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  #561  
Old 09-21-2017, 06:01 PM
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Mary Pat Campbell
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UNITED KINGDOM

https://www.ai-cio.com/news/tpr-pros...ding-pensions/

Quote:
TPR to Prosecute Firm for Not Providing Pensions

The UK’s The Pensions Regulator (TPR) said it is prosecuting Stotts Tours (Oldham) Limited, a Manchester-based bus company, as well as its managing director Alan Stott, for deliberately failing to provide its employees with a workplace pension.

It is the first time that TPR has launched prosecutions for this offense.

The TPR has accused Stotts Tours (Oldham) Limited of failing to comply with the law on automatic enrollment for 36 members of its staff. “Stott is accused of either consenting or conniving in the bus company’s offense, or allowing the offense to be committed by neglect,” said the TPR in a statement.

Stotts Tours and Stott have been summoned to appear at Brighton Magistrates’ Court on Oct. 4, where they will face eight charges of willfully failing to comply with the company’s duties under the Pensions Act 2008. Under section 45 of the Pensions Act 2008, “the employer must make prescribed arrangements by which the jobholder becomes an active member of an automatic enrollment scheme with effect from the automatic enrollment date.”

According to the Act, when an offense under section 45 is committed by a company with the “consent or connivance of one of its directors, or is attributable to the director’s neglect,” the director is also considered guilty of the offense.

The offenses can be tried in a crown court or in a magistrates’ court. In a crown court, the maximum sentence is two years’ imprisonment, and in a magistrates’ court, the maximum sentence is an unlimited fine.

The TPR has been cracking down on companies and individuals it says have shirked their responsibilities toward their employees’ pensions. Late last month, it said it would prosecute Dominic Chappell for failing to provide information and documents it requested during its investigation into the sale of BHS. It has also begun publishing the names of pension plan trustees who have been fined for failing to complete plan returns or annual chair’s statements, and has begun carrying out spot checks to ensure employers are complying with their automatic enrollment duties.

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  #562  
Old 09-24-2017, 03:18 PM
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http://www.reuters.com/article/us-to...-idUSKCN1BX2TP

Quote:
Exclusive: U.S. agency claims huge hole in Westinghouse's pension plan

WILMINGTON, Del. (Reuters) - Employees of U.S. nuclear power firm Westinghouse Electric Co LLC, which is bankrupt and reeling from a failed reactor project, got a nasty surprise recently: in the eyes of the U.S. government’s pension insurer, its retirement plan has a massive shortfall.

While bankrupt companies often have big pension deficits, the vast majority flag the underfunding years in advance of filing for Chapter 11. By contrast, the Westinghouse Electric Co Pension Plan, which has about 9,700 participants, appeared fully funded in its most recent report to the Department of Labor in 2015.

The Pension Benefit Guaranty Corp estimated the pension plan is unfunded by $937 million, according to previously unreported court filings in August.

The shortfall is conditional on Westinghouse using the tools of bankruptcy to terminate the plan. In that case, the PBGC would step in, take over the plan and apply its more conservative accounting.

Westinghouse spokeswoman Sarah Cassella said the company has not told the agency it will end the plan.

Westinghouse is considering bids for the company, and has asked potential buyers to assume the pension would be maintained and that annual contributions would continue near current levels, according to a person familiar with the bidding process.

https://burypensions.wordpress.com/2...tia-worthless/

Quote:
PBGC Claiming Westinghouse MTIA Worthless?

The reporter recently contacted me on this story:
Quote:
WILMINGTON, Del. (Reuters) – Employees of U.S. nuclear power firm Westinghouse Electric Co LLC, which is bankrupt and reeling from a failed reactor project, got a nasty surprise recently: in the eyes of the U.S. government’s pension insurer, its retirement plan has a massive shortfall.
While bankrupt companies often have big pension deficits, the vast majority flag the underfunding years in advance of filing for Chapter 11. By contrast, the Westinghouse Electric Co Pension Plan, which has about 9,700 participants, appeared fully funded in its most recent report to the Department of Labor in 2015.
That was the question and this is what I found out (and did not find out):

Last March the Westinghouse Electric Company filed for bankruptcy however, according to the 5500 filing they made for 2015, their Defined Benefit Plan was 115% funded. So why did the Pension Benefit Guaranty Corporation (PBGC), which would not be covering all benefits anyway, file a claim as if the plan had no money?

