Balancing Risk: Designing and Implementing an Adjustable Pension Plan

Over the last 20 years, many plan sponsors and providers have replaced their traditional defined benefit pension plans with 401(k)-style defined contribution plans with the goal of controlling costs and minimizing the volatility of contributions. But one of the risks of disbanding a traditional pension plan and moving participants to a DC plan is that it leaves participants to fend for themselves and may result in lower benefits. Plan sponsors that seek to provide the best of both traditional DB plans and DC plans may want to consider adopting an adjustable pension plan.

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Pension Solvency Relief Gets Fresh Shot in Democratic Congress

Saving underfunded pension plans from bankruptcy has a better chance of coming to fruition now that Democrats control both the White House and Congress. Under divided rule, lawmakers pushed pension solvency via standalone bills, as part of economic relief packages, and in supercommittee talks that ultimately failed because of partisanship. But with unified control, Democrats can expedite their utmost priorities in a simple majority-based budget reconciliation vote.

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San Diego's pension payment spiking $50M, worsening budget crisis during pandemic

San Diego's annual pension payment will rise by nearly $50 million this June, making it much harder for the tourism-reliant city to balance its budget while tax revenues continue their sharp slide due to the COVID-19 pandemic. The city's pension board is requiring a $49.3 million spike in the annual pension payment, from $365.6 million a year to $414.9 million, because estimates of long-term pension debt rose this year from just over $3 billion to $3.34 billion.

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