October 1, 2009 (PLANSPONSOR.com) - Benefits
consultant and service provider McCready and Keene has
unveiled a recordkeeping platform aimed at small-sized
clients.
A news release said the open architecture system
for target employers with assets below $1.5 million
includes daily valued investments offered at NAV without
back-end loads, fully disclosed pricing, and 100% revenue
sharing to offset plan fees.
Number of Endangered Pensions Almost Tripled in a
Year
September 30, 2009 (PLANSPONSOR.com) - In a recent
survey conducted by the International Foundation of Employee
Benefit Plans (IFEBP), nearly three-quarters (73%) of
multiemployer pension plans reported they are less than 80%
funded.
According to a press release, in 2008, 75% of
survey respondents reported they held a safe status as
defined by the Pension Protection Act (PPA), 14% were
endangered or seriously endangered, and only one in ten
(11%) reported being in a critical status. A year later,
only 27% of the survey respondents reported holding a
safe status. Slightly more than one-third (36%) are in an
endangered status, and a similar proportion (37%) report
a critical status.
Among plan sponsors with underfunded DB plans,
slightly more than half (51%) have developed a funding
improvement or rehabilitation plan which has been
implemented or is on its way to being implemented, the
press release said. The remaining sponsors with
underfunded plans (49%) are waiting for guidance or are
just starting to develop a plan.
Of those plan sponsors who have developed a plan to
address their endangered or seriously endangered status,
most (86%) are increasing employer contribution levels.
Among plan sponsors who have developed a plan to address
a critical status, a similar proportion (87%) report they
are increasing employer contribution levels, 68% report
reducing or eliminating early retirement subsidies, and
55% say they are reducing future benefit accruals.
Under PPA, plans certified as endangered must
create a funding improvement plan. Those certified as
critical must create a rehabilitation plan.
To provide defined benefit plans temporary funding
relief, the Worker, Retiree, and Employer Recovery Act of
2008 (WRERA) allows sponsors to choose a one-year funding
status freeze.
Slightly more than half of plans responding to the
IFEBP survey (54%) are taking advantage of the freeze
option, according to the press release. One in four (25%)
have decided not to take the freeze option. For the
remaining 21%, the option is not applicable because their
2009 status remained the same as their 2008
status.
Plan sponsors that took the freeze option cited
waiting to see if the markets will rebound as the number
one reason (75%), followed by waiting to see if the
federal government will provide additional funding relief
(50%), and allowing more time to fix funding on their own
terms versus as directed by PPA (46%).
Of the plan sponsors not taking the freeze option,
the majority stated they did not want to delay
implementing changes to improve their funding status
(78%). Other reasons cited include wanting to take
advantage of the three-year extension for their funding
improvement/rehabilitation plan (37%) and the thought
that waiting will only worsen their finances and make
finding solutions more difficult (33%).
The survey, Multiemployer Pension Funding Status
and the Freeze Decision, was conducted in August 2009.
Responses were received from 213 International Foundation
of Employee Benefit Plans and International Society of
Certified Employee Benefit Specialists members in the
United States, each representing a separate plan.