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Cypen & Cypen
January 25, 2018

Stephen H. Cypen, Esq., Editor

News Service of Florida writes that Florida counties would have to contribute an additional $66 million to the state pension fund in the new budget year, according to legislation that has started moving in the Senate. As a result of a decrease in the assumed rate of investment return on the $160 billion pension fund, counties, school boards, state agencies, universities, state colleges and other government entities will have to increase their contributions in the 2018-2019 budget year to make sure there is enough money to pay retirement benefits in the long term. The increased payments total $178.5 million, including $66.4 million for county governments, according to legislation (SB 7014) approved by the Senate Governmental Oversight and Accountability Committee. School districts, whose employees represent about half of the 627,000 active pension participants, will have to contribute an additional $54.4 million. State agencies will have to contribute another $31 million. Universities will have to contribute $11.8 million and state colleges an additional $4.8 million. A handful of cities and special districts that participate in the state retirement system will face a $10 million contribution increase. County governments, which face the largest contribution increase, will have to accommodate the added expense as they shape their 2018-2019 budgets. “Counties are closely monitoring the FRS (Florida Retirement System) contribution but remain committed to a program that provides retirement security to our dedicated public servants,” said Cragin Mosteller, a spokeswoman for the Florida Association of Counties. The bulk of the other contribution increases are part of overall budget challenges facing House and Senate members as they craft the 2018-2019 state budget, which takes effect July 1. The $54 million increase for school districts, for example, will be in the mix as lawmakers address overall public-school funding. Lawmakers are already having to accommodate an increase of more than 27,000 new students next academic year, and the House and Senate remain at odds over using increased local property tax collections to boost school spending Senate Appropriations Chairman Rob Bradley, R-Fleming Island, said the state pension fund in the Senate budget bill will be “fully funded with the new assumptions.” “It’s an obligation of the state,” Bradley said. “And we are comfortable with the current level of (pension) benefits in the Senate, with the understanding that when you change the assumptions, that requires more money to go to that area.” The Florida Retirement System Actuarial Assumption Conference lowered the projected rate of return on the pension fund’s collection of stocks, bonds, real estate and other assets from 7.6 percent to 7.5 percent last fall. It was the fourth year in a row that analysts have lowered the assumed rate of return on the fund. The decision came after new evaluations from independent financial consultants projected a 30-year rate of return for the pension assets in the range of 6.6 percent to 6.81 percent. With a 7.5 percent assumed rate of return, the Florida pension fund is expected to be able to pay 84.4 percent of its future obligations, with a $27.9 billion long-term unfunded actuarial liability, according to the consultants. Public employees who participate in the pension plan have been required to contribute 3 percent of their annual salaries to the fund since 2011.
Individual retirement accounts (IRAs) represent the largest single repository of U.S. retirement plan assets, and are a vital component of U.S. retirement savings, holding one-quarter of all retirement plan assets in the nation. In response to this growing importance, the EBRI IRA Database was developed by the Employee Benefit Research Institute (EBRI) to analyze the status of and individual behavior in IRAs. This is the fourth annual IRA database study of longitudinal changes in IRAs, supplementing annual cross-sectional analyses. This Issue Brief, using the EBRI IRA Database, specifically examines the trends in account balances, contributions, withdrawals and asset allocation in IRAs from 2010‒2015. Results from both the annual crosssectional sample and a consistent sample of IRA owners who have been in the database in each year from 2010‒2015 are presented. This allows for the investigation of the behavior in IRAs that are continuously maintained, instead of the results being affected by new and former IRA owners.
· Account balances:
Not surprisingly, results show significantly higher balances in the consistent sample of IRA owners compared with the annual cross-sectional sample. While the cross-sectional overall average balance increased 36.1 percent from 2010 to 2015, the increase for those IRA owners who continuously owned IRAs from 2010‒2015 was 47.1 percent.

