Page1 of 11 Benefits"' Execu[ive programs, welfareBenefitPlans, Benefitplans,Retirement Employee

IRS announces 2012 dollar limits on contributions and benefits BY l0 | 21 | 2011Posted JerryKalish 1o applicable the announces cost-of-livingadjustments Service Eachyearthe InternalRevenue mostlimits did not change plansfor the following year.Unlike 2001in which qualifiedretirement year,mostllimitsincreased: from the prior by yesterday theIRS: planlimits announced are Following thekey retirement . . . . from $16'500to increases $17,000 contributions The401(k)and403(b)limit for employee at the age limit for participants 50 andolderremains same $5,500. Thecatcljup contribution from $49,000. to planincreases $50,000 contribution to allocation a defined Themaximum to plan increases from a definedbenefitpension Themaximumannualbenefitpayable from$I 9:5,000. $200,000 plan pu{poses for . Themaximumannualcompensation canbe recognized retirement that from to increases $250,0t00 $245,000. form to increases $115,000 . Thethreshold Employee for compensation Highly Compensated $110,000.

to plan limits for 2012compared 201I . listing all the retirement Hereis a link to our charrt lalaqae-PlansDefinsdEsnafi!-Psnsignllaru, ' In Posted 401&) Plans,:lO3lb)Jlals, Qash Plans Stock-Ow-nelgtrip Emplovee / Comments Questions I Permalink /0i

The New World of 403(b) and 457 plans

By l0 | 16 | 2011Posted JerryKalish Munster,a German That's a map of the New World circa 1540by Sebastian It cartographer. depicts the Europeanview about the New World and North America". especially It's my visual metaphorabout where the 403(b) and 457 marketsare now -' becameeffectiveJanuary1,2009. almostthreeyearsafter the final regulations

403(b) and457world. the The final regshavebecorne focal point for a new andrapidly changing by yearold environment characterized limitedemployer Onein whichtheOld wasa 40-plus

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2 Page of 11 Benefits... Executive programs, welfareBenefitplans, Retirement Benefitplans, Emproyee in bestpractices an one The doneon a retailbasis. New is becoming with ERIS'A-like involvement setting. institutional at JohnMarshallLaw er on Thatwasthethemeof my presentation Octob 7,2011,a part of the cours which Programs", Retirernertt "Non-Traditional Program, L.L.M. in empfoyieBenefits School, follows:

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Phtrs* Rs,tirern*nt NewRud**for F{sl+Tr Fis*rm*icn $dsrls$ Katrielt Sy JerrY Ine,, $;Sry,iees, bl*tbna|Beneffi Fresld*nt,

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pqL Toth who and This wasyearthreeof this programwhich hasbeenorganized led by attorney of planson his blog,Ih.e-Business Benefitg. on tomments aO:iU)andotherretirement regularly Plans In Posted 403(.b) ,

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Book Review: THE VIGILANT INVESTOR: A Former IiEtC Enforcer Reveals How To Fraud Proof-Your Investments
By 10| 10| 2011Posted JerryKalish My bloggingbuddysecgritylawyerBill Singeron his blog,Btpkg-aud-Brokgt':In investment abou't IrieVglgnt.Itrall_gfieet (alwaysa goodread),postsfrequently B,t_gg In and scams scoundrels. oneof his latest,Bill writesthat FedsBustBank Guarantee Scarg. to and don't havethe manpower resources getto all of the $40billion ayear But theFeds on watchout,youL're your own. lose investors to fraud.In otherwords, theFBI says that

