It was 1982, and many of today’s baby boomers were listening to the song, “Should I Stay or Should I Go” that was on The Clash’s album, Combat Rock. According to NME, Mick Jones, the lead guitar on the song, wrote it about singer Ellen Foley, who sang the backing vocals on Meatloaf’s Bat Out … Continue Reading
View larger image. Lost in the mass media focus on the Baby Boomers retiring is Generation X, the generation that follows. Depending on how they are defined, it’s the people born between 1965 and 1985 (age 23 to 43). I’ve written about them before, Not my generation that nobody seems to want. The "nobody" referred … Continue Reading
I’ve got that queasy feeling again in my stomach. The recent collapse of Bear Stearns gave me flashbacks to the 1990s during which we struggled with insolvency issues affecting ERISA plans. If you were around back then, you’ll remember the insurance companies that failed or were seized by insurance regulators as a result of failed … Continue Reading
Retirement plans in the U.K. and this country are a lot alike. Employers in both countries have shifted from defined benefit plans to defined contribution plans. Employers in both countries use a trust-based system complete with fiduciary responsibilities. And employers in both countries are understandably trying to limit their exposure to fiduciary liability. U.K. employers, … Continue Reading
This is one of those Good News/Bad News stories. The Wall Street Journal on March 27 reported that “Household Wealth Rises as Retirees Age” citing a paper posted on the Federal Reserve’s website. The Journal quotes the authors as saying that adjusted for inflation, The median’s household’s wealth declines more slowly than its remaining life … Continue Reading
Add one more trend to Boomer demographics. Recent research has revealed that Boomers continue to push the limits regarding the prevalence of divorce. While just 33% of married adults from the two preceding generations has experienced a divorce, almost half (46%) of all married Boomers have already been divorced. They will be almost certain to … Continue Reading
One of those wonderful tax benefits that a qualified retirement plan and IRA provide is the tax deferral of contributions and earnings. But nothing lasts forever including the payment of benefits (and the taxes thereon). So the tax laws require RBDs and RMDs. That’s tax talk for “required beginning date” and “required minimum distribution” respectively. … Continue Reading
It starts tonight, the 2008 NCAA Men’s basketball tournament (the play-in game between Mt. St. Mary’s and Coppin St. with the winner having the dubious honor of playing North Carolina on Friday). And a lot of money is going to be lost. No, not just by most of the bettors, but by employers whose employees will be … Continue Reading
See full-size image. “Decumulation”, in definitional terms, means the conversion of pension assets accumulated during an employee’s working life into pension income to be spent during retired life. But in practical terms, decumulation embodies a significant new risk for the record number of future retirees moving from the accumulation phase of their lives to the … Continue Reading
They’re back! They’re employees who back in the day we called "rehires", those former employees who were hired back. Now they’re called "boomerang employees". Diane Stafford, the Kansas City Star’s workplace columnist, writes about the trend for employers to re-hire former employees as reported by Management Recruiters International, an executive search and recruiting firm. In … Continue Reading
See full-size image. It didn’t get quite the attention that did the landmark Supreme Court ruling in LaRue v. DeWolff that defined contribution participants can bring fiduciary breach suits to recover individual damages. The "it" is the Department of Labor’s recent Field Assistance Bulletin (FAB) No. 2008-01, and it’s long-term implication may be as profound. … Continue Reading
A few months ago, I wrote about the possibility that a class action law suit might be filed against the National Education Association (NEA). Well, now it’s happened. The law suit claims that the NEA accepted payments from the 403(b) providers to endorse those retirement plans, and that the fees and expenses charged by the … Continue Reading
Yesterday, I discussed the first of two big changes ahead for 403(b) plans that would make 403(b) plans resemble 401(k) plans, proposed IRS regulations that would be effective in 2008. Here is the second big change, the IRS Universal Availability Project. The IRS is sending out letters and questionnaires to public school districts regarding their … Continue Reading
Major changes are on the way for 403(b) plans. Named after Section 403(b) of the Internal Revenue Code enacted in 1958, 403(b) plans are retirement annuity contracts, mutual fund custodial accounts for employees of certain tax-exempt organizations, public educational organizations, and retirement income accounts established by churches or church-affiliated organizations. The Internal Revenue Service is … Continue Reading
Keller Rohrback, a Seattle-based law firm and one of the leaders in 401(k) class action law suits, has now turned its attention to 403(b) plans. The firm, whose website is named ERISAfraud,com, announced its investigation into ithe National Education Association (“NEA”) Valuebuilder 403(b) variable annuity plan. As background, the NEA has 3.2 million members who … Continue Reading
