Products January 18, 2008

CPI's New Division Assists 403(b)s with Vendor Management

January 18, 2008 (PLANSPONSOR.com) - CPI Qualified Plan Consultants, Inc., a third party recordkeeping and administration company headquartered in Great Bend, Kansas, has announced the creation of a new division to offer common remitter and compliance services to 403(b) retirement plan sponsors.
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CPI Common Remitter Services will offer the Common Remitter and Compliance Program (CRCP), which features three different service levels, allowing plan sponsors to choose the level of daily involvement they will have with the administrative aspects of their 403(b) retirement plans and the multiple vendors participating within their school district or tax exempt organization. According to the announcement, in addition to plan documentation, vendor verification, required testing, and limits monitoring, CRCP also offers Internet and call center services for the plan sponsor and participants.

“Payroll processing can continue as usual, and the plan sponsor can include any number of vendors in the 403(b) plan to meet the needs of the plan participants,” Jon Prescott, Chief Marketing Officer, said in the announcement.

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Final 403(b) regulations put out in 2007 include more stringent rules about making sure plan requirements for loans, withdrawals, and transfers are being met by the multiple vendors at which participants hold accounts (See Final 403(b) Regs Give Sponsors a Break on their Effective Date ). The 2006 NTSAA (National Tax Sheltered Accounts Association) & Cerulli Associates 403(b) Vendor Survey noted plan sponsors were moving toward limiting the number of vendors used in order to ease their administrative burden; monitor participation rates, contributions, and withdrawals; and lower participant fees, in anticipation of the final rules (See 403(b) Vendors Brace for Change ).

Benefits January 17, 2008

Women over 50 Can Lag in Annuity, Pensions

January 17, 2008 (PLANSPONSOR.com) - Because of a difference in their length of time in the workforce, women who were older than 50 in 2006 were much less likely to have an annuity and/or an employment-based pension than men, according to a new study.
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The Employee Benefit Research Institute (EBRI) reported that if female workers over 50 in 2006 received an annuity or employer pension, they were likely to end up with a smaller amount. However, EBRI was quick to add, women currently in the workforce are in better shape than their older counterparts since they are more likely to spend more time in the workforce.

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The EBRI study evaluated the impact of gender, age, education, marital status, and other demographics in the likelihood of a worker receiving annuity and/or pension income in retirement.

According to the EBRI data, in 2006, 44.6% of men age 65 and older received annuity and/or pension income, with a mean amount of $17,200 per year while only 28.4% of women age 65 and older received annuity and/or pension income in 2006, with a mean amount of $11,142 annually.

A woman age 65 or older in 2006 was only about two-thirds (63.7%) as likely to receive an annuity and/or pension payment as her male counterpart, and her mean benefit was likely to be about 65% of that received by a man of he same age.

EBRI pointed out that the women who were born in 1956 at the latest are part of a group who, on average, spent fewer years in the labor force than their younger counterparts. However, on average, today’s younger women tend to spend more time in the workforce than did women who were 50 and older in 2006, so the number of younger women who will receive annuity and/or pension income and the amounts they will receive are likely to increase over time.

Other study findings included:

  • The likelihood of receiving annuity and/or pension income increases with age, until the oldest age group (80 and older), for whom the data shows a lower percentage receiving such income. However, the percentage of those 80 and older receiving annuity and/or pension income increased from 17.7% in 1975 to 39.7% in 2006.
  • In 2006, some 27.5% of men age 50 and older with a graduate-level education received annuity and/or pension income, compared with 21.7% of men without a high school diploma.
  • Men age 50 and older in 2006 who were married or widowed were more likely to receive annuity and/or pension income than men of the same age who were never married. Women age 50 and older in 2006 who were never married were more likely to receive annuity and/or pension income than married women, but widowed women were much more likely to receive annuity/pension income than either married women or women who were never married.
  • While fewer individuals age 50 and older received pension income from a public-sector plan (7.5%) than from a private-sector plan (12.6%) in 2006, the median amount an individual received from a public-sector plan ($17,974) was considerably larger than that received from a private-sector program ($8,146).

The research is at http://www.ebri.org/pdf/notespdf/EBRI_Noptes_01-2008.pdf .

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