An asset increase of $23 billion is not enough to offset a $60 billion increase in liabilities as interest rates fall below 4.0%, raising the funded status deficit to $321 billion
According to this weeks 401(k) Performance Survey, approximately 5% of 401(k) plans, or 13,811 plans, stopped matching in 2010, and an additional 2% halted the employer match in 2011.
Towers Watson reports that employers contributed $45.1 billion to their pension plans last year, up from $38.9 billion in 2011, but it wasnt enough: pension deficits jumped 17%, or $42.5 billion, to $295.2 billion at year-end 2012.
Using a complex formula, President Obama's 2014 proposed budget establishes a beachhead for taxation of previously tax-protected retirement benefits. Under the proposal, an individual's total lifetime balance across all retirement accounts (pension, profit-sharing, 401(k), IRA) will be limited to the amount necessary to purchase a life annuity generating an annual payment of $205,000 for a 62 year old. Calculating the limit using existing assumptions yields a balance limit of $3.4 million. Many retirement plan experts were surprised at the proposal for the following reasons:
A cap that President Barack Obama has proposed on the size of tax-advantaged retirement accounts is seen as potentially pushing savers to another product that limits payments to the government: life insurance.
Increased loan activity raises fresh concerns about preparation for employee retirement readiness.
Even before the presidents proposed budget had been released, the American Society of Pension Professionals and Actuaries blasted its restrictions on defined contribution plan accumulations and on the cost of purchasing an annuity equivalent to the top benefit allowed for defined benefit plans.
A federal judge has ruled that the pension beneficiaries can sue the company as a group over its transfer of $8.5 billion in plan obligations to Prudential Insurance Co. of America.
A projected cost increase across the more than $13 trillion in pension liabilities in North America and Europe would be about the same as everyone giving up smoking within a generation, a risk-modeling firm says.
A new study shows strong employer objections to state-run plans such as those recently proposed by legislatures in California and Massachusetts.
The 23rd annual Retirement Confidence Survey, the longest-running survey of its kind, reports 28% the highest level in the surveys history are not at all confident about being able to afford a comfortable retirement
Ford Motor Co., while moving to close a growing deficit in its pension, will shift more of its plans assets to fixed income to shield against changes in interest rates.
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 sponsors common stock shares.
Advisers are familiar with the general challenge of getting people to take advantage of sound financial advice and do more to achieve retirement goals. A recent survey by PNC Financial Services Group quantifies that challenge, and points to some ways to overcome it.
There is a general belief that advisers acting as fiduciaries to a 401(k) plan would violate ERISA if they advise participants on IRA rollover opportunities and wind up managing those rolled over funds. That opinion is not surprising, according to ERISA attorney Marcia S. Wagner of the Wagner Law Group. But it is not necessarily correct.