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  #21  
Old 04-20-2014, 02:07 PM
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HEINZ

http://www.post-gazette.com/business...s/201404200033

Quote:
Arnold Waldo is boycotting products made by the H.J. Heinz Co.

The Carrick resident who is near his 83rd birthday knows that losing his business is probably not going to make or break the Pittsburgh-based food company that reports billions in sales annually. But for him the symbolism is strong.

Mr. Waldo started work for Heinz in 1951 and — except for a stint in the military — worked there until his retirement in 1985. He had several aunts who also worked for the company that was founded in Sharpsburg in the 19th century and employed generations of Pittsburghers at both its headquarters and its former North Side plant.

A few months ago, the company — which was acquired for more than $28 billion by new owners last June — sent a letter telling him that his annual retiree reimbursement account to cover certain medical expenses was being cut from $3,500 a year to $1,093.

Then the mailbox delivered another blow from Heinz. The company doesn’t want to manage his pension plan anymore. “At Heinz, we are committed to being the best food company in the world and pension plan management is not our core competency,” said the letter dated Feb. 26 sent to people like Mr. Waldo who were involved in one of two pension plans covering salaried employees and nonunion hourly workers.
....
The Pension Rights Center has concerns, arguing that both offering people lump-sum buyout offers and transferring pensions to insurance companies in the form of annuities could open retirees up to new risks. Individuals may not be prepared to invest the sums properly to make the money last, and they'll no longer be backed by the Pension Benefit Guaranty Corp. Instead, the annuities will be insured by State Guaranty Associations, which vary from state to state.


For its part, Heinz believes the changes to its U.S. and Canadian pension plans will protect retirees’ benefits while helping the company. “The value of pension benefits earned to date under these plans will not be affected by these changes,” said Michael Mullen, senior vice president of corporate and government affairs for Heinz. “We are simply changing the way pension benefits will be managed and delivered in the future.”


......
Heinz has also merged two other plans, known as Plan B and Plan C, which cover both active and former employees covered under collective bargaining agreements, said Mr. Mullen. That second combined plan is not being terminated, but the company is offering lump sum payments for vested participants and annuities for retirees already receiving benefits.

In the case of Mr. Waldo’s plan, Heinz is offering those who have not started getting benefits the option of getting a lump sum payment. If they reject that, the company will purchase an annuity from an insurance company approved by government regulators.

Participants can expect to receive a lot more letters and updates as Heinz works its way through the IRS and other agencies assigned to regulate pensions, said Donald Fuerst, senior pension fellow at the American Academy of Actuaries in Washington, D.C.

In buying annuities, Heinz will be required to choose an insurance company large enough to securely handle the size of its plans. When GM made the move a couple of years ago, the sheer size of the pension plans limited its options.



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  #22  
Old 05-12-2014, 01:30 PM
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well, kinda

CONNECTICUT

http://ai-cio.com/channel/NEWSMAKERS...ves_Ahead.html

Quote:
(May 12, 2014) -- The Connecticut General Assembly has approved a bill to create and fund the Connecticut Retirement Security Board, a group tasked with studying the feasibility of a public-run savings system for private-sector employees.

The system's foremost goal, according to the legislation, would be to increase participation in quality retirement plans without adding to the state's debts or liabilities.

The defined contribution plan would be designed to require minimal financial knowledge from participants, and to incur "low administrative costs…limited to an annual, predetermined percentage of the total plan balance."

A successful scheme would reduce the need for public assistance by offering workers a structure in which to pre-fund their own retirements, according to the law.

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  #23  
Old 05-16-2014, 04:57 PM
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http://blog.fraplantools.com/court-f...all-ascension/

Quote:
Today, May 9, 2014, the court in Overall v. Ascension Health dismissed the plaintiff’s claims seeking to find that the pension plans sponsored by defendants are not church plans, and thus subject to ERISA. Instead, the court agreed with the defendants and the long time IRS interpretation of the church plan exemption and ruled as a matter of law that the plans in question qualify for the church plan exemption from ERISA. -

....
As referenced, this decision by the court in the Eastern District of Michigan came to the opposite conclusion of previous decisions in the Northern District of California in Rollins v. Dignity Health (Court Finds Plan Sponsored by Catholic Hospital is NOT a Church Plan) and the District of New Jersey in Kaplan v. Saint Peter’s Healthcare System (Court Finds St. Peter’s Pension Plan is NOT a Church Plan & A New Case is Filed in Chicago).

