Products December 26, 2013

Prudential Adds DST Clearing Service

December 26, 2013 (PLANSPONSOR.com) – Financial services and asset management firm DST reached an agreement to bring its retirement income clearing calculator (RICC) services to Prudential Retirement clients.
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DST’s retirement income clearing calculator tools are designed to enable easier distribution of retirement income across traditional recordkeeping platforms. The goal is to connect product providers with recordkeepers to better facilitate the delivery and portability of retirement income products, according to a statement from DST. 

Prudential Retirement, a business unit of Prudential Financial, plans to use the income clearing calculator to distribute retirement income products—such as its Prudential IncomeFlex Target—across multiple recordkeeping platforms.

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According to Jude Metcalfe, president of DST Retirement Solutions, the tool will provide Prudential the opportunity to make its guaranteed retirement income products available to more distributors and large plan sponsors.

"RICC breaks through the technology barriers to enable providers like Prudential Retirement to reach the marketplace without the immense and costly effort of continuously updating systems," says Metcalfe. "With RICC, building one platform allows you to reach many guaranteed income products."

Specifically designed to effectively work with a broad array of income solutions, RICC enables providers to incorporate various functionalities to deliver income solutions to the market. The platform incorporates all of the calculations, and product and business rules around a guaranteed income product.

DST Retirement Solutions provides a broad array of front- and back-office technology and servicing solutions to financial service organizations offering retirement plan recordkeeping.

More information is available at www.dstsystems.com.

Compliance December 26, 2013

California Judge Rules Against Pension Reductions

December 26, 2013 (PLANSPONSOR.com) – A California judge has ruled that the pensions of employees for the city of San Jose cannot be reduced, according to news reports.
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Judge Patricia Lucas of the Santa Clara County Superior Court found that due to California state law, the city of San Jose cannot require its employees to pay an additional 16% toward their pensions, says a news report from the New York Times. This ruling comes despite the 70% approval by voters in June 2012 of Measure B, which asked for these pension reductions.

The relevant portion of the measure would have required city employees, such as police officers, firefighters and others, to contribute more of their own money toward their pensions.

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While the ruling by Lucas does not allow for reductions in the pensions of San Jose city employees, it does allow for voter-approved reductions in both salary and some health benefits, says a news report from Reuters, adding that the ruling apparently recognizes the city’s need to balance its budget.

San Jose’s mayor, Chuck Reed, expressed concern that the ruling (and the state law that supported it) gives California cities, counties and government agencies little flexibility to control pension-related costs, say the news reports.

This is not the first time San Jose has been in the news concerning pensions for city employees. In April 2012, an appellate court found that the city’s Measure B was unlawfully worded to sway voter support and advised that it be edited to feature more neutral, unbiased language (see “San Jose Pension Ballot Wording Unlawful”).

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