quarter of 2021, the largest inflation adjustment in 40 years. In addition, the maximum amount of earnings… Read More
Overhead costs have skyrocketed for sponsors of traditional defined benefit plans. The main component of the skyrocketing cost is the insurance premiums paid to the Pension Benefit Guarantee Corporation (PBGC). The PBGC premiums are a combination of a fixed per participant fee and a variable rate based on the amount unfunded but capped at a per participant maximum. These components have grown greater than 200% for the fixed and 500% for variable rate since 2012.
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