Compliance March 15, 2011

PBGC Takes on Tissue Paper Manufacturer Plans

March 15, 2011 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation is taking on three pension plans of Erving Industries, Inc., a manufacturer of tissue paper based in Erving, Massachusetts.
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The three underfunded pension plans cover a total of 877 current or former Erving employees. The PBGC said it stepped in because the company could not emerge from bankruptcy without terminating the plans.   

According to a news release, together, the pension plans have $16.8 million to cover $32.9 million in benefit promises. The agency expects to pay $14.7 million of the $16.1 million shortfall.  

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The announcement said the action will not have a significant impact on the agency’s financial statements, as PBGC included an estimate of the Erving Industries benefit payments in its fiscal year 2010 financial statements, in keeping with generally accepted accounting principles.
Benefits March 15, 2011

Boomers Have Retirement Savings Regrets

March 15, 2011 (PLANSPONSOR.com) - A new survey, commissioned by online investing firm Scottrade finds many Baby Boomers (born 1945-1966) have retirement savings regrets that can provide an important lesson for younger generations.
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Nearly half (46%) of Boomers didn’t start saving for retirement until age 35 or older. However, if given a second chance, the majority of Boomers (58%) would have started saving at a younger age, and nearly half (45%) would have saved more.   

According to a press release, 50% of Boomers surveyed would recommend starting to save for retirement earlier than age 25.   

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Scottrade found that almost half (47%) of Boomers have $100,000 or less saved, and more than a third (37%) are concerned that they will have to work in their retirement years. Almost a quarter (23%) think they’ll still be working at age 75 or older.   

“Considering the Boomers’ plight and how easy it is to invest on your own in a very low-cost way, we would have expected to see Gen Y reacting by increasing its savings,” said Craig Hogan, director of customer intelligence at Scottrade, in the press release. “But our data shows that the vast majority – 73% – currently has less than $25,000 saved for retirement. And that number has been about the same for the past three years.” (See Majority of Gen Y not Saving for Retirement)

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