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Welfare Benefit Plans,ExtlcutiveBenefits"' Page3 of 11 EmployeeBenefit plans,RetirementPrograms, yourself? Educateyourself, and here'san excellent starting point. So how do you go about prnotecting recentlypublishedbook picturedabove,IHEJIGII-AI\T It's Pat Huddleston's Enforcer RevealsHow To Fraud Proof-Your Investments. Former SEC INVESJO-R:A

a Intriguing title, eh? But before I tell you about the book itself, let me tell yor-r little about Pat and how this book cameto be written. After leaving the U.S. Securitiesand ExchangeCommission where he w,asan EnforcementBranch Chief, pat was a private attorney for ten yearsrepresentingdefraudedinvestors.As Pat tells it in the Introduction, he closed his law practice in July 2006 aftermeeting with ar7O-yearold man who lost to his entire savingsin a Ponzi ..he-". But since the con man had no assetrs go after, chancesfor recoverywere slim. So saysPat, that was whe,nhe launchedIrygSlqfgUlalgtld9g'-L!,t, a finnproviding investment protection servicesto investors and subsequentlyacting as court-appointedreceiversin SEC fraud cases. pat's experience and writing style has resultedin a book lrom which investorscan learn how to better He protectihemselves. usesreal storiesand provideschecklistsin his book organizedin two easily sections: readable . pART 1: The Wide World of Fraud: First Stepsand AdvancedTattics on the Pathto Vigilant Investing . PART Z: fne Securities Industry: Hunting the Wolf with the Million-Dollar Smile plans can bre risk also.In fact, Pat at It's not just seniorsthat are vulnerable,of course.Retirernent investmentfraud is perpetratedagainstretirement plans 20o/o of estimatesthat approximartely including small plans. Attorney and SusanWynn wrote about that very subject in February 20()9 in her post, Madoff V-iqtim; her tnglude_Small,Pgn;lgn..P_lang.Note comment about the efficacy of the enforcementagencies: and points of the Madoff story when it comesto,re1;irement pension One of the interesti.ng plans is that none of the 4 governmentalagencieswhich regulate and audit retirement and pensionplans saw Madoff coming. So if you'rea fiduciary of'a fiduciary of a retirementplan, in addition to Pat'sbook, thereare other Learnedfrom Scoundrels Fiduciary Lessions resources available.Here'san excellentone,the webcast, of presented 2009 by Blaine Aikin and Rich Lynch, CEO and COO respectively ft360. in An{ThlgJg.g Defined Ilenefit PensionPlans PostedIn 401(h_P-l.gns ,l:lqakRqylgwl, CAshBalanceBlan*s-, Comments/ Questions(()- | Permalink

Meet the "ERISA Accountrrothe newcomer to the small 401(k) plan scene Kalish 10| 3 | 2011Posted Jr:rry By you a newcomer the small401(k)planmarket. to Let me introduce to 1l[re "ERISA Account", relative partof the largeandmedium planmarket some has down It's been for time.Only recently it migrated

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Page4 of I I Benef,tts"' Welfare Benefit Plans,Execurlive EmployeeBenefit plans, RetirementPrograms, anLd of streambecause (yes, yc)uguessedit) the increasedregulatory emphasir; fiduciary attentionto fee clisclosure. Overview

EFI9ff ficcor.nqr

referredto as "ERISA Budget Accounts",'"ERISA Expense ERISA Accountsare sometimes Accounts, "Expense RecapfureAccount", or "Revenue Sharing Account". We use the term ERISA of the describes essence what it is: it Account because succin.ctly A plan level account that captures excessincome collected by the recordkeeperthat can be or usedto pay etigible plan expenses evenallocated to participant's. from, and}) how it can be this Let's separate discussioninto its elements:1) wherethe incomecom.es used. From Wherethe Income Comesi all A mutual fund chargesa tfeethat encompasses the various fees that a participant is chargedto invest in the particuiar furrd. It's usually referred to as the ExpenseRatio, In addition to the the fee management chargedby the fund managerto managethe fund assets, ExpenseRatio may include: . I2(b)(l) Fee:the fee paid by the mutual fund to a a0lft) provider or brokerfor including in it in the plan and serl'icing it after the sale. . Sub Tiansfer Agent (Sub-TA)Fees: the fee paid by the fund when it subcontractsthe participanl clear,and settletrades, e.g.,bank or trust company,to execute, to accounting transfbragents, ownership records.Theseorganizationsare called Sub-Transfer maintiin sharelholder and Agents. . Piovider Compensution:the fee paid by the fund to the serviceprovider, sometimesreferred to as RevenueSharing, for administrative or contract owner or participant servicesprovided on behalf of the tund. of The ExpenseRation is usually statedas a percentage assetsunder management,and is netted from performancerather than being paid directly by the plan. mutual fund How the IncomeCan Be lJsed i.e., excess,ive, more revenuethat is becomes At somepoint, the incomereceivedby the recordkeeper to or plan, and can be usedto pay plan level expenses reaLllorcatedparticipants. needed run the to Plan Expenses The expenses can be paid by the plan are part of that ERISA basic:a firluciary must'oactfor the that expenses of r,easonable exclusive purposeof providing benefits to plan participants and defrayinLg the administering plan." soulldinclude: administrative expenses The Department Labor:saysthat reasonable of . . . . Plan amendmentsrequired by changein law Plan amendmentsnecessaryto maintain tax qualified status testing Nondiscrimination Recordkeeping