  1. For consistent account owners, the distribution of actual changes in the account balances was measured. The lowest 25 percent (regardless of age) had increases less than 0.1 percent since 2010. On the other hand, the highest 25 percent of balance increases exceeded 87.3 percent. Consistent Roth-IRA owners experienced a much higher distribution of increases, with the lowest 25 percent of balance increases for IRAs topping out at 29.7 percent, and the highest 25 percent exceeding 117.3 percent. 
  2. For consistent account owners, the overall average balance increased each year including 2015—from $99,603 in 2010 to $99,960 in 2011, to $113,564 in 2012, to $134,781 in 2013, to $146,308, in 2014, and to $146,513 in 2015. Average balances for each gender also increased each year. The median values followed a continual upward trend across all IRA owner groups, except for those ages 65 or older

· Contributions:
There were considerable differences by IRA type in the likelihood of consistent account owners contributing to the IRA and in the number of years contributions were made. Among Traditional IRA owners, 87.2 percent did not contribute to the IRA in any year, while 1.8 percent contributed in all six years. In contrast, 60.1 percent of Roth IRA owners did not contribute in any year and 9.7 percent contributed in all six years. Roth IRA owners ages 25‒29 were the most likely to contribute in any year at 64.1 percent, and Roth IRA owners ages 30‒34 were most likely to contribute in all six years at 15.0 percent.

  1. While the percentage of individuals contributing in each year remained relatively consistent across the six years, the percentage of contributors that contributed the maximum rose from 43.5 percent in 2010 to 53.5 percent in 2012. Increases during that time occurred for each IRA type, with owners of Traditional IRAs having higher likelihoods of contributing the maximum in each year. However, in 2013, with the increase in the maximum allowable contribution, the percentage contributing the maximum overall fell from 53.5 percent in 2012 to 43.3 percent in 2013. Similar percentage-point drops occurred for both Traditional and Roth IRAs. In 2014, the likelihood of contributing the maximum among those who contributed increased again, reaching 55.4 percent, before a slight decline in 2015 to 54.4 percent. 
  2. The overall average contribution increased each year through 2013 before a slight decline in 2014 and a small increase in 2015. In 2010, the average contribution was $3,335, increasing to $3,723 in 2011, to $3,904 in 2012, and to $4,145 in 2013, before declining to $4,119 in 2014 and increasing to $4,169. This pattern of multiyear increases followed by a decrease in 2014 occurred in the average contribution for each known age and gender group of contributing owners of IRAs, except for those IRA owners ages 60 or older. In 2015, the average contribution increased in each age and gender group, except for those under age 25 and those who were female.

· Asset allocation:
For the annual cross-sectional snapshot, the percentage allocated to equities decreased from 45.7 percent in 2010 to 44.4 percent in 2011 before a sharp increase in 2012 to 52.1 percent, subsequent increases to 54.7 percent in 2013, and to 55.7 percent in 2014, then a decline in 2015 to 54.7 percent. The amount allocated to balanced funds was constant from 2010 to 2011 before a slight decline in 2012 and an even smaller uptick in 2013, 2014, and 2015, while the percentage in money increased in 2011 and fell through 2014 before leveling off in 2015.

  1. Among consistent account owners, the changes in the asset allocation from 2010 to 2012 were relatively small. For instance, the share of assets allocated to equities in 2010 was 44.5 percent and 46.4 percent in 2012, with a decline to 44.2 percent in 2011. However, after 2012, the percentage allocated to equities increased, reaching 53.1 percent in 2014, before a slight retrenchment in 2015 to 52.6 percent. The percentages allocated to bonds, money and other assets all fell from 2010 to 2015, while the percentage allocated to balanced funds inched upward.         
  2. Just over one-quarter (27.1 percent) of IRA owners in the consistent sample had zero percent allocated to equities in 2010 and 2015, while 16.8 percent had 100 percent allocated to equities in both years.

