Description: This article discusses the goals of the section.

Description: Provides a summary of key points from the ERISA Advisory Council Report on Outsourcing (2014). The report provides interesting and important perspectives and the article encourages the reader to look at the report and consider the issues raised

Description: The article endorses broader use of lifetime income in DC plans. It explains why the use of DB plans will continue to decline. The article points out that plans sponsors will not willingly take on additional ERISA fiduciary exposure. The article endorses three regulatory reforms that would increase the use of lifetime income in DC plans. 1. A robust annuity issuer safe harbor that would free employers from fiduciary exposure for putting an annuity provider on the DC platform. 2. A requirement that a plan offer a lifetime income option to qualify for the 404(c) safe harbor. 3. A revision to 404(c) to allow plan sponsors to allocate part or all of the employer match to lifetime income.

Description: Behavioral Finance proposes that psychological and social factors influence financial and economic decisions, causing people to make decisions other than those predicted by conventional economics and which may not be optimal for them. This article strives to help defined benefit (DB) plan actuaries understand how concepts from behavioral finance may provide insight into the actions of the sponsors of defined benefit plans. We specifically explore how behavioral finance concepts may affect sponsors’ decisions regarding their plan’s preferred funding level and risk profile. Our hope is that actuaries can assist their clients in becoming aware of how these concepts may be affecting the quality of the sponsors’ decision-making process.

Description: This essay advocates that the transition from DB to DC plans won't be complete until plan sponsors offer programs of retirement income in their DC plans. The essay discusses the relevant actuarial and behavioral issues.

Description: Provides an overview of several EBRI studies on spending by older Americans and brings together with Society of Actuaries research on shocks in retirement.

Description: Protecting oneself in older age from risks is the sine qua non of retirement planning. But far too many people don’t approach retirement (or retirement planning) well. From a policy perspective, we know about half the senior population will have some sort of long-term care event. We need to recognize that long-term care risk is a component not just of aging but of retirement. Placing long term care solutions in the retirement space is critical to reaching the bulk of the population. Combined with the additional element—recognition of risk—this would be both a powerful protection but also a natural one for individuals to understand.

Description: Presents a tool for actuaries to analyze defined contribution plans. Analytical Hierarchy Process weights plan features. Result is accessible to non-actuaries.

Description: Provides preview of the two essays published in this Pension Section News and encourages dialogue, particularly on the 401(k) essay and the ideas for change.

Description: Chronically low interest rates are a reflection of macroeconomic trends. Care must be exercised in making assumptions regarding mean reversion.