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Welfare Benefit Plans,ExecutiveBenefits"' Page5 of I I EmployeeBenefit plans,RetirementPrograms, . Plan accounting . Preparation Form 5500 of that are for the plan assets, however, cannot be used for "settlor Functions", i.e., those expenses benefit of the employer. Settlor Expensecould include: . Studiesof options fbr amendingplan to maintain tax qualified statusor for meeting new legal requirements . Terminating plan . Testingto exploreplan design . Union negotiations aboutplan provisions cost of The Departmentof Labor also permits participantsto be chargedfor the reasonable transactionsattributable to individual participants,e.g., loans, QDROs, hardship withdrawals, calculationsto determinebenefits under various distribution altematives,and benefit distributions. Allocation to ParticiPants funds in an ERISA A.ccountmay be reallocatedto In addition to paying for reasonableplan expenses, accountbalancesat the end of the year, or on a per capita participant aciountJpro-r'ata basedon their tasis. ilote, however, that funds must be usedby the end of the plan year. They cannot be rolled over to anotherplan year, or returned to the employer. Plan Documentation would be to Best practiLces As with all things ERISA, there hasto be properdocumentation. reflect specifically statein the plan document that the plan may pay reasonableoperating expenses, Material Modification thereof, and have a written Expense that in the Summary Plan Description or Policy. Conclusion However,as we Not all 401(k) plans will seeexcessincomethat can be usedin an ERISI\ A,ccount. more prevalent in the move more into the "Age of Transparency",expect to seeERISA AccouLnts small plan market.And vrhat's a "small plan'? We've seen$1 million plans'with ERISA Accounts. Plans, |iduc-iar)Ll$:sues PostedIn 40_1(k) (6[ Comments/ Q-uestions | Permalink

BalanceForward Plans: The More Things Change,The Mlore They Stay The Same Posted Jerrv Bv Kalish 08| 11| 2011
in If you're a Bon Jovi fan, you'll recognizethe expression the headline,"T'heMore ol Things Change, The More They Stay The Same".It's Track 12 onDisc 1Z their album,Bpn Jovi Greatesl.Hits The Ultimate Collection. Alphonse Kam But, of course, that's not Jon picturedhere.It's Jean-Baptiste - Septemb 29, 1890),a Frenchcritic, joumalist, and novelist,to (November24, 1808 er