Interestingly, the court here found that the use of the phrase “includes” rather than “subject to” made the difference in the court’s interpretation that Section (A) was not a “gatekeeper” to Section (C). Notably, the court did not directly address the fact that the word “established” is missing from the second part of Section (C), which was so important to the previous two court’s decisions.


.....
Our Thoughts

It is not surprising that different courts have come to different conclusions as to the proper interpretation of the church plan exemption found in ERISA. We’ve guessed since these cases were filed, that the “final” answer, if there is one, will end up coming from the circuit courts, if not the US Supeme Court.
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  #24  
Old 05-18-2014, 07:14 PM
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http://americasmarkets.usatoday.com/...215-companies/

Quote:
Big companies like automaker Ford, aircraft builder Boeing and beverage king Coca-Cola are planning to cut the cash they put into employees’ pensions this year. Investors are hoping to get their hands on the money instead.

Thanks to the rising stock market and higher interest rates, companies aim to cut contributions to their employee pension plans by 28% or $16 billion this year to $40 billion, says research firm International Strategy & Investment, based on estimates provided by the 345 companies in the S&P 500 that still have pension plans.

These expected 2014 pension contribution cuts come after the companies already reduced their pension contributions 27% in 2013 to $56 billion, the lowest contribution since 2008, ISI says. That’s all money investors hope will be coming their way in the form of dividend hikes or stock buybacks.

.....
Investors hope the money not being put into pension plans, if not paid out as dividends, might benefit them indirectly through the purchase of capital equipment, which could boost profit in the future.

The companies expected to get the biggest boost to cash flow by cutting back their pension contributions include Ford, United States Steel and motorcycle maker Harley-Davidson, ISI says. All these companies, plus tech services firm Computer Sciences, insurer Marsh & McLennan, defense contractor Lockheed Martin, lab services company Perkin Elmer, defensive contractor Northrop Grumman and auto-parks maker BorgWarner, are all expected to enjoy 13% or higher boosts to cash flow due to pension contribution cutbacks, ISI says.

Investors had better not assume this cash is coming their way, though. Companies are infamous for underestimating how much they need to contribute to their pension plans, ISI says.

Companies end up contributing more to pensions than they expect 71% of the time, ISI says. If the plans’ investment returns come in below expectations, a possible scenario given the market’s poor showing this year and a decline in interest rates, the cash may not be up for grabs, after all. Also, new mortality tables and pension regulations could boost the requirements for pension contributions, ISI says.

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  #25  
Old 05-19-2014, 01:25 PM
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http://ai-cio.com/channel/ASSET_ALLO..._DB_Plans.html

Quote:
(May 17, 2014) — US firms with underfunded defined benefit (DB) plans are likely to have high cash holdings, according to research.

Neeru Chaudhry of Monash University in Australia argued that plan sponsors may intentionally decide to underfund their pension plans largely to “use retained funds for different activities” and increase their cash holdings.

The research studied over 3,000 US firms with DB plans from 1980 to 2012 and found plan sponsors have withheld contributions to pension funds with either a precautionary motive associated with cash flow volatility or with an intention to save more cash.

“Funding status of pension plans can be significantly affected by market conditions, which are beyond the control of managers,” Chaudhry wrote. “As the level of underfunding increases, firms are required to make high mandatory pension contributions and pay higher insurance premium to Pension Benefit Guaranty Corporation (PBGC).”

This phenomenon creates a cash flow volatility, the paper said, which encourages plan sponsors to save more cash to help the pension plan hold up against adverse market conditions. “Firms may find it profitable to hold cash to mitigate costs of financial distress if the cash flow shortfall prevents a firm from investing in profitable projects.”
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Old 05-22-2014, 01:58 PM
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ILLINOIS

http://politics.suntimes.com/article...14-536pm#bmb=1

Quote:
Pension payouts: $590,911.