· Withdrawals:
Among consistent account owners, the percentage of individuals taking a withdrawal from a Traditional or Roth IRA rose from 14.6 percent in 2010, to 18.4 percent in 2011, to 19.6 percent in 2012, to 21.0 percent in 2013, to 22.6 percent in 2014, and to 23.8 percent in 2015. Furthermore, the percentage of consistent account owners ages 71–79 in 2015 who took a withdrawal increased from 34.4 percent in 2010 to 80.5 percent in 2015.

  1. This pattern is the result of the increasing percentage of individuals in this sample surpassing the required-minimum-distribution (RMD) age each year due to the sample size being constant from year to year. Moreover, the likelihood of taking a withdrawal increased with age.

This article comes from Craig Copeland, Ph.D., Employee Benefit Research Institute
The Society of Actuaries has developed this report to provide insights on the historical levels and emerging trends in U.S. population mortality. The most recently released U.S. population mortality experience from 2016 has been incorporated and added to prior available data to enable analysis of mortality experience over the period 1999-2016. This research is part of its ongoing longevity and mortality research initiatives. The report begins with a set of high level, summary observations obtained by looking across the overall population results and the results from the individual causes of death (CODs), subsequently analyzed in the report. Next, in section 4, the overall population mortality is reviewed. Results from the analyses of ten individual CODs follow in sections 5-14, with one section devoted to each of the CODs. The ten individual CODs were selected from the National Center for Health Statistics’ (NCHS) list of rankable causes of death. Given the continued interest in opioid-related deaths, the report concludes with a section devoted to deaths from opioid drug overdoses. Each of the ten individual COD sections and the opioid section also contain an analysis of mortality by income level. Here, the top 30% of the counties, based on the average, county-level median household income, were identified and the mortality for this population subset was compared to the overall population. The following observations were obtained by comparing and contrasting the overall population results from section 4 and the results from the individual CODs analyses:
· The overall age adjusted mortality rate (both genders) from all causes of death decreased 0.6% in 2016. This decrease in overall mortality may seem to run counter to the CDC’s report that life expectancy at birth declined 0.1 years in 2016. Generally, a decrease in the mortality rate would be expected to produce an increase in life expectancy. However, both figures are correct. In this respect, 2016 was a somewhat anomalous year. In most years, when age adjusted mortality rates decrease, life expectancy at birth would increase. Conversely, when age adjusted mortality rates increase, life expectancy at birth would decline. This is what occurred in 2015, when age adjusted mortality increased by 1.2%, and life expectancy at birth declined by 0.1 years. The anomaly that occurred in 2016 is explained by the differing impacts on life expectancy of mortality rate changes of different ages. In 2016, increased mortality rates in the younger and middle ages (mostly due to accidents) reduced life expectancy at birth more than it was extended by mortality improvement at older ages. However, the overall age adjusted mortality rate for the entire U.S. population did decline by 0.6%.
Age adjusted rates are calculated assuming the mix of ages in the population stays the same each year. Life expectancy is a composite of mortality rates over a single person’s future lifetime. This report focuses on age adjusted rates, as opposed to life expectancy, because actuaries generally require mortality rates, not life expectancies, as an input assumption for their work.
· The overall decrease of mortality in 2016 reversed the experience of 2015. Mortality improvement in older age groups offset large mortality increases, mostly due to external causes, in middle age groups. All age groups, except ages 25-34, had lower mortality in 2016 than 1999.
· The rate of overall mortality improvement has slowed in the most recent five years.

  1. A very large contributor to the recent slowdown in population mortality improvement since the late 2000’s has been deaths due to heart disease. While the improvement rates for this #1 COD have continued to be mostly positive in recent years, they have shifted from material improvement levels to much smaller levels (e.g. average annual mortality improvement over 1999-2011 was 3.5%, but only 0.9% in 2011-2016.)
  2. Conversely, a notably consistent contributor to positive population mortality improvement since 1999 has been the reduction (average annual decrease of 1.5% from 1999-2016) of cancer deaths.

