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Pension liabilities of the 100 largest U.S. corporate defined benefit pension plans decreased by $28 billion in November, while assets increased by $5 billion, bringing the Milliman 100 Pension Funding Index funded status deficit to $466 billion and the funded ratio of 74 percent. The November ratio still lags the year-end 2011 value of 78.7 percent, […]
Large corporations thinking about transferring hefty defined benefit plan payouts to insurance companies for them to manage now have judicial support for that approach. A federal judge in Texas has denied a bid by retired Verizon Communications executives to block the company from making a proposed shift off its books of $7.5 billion in pension […]
A victory by the health plan participant in US Airways v. McCutchen, now before the U.S. Supreme Court, may erode ERISA plans’ ability to enforce plan terms as written, a legal expert tells the blog. In McCutchen, the Court has a very difficult balancing act to answer whether: (1) an ERISA health plan administrator is entitled […]
A recent Illinois federal bankruptcy court ruling is an important reminder to ERISA plan fiduciaries that violations of fiduciary duties under ERISA can result in personal liability from which Chapter 7 bankruptcy proceedings cannot protect the fiduciary. The case is In re John Dombek III, No. 11-40894 (Bankr. N.D. Ill. Oct. 16, 2012); In re John […]
Plan sponsors and administrators face many issues when making disbursements from retirement plans. A recent court ruling on a payout based on a fraudulent claim should reassure those making distributions that if the distribution was in accordance with the plan terms, an employer may not suffer a penalty. In Foster v. PPG Industries Inc. (No. […]
Plan sponsors in areas Hurricane Sandy affected may want to prepare for an increase in loan or hardship withdrawal requests after the IRS on Nov. 16 said it temporarily will relax its rules that apply to such emergency funding for retirement plan participants. The IRS announced the relief in Announcement 2012-44. Hurricane Sandy should be […]
Eliminating a participant option to switch to a defined benefit plan from a defined contribution offering does not violate ERISA anti-cutback provisions, even if participants’ accrued — but unclaimed — benefits are reduced. The recent ruling in Andersen v. DHL Retirement Pension Plan (Case No. 2:12-cv-00439-MJP WL 5389141, U.S. Dist., Western District of Washington Nov. […]
A “snapshot” survey conducted in October found the start of disclosure of fees from retirement plan service providers spurred little change in the behavior of either plan participants or sponsors. A total of 176 defined contribution plan sponsors responded to the Plan Sponsor Council of America’s survey, launched a few weeks after sponsors began disclosing […]
Funding gains by U.S. corporate pension plans in September were erased in October, according to data Mercer Investment Consulting Inc. released Nov. 5. Mercer reports that the aggregate deficit in pension plans S&P 1500 companies sponsored increased by $26 billion during the latest month, to $619 billion. This deficit corresponds to an aggregate funded ratio […]
As a growing number of large U.S. companies announce plans to “de-risk” their traditional defined benefit plans to lower their pension obligation and retiree distribution costs, the Pension Rights Center called for a moratorium on such actions until Congress can look into the risks these strategies pose to workers and retirees. On Oct. 17, Verizon […]