Oxford Economics has released a study, commissioned by ASPPA and other retirement-related organizations and financial firms (including AARP, the U.S. Chamber of Commerce, Financial Services Roundtable, and more), highlighting the importance of the employer-based retirement system in the United States. After ramping up their savings efforts during the recession, Americans are returning to their free-spending ways; this paper examines the dangers of this trend, and what policymakers can do to encourage workers across the socioeconomic spectrum to make responsible choices.
This white paper by Lowell M. Smith of Inspira looks at the problems posed by uncashed pension checks, which include handling interest on the funds awaiting transfer, notification requirements and how appropriate corrective actions are, not to mention the added complication of there being no clear guidance from the IRS and the Department of Labor on the subject. This paper examines the regulatory issues surrounding uncashed checks as well as possible solutions for handling them.
This paper, by Richard Glass of Investment Horizons, Inc., looks at how 401(k) fiduciaries exercise the fiduciary duties of prudence and disclosure regarding target date funds. It argues that Congress’ assumption that generally accepted investment principles and modern portfolio theory are widely accepted and understood, and the Department of Labor’s ambiguity on selecting and monitoring TDFs, have created inconsistency in how information is provided about them and participants receiving incomplete information. This paper discusses these issues and provides suggestions for addressing them.
This paper, by Richard Glass of Investment Horizons, Inc., discusses the importance of employers exercising their fiduciary duties of monitoring and communicating about their retirement plans and — especially in light of recent studies that show that majority of employers are disengaged regarding their benefits and planning for the future.
In a this white paper published by Arnerich Massena, Inc, Scott Dunbar; Jake O’Shaughnessy, CFA; and Jillian Perkins review a variety of research studies that look at the investment returns of DC participants’ accounts compared with the returns of index funds, market returns, committee- or trustee-directed defined benefit accounts and asset allocation accounts. They conclude that participant-directed accounts, in aggregate, consistently under-perform over long periods. They also discuss studies that take a close look into participants’ asset allocation strategies.
In this white paper, Olivia S. Mitchell and Timothy (Jun) Lu, Stephen P. Utkus and Jean A. Young of the Wharton School examine the option of borrowing from a retirement account, and show that employers' loan rules have a strong effect on borrowing patterns. They found that for plans allowing multiple loans, participants are more likely to borrow and take out larger loans. Their results show that defined contribution plans, while designed mainly to support old-age financial security, include important features for financing current consumption.
This white paper by Cammack Retirement Group provides an overview of the increasingly important role target date fund (TDFs) play in retirement plans. It also describes the methodology and classification system Cammack uses for monitoring TDFs. It argues that monitoring a plan’s TDF options is one of the most important fiduciary obligations plan sponsors face in managing their retirement plan investment lineup.