Nevin's Data "Points"

Two things have been overlooked by many people in the days leading up to the Supreme Court’s decision in Tibble v. Edison International and the weeks thereafter: (1) most of the wrongs 1 initially alleged did not survive the judgment of the district court ; and (2) only a single issue — the determination as to how to apply ERISA’s statute of limitations to fund selection — was before the nation’s highest court. While the Supreme Court rejected the notion that an initial fund review was sufficient in the absence of significant changes in circumstance to preclude the need for an ongoing assessment, the defendants in Tibble did a lot of things right that many plans don’t. Here are five: 1. They had a plan investment committee. ERISA only requires that the named fiduciary (and there must be one of those) make decisions regarding the plan that are in the best interests of plan participants and beneficiaries, and that are the types of decisions that a prudent expert would make about...

One of the most celebrated plan design features of the 401(k) era is automatic enrollment. Nearly as old as the 401(k) itself, once upon a time it was called a “negative election.” But regardless of the name, the concept has been extraordinarily effective at not only getting, but keeping, workers saving via their workplace retirement plans. However, adoption of the design, after a surge in the wake of the passage of the Pension Protection Act of 2006, now seems to have plateaued. Moreover, current data suggests that, while automatic enrollment adoption has certainly had a positive impact on retirement outcomes, we’re not getting as much mileage from it as we might. So, here are three things that plan sponsors — and others — should know about automatic enrollment. 1. You don’t have to default contributions at 3%. Three percent was the standard default contribution rate for automatic enrollment plans long before the Pension Protection Act of 2006 incorporated it as part of its au...

One of my more frustrating memories of parenthood was trying to help my kids with their homework. Not because I hadn’t covered the territory once upon a time myself, or because I couldn’t manage to refresh my recollection(s) of the subject. It wasn’t enough to teach my kids a method sufficient to arrive at the correct answer, and to help them understand how we got there. No, it didn’t “count” unless I could arrive at the answer by adhering to what struck me as a weirdly inefficient and complicated regimen upon which their teachers insisted. If this was the “new math,” I remember thinking at the time, I fear for the sanity of the next generation. This past weekend The New York Times ran an article aptly, if somewhat awkwardly, titled, “ New Math for Retirees and the 4% Withdrawal Rule .” The focus of the article, like the 4% rule itself, was how to pace withdrawals in retirement so that you don’t run out of money before you run out of retirement. However, like so many other things...

This weekend our youngest will graduate from college. It’s a big day for him, of course, and a big deal for us, having for some part of the past eight years had either one, two — and for one interesting year, all three — of our children in college at the same time. Life has many lessons to teach us, some more painful than others. But as my son — and graduates everywhere — look ahead to the next chapter in their lives, it’s a natural time for the rest of us, particularly those of us who are parents, to reflect on the lessons we’ve learned along the way. So, for my son — and all the other graduates out there — here are some things I wish I had known when I entered the workforce:   1. If you don’t speak up, people will assume you’re happy with the way things are.   2. If you wouldn’t want your mother to learn about it, don’t do it.   3. Never assume that your employer (or your boss) is looking out for your best interests.   4. You can be liked and ...