According to the 5500 filing the plan keeps their money in a Master Trust Investment Account (MTIA):

I posted the question that I ask you people here:
Could an MTIA really be worthless in a bankruptcy? Or could this be the PBGC filing a routine claim to protect themselves?
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  #563  
Old 09-24-2017, 06:36 PM
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401(K)s and FEES

http://www.investmentnews.com/articl...le-mark-on-the
Quote:
Jerry Schlichter's fee lawsuits have left an indelible mark on the 401(k) industry
After a decade of litigation, fees are lower and retirement plans are more transparent. But have the lawsuits gone too far?
t first glance, Sept. 11, 2006, may not stand out as a remarkable date in American history.

But to retirement wonks, it is: That's the day a personal injury lawyer from St. Louis filed a flurry of lawsuits against major corporations, alleging their 401(k) plans had high fees that harmed employees. It's a moment that forever changed the 401(k) plan market.

Such litigation has proliferated in the 11 years since Jerome Schlichter filed those lawsuits en masse, branching into new areas, and contributing to lasting change, largely to the benefit of plans and retirement savers.

"It's had a tremendous impact," Sean Deviney, the director of retirement plan consulting at Provenance Wealth Advisors, which oversees $500 million in DC plan assets, said of the litigation. "It brought awareness to the fees being charged in plans and a sense of urgency for [employers'] retirement-plan committees to really take their jobs seriously."

But, observers say the litigation has also contributed to fee hysteria among employers and, following some large monetary settlements, resulted in a plaintiff's bar that seems to be unnecessarily piling on the litigation to score a quick payday.
….
Mr. Schlichter's initial tranche of lawsuits, against such companies as Lockheed Martin Corp., Caterpillar, General Dynamics, International Paper and Exelon Corp., alleged workers in those companies' 401(k) plans were paying excessive fees — or, beyond what would be considered reasonable — for plan administration and investment management.
Broadly, they focused on three areas: companies' use of retail share classes of mutual funds, when identical, less-expensive institutional share classes were available; uncapped, asset-based revenue-sharing fees paid for record-keeping services; and imprudent, historically poor-performing investment options.

These charges constituted breach of fiduciary duty under the Employee Retirement Income Security Act of 1974, according to the lawsuits.

"When we began this journey, there was no attention being given to litigation in this space," said Mr. Schlichter, who successfully litigated the only 401(k) fee case that's ever gone to the U.S. Supreme Court. "Fees were in a dark closet."
While there had been a handful of 401(k) fee cases filed around the year 2000 by different law firms, they focused on plan service providers such as Nationwide and New York Life Insurance Co.; Mr. Schlichter's pioneering lawsuits targeted employers in their role as plan sponsors.
All told, there were 31 so-called "excessive fee" suits filed by Mr. Schlichter and other firms over 2006-07, according to data from Groom Law Group. Following several large monetary settlements, including $62 million from Lockheed Martin, the litigation caught a second wind beginning in 2015.
…..
FEE TRANSPARENCY

One result of the litigation has been increased fee transparency.

Before, employers often thought record-keeping services were free of charge, advisers said. Of course, this wasn't the case.Often unbeknowst to them, participants were paying for those services through revenue-sharing fees, which involves directing a portion of a mutual fund's expense to service providers.

"No one quibbled over how much the record keeper was making," Mr. Montgomery said. "Too many plans were sold because they were 'free' prior to that."

Advisers and employers have since moved away from revenue sharing as they've tried to make fees more transparent and better control participant costs.
….
Further, record keepers have created "open architecture" investment platforms, allowing plan sponsors to select investments that are not proprietary to the record keeper but based solely on the merit of the investment, advisers said. They've also integrated technology-driven fiduciary investment adviser services, offered by firms such as Morningstar, Envestnet and Mesirow Financial, as awareness of fiduciary issues has grown.

"It's pushed providers to adopt some very positive practices," Mr. Montgomery said.

401(k) advisers have upped their frequency of completing fee benchmarking for plan services, too, to ensure fees are reasonable for services rendered. Mr. Larsen, for example, now completes these exercises with clients once a year, compared with every couple of years in the past.