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Welfare Benefit Plans,ExecutiveBenefits"' Page6 of I I EmployeeBenetit plans,RetirementPrograms, 'which usually translates "plus ga change,plus c'est la m6me chos,e" who was attributedthe epiLgram, the to "the more things chang,:,, more they stay the same"' page. Never heardof Monsieur Karr? Well, he'sactuallygot a Facebook So you're asking, what this has to do with balanceforward plans?You may also be asking what exactly is a balanceforward Plan? Let me fast forward to the,bottom line (literally and figuratively). climate is not a good time to If you're a plan sponsorcrra 401(k)plan participant, today's investment bepart ofone. Let me explainwhy. BalanceForwardis an industry term given to thoseoriginal participantdirected401(k) and profit sharingplans, many of which are still around.Unlike the more common daily valuation plans, participants' accountsare valued monthly, quarterly or annually. After alll the balanceforward plan u".ounti.rg takes place, it oan be 4-8 weeks after the valuation date before participants receive statements. at What's the problem you might ask?Let's hearkenback to November,2C108 which tirne I blogged, Losq and BalanceForward Cot BalanceForward40i(K) Ptans: Someone's Plans Re_visite4. scenariosof a participant in a balanceforward plan with a Now considerthesetwo zrlternative a 30, $50,000accountbalanceas of September 2008. The participantreceiver; distributionfor $50,000 the 30 on November 1, 2008,bui betweenSeptember and the distributiondaLte, plan lost2}Yo. Thus, had to eat the $10,()00loss. the plan - which is to say - all the remainingparticipants by increased 2}%.That But say,insteadof October,2008being October2008,tlte plan'sassets participant receivesthe same$50,000 distribution, but only the remaining participants sharein the gain. $10,000 Seethe problem. So now here we are again today ("the more things change,the more they' stay the same"), when there 30, could be a decideddifferencebetweenthe June 30,2011 valuationand Sieptember 2011 valuation. valuations. But with all What's the solution? Maybe balanceforward plans should provide for inLterim complicatedlegal, tax, fiduciary and humanresoulceissuesinvolved.No mattersERISA, there are In with adrzisc,rs. the meantime,here but easyanswers, definitely a situationthat shouldbe discussed of is an excellentdiscussion the issuesinvolved by SungardRelias,Interim Valuationsin a Falling again. Market - It's ddjd vu all <2ver isn't perfecteither,but ...... Now daily valuation Photosraphabove: Woothufylyrycirca lB70s. Photo by Antoine SamuglAdam-Salomon. Posted 401(k)Plans In Comments/ Ouestions([] I Pgrmalink

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Page7 of 11 Welfare Benefit Plans,ExecutiveBenefits... EmployeeBenefit plans,RetirementPrograms,

What do modern art and defined benefit pensionplans hal'e in common?

BY 0S | 3 I 2011Posted JerryKalish The answeris obvious. Both can be difficult and often impossible to undrersl'and. do Modern art enthusiasts have help. They can turn to the UnderstendM,cdernArt as shown here from the website !j441pgqp[-a_9ry'9d' tgstantly Breath Spray Unfortunately, there is no such canned(pardon the pun) explanationto help communicatea defined benefit plan to employees.Hence, no surprisewith the resul of a recentFidelity surve)/conductedonline by l&nlajggg4lgb, an Evatston, and public opinion polling firm. IL basedmarketresearch who were participants in both current and frozen defined benefit pension plans The 506 respondents indicatedthat: . 3lo/odon't know their plan's vestingschedule. . 40o percent don't know what their distributions will be at retirement. . 27o/o don't know don't know at what age they can begin to receive palrments. That's what they said the;, don't know. I can tell you directly from workirng'with defined benefit pensionplans for more than a few years, it's just the tip of the iceberg. So let's approachit from the itandpoint of what employeesneed to know about their defined benefit pension plan. Here are some of the basics: Type of Plan 1. The plan is funded by the employer and promisesto pay a participant a specific benefit at retirement. by 2. lf thePlan is coVererd the PensionBenefit GuarantyCorporation(I'BGC), a certainamounl of retirementbenefits are guaranteedif the if the plan is terminaterl without enough money to pay all of the promisedbenefits. for 3. Thereis no PBGC ooverage for definedcontributionplans suchas 401(k). Plan Provisions 1. 2. 3. 4. 5. 6. becomeseligible.. When an employee' How benefitsaccrue(accumulate). non-forfeitable). How benefitsvest tibecome When distributions can be taken. What distribution options are available. Whether benefits can be reducedor the plan terminated.

processthan for 401(k) plans. It's obviouslya more difficult and complicatedemployeeeducation and assetallocation, compounding, like dollar cost averaging, Insteadof explaining401(k) concepts programshave to deal with more esotericconceptslike actuarialequivalence, employeeeducation joint and survivor,and the plan'sfunded status. when and how much Nonetheless, effort has to be made so that employeescan understand. the monthly retirement incon:lethey could expect and to factor that into their personalplanning. That is, of course,for those still fbrtunate to be part of a defined benefit pension plan.

