FALL 2014
THE ONE PAGE MAGAZINE
Large firms continue
moving away from defined
benefit plans: Survey
8 in 10 give thumbs up to
defined contribution plans
The number of defined benefit pension plans
sponsored by the nation’s largest corporations
continues to dwindle.
U.S. workers are upbeat about defined contribution
plans — at least as far as their usefulness — but
still don’t know how much to save for retirement.
Just 118, or about 24%, of Fortune 500 companies
offered a defined benefit plan to new salaried
employees in 2013, down from 123 in 2012 and
a steep decline compared with the 277, or 55%,
that offered the plans in 2003, according to a
Towers Watson & Co. survey.
That’s the word from a survey from the LIMRA
Secure Retirement Institute, which found that,
while 80 percent of workers think 401(k)-type
plans are an effective way to save for retirement,
half are still ignorant of how much they’ll need
to save.
Frequently cited reasons for the decline in
employer sponsorship of defined benefit plans
include longer employee lifespans, which increases
benefit costs; decreased corporate tolerance of
fluctuating contribution requirements, which can
jump up and down due to investment results;
and escalating Pension Benefit Guaranty Corp.
insurance rates.
This is despite efforts to educate participants on
how much is necessary, and how important it is
to start saving early and consistently.
To read the article on Forbes visit:
www.businessinsurance.com/article/20140904/NE
WS03/140909924?tags=|307|77|82#
—Business Insurance, 9/4/14
... Another interesting result of the survey is the
number of people who believe that an employer
has at least some responsibility to help employees
save for retirement, with 44 percent weighing in
in favor and 28 percent undecided.
Read the full article at:
www.benefitspro.com/2014/09/23/8-in-10-givethumbs-up-to-defined-contribution-pla
—Marlene Y. Satter, Benefits Pro 9/23/14
Retirement savings in the
US grow across all age
groups
According to a recent survey, median retirement
nest eggs among employed adults of all ages either
doubled or tripled between 2007 and 2014. The
increase in retirement savings can be credited, in
part, to a booming stock market and increased
awareness of the need to save.
For the full article click here:
www.csmonitor.com/Business/2014/0923/Retirementsavings-in-the-US-grow-across-all-age-groups-video
—Schuyler Velasco, CSMonitor.com, 7/18/14
Retirement plan
participants grow more
cautious
Defined contribution and defined benefit
participants are adopting goal-oriented
approaches to offset risk, as opposed to pursuing
the highest potential returns, according to
research commissioned by Principal Global
Investors.
The study sees the shift to more cautious investing
as a fundamental change, not a short-term trend.
Baby boomers especially are retreating from a
risk-taking mode.
To read the article on BenefitsPro.com visit:
www.benefitspro.com/2014/09/22/retirement-planparticipants-grow-more-cautious
—
Nick Thornton, BenefitsPro.com, 9/22/14
IRS Issues 401(k) After-Tax Rollover Rules
There are new rules for taking after-tax money out of your 401(k), and they are taxpayer-friendly. Basically,
if you have after-tax money in your 401(k) retirement account, you can roll it into a Roth IRA where it will
then grow tax-free (as opposed to tax-deferred). You don’t have to pay pro rata taxes on the distribution,
accounting for the percentage of the pre-tax money in your 401(k).
The new IRS rules have opened the door to a smart planning move. You’re basically isolating basis to do a
tax-free Roth conversion.
For the full article click here:
www.forbes.com/sites/ashleaebeling/2014/09/19/irs-issues-401k-after-tax-rollover-rules/
6 | FALL 2014
— Ashlea Ebeling, Forbes, 9/19/14