Fees have generally declined for all plan services over the past decade. Total 401(k) plan costs between 2009 and 2014 fell to 0.39% on an asset-weighted basis, from 0.47%, according to a joint study by BrightScope Inc. and the Investment Company Institute.
….
Some observers believe there's been overreach from the plaintiff's bar. One frequently derided lawsuit, filed by Mr. Schlichter in 2016, targeted Anthem Inc., whose plan contained several funds offered by Vanguard Group, known widely as a low-cost provider. Participants could have had a fund costing 0.02% in place of the Vanguard Group Institutional Index Fund, which cost 0.04%, the lawsuit said.

"I think some of these lawsuits have come too far," William Chetney, founder of Global Retirement Partners, said, adding that he believes employers are focused more on risk aversion than participant outcomes.

Mr. Schlichter, though, doesn't shy away from the allegations in the Anthem lawsuit.
"That argument pre-supposes it's OK to rip off employees and retirees a little bit," said the founder and managing partner at Schlichter Bogard & Denton. "Two basis points is a small amount, but 2 bps over 30 years and over tens of thousands of employees is not a small amount."
Mr. Schlichter made headlines again in a big way last summer by suing more than 10 prestigious universities, including Yale, Duke, Johns Hopkins and Vanderbilt. They were the first lawsuits to target fees in university 403(b) plans, a type of DC plan for nonprofit institutions.

Marcia Wagner, principal at The Wagner Law Group, who's been an expert witness in fee litigation for both plaintiffs and the defense, said these suits have brought rapid change to the 403(b) market. She said she wouldn't be surprised if 457 plans, which encompass governmental institutions, became the next frontier.
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  #564  
Old 09-26-2017, 03:01 PM
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UNITED KINGDOM
VALUATION
http://www.pionline.com/article/2017...ot-the-problem
Quote:
Commentary: Pension plans – bond discounting is not the problem
Spoiler:

Despite strong investment returns, many U.K. defined benefit plans continue to report material increases in deficits. You do not have to look far to find the culprit: a mismatch between assets and liabilities and falling bond yields.
This has once again raised the question of whether it is appropriate to discount pension liabilities using a government bond yield or similar high-quality bond interest rate. Given the scale of the deficit problem, some are proposing it is time for a rethink. But it is too simplistic to characterize bond discounting as the root of schemes' problems; in fact it has much to commend it.
Benefits of bond discounting:

It is objective. The market may not be fair, but it doesn't rely on a subjective judgment of long-term expected returns. History tells us almost nobody is good at this. Estimates have not just been wrong; they have been consistently, wildly and catastrophically wrong. This has cost companies hundreds of billions of additional contributions; reduced the income and quality of life of hundreds of thousands of pensioners, and threatened the financial future of DB pension plan participants.

It has real meaning. Theoretically you can invest in a portfolio of government bonds that will meet all the promised pensions, with a government-backed guarantee. This is about as good as it gets. Nobody is saying you should do this now, but it is a handy reference point to start from.

It is consistent. If everyone talks a common language, we have greater clarity. Clarity can only be good for financial decision-making and outcomes for pension scheme members.
Anything else is delusion. It is one thing to plan an investment strategy based on outperforming meager government bond yields, but marking liabilities lower by discounting at this higher expected rate of return? This sleight of hand tells us the more investment risk taken, the lower our liability. Taking advanced credit for what we expect to happen in the future is not only illogical; it has consistently burned pension schemes.

Downsides of bond discounting

Low yields. The uncomfortable economic reality facing DB plans is that with government bond yields so low, liabilities are high. We can debate about whether fixed-income markets are now more distorted than other markets that pension schemes may invest in (equities, real estate, infrastructure, hedge funds, etc.), but the only way we will know whether we are right is with hindsight.

Not enough supply. In the U.K. in particular, it is clear there is a significant imbalance of demand for government bonds by pension schemes over the current stock and modest issuance. This suggests the market is indeed distorted and is not a fair reflection of the future path of interest rates. Pension schemes should not be forced to hold more overpriced bonds than is appropriate. This has clearly not been the case, as many pension schemes have chosen to run significant interest rate mismatches — to their detriment.

Yields are increasing. Sometime in the future, yields will be higher than today; possibly a fair amount higher (although probably not anytime soon, according to central bankers). Will they rise faster than market expectations to make this a winning bet? The truth is this is anyone's guess, and I would question how much emphasis should be put on this single view.



