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.
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.
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.
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.
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.
Milliman has launched a new publication, “DB Digest,” which focuses on best practices in pension administration. The first issue, which features an article by David Benbow called “Form 8955-SSA, Participant Statement: More Than Meets the Eye,” is available here.