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8 Page of 11 Benefits"' Execulive BenefitPlans, Welfare Programs, Retirement BenefitPlans, Employee (Jnderstand Art lufodern instantlyBreath E-commerceNote: Lestyou think I wasjoking aboutthe . But sufficeit to say,you'reon yourown' ipiiy,it'savailable ontitt.ifromHyau'sAll nr-iqgq! 4I Plans Benefit.Pension In Posted Defined (0| / Comments Ouestioqg | Lerualbk

0n a clear daY, You can see... a QDRO? Kalish BY 07 122| 2011Posted Jterry
That's the album cover of the original Broadwaycastrecordingof the 1965 subsequentlywent on musical, On a Clear Day You Can SeeForever ('whiLch tc, becom" a rnoui. ttu.ting Barbara Streisandin 19'70and which will be returning to Broadway starring HarrL-Conqick. J1'tlhisFall)' a It's the story of clairvoyant Daisy Gamble who erttends classtaught by a while undergoing psychiatrisifot tt"lp in kicking her smoking habit. she iryprrorir, it is discovered had a pastlife in late l8th centuryEngland'And .rritil th" recent Appellate Court decision in Brorvn'v. Continental, shemight have had a future as a PlarnAdministrator dealing with QDROs. createsa right That,s the acronym for q,sa1i6"d Domestic RelationsOrders which is a court order that payeet,creceivesomeor all of a participant'sbenefitsin a qualified retirementplan. for an alternative in a to It,s one of thoseexceptio,rrs the Internal RevenueCode's generalrule that prohibits benefits qualified retirement from being assignedor alienated. one of those acronyms)or And it,s up to the plan A<lministratorto determinewhether a DRO (anotther law issuedby ajudge pursuantto a statedomesticre.lations is, in fact, a DomesticRelationsOrde,r QDRO. Maybe Daisy could have helped two years ago when Continental Airlinr:s claimed that nine pilots iarly, a situationaboutwhich Jtblogged,QDROs:The usedshamdivorcesto co,llecitheir pensions View From 39.000Feet. went on to suethosepilots allegingthat the pilots filed divorce papersbut continuedto Continental -including their children.Once the divorceswere final, and didn't1ell atryone live with their spouses rights to the pilots' pensionsand applied for lu'mp-sumdistributions, the former rpoui.t recei,,red which Continentalsaid were worth as much as $900,000apiece.Continentillalso allegedthat after they got the money,the couplesremarried. aboutlosing significantpartsof their pensions Continentalclaimedthat the pilots were concerned of because the financial riifficulties the airline industry was encountering,a,ndthat the maximum by annual pensionguaranteed the PensionBenefit Guaranty Corp. (PBC}C)was less than a typical airline pilot pension. Court of Appeals for But now, in the aforementionedBfqty|r-v-lg!1iqgnlAl case,The United Stertes the Fifth Circuit agreedvrith the District Court (SouthernDistrict of Texas')decision that ERISA does not doesnot authoiize al>lanAdministrator to investigateor even considerthe good faith, or lack thereof,underlyinga divorce.