CAPITA
https://www.ai-cio.com/news/capita-s...close-pension/
Quote:
Capita to Strike over Attempt to Close Pension
Spoiler:

Workers at UK-based Capita, a provider of business process management services, have voted to strike in response to the company’s proposal to close the current defined benefit plan, and transfer participants to a defined contribution plan.

The union Unite conducted an industrial action ballot following the proposal to close the current defined benefit plan, and the workers will begin six consecutive days of strike action starting Oct. 5. In June, Capita informed its employees of significant changes to its pension arrangements, which Unite says will cause the plan’s participants to “suffer a massive cut in their retirement income.”

“The disgraceful plans by Capita to slash the deferred pay that staff will get in retirement is utterly unacceptable,” said Dominic Hook, Unite national officer, in a statement. “Capita’s pension proposals will have far-reaching consequences for the retirement of many Unite members. Some staff will lose a shocking 70% of their retirement income.”

However, a Capita spokesman defended the company’s decision to move its workers from a defined benefit pension into a defined contribution plan.

…..
But according to Unite, under the proposed pension changes, a 60-year-old worker who makes £25,000 a year, and pays 3% into the plan would see their pension go from earning approximately £2,000 a year for the final five years of service to only £350 a year. This translates to a loss of around £1,650 per year, and a total loss of about £33,000 over a 20-year retirement.

Meanwhile, a 35-year-old employee paying 7% into the plan would see their projected pension halved from £22,000 per year to £11,000 upon being moved into the new proposed plan and paying 6% until retirement, said Unite.

“The extremely high vote in favor of strike action shows how strongly members feel about this,” said Hook. “Capita must urgently rethink these pensions proposals in order to prevent industrial action.”
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  #565  
Old 09-26-2017, 03:02 PM
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http://www.benefitspro.com/2017/09/2...g-down-depends
Quote:
Is Westinghouse pension plan melting down? Depends on how you calculate it
Difference between Westinghouse and PBGC calculations
Spoiler:

Not only is U.S. nuclear power firm Westinghouse Electric Co. LLC bankrupt and on the mat after a failed reactor project, its employees have been given another dose of bad news—something that came as a surprise: According to the U.S. government’s pension insurer, its retirement plan has a massive shortfall.

Reuters reports that although the vast majority of bankrupt companies with major pension deficits indicate that underfunding years before they file for Chapter 11, such is apparently not the case for Westinghouse, whose Westinghouse Electric Co Pension Plan, with about 9,700 participants, looked to be fully funded in its most recent report to the Department of Labor in 2015.


The Pension Benefit Guaranty Corp. has, contrary to Westinghouse’s own figures, estimated the pension plan is underfunded by $937 million.

That was revealed in previously unreported court filings in August, the report says. The shortfall is conditional on Westinghouse resorting to the tools of bankruptcy to terminate the plan—which would mean that the PBGC would step in, take over the plan and apply its more conservative accounting.
According to PBGC data, not only does the shortfall exceed the plan’s $926 million in assets but it would also be among the 10 largest for a pension shortfall, ranking ahead of Trans World Airlines in 2001 and Pan American Air in 1991 and 1992.

However, the claim doesn’t result from fraud or mismanagement, but a difference between how Westinghouse and the PBGC calculate how much must be set aside today to satisfy future pension benefits.


Under Department of Labor rules, Westinghouse is required to assume that a bond portfolio will earn a much higher rate of return than the current market rates.

PBGC, on the other hand, uses those current market rates in its calcuations—which indicate that more money is needed today to pay for retirees.
As a result, Joseph House, a principal at Palisades Capital Advisors and former head of the PBGC’s restructuring group, is cited in the report saying that PBGC claims in bankruptcy cases often catch other creditors off guard.

Employees have been caught off guard as well—and that could weigh on the company’s future, since Westinghouse has said in court documents that hanging onto its highly specialized engineers is key to its success. Until it filed for bankruptcy in March, the pension was one way to do so.

If the plan is terminated, that would result in more Westinghouse debt and less for other creditors, as well as possibly reduced benefits for plan participants.

In that case, participants will receive a guaranteed benefit from the PBGC, which currently hits a maximum at about $64,000 a year.


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Old 09-27-2017, 08:55 PM
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WESTINGHOUSE

http://powersource.post-gazette.com/...s/201709260050
Quote:
Westinghouse tries to calm fears about its pension


Spoiler:
Westinghouse Electric Co. sought to reassure employees that their pensions aren’t underwater after a report published Friday estimated the bankrupt Cranberry-based company’s plan is underfunded by $937 million.

