In an odd coincidence, at the same time Wall Street has been imploding, laying bare valuation and other problems with investments in retirement plans and elsewhere, I happen to have been reading independent fiduciary/401(k) advisor Joshua Itzoe’s book, Fixing the 401(k), which is premised on the idea that 401(k) plans are compromised by inherent
Pensions
The End of the Pre-History of Retirement
By Stephen Rosenberg on
Posted in Pensions
Here is an entertaining history of retirement in a nutshell, at least up to the new world we inhabit today, in which defined contribution plans govern and employees bear all the risk. What is interesting to note is that this conventional version of the story basically ends with the – effectively, in any event –…
Follow the Numbers: the Evolution in ERISA Law
By Stephen Rosenberg on
I have noted two things – well, many things, only two of which are relevant to this post – in the past, one the line that Marx was wrong about a lot of things, but he was right that everything is economics, and the second that we are beginning to see an incremental evolution in…
There’s A Public/Private Sector Distinction For a Reason
By Stephen Rosenberg on
Posted in 401(k) Plans, Pensions
Two of my favorite bloggers ended up at the same place on a topic of interest over the past week, although from different directions and apparently unwittingly. The WorkPlace Prof posted last week on the idea being floated in a number of state legislatures that the states or their pension plans manage private sector 401(k)…
Actuarial Assumptions and Problem Pensions
By Stephen Rosenberg on
Posted in Pensions
Maybe, rather than three, there are actually four kinds of lies: lies, damn lies, statistics, and actuarial assumptions relied upon for public pensions. A little harsh, perhaps, but that is certainly what this article in the New York Times today suggests. Less flippantly and more substantively, the article’s discussion of underlying actuarial problems with…
Millions for Defense, Billions for Damages: State Street’s Exposure
By Stephen Rosenberg on
Backdating. It’s a scandal. No, not that backdating. I mean when bloggers can’t get to something when it first comes up, and then go back in time to talk about it. That’s what I mean by backdating, and that’s what I am going to do today. Last week, I read, but didn’t have a…
Big Questions From A Small Story on a (Relatively) Small Loss
By Stephen Rosenberg on
Here’s a short newspaper story of a local municipal pension plan that suffered a $2.4 million loss to its pension fund, which is only about a $53 million fund, as a result of investments in subprime mortgage backed assets made either by State Street or in State Street funds (the article isn’t clear on the…
Pension Estimates: Not Worth The Computer They Are Printed On
By Stephen Rosenberg on
Posted in Fiduciaries, Pensions
Here’s an interesting decision out of the First Circuit yesterday, concerning errors in providing estimates of pension amounts to participants and whether a participant can hold the sponsor to the erroneous estimate, rather than receive only the correct amount under the actual terms of the retirement plan in question. Short answer? A participant only gets…
Does Employer Stock Even Belong In Retirement Plans?
By Stephen Rosenberg on
Should there even be employer securities in a 401(k) plan or other retirement vehicle? That’s the million dollar question (or more like the hundred million dollar question) that cases like those arising out of the Bear Stearns collapse raise. Moreover, it goes right to the underlying tension between ERISA and the securities laws that plays…
What Happens When ERISA and the Law of Insurance Coverage Collide?
By Stephen Rosenberg on
Wow, I guess this is really Seventh Circuit week here, with, I guess, a particular focus on the jurisprudence of Judge Easterbrook, whose opinion in Baxter I discussed in my last post. This time, I turn to his decision from Wednesday in Federal Insurance Co. v. Arthur Andersen, which strikes right at the intersection…