The past few weeks has been eventful, to say the least. We have watched the disappearance of Lehman Brothers and the changing status of Goldman Sachs and Morgan Stanley to bank holding companies from investment banks; seen Merrill Lynch, Wachovia, Halifax Bank, and Fortis get bought; and witnessed the nationalization of Bradford & Bingley, Fannie […]
A number of plan sponsors have one or more closed defined benefit (DB) plans that they intend to fully wind up over the coming years. In previous articles, we defined a closed DB plan to mean a plan that does not permit new members and may or may not allow current members to continue to […]
There is always much debate about whether being part of a defined benefit (DB) or defined contribution (DC) pension plan is better. People who wish to work for a number of employers and potentially have a number of careers as is often the case these days, and younger workers can often be well served by […]
In her article (Managing Risk Through Transition), Laura Lynch examined the decision tree leading to directional strategies for exiting a closed defined benefit (DB) plan. A closed DB plan does not permit new members, and it may or may not permit existing members to continue to accrue DB benefits. A plan sponsor who is operationally […]
Should pension plans maintain a high allocation to public market equities? In the rush to the LDI exit doors, many pension plans are reducing their allocation to public market equities, some by a material amount. Is this a prudent strategy? The answer, of course, is—“it depends”—on the plan’s benefit design, funded status, investment horizon and […]
A lot has been said on member engagement, education and investment performance, but it often seems like plan design and employer contribution rates are (relatively) rapidly dealt with. Will defined contribution plans deliver sufficient retirement benefits for their participants? The real question may very well be: “Are DC plans as well funded by employers as […]
Over the years, I have given hundreds of retirement planning seminars, for all types of employers—in multiple industries—with defined benefit (DB) and defined contribution (DC) plans. Now, what do you think the number one question at the end of each seminar is? Fishing for decent help Retirement used to be simple. You worked all your […]
We have all heard this in one form or another: you should progressively invest more conservatively as you approach retirement (my personal favourite is the dictum that the equity portion of retirement savings should equal 100 minus your age). But does this make sense? Where does it come from? Should defined contribution (DC) plan members […]
Plan sponsors put in a lot of effort monitoring the performance of investment options. Perhaps going one step further can prevent DC disasters. Investment performance measurement has often focused on portfolio managers, individual funds available in the plan, and “plan” performance. But what does “plan” performance represent in a capital accumulation plan (CAP)? As a […]