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Programs,WelfareBenefitPlans,Exer;utiveBenefits.'.Page9of11 Re'lirement BenefitPlans, Employee

here' SowhatarethetakeawaYs Qgqsl4y-iBro'oksandSmith'L-L-B $liuiamMgMahgs, an attorney.with Froma legalstandpoint, says BenefitsUnplugged, writing iritris firm'-sblog, lfimployee
simplicity for administrators.Look at the court order, confirm ... the Court is prom,crting and then that it complieswith.thJcriteiia roi a eDRo set forth in section 206(dD(3XD)' stop.Don't out-think Yourself. From a moral standpoint,;/ou're on your own' PostedIn 40 1(klBlans, Dpfined-Bqnefit Pen$eg-Bluq Comments/ Questions/0) | Pe-fmalink

Inside the actuarial their pensionPlans

'"black boxt': what employersneedto lrnow to better manage

Kalish BY Posted Jerry 061292011 |

a In the world of scienceand engineering, black bo>lis a deviceor systemor terms of its input and output without the ob;..rt which can be viewed solely in user knowing how it works. In the world of ERISA, a black box can be an actuarial valuation, the report that your actuaryprovidesyou on an annualbasistellin,you how well or not well your definedbenefit pensionplan is "funded"' and why this So let,s take a peak inside the black box to help you better understandwhat it all means objectives. Here is a very brief is understanding crucial tr:,managing the plan and your company's oltht.. ways to view the "funded status"of your pensionplan: explanation RevenueCode (the "Clode")imposescertain l. Minimum Funding Requirements.Thelnternal on minimum funding'requirements an employerto fund the plan on a annual,on-goingbasis. is basedon plan's "normal cost", i.e., cosl of benefitsearnedin the Generally,the coirtribution and cl]Irent year, plus an amount sufficient io amortize the plan's shortfal.l(gap betweenassets can result in an excise Failure to meet minimum funding requiremetrts liabilities) ovir 7 yr3ars. tax of up to 100%. The PensionProtectionAct of 2006 ("PPA") addeda funding measure 2, BenefitRestrictionr;. to ("AFTAP") vrhich is the plan's asset calledAdjustedFunding TargetAttainmentPercentage are thresholds not met, liability funding ral.io.Benefitsmust be restrictedif certainpercentage on lump sumsand an:luity purchases. restriction e.g.,if lessthan 80'%,there is a 5Ooh 3. Plan Termination.In order to terminatea pensionplan, the plan rnustbe fully funded,i.e., plan to must be equalto or exceedplan liabilities. If the plan is sub.iecl; lhe PensionBenefit assets that assetsare sufficient to meet Guaranty Corpoiation ("PBGC"), it must demonstrate and and liabilities. the CodLe IRS regulationsrequire the use of interestraLtes mortality generallylower than thoseusedfor funding the plan on an on-goingbasis, that assumptions are i.e.,more costly. plan, howeverviewed, So why is all this important?Simply this: the "funded status"of your pe.nsion directly impactsboth yourrcontributionand investmentstrategy.

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Bene... Page10of 11 Execul.ive programs, welfareBenefitplans, Retirement Benefitplans, Employee of the subject that of stiil if your plan is part of the a0%o .p-lans havebeenfrozen, And moreimportant OfirceReport, DEHMD-BENEFII-IENSIoNS: BlanEre-"ezeq Acoountability the200gGovernment Are your objectives
Aff^^+ r\r:rt:^-- ^rDo.rininqnrc and Mav Pose Rltirement tnCome Challg4geli.

in clearlydefinedanda strategy place? BlAns In Posted DefingdBeLefl!.Pensjsn (0il Permalink / CommentsOuestions

