Retirement benefits

The California State Teachers’ Retirement System’s $73 billion unfunded liability may be the state’s “most difficult fiscal challenge” and lawmakers should increase funding for the second-largest U.S. pension, the Legislative Analyst’s Office has reported.

Illinois teachers would be asked to choose between pension increase and retiree health under a measure that was adopted by the state’s senate this week. The bill’s impact is a matter of dispute. Illinois’ pension system is the most under-funded state system in the country.

The Labor Department provides more rationale to guide clients to best-in-class asset managers. But consider the case for “quasi-customization.”

International rules designed to make derivative transactions safer by increasing collateral requirements may lead pension plans to take unnecessary risks, according to the National Association of Pension Funds

The Shrinking Emergency Account Losses (SEAL) Act, sponsored by U.S. Sens. Bill Nelson (D-Fla.) and Mike Enzi (R-Wyo.), is before the Senate again. The bill, originally proposed in 2011, would give 401(k) participants who borrow against their 401(k) retirement plans more time to replenish their accounts after leaving a job.

A recent academic study examined whether mutual fund companies that act as trustees for 401(k) plans “display favoritism towards their own funds.” Although its conclusions will not shock many advisers, the research can be useful as a source of independent evidence on this important issue, and reinforce the vital role that an independent adviser can play in overseeing plan investments.

Most Investment Committees spend the majority of their meeting time talking about things they can't do anything about.

President Barack Obama named Thomas Perez, an assistant U.S. attorney general, as his choice for labor secretary in his second term. Perez would replace Hilda Solis, ensuring that the Labor Department is led again by a Hispanic, helping the president maintain diversity in his cabinet. Solis resigned in January.

The Pension Benefit Guaranty Corporation reports that shifting its enforcement policy away from companies unlikely to default on their pensions benefited about 50 businesses by almost $1 billion since the start of a pilot program announced in November.

Last week Richard Stolz in his article, Red Alert for Fiduciaries on Plan Financial Reports properly noted that plan fiduciaries are more vulnerable than ever on a number of compliance matters, including the financial statements included with their 5500 filings.

Ford Motor Co., while moving to close a growing deficit in its pension, will shift more of its plan’s assets to fixed income to shield against changes in interest rates.

The experts all seem to agree: 401(k) plans should be set up to automatically distribute small ($5K or less) balances of former employees into IRAs using well established safe harbor procedures.

More than 78% of plan sponsors are planning to maintain their offerings of stable value funds, according to the MetLife 2013 Stable Value Study

California should force state workers to use up their vacation time rather than bank it until retirement, the Legislative Analyst’s Office said after finding the cost to taxpayers has reached a historic high.

The Los Angeles Fire and Police Pension System, with about $15.7 billion in assets, is allocating about $785 million for commodities, its first investment in the asset class.

In most surveys, average defined benefit portfolios are found to outperform the average defined contribution plan account. And while that was true in Callan Associates latest “Callan DC Index” report, one category of target date fund -- 2030 funds -- performed markedly better last year than both overall DC plan assets and DB plans, presumably due to a higher average equity allocation.

Air Canada stock gained the most in a week after the carrier reached an agreement with the Canadian federal government to extend a cap on pension funding by seven years, vividly demonstrating the impact of pension obligations and the price of publicly traded sponsor’s common stock shares.

A new nationwide public opinion research report produced by the National Institute on Retirement Security (NIRS) finds overwhelming support for Congressional action to provide all Americans with access to a new type of privately run pension plan.

Last week the Dow Jones Industrial Average reached record highs. Many expect the Standard & Poor's 500, a broader market index, to follow the Dow's lead soon. Is this a time to consider committing significantly to U.S. equities, or a time to take profits?

Plan fiduciaries are more vulnerable than ever on a lot of legal and regulatory fronts, including the financial statements included with their 5500 filings. In an era when 5500 forms and their attachments quickly enter the public domain online via E-fast 2, available to anyone -- including an enlarged army of DOL inspectors hunting for anomalies, “fiduciaries need to be on the top of their game,” warns Dave Dacey, CPA, a partner with the WithumSmith+Brown and leader of the firm’s Employee Benefit & Pension Plans Group.