The assessment came from the Pension Benefit Guarantee Corp., a government agency that insures certain private employer pension plans and, in some instances, takes them over.

One such instance is when a company decides to terminate its plan in bankruptcy — something Westinghouse hasn’t yet tried to do.

But the possibility is not remote: Westinghouse filed for bankruptcy reorganization in March and is currently being marketed for sale. While its five-year business plan includes paying its pension liabilities, there’s no way to know yet how that plan would be received by a potential buyer.

In the meantime, Westinghouse has told its employees that their pension is funded at 80 percent and the company plans to reach out to its retirees in the near future.

There are 9,714 beneficiaries — both retired and still employed — of the Westinghouse pension plan, according to the U.S. Department of Labor, and another 457 split between boilermakers who work at or are retired from facilities in Newington, N.H., and Windsor, Conn.

.....
Claims abound

There are also funding shortfalls in two other pension funds for Westinghouse employees in the United Kingdom, where the company has a nuclear fuel factory and a subsidiary called GPS Energy Solutions.

The Combined Nuclear Pension Plan, a government entity that administers a pension plan for nuclear workers in the U.K., has filed a claim for $208 million.

Sarah Cassella, a spokeswoman for Westinghouse, noted that those subsidiaries are not involved in the company’s bankruptcy and therefore should not be impacted.

In addition, a number of former Westinghouse executives have filed claims since the company terminated its executive pension plan in the spring and some former executives have also sought to recover their deferred compensation.

Jeff Benjamin, who served as senior vice president of new power plants from 2013 until earlier this year, said in a filing that he’s owed $1.9 million.

Danny Roderick, Westinghouse’s former CEO, told the bankruptcy court he’s out $4.2 million in deferred income.

Mr. Roderick has also filed a claim that he is owed $24 million as per his employment agreement, which he attached to his claim with the vast majority of its 24 pages blacked out. The parts that weren’t redacted dealt with “termination without cause.” Mr. Roderick is still employed by Toshiba Corp., Westinghouse’s parent company.


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  #567  
Old 09-28-2017, 07:15 AM
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ST. JOSEPH HEALTH SERVICES

http://www.valleybreeze.com/2017-09-...t#.WczVoFtSyHs

Quote:
‘Orphans’ of St. Joseph pension plan fear worst

Spoiler:
NORTH PROVIDENCE – The 2,724 “orphans” of the St. Joseph Health Services of Rhode Island retirement plan say they feel abandoned, sad and angry.

“We were promised a pension, and a lot of people have retired with the understanding that the pension would be there for us,” said Caroll Short, a Smithfield resident and former radiographer at Our Lady of Fatima Hospital in North Providence. “This is disappointing and very, very sad.”

Members of the bankrupt pension plan will soon find out if their worst fears come true. For many, what happens next in this unfolding “nightmare” could represent their financial doomsday, as many members are making only a few hundred dollars a month.

For Short, 64, the entire situation with the pension plan represents “a whole lot of incompetence and a big disgrace.”

Suggestions are that pensioners are in line for a cut of 40 percent to their pensions.

A cut of 40 percent to her pension would hurt badly, said Short, but she feels worse for people like her mother, 88-year-old retiree Claire Sharpe, whose pension after 25 years of work is much smaller. Older retirees rely on monthly amounts as low as $300 to pay for their food and medication, said Short, and many of these most vulnerable citizens are facing questions about how they’ll make it if their pensions are cut.
.....
Receiver: No immediate changes to benefits

Stephen Del Sesto, the attorney named as the receiver for the pension plan, told The Breeze that the most important thing for pensioners like Short to know heading into a planned Oct. 11 Superior Court hearing is that the hearing won’t result in any changes to benefits, he said. Del Sesto said he asked that the court push back that issue until after Jan. 1.

“At this point, the October hearing will only address my appointment as permanent receiver,” he said by email. “I may bring some other administrative issues to the court’s attention, but nothing that will change benefits. I am looking at everything and every option to do my best to try to make sure that the 2700+ people impacted are protected as much as possible.”

