Mind Over Market

The U.S. Government Accountability Office spent a year reviewing alternative retirement plan designs abroad and proposals for new plan designs in the United States to determine which features in these plans could potentially address retirement risks currently faced by American workers. GAO modeled the impact on retirement income potential from defined contribution plans in three scenarios: mandated universal access, automatic enrollment, and mandated employee participation. GAO found that universal access and mandated employee participation together would increase the share of workers with some defined contribution plan savings at retirement from a current 67 percent level to 97 percent. It would raise the equivalent annuity benefit from a baseline of $15,217 a year to $21,312 a year. In a scenario where there is mandated access and automatic enrollment, but no required employee participation, the results are almost as impressive: the share of workers with savings at retirement rises t...

In a joint hearing before the Department of Labor and the Securities and Exchange Commission, regulators questioned the make-up of target-date funds and the disclosures related to them. Such funds have been increasingly popular with plan sponsors -- as well as employees -- but even some with the same target date have widely divergent equity allocations. By Robert Stowe England Human Resource Executive Magazine June 25, 2009 Closer scrutiny of target-date funds by the U.S. Department of Labor and the Securities and Exchange Commission is likely to prompt new regulatory initiatives by both government agencies. A lengthy day-long joint DOL-SEC hearing on June 18 highlighted a number of issues facing employers that include target-date funds as options in company-sponsored plans, especially when the target-date funds are designated as a default investment. To read the full story at Human Resource Executive click on this link: http://www.hreonline.com/HRE/story.jsp?storyId=225086569