Subject:                                     FW: Your campaign BCG Pension Insider May 2019 has been sent


Subject: BCG Pension Insider May 2019

The Pension Insider


The Pension Insider is a monthly newsletter developed for individuals who work in the pension arena. The Pension Insider was created to share ideas, success stories, coming events and industry specific articles.



May 2019 - Volume 91, Edition 1



Cerulli: Midsize U.S. Corporate Pension Plans Focusing More on Risks, Fees

Pensions & Investments | By Rob Kozlowski | MAY 6, 2019


Midsize U.S. corporate defined benefit plans are focusing more on investment risks and money management fees in 2019 following a volatile end of 2018, a survey from Cerulli Associates shows.


In an April white paper called "De-risking DB Plans in Flux," Cerulli said when asked about third-party investment management fees, 70% of surveyed plan executives said third-party money management fees were somewhat concerning, 22% said very concerning and 8% said not concerning. When asked about performance/risk measurement and generating returns/yield, the same amount of plan executives, 22% said those were very concerning as well. Forty-eight percent and 38% were somewhat concerned about generating returns/yield and performance/risk measurement, respectively, while a respective 30% and 40% were not concerned at all.


Regarding midsize DB plan executives, the white paper said "after years of low discount rates negatively reflecting the present value of future liabilities, followed by rates rising for much of 2018 (providing some relief), the current environment has now muddied the waters of plans' interest rate outlook." On an asset-weighted basis, 42% of surveyed plan executives are concerned about the interest rate environment, while 37% are not, according to the paper. Click Here for full article



Largest DB Plans Move to Fixed Income and Continues to Derisk

PLANADVISOR |By Rebecca Moore | April 16, 2019


During 2018, the $20 billion club shifted asset allocations significantly away from risky assets and into fixed income, Russell Investments found.


According to the latest report from Russell Investments about the largest corporate defined benefit (DB) plan sponsors in the United States, they are uniquely situated to set the trends that the rest of the industry often follow.


Based on its analysis of the FYE 2018 annual filings, these corporations continued to make changes to their pension plan policies to take more control of the costs and to better manage their risks.


As for investment policy, the analysis finds over the last several years, the $20 billion club (the group of 20 publicly listed U.S. corporations with pension liabilities in excess of $20 billion) has been shifting from the traditional asset-only focus to an asset-liability focus. During 2018, the $20 billion club shifted asset allocations significantly away from risky assets and into fixed income. On average, equity allocations were down 5% and fixed income allocations were up 5%, which was the highest de-risking movement in the past eight years. Click Here for full article



IRS Expands Opportunities for Retirement Plan Sponsors to Self-Correct

PLANADVISOR |By Rebecca Moore | April 24, 2019


The IRS Self Correction Program (SCP) has been expanded to include certain plan document failures and certain loan failures and a way to self-correct via plan amendments.


The Internal Revenue Service has issued Revenue Procedure 2019-19 to expand Self Correction Program (SCP) eligibility to permit correction of certain plan document failures and certain plan loan failures, and also to provide an additional method of correcting operational failures by plan amendment under SCP.


The agency says the revenue procedure updates the comprehensive system of correction programs for sponsors of retirement plans that are intended to satisfy the requirements of Sections 401(a), 403(a), 403(b), 408(k), or 408(p) of the Internal Revenue Code, but that have not met these requirements for a period of time. The Department of the Treasury and the IRS have concluded that an expansion of SCP will facilitate compliance for plans, while reducing costs and burdens of compliance by allowing plan sponsors to self-correct in certain additional circumstances. The new procedures were effective April 19.


Correcting certain plan document failures

Numerous conforming changes to the revenue procedure have been made to implement the expansion of SCP to permit correction of certain plan document failures. Section 4.01 is revised to provide that SCP is available to correct certain plan document failures. Section 4.01(1)(b) provides that, if otherwise eligible to correct under SCP, a sponsor of a qualified plan or 403(b) plan may correct certain plan document failures under SCP, other than the initial failure to adopt a qualified plan or the failure to adopt a written 403(b) plan document timely. Plan document failures under SCP are always treated as significant failures and may be corrected under SCP only if the plan, as of the date of correction, is subject to a favorable letter and the correction is made within the SCP correction period.


The new revenue procedure also permits certain plan document failures to be corrected by plan amendment if the plan has a favorable letter and meets other requirements stated in the revenue procedure. Click Here for full article






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ANNUITY RATES Standard Pension Closeout/Terminal Funding Case Rates:

(No lump sums, no disability or unusual provisions)

Retirees - 2.98%

Term Vesteds - 3.03%

Actives - 3.10%

Annuity Purchase Rates as of May 13, 2019



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