· Mortality was analyzed over the entire U.S. population (All Counties) and compared to mortality in the top 30 percentile counties (Top 30%), based on median household income.
· The age adjusted mortality in the Top 30% was materially lower than the All Counties mortality in all years between 1999 and 2016. The difference between the overall Top 30% and All Counties mortality rates increased slightly over time. This difference also increased for each COD covered in this report, except accidents. Also, the difference between the overall mortality rate in the Top 30% and in All Counties narrows as the age increases.
· The highest increase in 2016 mortality, 27.4%, occurred in the opioid COD, which contributed to the large 9.3% increase in the accident COD. Opioid deaths are mainly a subset of accidents and suicide. In 2016, opioid deaths made up 23% of the accident deaths and 4% of the suicide deaths. Age groups between ages 15-44 saw the greatest increases in accident deaths and opioid deaths.

  1. Even though the death rate due to opioid drug overdoses was about five times greater in 2016 than in 1999, it only accounted for a small proportion, less than 2% of the total 2016 deaths.
  2. The highest 2016 age group ratios of the Top 30% mortality to All Counties mortality occurred in the opioid 15-24, 25-34,75-84 and 85+ age groups. These ratios were greater than 105%.

· All the CODs except accidents had their lowest 2016 ratio of Top 30% mortality to All Counties mortality in the age groups between ages 25 to 64. With respect to all ages combined in 2016, assault deaths had the lowest ratio, 58%, while the highest ratios were 98% for Alzheimer’s/dementia, 96% for opioids and 91% for cancer.
· Examining mortality by gender, female mortality is lower than male mortality for all CODs except stroke, which is similar, and for the combination of Alzheimer’s and dementia, which is higher.

  1. Female to male mortality is comparatively much lower for external causes of death (accident, assault and suicide) than natural causes of death.
  2. A table lists the average annual rate of mortality improvement for heart disease and cancer by gender over recent and longer periods. Generally, females had higher improvement rates than males for heart disease, while males had higher improvement rates for cancer in the short and long-term, both nationally and for the Top 30%. An exception to this occurred for cancer experience during 2016 in the Top 30%, where the male improvement rate was less than the female improvement rate.