Legal and audit expenses: $147,140.

Income from sponsors and royalties: $647,633.

Profits from games broadcast on TV, radio and the Internet: $66,095.

All of the above are part of the Illinois High School Association’s most recent audit filed with Illinois attorney general, covering the 2012-2013 school year.

But because the high school sports governing body is a private, not-for-profit organization, it doesn’t need to report anything more about its legal fees, pension costs or the terms of its sponsorship and television deals.

Spoiler:



Quote:
When pressed, Troha would acknowledge only that “there are currently 17 individuals receiving pensions from the IHSA.”

About six years ago, the association switched employees to a 401(k) plan because its pension plan — modeled after the state Teachers’ Retirement System — had become too great a financial burden to keep extending to its 25 full-time employees.

“Defined-benefit [pension] plans are extremely expensive. It’s similar to what the state is dealing with” in terms of skyrocketing pension costs for government workers, says Hickman, the IHSA executive director. “We recognized several years ago that continuing to provide a defined-benefit plan was going to become very cumbersome.”

Employees who were in the plan had their years of service capped as of July 1, 2008. Still, the association paid $425,000 into its $8.7 million pension fund last school year — and expects to pay out more than $7 million in pension benefits between this school year and 2023, records show.
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Old 06-01-2014, 04:43 PM
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UK

WON'T ANYBODY THINK OF THE CHARITIES AND VOLUNTEERS?!



http://www.telegraph.co.uk/culture/h...oss-warns.html

Quote:
The army of volunteers looking after Britain's historic homes and monuments could disappear as the pensions crisis makes wealthy, time-rich retirees a thing of the past, the head of English Heritage has warned.
Heritage charities currently rely on "well-off, fit and healthy people who have nothing to do", Simon Thurley said.
But the decline in pension pots, coupled with older people being forced to work for longer, could seriously deplete the number of volunteers in coming years.
English Heritage currently relies on 8,000 volunteers who provide their time for free, helping to run sites including Stonehenge, Dover Castle and Rievaulx Abbey.
Speaking at the festival, Thurley said: "People are going to work longer, their pensions aren't going to be as good. At the moment we're enjoying an extraordinary period with very wealthy pensioners with time on their hands.
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Old 06-09-2014, 06:58 AM
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press release from Milliman

http://insurancenewsnet.com/oarticle/2014/06/06/pension-funded-status-deficit-increases-by-$10-billion-in-may-a-514796.html#.U5WMRPldVic

Quote:
SEATTLE, June 6, 2014 /PRNewswire/ -- Milliman, Inc., a premier global consulting and actuarial firm, today released the results of its latest Pension Funding Index (PFI), which consists of 100 of the nation's largest defined benefit pension plans. In May, these plans experienced a $29 billion increase in pension liabilities and a $19 billion increase in asset value, resulting in a $10 billion increase in the pension funded status deficit.

"In every month of 2014 so far we have seen a decline in interest rates," said John Ehrhardt, co-author of the Milliman 100 Pension Funding Index. "These pensions have experienced a $43 billion increase in assets, but the market gains have been dwarfed by a $125 billion increase in liabilities."

Looking forward, if the Milliman 100 pension plans were to achieve the expected 7.4% median asset return for their pension portfolios, and if the current discount rate of 4.06% were maintained, funded status would improve, with the funded status deficit shrinking to $241 billion (86.0% funded ratio) by the end of 2014 and to $187 billion (89.2% funded ratio) by the end of 2015.

To view the complete study, go to http://us.milliman.com/pfi/. To receive regular updates of Milliman's pension funding analysis, contact us at pensionfunding@milliman.com.

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Old 06-09-2014, 07:00 AM
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on the irrelevancy of actuaries

http://online.barrons.com/news/artic...06273416166890

Quote:
In the past month or so, millions of Americans in traditional private pension plans have received their annual "Dear Participant" letters from their employers and former employers about the funded status of their pension plans in 2013.

