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Balancing Risk: Designing and Implementing an Adjustable Pension Plan

02/16/21

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

01/19/21

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

01/17/21

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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Are There Cracks in Your Pension Plan?

12/28/20

Look up defined pension plans these days and words you don't want to see associated with the money needed to secure your retirement come up: broke, crisis, underfunded. It looks mighty scary, especially as the coronavirus keeps raging and the economy remains uncertain. The reality? Most plans are fine, though "a small but significant number are in trouble," says Jean-Pierre Aubry, director of state and local research for the Center for Retirement Research at Boston College.

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Market opening up for more variable plans

12/28/20

The aftereffects of the COVID-19 pandemic on retirement plans and Congress' recent failure to achieve multiemployer pension reform could mean a boost for variable pension plans, pension experts say. The concept gained more visibility this year with a new variable annuity pension plan agreement between three major grocery companies and the United Food and Commercial Workers International Union, Washington.

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COVID-19 Having Major Impact on Pensions

12/15/20

"The Impact of COVID-19 on Retirement Plans," a webinar hosted by the American Academy of Actuaries Pension Practice Council, explored how the coronavirus pandemic has affected various types of pension plans.

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Pandemic puts new focus on variable plans

08/24/20

Interest in variable plan designs appears to be growing, sparked in part by the increased market volatility and uncertainty of this unusual year.

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States Pull Back on Pension Payments as Virus Ravages Revenue

07/31/20

Colorado and South Carolina have pulled back from making additional payments to their underfunded pensions, moves that may play out in other states that are struggling to balance budgets as the coronavirus ravages tax revenue.

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Pandemic Puts More Stress On Struggling Pension System

06/05/20

The coronavirus outbreak has presented daunting challenges for an already-struggling multiemployer pension plan system. It's also amplifying calls for Congress to step up and pass legislation to protect against millions of retirees losing their financial livelihood.

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What the Economic Downturn Could Mean for Pension Plans

04/28/20

While there's no immediate danger that defined-benefit pension plans will fall short of resources to meet obligations during the pandemic crisis, many are taking their lumps as financial markets tumble. And the knock-on effects of the economic downturn could pose long-term challenges for pension plan sponsors as they try to meet their obligations to participants.

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San Diego pension debt climbs past $3B for first time

01/13/20

A new analysis shows San Diego's pension debt has climbed past $3 billion for the first time, forcing the city to increase its annual pension payment by more than $11 million this year despite a projected budget deficit of $84 million.

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Risk of pension meltdown grows due to inaction by U.S. Congress

01/07/20

The window is closing on the chance to avert a pension meltdown that will slash the retirement benefits of more than a million U.S. workers.

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North American trade deal won't include measure to rescue underfunded pension plans

12/18/19

A plan to shore up struggling pension plans key to the retirement of tens of thousands of Teamsters and other workers in Massachusetts lost its best chance of congressional approval this year when its Democratic backers left it out of a landmark trade agreement.

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The 2020 Retirement Landscape

12/17/19

I forecast that Congress would try to avert an insolvency crisis in multiemployer pension plans, which would threaten the retirement of more than 1 million workers and retirees. I was correct--lawmakers did try. But they have not succeeded, and action before the 2020 elections now seems unlikely, as the House and Senate are at complete loggerheads over how to solve the problem.

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PBGC's good news could sour quickly

11/25/19

As PBGC officials cautiously celebrate a second year of good fiscal news for the single-employer program, plan sponsors are equally guarded about what could happen if more plans drop out or Congress decides it is not done hiking premiums.

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Senate GOP proposes multiemployer reform bill

11/25/19

A Senate Republican proposal to help critically underfunded multiemployer pension funds and prevent more was introduced Wednesday by Finance Committee Chairman Chuck Grassley of Iowa and Health, Education, Labor and Pensions Committee Chairman Lamar Alexander of Tennessee.

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Looking to Washington for a Retirement Lifeline

09/12/19

It is going to be a busy fall for legislators and regulators dealing with retirement policy.

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Retired Teamsters wait for Congress to act on wobbly pension fund

08/09/19

The U.S. House passed a bill to prop up the failing fund. Now it's in the Senate's hands.

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Long process predicted for multiemployer reforms

07/22/19

U.S. House committee approval of a multiemployer pension reform package seems likely to be only the first step in a process that will see many changes before a final plan emerges.

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Health insurance premiums up 5% for state workers

06/19/19

Health insurance premiums for current and retired state employees will increase 5% next year under a plan approved Tuesday that involves reducing the amount of money set aside to pay unexpected large medical claims.

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Rx shift weighed for state retirees; Medicare option outlined to panel

05/22/19

Dropping drug coverage for retired state employees who are on Medicare would save $20 million a year for state employee and retiree health plans and lower the overall health care costs for 82% of the retirees, a consultant told an advisory panel on Friday.

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Actuary: Without changes, health insurance rates for state workers likely need big increase

05/23/19

Without a cut in benefits or other changes, health insurance rates for state employees will likely need to rise by double digits next year, an actuary told a state board Tuesday. The projection by John Colberg, an actuary with the consulting firm Cheiron of McLean, Va., is in line with what he told the State and Public School Life and Health Insurance Board last year about the outlook for 2020.

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Public plans receive their own mortality tables

02/04/19

The first mortality tables specifically for public-sector pension plans--identifying teachers as likely the largest public pension obligation cohort--might not surprise administrators of large plans, but it does offer them a way to benchmark to their peers.

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Public plans receive their own mortality tables

02/04/19

The first mortality tables specifically for public-sector pension plans--identifying teachers as likely the largest public pension obligation cohort--might not surprise administrators of large plans, but it does offer them a way to benchmark to their peers.

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Mature Pension Plans Are Sensitive--Manage With Care

02/01/19

California county pension plans in SACRS or the State Association of County Retirement Systems are more mature than the typical public plan nationwide and thus more sensitive to investment volatility, according to a survey by Cheiron actuaries published in the Winter 2019 SACRS magazine. See page 18.

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Senators introduce bill to help United Mine Workers pension fund

01/07/19

Six Democratic senators introduced a bill that aims to shore up the beleaguered United Mine Workers of America 1974 Pension Plan, Washington, and ensure that no miners lose their health care due to 2018 coal company bankruptcies.

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