Archives: Resources
Church Plans Can Leave Retirees Out in the Cold
Learn how one group of private retirement plans have little-to-no protections for the workers and retirees who are covered by these plans. What happened? In late 2009 Augsburg Fortress, the publishing house of the Evangelical Lutheran Church in America, announced in a letter to employees that it would terminate its traditional pension plan, affecting approximately 500 workers […]
Annual Report to Congress
This provision requires the Thrift Savings Board to submit an annual report to Congress on the operations of the Thrift Savings Plan. The report will be available online and will include the following information: Number of participants in the plan Median account balances Demographic information of the participants Percentage of the allocation of amounts in […]
New Investment Options
This provision gives the Thrift Savings Board the authority to add new investment options to the Thrift Savings Plan. Currently the Board may only offer investment options that are low-cost, diversified, passively managed index funds. The TSP web site has fact sheets on the current investment options. The Board will nowbe able to add other […]
Automatic Enrollment
This provision requires that all new hires, transfers, and reappointments be automatically enrolled in the Thrift Savings Plan (TSP). Before this bill, federal agencies allowed employees to choose to participate in TSP. Agencies were already required by law to automatically contribute one percent of a new employee’s pay into an individual TSP account. Employees then had […]
Required Index Fund Investment Option
The Fair Disclosure for Retirement Security Act of 2009 (H.R. 1984) would require that all 401(k) plans offer at least one index fund in the plan’s investment options. An index fund is a passively managed mutual fund designed to match the performance of the entire U.S. equity market, bond market or a combination thereof. Read Section 3 of the […]
Increased 401(k) Oversight
The Fair Disclosure for Retirement Security Act of 2009 (H.R. 1984) would give the U.S. Department of Labor the authority to: Coordinate with other government agencies after identifying service providers that have engaged in a pattern or practice that precludes the plan administrator from complying with the law. Publicly identify and disseminate information to 401(k) plans regarding […]
Disclosure of Fees and Conflicts to 401(k) Plan Administrators
The Fair Disclosure for Retirement Security Act of 2009 (H.R. 1984) would require that firms seeking to provide services to 401(k) plans submit disclosure and conflicts of interest statements to plan administrators before signing contracts with the plans. The required service disclosure statement would identify who would be performing services for the plan under the contract, and […]
Court Overturns Cash Balance Ruling
Overturning a 2003 federal district court ruling, the U.S Court of Appeals for the Seventh Circuit found that IBM did not discriminate against older employees when it adopted its cash balance plan. The case was brought by 140,000 IBM employees who saw their promised pension benefits cut by more than half when IBM converted to […]
Corporate Restructuring Can Cut Promised Pensions
Legally, companies can change their plans to end special early retirement pensions, but if they do, employees must still get the portion of the special benefit they have earned as of the date of the change – as long as they later meet its age and/or service requirements. But as employees of Dresser-Rand learned, if […]
Proposed Regulations on Target Date Funds (January 14, 2011)
The Department of Labor has proposed regulations on “target date” funds. If adopted, the proposed regulations would require 401(k) plans to give employees more information about a type of mutual fund that changes the percentage of stocks and bonds held in the fund as people grow older. The proposed regulations will enable sophisticated participants to […]
New Bill Targets Broken Promises
On June 28, 2007, Senator Tom Harkin (D-IA) introduced a bill called “The Restoring Pension Promises to Workers Act of 2007 [PDF]”. This bill (S. 1725) contains several provisions aimed at improving retirement security for workers and their families. According to the press release that accompanied the introduction of the bill, each provision is designed to […]
Protection for Certain Retirees Against Benefit Cuts
The Restoring Pension Promises to Workers Act of 2007 would protect certain recent retirees of union pension plans from losing a large portion of their early retirement pensions. Current law as amended by the Pension Protection Act of 2006 allows severely underfunded union pension plans to reduce certain benefits in order to improve the pension […]
