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Quarterly Considerations – 03/31/2013

Plan Sponsors

Tips on TDFs – The DOL issued new guidance on target date funds (TDFs), stating that plan sponsors should understand the distinctions between custom-built, non-proprietary and proprietary offerings. Please let us help you determine the best fit for your plan.

Settle Up – The proposed SEAL Act would give workers who leave their jobs up until they file their federal taxes to repay money taken out of a retirement plan. It would also allow employees to contribute to their 401(k) plans during the 6 months following a hardship withdrawal.

Steady Decline – The number of employer-sponsored defined benefit pension plans fell to an all-time low of 22,697 in 2012. Except for a slight uptick from 2006 to 2007, the number of private-sector defined benefit plans has declined every year since 1995.

Funding Status – Pension funding ratios fell in 2012 to 77.2% as the impact of low interest rates offset strong asset gains, according to a Milliman study. Since the end of 2010, declining interest rates have widened the pension funding deficit by more than $150 billion, driving record deficits in each of the last two years.

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