Most read Fiduciary Matters blog posts of 2015
As 2015 draws to a close, Bob Collie and all of the Fiduciary Matters team wish you a happy and healthy new year. We list below the ten most-read posts of the year. That our most-read post was one on the challenges of documentation is a sign that fiduciary issues are now top of mind. Maybe next year, we’ll all be able to turn our attention to investment matters...
1. A caveat to the (usually sound) advice to pension fiduciaries to “document, document, document”
As a result of recent lawsuits, fiduciaries are putting more effort into documentation of their actions. But not all documentation is equally effective.
2. Asset allocation changes among the U.S.'s biggest pension plans
The largest U.S. pension plans made significant asset allocation changes in 2014, and are following a range of strategies, no longer acting as a herd.
3. There's $27 trillion in the U.S. retirement savings system: don’t expect legislators to leave it alone
U.S. household retirement assets total $27 trillion, split between the public and private sectors. But the pressure for change is growing.
4. The pension world's $20 billion club takes a hit from improving longevity
The pension deficit of U.S. corporate plan sponsors rose in 2014, hit by an unexpected fall in interest rates and an increase in life expectancy.
5. New best practices are emerging for company stock in DC plans
As the role of DC plans has changed, the company stock option has become less popular, and new best practices are emerging for those who do still offer it.
6. Multiple employer plans move out of the shadows and into the spotlight
Interest is growing in multiple employer plans (MEPs) as a means of addressing the retirement coverage gap.
7. Extending duration, hedge long first, and more bang for the LDI buck
The hedge long first approach to LDI makes the portfolio more sensitive to interest rates, hence more effective at reducing the volatility of plan surplus.
8. Five years of mark-to-market pension expense reporting
A minority of corporations mark actuarial gains and losses to market in their income statement accounting. This is clearer but produces more volatile results.
9. All quiet on the pension front at the $20 billion club
Compared to recent years, there has been relatively little pension activity at the U.S.'s largest corporations in 2015 so far.
10. Another reason for auto-features in DC plans: cognitive decline
Financial literacy tends to decline after the age of 60, which adds to the need for a focus on lifetime retirement income in Defined Contribution plan design.