Monthly Archives: October 2011

Retirement Town Hall rewind

If you haven’t been to Retirement Town Hall in a while you’ve missed some breaking news in the retirement benefits world and some in-depth analysis.

Inside the DB preference
Mark Olleman gave us a behind-the-scenes look at the new report he co-authored with Ilana Boivie of the National Institute on Retirement Security in Public DB plans get some love.

Beltway machinations
Sponsors of cash balance plans and their advisors who missed it will be happy to see the headline: IRS delays deadline for “Market Rate of Return,” other rules. Following that up, the Employee Benefit Research Group also noted that Social Security announces 3.6 percent benefit increase for 2012 and news that COLAs increase retirement, Social Security, health benefit amounts. That week, we asked for your thoughts on Social Security’s 2012 makeover in our poll. More recently we asked you to look into A crystal ball for taxes and give us your prediction of how Washington will handle 2012 payroll taxes.

Target-date fun!
We’ve covered target-date funds before and there’s new analysis in the October edition of the Milliman Benefits Perspectives. Here, Jeff Marzinsky sums up the four key points in Target-date funds: Plan sponsor considerations.

Finally, don’t forget to check out the new publication we highlighted in Introducing DB Digest and the latest edition of Multiemployer Review.

A crystal ball for taxes

Payroll taxes went down in 2011 from 6.2% to 4.2%, which is due to a one-time change in the law. Ideally, Americans would have used that extra cash to increase their retirement savings, but at this point, it’s hard to tell what they did. Although there is some speculation that the reduction could be renewed in 2012, payroll taxes could go back up to 6.2%. For Americans who were able to save, only time will tell if those who have gotten used to socking away more in their retirement savings will revert back to smaller contributions in 2012 (compared to 2011) because they can’t afford to do it or if it’s too painful.


Public DB plans get some love

Here’s some good news about defined benefit (DB) plans: Public employees, in overwhelming numbers, are showing that they understand and appreciate the value of their defined benefit pension plans.

We know this is true because we studied the data from seven statewide retirement systems that offer employees the choice between a DB and a defined contribution (DC) plan such as a 401(k). The systems included in the study were Colorado Public Employees’ Retirement Association, Florida Retirement System, Montana Public Employees Retirement Association, North Dakota Public Employees Retirement System, Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio, and South Carolina Retirement Systems.

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COLAs increase retirement, Social Security, health benefit amounts

With the release of the September 2011 Consumer Price Index (CPI) by the Bureau of Labor Statistics, the Social Security Administration (SSA) and the IRS have announced cost-of-living adjusted figures for Social Security and retirement plan benefits, respectively, for 2012. For the first time in the last three years, almost all the figures published will increase.

Read more in the latest Client Action Bulletin.