Technical Competence

This station houses posts and commentary about the challenges facing state and municipal DB pension plans — funding, municipal bankruptcies, litigation, etc.

Technical Competence

Technical Competence

By Fred Barstein11/6/2013 • 0 Comments

The city of Stockton, CA is set to emerge from bankruptcy next year in a settlement with bond holders that does not include cutting back on pension rights. In the Stockton bankruptcy case settlement, the bond holders blinked first, agreeing to take as much as a 50% haircut on some bonds. READ MORE

By Ray Harmon11/6/2013 • 0 Comments

A new report from the U.S. Government Accountability Office (GAO) recommends that the Labor and Treasury Departments collaborate on default electronic delivery rules for pension-related disclosures. READ MORE

By John Ortman11/1/2013 • 0 Comments

The Internal Revenue Service announced on Thursday cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2014. Some limits will remain unchanged in 2014 because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment. However, other pension plan limitations will increase for 2014. READ MORE

By Fred Barstein11/1/2013 • 0 Comments

There’s a saying that if you’re a hammer, the whole world looks like a nail. For plan advisors focused on 401(k) plans, they might be offering K plans to all clients — even those that might be too small or as a one-stop solution for all retirement needs. Cash balance plans, on the other hand, might be right for smaller companies who don’t want the administrative headaches or liability of K plans, especially their unattractively low deferral limits. READ MORE

By Fred Barstein10/30/2013 • 0 Comments

According to an interview by FiduciaryNews’ Chris Carosa with Sarah Simoneaux and Rick Rodgers at the ASPPA National Conference this week, the focus of education should shift from investing to saving, with more money flowing into managed investments anyway. READ MORE

By Fred Barstein10/23/2013 • 11 Comments

According to research from academics at the University of Colorado, the University of Virginia and Catholic University, financial education and training has a 0.1% effect on behavior. Analyzing 168 papers and 201 studies, the professors found little correlation between financial education and how people act with knowledge — negating the benefits of extensive education programs. READ MORE

By Fred Barstein10/21/2013 • 0 Comments

DB plans with tens of billions in assets are waiting to transfer the risk to third-party insurance companies when interest rates rise, according to a report by P&I. De-risking has been light this year: Only $1 billion of deals were done, compared with $37 billion in 2012, a year that included plans like GM and Verizon. READ MORE

By Fred Barstein10/21/2013 • 0 Comments

Is there any constitutional right, state or federal, that is absolute? This issue was considered last week by a bankruptcy judge in Michigan who is hearing arguments in the Detroit Chapter 9 filing. Union workers and municipal pensioners argued that the Michigan state constitution guarantees their rights to receive retirement benefits that cannot be usurped even by federal bankruptcy law. READ MORE

By Fred Barstein10/17/2013 • 0 Comments

A number of mayors from cities in California like Anaheim, San Bernardino, San Jose and Santa Ana have banded together to create the Coalition for Fair and Sustainable Pensions to address state pension plans that they call “unsustainable.” A statewide ballot initiative the group is pushing would amend the state’s constitution to allow state agencies and cities to negotiate retirement and health care benefits prospectively. READ MORE

By Fred Barstein10/15/2013 • 10 Comments

Is the move toward using a 3(16) fiduciary inevitable? According to the folks at Fiduciary Plan Governance, the answer is yes. But what does it mean to plan advisors, and should they be adopting the model? READ MORE

By Fred Barstein10/14/2013 • 0 Comments

Stopping short of requiring fiduciary education by plan sponsors, the DOL is asking more questions about how companies are training their committee members, according to a report by BNA citing attorneys at the law firm of Trucker Huss. READ MORE

By Fred Barstein10/14/2013 • 0 Comments

Though much of the government is shut down, there are some deadlines that are not — like Form 5500 filing and other deadlines, such as plan funding. According to David Levine of the Groom Law Group, a skeleton crew of 20 IRS staffers exempted from the furlough will focus on statute protection and processing of remittances, but will probably put on hold audits, determination and private letter rulings voluntary corrections. READ MORE

By Fred Barstein10/11/2013 • 0 Comments

As the financial services industry braces for changes in the definition of a fiduciary, SEC Chair Mary Jo White indicated at a Washington, DC conference this week that the uniform fiduciary rule remains a “major focus” at her agency — although she would not specify a time frame in which the proposed rule might be released. READ MORE

By Fred Barstein10/4/2013 • 0 Comments

Like a snow day for students when a test is scheduled, some DOL investigations and actions will be delayed as a result of the government shutdown. Extensions on some DOL litigation have already been filed, and routine functions will be put on hold. READ MORE

10/2/2013 • 0 Comments

A subcommittee of the SEC’s Investor Advisory Committee has submitted a draft “Recommendation of the Investor as Purchaser Subcommittee Broker-Dealer Fiduciary Duty” in advance of a scheduled Oct. 10, 2013 meeting of the Committee. The draft document from the Committee’s “Investor as Purchaser” subcommittee contains two recommendations. READ MORE

By Daniel Long9/27/2013 • 4 Comments

“What's in a name? That which we call a rose by any other name would smell as sweet.” In Shakespeare’s timeless love story, Juliet’s romantic plea to Romeo to relinquish his Montague family name was so convincing that he responded, “Henceforth I never will be Romeo.” In one of the most successful sales pitches ever, Juliet convinced Romeo that the names of things actually do not matter. Let’s think about this in the context of retirement plans. READ MORE

By Fred Barstein9/27/2013 • 0 Comments

News about Detroit’s pension plan shortfalls only gets worse. A new report by the New York Times indicates that excess payments of $2.3 billion might have been paid to retirees and active workers over a 23-year period from 1985-2005. Bonuses were paid to retirees; supplemental payments were made to active workers; and cash was paid to families of deceased workers before they were eligible. READ MORE

By Fred Barstein9/25/2013 • 4 Comments

In an exclusive interview with Chris Carosa of FiduciaryNews, EBSA Director Phyllis Borzi weighs in on several key topics — including her agency’s commitment to redefining the fiduciary rule to protect investors from what she calls “conflicted advice.” READ MORE

By Fred Barstein9/24/2013 • 0 Comments

Think that DC plan participant education is dead? Stanford Graduate School of Business professor Joshua Rauh thinks otherwise. He’s teaching an eight-week online course about the fundamentals of retirement plan investing for private as well as public pension plans. Rauh’s course is intended to help students make informed decisions about their portfolios with strategies to improve asset allocation. It will also include guest lecturers addressing public policy issues affecting the retirement industry. READ MORE

By Ray Harmon9/19/2013 • 0 Comments

The DOL announced Sept. 18 that it will be following the example of the recent IRS Revenue Ruling (Rev. Rul. 2013-17) adopting a “state of celebration” standard for defining “spouse” and “marriage” under ERISA. READ MORE

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