Nevin's Data "Points"

Halloween is the time of year when one’s thoughts turn to trick-or-treat, ghosts and goblins, and things that go bump in the night. But what are the things plan sponsors are scared about? Getting sued. Plan sponsors will often mention their fear of getting sued, and little wonder. The headlines are full of multi-million-dollar lawsuits against multi-billion-dollar plans, and if relatively few actually get to a judge (and those that do are decided in the plan fiduciaries’ favor), they nonetheless seem to result in multi-million-dollar settlements . Oh, and not only has this been going on for more than a decade, the issues raised are changing as well. As a plan fiduciary, you can still be sued of course; and let’s not forget that that includes responsibility for the acts of your co-fiduciaries, and personal liability at that (see 7 Things an ERISA Fiduciary Should Know ). That said, those cases seem to involve a rather small group of rather large plans. Most plan sponsors won’...

When it comes to retirement, Americans seem to be a pretty insecure bunch. But then maybe it’s because they don’t know all the things they need to know. This, of course, is National Retirement Security Week , a week devoted to making employees more aware of how critical it is to save now for their financial future, promoting the benefits of getting started saving for retirement today, and encouraging employees to take full advantage of their employer-sponsored plans by increasing their contributions. In the spirit of the week, here are six things that people who need to save for retirement (and who doesn’t?) need to know about saving for retirement. You should save to at least the level of the employer match. Many employers choose to encourage your decision to save for retirement by providing the financial incentive of an employer matching contribution. That match is often referred to as “free money” because you get it just for saving for retirement. That match is not actually ...

I’ve always had a certain ambivalence about what are cynically referred to as “Hallmark holidays.” You know the ones I’m talking about – the ones that seem (and in many cases, are) crafted for the sole purpose of generating sales for greeting card sellers. Next week some – and I hope many – will commemorate National Retirement Security Week (which used to be called National Save for Retirement Week). Sponsored by the National Association of Government Defined Contribution Administrators (NAGDCA), it runs from October 16-22. It’s a national effort to raise public awareness about the importance of saving for retirement – and it’s even managed to obtain a Senate resolution in support of its observance. That said – and despite the hard work, talented designs, and sponsorship of a number of large and reputable financial services organizations, I suspect many of you haven’t even heard of it. More’s the pity. The week is focused on three key objectives: Making employees more aware ...

It’s been a busy year, a crazy summer – and we’ve still got a presidential election to go. It has been years since things actually slowed down in the summer (at least in the way we all seem to remember it), but this summer has been busier than any I can remember. Not only has everybody been making preparations for the implementation of the Labor Department’s fiduciary regulation (and it’s affecting different business models very differently), we’ve had the looming prospects of litigation regarding the legality of the regulation itself, and the authority of the Labor Department to undertake it. The challenges to that regulation share certain critical aspects, and yet each has its own unique flavor – and let’s not forget that they are filed in three different federal venues (four, counting the one filed just last week ). Could one prevail in convincing a federal judge to grant a preliminary injunction to stop the rule’s implementation? Could such a ruling actually serve to maintain t...

Delegates to last week’s NAPA DC Fly-In Forum were treated to a discussion about a proposal touted as “rescuing retirement.” But the math (still) doesn’t seem to work. And it’s likely to kill the 401(k) (or at least its tax benefits). Here’s how. The proposal itself isn’t new – its the Guaranteed Retirement Account (GRA) concept initially introduced by the New School’s Professor Teresa Ghilarducci, now somewhat modified, and embraced by Hamilton E. (Tony) James, President and COO of money management Blackstone. This newest version was rolled out earlier this year. Writ large there seem to be two significant differences in this newest version (packaged in a nice 119-page softbound book, Rescuing Retirement ): James’ involvement, which lends some investment cred to the assumptions of the proposal; and a reduction in the mandatory contributions from employer and employee (the original proposal called for 5%, the new one only 3%). The Ghilarducci/James team firmly believes that th...