Based on Del Sesto’s last report, there were 2,724 participants in the plan, 1,229 of those active retirees receiving benefits, including full retirees, disable-eligible employees and retirees who may still be working either for the hospital or elsewhere. There are approximately 498 pensioners who are active but not yet collecting (of an age to apply either through early or standard retirement age). There are 997 members who are vested in the plan but inactive, meaning they’re not yet eligible to receive payouts.


.....

Plan is in a precarious position

First set up in 1965 by the Roman Catholic Diocese of Providence, the St. Joseph retirement plan was orphaned in 2014 when CharterCARE Health Partners joined with Prospect Medical Holdings. The retirement plan became an orphaned liability, with no significant revenues going into it. Prospect made a one-time contribution of $14 million into the plan, bringing it to 90 percent funded.

Over the past year, the plan has paid out $10 million, bringing its market value down from $98.5 million to $86.8 million. The plan is now funded at about 75 percent, a higher number than many other plans, but not when considering there is no money going into it.

Union representatives and others have questioned how the plan has fared so poorly since 2014, even as the stock market has continued to boom. About $43 million is needed to fully fund the plan, according to an actuarial report.

Like the Diocese, CharterCARE is saying the company has nothing to do with the pension plan and directing questions to Del Sesto as the receiver.

“It is important to note that the pension fund is not connected to either CharterCARE Health Partners or Prospect,” said CharterCARE CEO John Holiver in an email to employees last month. “The Pension was not transferred to the purchaser when the transaction with Prospect was completed three years ago. Neither CharterCARE Health Partners nor Prospect have any oversight or control of the pension.”


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Old 09-29-2017, 05:36 PM
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DEPT OF LABOR AUDITS
TERMINATED VESTED

https://www.benefitnews.com/news/dol...ease-db-audits

Quote:

DOL to increase DB audits


Spoiler:
While all eyes have been on the Senate in its push to repeal and replace the Affordable Care Act, the regulatory benefit landscape still has some changes on the horizon.

A hot topic coming out of the Department of Labor is the agency’s plan to audit DB pension plans to ensure plan sponsors are getting benefits paid out to terminated vested participants, says Norma Sharara, a principal in Mercer’s employment practices risk management group.

It’s something “completely new” that started as a pilot program out of the Philadelphia DOL office, Sharara noted Thursday on Mercer’s Washington Outlook webcast.

While it sounds beneficial to many, “the bad news is that plan sponsors aren’t happy because the DOL views not contacting people entitled to benefits as being a plan sponsor breach of fiduciary duty,” she warned.

In the DOL’s view, not contacting totally vested participants early and periodically to inform them they are not entitled to benefits is a breach of the plan sponsors duty to provide benefits, Sharara said.

For a scope on the initiatives effect, the Philadelphia office alone between October 2016 and August 2017 found $165 million in benefits that were paid out to eligible participants.

The agency announced at a recent ERISA Advisory Council meeting it would be releasing guidance at some point. In the meantime, Sharara suggested following some best practices EBSA acting director, Tim Hauser, mentioned at the meeting.

· Send participants a certified letter using their last known address — “certified” being the key word, Sharara added.
· Keep good records on how to reach plan participants and pass those records onto successors during a M&A.
· Contact coworkers and ask if they know how to get in touch with plan participants.
· Try using phone numbers and not just addresses, as people tend to keep their cell phone numbers even when they move, Sharara added.
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Old 09-30-2017, 03:04 PM
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ILLINOIS

http://www.chicagobusiness.com/artic...oreUserAgent=1

Quote:
Have you checked your employer's pension fund lately?

Spoiler:
There's a whole other group of workers whose pensions are in trouble, but their predicament is getting a lot less attention than the dismal state of plans for Illinois' teachers, cops and government clerks. Most big Illinois companies, including Boeing and Navistar International, have underfunded pensions, and many are worse off than national peers.

Low interest rates, longer employee lifetimes, smaller corporate contributions and shrinking returns conspired over the past decade to squeeze pension assets and boost liabilities, creating a nationwide funding gap of nearly $400 billion just at the largest publicly traded companies. Even though most businesses have now frozen their defined-benefit plans—which promised fixed future payments—the burden will last for decades, and some could fail.

"The workforce has changed—few people remain a lifetime at one firm—and companies that offered DB plans have grown increasingly aware of the risks these pose to the plan sponsors," says Olivia Mitchell, a professor at the University of Pennsylvania's Wharton School who is executive director of the school's Pension Research Council.