On December 14, 2017, presenters at EBRI’s 82nd Policy Forum examined retirement security topics with a special focus on overall financial wellbeing. Presenters addressed questions such as how sufficiently have Americans saved for retirement, and whether options are available to help improve the current state. Other questions included how can we protect retirement security for those who struggle with their financial wellbeing? What are the best ways to examine and address financial difficulties? In the following presentations and ensuing discussions, the Policy Forum brought to light research tools, ideas, and analyses that employers, policymakers and other stakeholders can use in approaching these and other questions. From new research models to innovative thinking, the event began with a focus on retirement security and then transitioned to financial wellbeing, in the process highlighting the connection between the two topics.
Do Older Americans Have More Income Than We Think? 
Josh Mitchell from the U.S. Census Bureau presented joint research produced with Adam Bee, also with the Census Bureau, about retirement preparedness. Adopting a critical analysis of the data used in previous research, his presentation focused on the discrepancies between retirement income reporting in household surveys—which often are cited to describe Americans’ retirement readiness—and retirement income reporting in administrative records from the Social Security Administration and the IRS. By linking the Census Bureau’s 2013 Current Population Survey to administrative records, their research developed a nationally representative estimate of median household income and poverty levels for those over 65 from 1990 to 2012, allowing for a reassessment of overall retirement readiness. Ultimately, they found that retirement income is underreported in household surveys, with administrative records indicating a much less drastic decline in income at retirement and providing no evidence of an increase in poverty.
Worker Reactions to State-Sponsored Auto-IRA Plans
Continuing with retirement security, Sarah Spell from Pew Charitable Trusts examined how private-sector employees without employer-sponsored plans reacted to automatic enrollment in proposed state-sponsored, workplace/payroll deduction IRAs. Survey respondents’ initial reactions to such a program were largely positive. After learning additional details about the proposed program, such as the state’s role and the absence of employer contributions, approximately 75 percent of respondents did not change their reactions to the proposed program. The results of the survey, Pew concluded, highlighted that clearly defined policies are an important factor in encouraging employees to save.
Financial Shocks Put Retirement Security at Risk 
A presentation by Alison Shelton (also from Pew) combined the two overarching subjects of the Policy Forum. She discussed the impact of financial shocks—large unplanned expenses like car or home repairs, medical emergencies, or income loss—on retirement security. With a focus on the threat posed by financial shocks in the form of retirement account leakage, this presentation looked at Pew’s Survey of American Family Finances that was administered in late 2015. Fifty-six percent of respondents experienced a financial shock in the year prior to the survey, and the median cost was $2,000. Among households with retirement accounts, about 13% experienced a financial shock and took a loan or distribution. Factors increasing the likelihood of drawing on retirement accounts included size of financial shock relative to income and prolonged financial struggles, among others. Her presentation concluded that additional tools—such as “sidecar accounts”—are necessary to encourage short-term savings in addition to retirement savings.
Can/Should We Build Emergency Savings Through Employer-Sponsored Accounts? 
Mark Iwry of the Brookings Institution addressed a similar topic, asking if short-term savings can be integrated into retirement savings more effectively. He, like Alison Shelton, proposed the implementation of a buffer or “sidecar savings account” to cover emergency expenses. He suggested that the availability of non-retirement plan savings could reduce retirement plan leakage (tax data shows that nearly a third of retirement income is distributed before employees’ actual retirement). Some evidence, he argued, indicates that simply contributing to a second account with a separate purpose could lead to an overall increase in savings, including retirement savings. He concluded that with a secondary source of savings to manage unpredictable costs, employees’ financial stability and retirement security could be better protected.
Introducing the Inside Employees’ Minds™ Survey - Financial Wellness Edition 
With Neil Lloyd from Mercer, the Policy Forum transitioned to employees’ views of financial wellbeing and employer-sponsored financial wellbeing programs. In a survey of 3,000 employees, Mercer found that objective financial literacy and financial wellness are not correlated, while subjective self-assessment and financial wellness are. As a result, Mercer developed a “financial courage” index, finding that those with low levels of financial courage tend to have lower levels of financial wellness and are less likely to engage in employer-provided financial wellness programs. Mercer concluded that employees with access to financial wellness programs report higher levels of trust and satisfaction with their employers, that financial courage is important for initial engagement with financial wellness programs, and that even those employees with low financial courage tend to implement specific steps provided by financial wellness programs.
Financial Wellbeing and Employer Benefits: Findings from CFPB’s Financial Wellbeing Survey 
