Pension Plan De-Risking: Lump Sum or Annuity?

Part of Invesco’s Retirement Strategies series

Pension Plan De-Risking: Lump Sum or Annuity?

If someone had told me 30 years ago that Bethlehem Steel, United Airlines, Lehman Brothers and the city of Detroit would go bankrupt, I would have laughed. Just how implausible these events once seemed occurred to me as I prepared for Invesco’s April 22 advisor-only continuing education webinar “What Happens When a Pension Plan Fails?” Part of the fallout from these “too big to fail” bankruptcies is disruption of pension plans.

Read More

Patchwork System Leaves Many Unprepared for Retirement

Part of Invesco’s Retirement Strategies series

Patchwork System Leaves Many Unprepared for Retirement

You’ve no doubt seen the plentiful news stories about how unprepared many Americans are for retirement. That conclusion is supported by five studies1 I recently read. Because they used different approaches for measuring readiness, the studies offer different estimated percentages of Americans who will likely struggle financially in retirement. But all five reached the same verdict that’s generating headlines: Many Americans aren’t saving enough to maintain their standard of living in retirement.

Read More

DOL Raises the Fiduciary Bar for Advisors

Part of Invesco’s Legislative Insights series

DOL Raises the Fiduciary Bar for Advisors

The long-awaited fiduciary rule proposal made public by the Department of Labor (DOL) yesterday could have a great impact on how advisors serving retirement clients do business. The proposal:

  • Holds brokers to a “standard of care” that requires putting their customers’ interests ahead of their own when making investment recommendations, rather than simply finding “suitable” investments for their clients.
  • Gives fiduciary status to any individual who receives compensation for providing individualized advice or advice specifically directed to a particular plan sponsor, plan participant or IRA owner for consideration in making a retirement investment decision. These decisions include, among others, purchase and sale of assets and rolling over an employer-based plan to an IRA.
  • Exempts professionals who provide financial education from fiduciary status. The rule also doesn’t apply to brokers who take purchase orders directly from investors.
Read More

Things I Learned in Skokie, Illinois

Part of The Business of Retirement series

Things I Learned in Skokie, Illinois

While grocery shopping in Skokie, Illinois, 30 years ago, I learned a very interesting communication skill from a harried mother urging her son to choose a package of chewing gum in the checkout line. In a hurry and frustrated, she simply said, “Pick one now — green, yellow or white.” She was referring to the package colors of well-known brands of mint, fruit and spearmint gum. Likely she knew from experience that giving even that much more information about flavors would lead to more questions, more indecision and further delay leaving the store.

Read More

DC Plan Sponsors: Five Reasons to Consider White Labeling Your Investment Menu

White labeling can benefit both participants and plan sponsors. Here’s how.

DC Plan Sponsors: Five Reasons to Consider White Labeling Your Investment Menu

Over recent years, much attention has been paid to target date funds in US defined contribution (DC) plans. This is, by all accounts, a worthwhile cause. Industry surveys say that target date funds will capture as much as 50% of overall plan assets in the next few years.

Read More

DC Plans: Changing Times Call for Diversified Fixed Income Options

How unconstrained fixed income strategies may help lessen interest rate risk for plan participants

DC Plans: Changing Times Call for Diversified Fixed Income Options

With the multitude of baby boomers preparing for or in retirement — coupled with the threat of rising rates — the need for fixed income diversification in Defined Contribution (DC) plans has arguably never been higher. And yet, the average 401(k) plan offers 12.51 equity options, but just 2.9 bond strategies.1

Read More