U.S. companies in the Standard & Poor's 500 index have assets to cover 83 percent of their defined-benefit pension obligations, according to recent reports. Based on a Bloomberg analysis, the top 200 are short about $382 billion needed to make good on pledges to employees. By one measure, the U.S. has the worst pension funding in the world, with underfunding equal to about 10 percent of the companies' revenue, according to market indexing firm MSCI.

That's trouble for the Pension Benefit Guaranty Corp., a federal entity that takes on pensions when sponsors default. It called for more "reforms" last November. It's already been handed plans covering 1.5 million Americans and is trying to protect plans for 40 million others. It recently reached an agreement with Sears to help shore up the retailer's plans.

Chicago bank Northern Trust has the only major pension in Illinois that is overfunded, according to a Bloomberg analysis of 200 public Illinois companies with the biggest plans by 2016 assets. It has 14 percent more money than needed to cover $1.3 billion in obligations.

Retailer Walgreens Boots Alliance; CME Group, the world's biggest futures exchange operator; and Illinois Tool Works are also nearly fully funded. But the funding percentage on the Bloomberg ranking drops off after that.

Boeing, which has the biggest defined-benefit pension in Illinois and one of the largest in the U.S., with nearly $57 billion in assets, has about 74 percent of its liabilities covered. Boeing spokesman Chaz Bickers asserts that the company's plans are fully funded under another accounting method. A majority of its 140,000 staffers have pension benefits coming. "For those employees who earned benefits under the defined-benefit pension plans, we are keeping our commitment to them and their families," Bickers says.

Manufacturers and industrial companies have some of the richest pension pots, hard-won by unionized workforces that have shrunk over the past decade as many of those jobs were automated or moved outside the country to less expensive locales. Truck and engine manufacturer Navistar is in much worse straits than Boeing, with money set aside for just 56 percent of its $2.2 billion in pension obligations.

United Continental, which turned its pilots' pension obligations over to the PBGC a decade ago as part of a plan to exit bankruptcy, still has a $1.9 billion funding gap on pension plans it continues to administer for some flight attendants and other workers. When plans fail, employees suffer. "The defined-benefit plans were a major portion of our compensation plan," says Todd Insler, who leads United's pilots union. "Half of my compensation was taken from me."

....
Finally, some companies worry a tax overhaul by President Donald Trump and the Republican-led Congress may do away with deductions for pension contributions, so they're stepping them up now.

Boeing made an outsize $3.5 billion stock contribution to its pension plans in July, and some companies are borrowing money to make contributions.



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Old 10-02-2017, 12:22 PM
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NFL
O.J. SIMPSON

http://www.espn.com/nfl/story/_/id/2...-prison-nevada

Quote:
Calculating how much O.J. Simpson made from NFL pension in prison

Spoiler:
In July we reported O.J. Simpson might have made more than $600,000 over the course of his nine years in prison.

Simpson was released on Sunday morning, which means that money is now his to spend and it can't be touched by the families of Nicole Brown Simpson or Ronald L. Goldman. The Brown and Goldman families won a civil judgment against Simpson in February 1997 that, including interest, is now worth about $65 million, a Goldman family lawyer told The Associated Press.

Unlike other money he might earn in the future, this particular income is O.J.'s because his NFL pension is protected by state law.

There has been much confusion as to how much Simpson was pulling in for his pension, but it's fairly easy to calculate since the terms of NFL player pensions are public. One factor that adds to the confusion is the uncertainty of the age Simpson elected to begin collecting on his pension.

Let's do the math: Simpson played in the NFL from 1969 to 1979. NFL players who played before 1982 get a monthly pension credit of $250 for every season played. Since Simpson played 11 seasons, that adds up to $2,750 a month.

As part of a settlement in 2011, former players were given an extra monthly payment of $124 per season played before 1975, and $108 per season played in subsequent years. Simpson played six seasons before 1975 (a monthly total of $744) and five seasons after ($540). That's an additional $1,284.

That adds up to $4,034 a month.

That's what Simpson would have made if he elected to start taking out his NFL pension at the age of 55. Getting paid that for 108 months in jail would mean O.J. made $435,672.

But if he waited until 65 (he turned 70 in July), he would have collected 2.619 times that, according to the formula. That would make his pension approximately $10,565 a month, and based on 60 months in jail after his 65th birthday, that's $633,900.



I guess that's an MEP, but eh, I'll keep it here.
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