Hector Ortiz of the Consumer Finance Protection Bureau (CFPB) discussed selected findings from CFBP’s National Financial Wellbeing Survey. The 2017 survey of 6,400 adults measured respondents’ financial status and circumstances using CFPB’s Financial Wellbeing Scale and Score (a scale of 0-100 created by CFPB that is designed to capture how people perceive their ability to meet current and ongoing financial obligations, feel secure in their financial future, and make choices that allow enjoyment of life). Using this Scale and Score, CFPB found consumers’ levels of financial wellbeing were widely distributed when matched up with factors like employment status, income, and employer-provided benefits. But, on average, objective financial measures correlated with consumers’ subjective perceptions of financial wellbeing. As a result, CFPB research identified a strong relationship between its subjective scale and objective circumstances, and concluded that perception can be an effective predictor of reality when it comes to financial wellbeing.
Defining and Measuring Financial Wellness 
Meghan Murphy from Fidelity closed off the presentations by shifting to the employer’s perspective. She first described Fidelity’s work in developing a financial wellness score that is determined through a combination of objective and subjective measures. She then turned to Fidelity’s predictive model for financial wellbeing that uses 401(k) plan data to analyze a particular employer’s workforce. The model looks at 50 different behaviors within the employer’s 401(k) plan (such as contributions and loan activity) to estimate what percentage of the employer’s workforce is financially well, and what percentage needs help. The model can then be used to identify areas where employees may need assistance, such as managing debt or establishing/increasing savings.
Closing Discussion and Looking Forward 
In a closing panel, speakers discussed the relationship between retirement security and financial wellbeing. Without an appropriate degree of financial wellbeing, retirement solutions like automatic enrollment may be ineffective. The panelists recognized, however, that retirement savings may be out of reach for some individuals who are focusing on managing day-to-day expenses or due to personal circumstances. Also, they discussed the need for research on whether short-term savings opportunities might improve retirement savings, particularly if some amounts earmarked for short-term savings can actually be used in retirement. It’s evident that EBRI and the research community at large will need to continue examining and working to solve these complex issues of retirement security and financial wellbeing. By challenging prevalent ideas and approaching existing issues from new angles, however, the Policy Forum focused on new possibilities for improving people’s overall financial futures. To focus EBRI’s and other research activities more crisply on key questions around financial wellbeing itself and as it relates to retirement (and health and other benefits), EBRI is starting a new Financial Wellbeing Research Center.
A California state appeals court panel has ruled that some benefits for participants in public pension plans in Alameda, Contra Costa and Merced counties may be protected prior to a pension reform law outlawing them in 2013. The benefits outlawed in California Gov. Edmund G. "Jerry" Brown Jr.'s Public Employees' Pension Reform Act of 2013 were those that allowed workers to calculate and add unused vacation time and other leave time to their final years' salaries, thereby increasing their pension benefits. In a challenge to the constitutionality of the reduced benefits by employees of the three counties, a trial judge in Contra Costa County had ruled in May 2014 that using the accumulated vacation time to increase pensions was "unlawful." The appeals court concluded that the trial court's analysis of the reform law "on the pensions of legacy members was incorrect in certain respects and also improperly failed to include a necessary vested-rights analysis," according to the ruling. Portions of the case will go back to a lower court. The California Supreme Court has already agreed to hear the case, consolidating it with the decision of another state appellate panel, which ruled in August 2016 that employees in Marin County were only entitled to a "reasonable pension benefit," not their original pension guarantee. The ruling did note much of the Marin County case's "vested-rights analysis — including its rejection of the absolute need for comparable new advantages when pension rights are eliminated or reduced — is not controversial, and we do not disagree with it." Ali Bay, Mr. Brown's deputy press secretary, said in an email, "We welcome the decision's affirmation that egregious pension spiking practices called out in the governor's 12-point pension reform plan have long been contrary to the law, and that (the reform act's) effort to end them was constitutional. The decision also affirms the core arguments that the governor made in his recent brief in the California Supreme Court. We are closely reviewing the decision and considering next steps." Timothy Talbot, partner at Rains Lucia Stern St. Phalle & Silver, attorney for one plaintiff, the Contra Costa Deputy Sheriff's Association, said in a telephone interview, "The decision is the right outcome for the employees we represented. The court did recognize the importance of the promises. For my clients anyway, this is a good outcome irrespective of the bigger broader picture of pension law generally," Mr. Talbot said.
Next payday, when you see a portion of your wages go toward FICA taxes, rest easier knowing that your investment in Social Security brings a lifetime of protections for you and your family. From your first job and throughout your career, Social Security tracks your earnings and gives you credits for the contributions you have made through payroll taxes. Those credits can translate into important future benefits. As you prepare for a financially secure future, you should know about these five benefits that you, your spouse, and your children may become eligible for through Social Security:
