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Labor Productivity Revisited

In my April 2015 blog, A Few Notes on Labor Productivity, I discussed how productivity is defined by the US Bureau of Labor Statistics (BLS) and its potential impact on employment, inflation and economic growth. The blog emphasized that it is important to distinguish between…

DOL’s Cybersecurity Guidance Arrives Just in Time

…to just what an issue cybersecurity has become. Information security research firm Cybersecurity Ventures estimates that by 2025, cyberattacks will cost businesses worldwide $10.5 trillion annually. In the meantime, EBSA estimates that, as of 2018, there were 34 million defined benefit plan participants in private…

Portfolio Rebalancing in the Recent Market Environment-Revisited

…their exposure to sudden market downturns-such as in 2008, late 2018 and the first quarter of 2020? A well-known form of adjustment is known as rebalancing. I first posted a blog on this subject in the 2017 Current Thinking. Rebalancing can be defined as reducing…

Partial Plan Termination and the Applicable Period Case Study

…plan or vesting is adversely affected. In a defined benefit plan partial plan termination can occur when future benefits are reduced or ceased. The IRS adopted the 20 percent guideline in Rev. Rul. 2007-43 from a 2004 court case Matz v. Household International Tax Reduction…

The Combination of DB and DC Plans. Why Not Have the Best of Both Worlds?

…to a market-value based formula for additional efficiency and smoothing of contributions. The point is—there are so many plan design choices today to consider and, they continue to evolve. Historically, defined benefit (DB) plans were the dominant retirement benefit offering until 401(k) plans came on…

Pensions, Retirement & Markets: 5 Questions for 2019

…to defined benefit plans in 2018. In addition, many plans have increased the company match in their 401(k)s. Both contributions and matches may be diminished in 2019 as the tax advantage of front-ended employer contributions becomes less beneficial. On the policy side, higher budget deficits…

Retirement Plan Implications of the New Tax Bill

…relief to closed defined benefit plans that met specified conditions, was also not included. Many of the other changes included in the new law revolve around taxes, which of course will have an impact on participants’ retirement strategies as well. These include: Individual tax cuts,…

US Tax Reform and Retirement Savings – Should the Two be Related

…brackets on investments at current levels (20%, 15% and 0%).1 On its surface, there should be relatively little impact of these proposals on the economics of retirement savings. Tax deferral via defined benefit plans and 401(k) provides a superior means of accumulating wealth for retirement….

Working With Time When It Comes to Your Retirement

…retirement plan is based on the fact that most employers no longer offer defined benefit plans – e.g. pensions. Instead, the onus is now on plan participants to take the bull by the horns and put a little more time and effort into managing their…