some fiduciary services are more equal than others Kalish BY 06 | 18 l20ll Posted Jterry needs to it's the Onethingyou cansayfor:sureabout 401(k)business, responsive the of the marketplace. have providers 401(k)service plansin theearly1980s, of sincethebeginning 4cr1(k) providers' with othLer to n,rrnb",of services staycompetitive an introduced increasirrg as: of proliferatiion suchfeatures the We'veseen
Daily valuation Loans Self-directedbrokerageaccounts Web access educationtools Investment Multi-shareclasses; Index funds ETFs Target maturity funds Participant Investnlent advice of of lbcus by the Department Labor on the fiduciary aspects a01(k) plans, Now with the increased some 401(k) providersoffer servicesallowing fiduciariesto delegate the marketplacehasrespronded. servicesare the headlinesa:[s,,some But fiduciary or all of their responsibiiityfor plan investments. as more equal than others. So hereis a brief descriptionof the servicesavailablein the order of lowesl;to highestfiduciary protection: with regardto the l. Due Diligence Support. Employersusethe provider'sevaluationprocess Employers use this available investmelit options. It's usually known as due diligence 'sup'port. for plan, but they are still responsible line-up for their an tool to help constrr;ct appropriate selectingand monitoring the plan investmentoptions. 2. Fiduciary Certifiaate or Warranfy. Employersreceivea Certificateor Warranty generally if availableto plan sponsors they selectat leastone fund from the prrlvider's lineup in assetciasses.In addition to due diligence support for evalluatingtheir funds, designated fiduciary liability protectionif numerousconditionsare met. have last-resort "*ploy"tr 3. Aclnowledgment as a Fiduciary under Section3(2lXAXii) of EFISA. An independent registeredinvestment advisor (RIA) agreesto becomean investment advice fiduciary under and monitorsfunds fcrrthe plan's fund menu. section3(21XAXii). The RIA recommends However, employr:rsare still responsiblefor selectingand monitorin.gfunds on the menu.

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WelfareBenefit Plans,ExeculjveBene"' Pagel1 of 1l EmployeeBenefit plans,RetirementPrograms, above,employers 4. Acknowledgment as a Fiduciary under Section3(3S) of ERISA'_As in #3 the RIA agreesto be'comean investment usethe servicesof an RIA. But with this service, the t represents Section3(38) of ERISA. A Section3(38) arraLngement advisorfiduciary unLder all mosr comprehensiv,;level of fidu.iury supportpossible under ERII}A since the RIA assumes responsibilityfor selectingand monitoring the funds. Which one is best is a decision that each fiduciary has to make basedon lhis/herindividual facts and But remember,all fiduciary responsibilitiescannot be delegaledaway' The circumstances. remainsto monitor the serviceprovider on a periodic basis' responsibility PostedIn 401(k) Plans , E-rdugja{yl$ugg / Comments Questions(0ll Permalink

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,,Decumulation":a concept about which you will hearing more : Retiremenl'Plan Blog

Page1 of 1

Plans,40l(k) Planq,401(k) 401(k)Plans,401(k) PJans, Plans,401(k) > Ptans,401(k) Home 401(k) > ,,5;;;;ation": aboutwhichyou will hearingmore zrconcept ttgas, you will hearing nnolre "Decumulation": a concept about which

0 3 1 r s 1 2 PostedBy Jerry Kalish 008

Seefull-siztl image. o.Decumulation", definitionalterms,meansthe conversi0nof pensionassets in during an employee'sworking life into pensi6nincometo be spentduring accumulate,C embodiesa significantnew.riskfor the retired life. But in practicaiteims,decumulation to record number of future retireesmoving from the accumulationphaseof their lives But thoseof us in the call it "longevity risk". the distributionphase.The actuaries industry simply call it "running out of money"' financial service discussed in It will require a major charnge thinking for them. Away from conceptswhich have been cost as part of most 40lik) pr.rui=d.trinvestment educationprograms: assetallocation, dollar to think about having to make a whole averaging,and the iosiol'waiting. But rather requiringthem new set ofdecisions suchas: . . . . . . Whether to continue to work When to apply for isocial Security benefits What to do, if anything, about housing What choicesto make about insuranceand health care How financial assetsshould be invested What distribution 6,ptionsto take from employer retirement plans and IRAs

public of a So you'll be hearingmore about "decumulation"as it becomes major f<rcus future research, policy, and financial services.

Blog. Picturecredit: Water Secrqets

. 3011012011 http://www.retirementplanLlDlog.com/-401k-plans-decumulation-a-corcepL&brout-which-y..