Retirement benefits provide you with a continuous source of income later in life. If you have earned enough credits, you can start receiving your full retirement benefits at age 66 or 67 — depending on when you were born. You may choose to claim these benefits as early as age 62 at a permanently reduced rate, but waiting until after your full retirement age increases your benefit amount by up to 8 percent per year to age 70. Plan for your retirement at:
Disability benefits offer a financial lifeline if you are struck by a serious medical condition that makes it impossible for you to work and provide for yourself and your family and is expected to last at least one year or to result in death. Learn more at:
Child benefits support your minor children while you are receiving Social Security retirement benefits or disability benefits. This financial support also is available to adult children who become disabled before age 22. Grandchildren and stepchildren may qualify in certain situations. Please see:
Spousal benefits supplement a couple’s income if one of the two never worked or had low lifetime earnings. In some cases, this benefit is also available to divorced spouses. Please see:
Survivor benefits ease the financial burden on your loved ones after you die by providing monthly payments to eligible widows, widowers, children, and dependent parents. It is likely the survivor benefits you have under Social Security carry greater value than your individual life-insurance policy. Read more about survivor benefits at: You must meet specific eligibility requirements to receive any type of Social Security benefits. Currently, Social Security provides benefits to more than 66 million American workers and their families. And we will be there for you and your family through life’s journey. Learn more about all of our programs at
Patty Kujawa at writes that more than 74 million people have a 401(k) plan to prepare them for the day they don not have to work. But most employers do not offer investment options that might help retirees spend what they have saved more predictably. Such options are called lifetime or retirement income solutions and are similar to defined benefit plans where participants get a set monthly income. These products are guaranteed or variable annuity options, but instead of purchasing them at retirement, workers put dollars in the products just like any other investment choice in their 401(k). At retirement, participants get a steady paycheck for life from the annuity. “What people have wanted is to accumulate wealth” in 401(k) plans, said Diane Garnick, chief income strategist for TIAA. “It’s only now that the baby boomers are turning 71 that they are demanding retirement income solutions.” Historically, lifetime income has not been popular with employers for various reasons. They are tough to explain easily, employers see them as a commitment and there is always the cost factor to consider and the potential for being sued for having pricey investment options. But as Garnick said, the largest wave of workers is retiring on a daily basis, and they are realizing that they do not know how to budget a spending plan for retirement. In fact, respondents to a recent TIAA survey said only 50 to 69 percent of their current income would be enough to live on in retirement, when most experts say 70 to 100 percent is needed. Meanwhile, with automatic features becoming so highly used in plan design, many participants do not have to think about much because they are used to setting their retirement savings goals once and forgetting about the plan, she added. “We are now asking people to make a very proactive decision and to figure out their finances,” Garnick said. “In many ways, it is the most irresponsible thing we do.” More than half of respondents to the recent TIAA survey said the most important goal of their retirement plan should be to provide a monthly income stream for life. If given a choice between a $500,000 lump sum and a check for $2,700 each month, 62 percent said they would choose the monthly option. “We were so happy to see this,” Garnick said. But a good bit of education is needed, the survey showed. Nearly half of respondents did not know whether their 401(k) offered a lifetime income solution. Plus, 63 percent said they thought their target date fund would provide a monthly paycheck for life. That would only happen if an annuity option was built into the fund or if the participant purchased it on their own. Employers are starting to see what is happening, and slowly heads are turning. According to investment consultancy NEPC’s 2017 “Defined Contribution Plan and Fee Survey,” about 8 percent of plans reported offering a lifetime income solution investment as part of their plan lineup. “Five years ago, most [employers] reported no lifetime income” investment option, said Kevin McCullough, analyst at NEPC. “It continues to be a focus in the marketplace even though we have not seen a migration in that direction.” Garnick added that employers are waiting for Congress and the Labor Department to make it easier to adopt lifetime income products into their investment fund lineup, but particularly into target-date options. Ideas have included tax incentives for employer contributions as well as federal guidance for employers to show participants what their balances might look like in retirement on a monthly basis. “There is opportunity here,” she said.
8. NEW OFFICE ADDRESS: Please note that Cypen & Cypen has a new office address: Cypen & Cypen, 975 Arthur Godfrey Road, Suite 500, Miami Beach, Florida 33140. All other contact information remains the same.
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Two roads diverged in a wood, and I—I took the one less traveled by, and that has made all the difference. – Robert Frost
He had a photographic memory which was never developed.
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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.

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