Compliance July 20, 2012

DOL to Hold Women’s Retirement Forum

July 20, 2012 (PLANSPONSOR.com) – The U.S. Department of Labor (DOL) is holding a free women’s retirement savings forum at the University of Illinois – Chicago.
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“What Every Woman Should Know About Retirement Savings and How to Make It Last” will be held Saturday, July 28, 10 a.m.–12:30 p.m. CDT, at the University of Illinois-Chicago, Student Center East Building, Illinois Room A, 750 S. Halsted St., Chicago.  

The event will feature panel discussions as well as remarks by Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi; Hubert H. “Skip” Humphrey III, assistant director, Consumer Financial Protection Bureau’s Office for Older Americans; Doug Nguyen, deputy regional communications director, Social Security Administration; Lara Hinz, director of programs, Women’s Institute for a Secure Retirement; and Joseph C. Peiffer, attorney and member, Public Investors Arbitration Bar Association. Christine Benz, director of personal finance for Morningstar, will moderate the forum. Additionally, free educational materials will be available to all attendees.  

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“For a host of reasons, women are more likely than men to have smaller savings or even no nest egg at all when heading into retirement. It’s a problem that can be made more severe since women tend to live longer than men,” said Borzi. “It is important that both women and men saving for retirement have the information needed to prepare for a secure retirement and avoid potential pitfalls in the savings marketplace. We intend for this forum to be a helpful tool for those giving thought to how they will spend their golden years.”  

Space is limited, and members of the public who wish to attend this forum must register in advance with Meredith Regine, who may be reached at regine.meredith.e@dol.gov or 202-693-8300. 

Benefits July 20, 2012

Cash Balance Plan Growth Outpacing Other Plan Designs

July 20, 2012 (PLANSPONSOR.com) – Kravitz’ 2012 National Cash Balance Research Report indicates a 21% annual increase in new cash balance plans, almost double the previous year's 11% growth rate.
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Cash balance plans continue to outpace all other sectors of the retirement plan market, including 401(k) plans, which showed a 1% decline in the same period.   

There were 7,064 cash balance plans active in 2010 (the most recent year for which IRS reporting data is available), up from 1,337 in 2001, representing 810% growth in under a decade. There are now 11.1 million participants in cash balance plans nationally, with $713 billion in total plan assets.   

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The stalled economy was no deterrent to adoption of new plans. Between 2008 and 2010, there was a 38% increase in new cash balance plans, despite the lingering recession and stalled recovery.   

Small businesses are driving cash balance growth: 84% of cash balance plans are in place at firms with fewer than 100 employees.   

“Business owners are increasingly choosing cash balance plans as a strategy to accelerate retirement savings, enhance employee benefits, and gain a buffer against market fluctuations,” said Dan Kravitz, President of Kravitz, a cash balance plan service provider. “IRS regulations released in October 2010 added flexibility for plan sponsors, so we expect this growth rate to continue accelerating.”   

The research also found companies more than double contributions to employee retirement savings when adding a cash balance plan. The average employer contribution to staff retirement accounts is 6% of pay in companies with both cash balance and 401(k) plans, compared with 2.3% of pay in firms with 401(k) alone.   

California and New York together account for 23% of all cash balance plans nationally, but the fastest growth in new plans has been in Florida, Texas and Michigan.   

The 2012 National Cash Balance Research Report is here.

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