This letter has long been an annual joke, containing up front a bold-face advisory that "you are not required to take any action." From that line to the wastebasket is often a short toss.

This year, however, there's real information in the letter. It shows that a "reform" bill signed into law in 2012 has taken hold to reduce the security of most pension beneficiaries in the U.S. The law changed the way pension sponsors are required to estimate the present value of their future liabilities. That change reduces the annual payments that sponsors are required to make to keep their plans solvent. In some cases, it frees the sponsors from making any payment at all.

In no case does it actually reduce the pension benefits that have been promised—it just cuts the official estimate of those benefits, and it cuts the amounts that plan sponsors must contribute. It lulls everyone into a false sense of security.

Before that bill passed in 2012, company sponsors of pension plans were required to use the average of interest rates over the previous two years when calculating the present value of their future liabilities. Interest rates being unusually low the past few years, the required calculation produced a high estimate of the liabilities, which produced a high estimate of funding shortfalls and high minimum funding requirements.

Under the new law, companies must use a 25-year average of interest rates. The result is a higher discount rate, a lower estimate of the funding shortfall, and a lower minimum-funding requirement.

The Society of Actuaries surveyed U.S. Department of Labor filings from 6,692 pension plans with more than 100 participants. The interest-rate change applied to 5,425 of them in 2012. There were magical improvements in funding ratios, with the average funding rising from 88% of the legal target in 2011 to 102.9% of the target in 2012. The aggregate funding requirement for the affected plans dropped by $29 billion. Results for 2013 are likely to be even more comfortable for employers.

......
The same highway bill, which ironically was titled the Moving Ahead for Progress in the 21st Century Act, also raised revenue the opposite way, by increasing pension security. It raised the per capita premium for federal pension insurance from $35 per participant to $49 this year, indexed to inflation thereafter.

The American Academy of Actuaries recently scolded Congress for indulging in these revenue offsets. Its Pension Finance Task Force sent a letter to congressional leaders, warning, "Extending these temporary provisions accelerates tax revenue while deferring the pension cost to future generations, distorts the pension measurements, and undermines the benefit security of plan participants while increasing the risk exposure to the Pension Benefit Guaranty Corp."

Actuaries don't pave highways, or please constituents. Congress isn't listening.

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Old 06-09-2014, 04:18 PM
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this does intersect with public pensions, but this is just about the general conflict of interest

http://online.wsj.com/articles/lawma...722518614.html

Quote:
A senior Democratic congressman is urging Labor Department Secretary Thomas Perez to examine possible conflicts in the growing number of U.S. pension-plan consultants that also manage investments, according to a document reviewed by The Wall Street Journal.

In a letter to the Labor Department, U.S. Rep. George Miller (D., Calif.) said the trend "appears to create significant and inappropriate conflicts" within the $6.5 trillion pension-fund industry. He asked the Labor Department to "take a careful look at these practices" as it considers a new rule governing the conduct of advisers to retirement plans. A Labor Department spokesman acknowledged receipt of the May 21 letter but declined further comment.

Consulting firms are hired by cities, states, corporations and others to provide impartial guidance to retirement plans. But an increasing number of those firms also offer to help manage those pension assets or select a fund's investment managers. More than 75% of pension-consulting firms registered with the Securities and Exchange Commission act as both investment managers and outside consultants for their clients, according to reports filed on the SEC website.

.....
Some of the nation's largest public pension funds already bar consultants from acting as investment managers because of concerns about the dual roles, but many don't.

......
An SEC investigation found in 2005 that some consultants had accepted payments from money managers even as they offered advice about which managers to choose, while the Government Accountability Office said in 2007 that annual returns were 1.3% lower for pensions that hired consultants who failed to disclose such conflicts. The Labor Department eventually ordered consultants to disclose more about their compensation—a move designed to root out any conflicted business relationships, or "pay to play" arrangements.

.....
"Just because a consultant graduates into investment management does not necessary constitute a conflict" as long as the pension plan "goes through an appropriate fiduciary process," said Brian Graff, executive director of the American Society of Pension Professionals & Actuaries, which represents pension consultants and other firms that provide services to retirement plans.

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