Time for a Defined Contribution Plan Checkup?

By Jeff Chang

Many public sector employers maintain various defined contributions plans (either 401(a) or 457(b)) in addition to their participation in a large, public-defined benefit system, such as CalPERS, CalSTRS or a ’37 Act county plan. There are a number of reasons that these plans get little attention from their sponsors. But, there also are a number of very good reasons why the public agencies that maintain them should give them a “checkup” from time-to-time.  Continue reading

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The Battle Over “Vested Rights” In California

By: Jeff Chang

Those of you who follow California public pension issues closely already know about the pending California Supreme Court cases focusing on the “vested rights doctrine.” Some of you may have attended, or viewed, my recent webinar, “Preparing for Changes in the ‘Vested Rights Doctrine’ – Understanding Plan Design Options – Best Best & Krieger” or attended an earlier presentation at the California Society of Municipal Finance Officers conference where Public Retirement Journal Owner Amy Brown and I discussed and made predictions about the pending cases. Continue reading

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They’re Yours, They’re Mine or They’re on Their Own: More On Employee vs. Independent Contractor

By: Jeff Chang

Previously, in Yours, Mine or Ours?, we examined the basics of “who” your  employees are for employee benefits purposes. We also discussed some of the adverse tax and business consequences that can befall employers who either don’t understand who their common-law employees are or attempt to treat their common-law employees as someone else’s employees. Hopefully, we have convinced many of you that it is better to understand and analyze these issues rather than assume that your outsourcing arrangement works for all purposes. Continue reading

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Yours, Mine, Ours: Are the Individuals Working for You Your Employees?

By: Jeff Chang

As the name suggests, “employee benefit plans” are for employees. However, in today’s increasingly outsourced economy, it is not always easy to figure out which of your workers are your employees for benefit purposes. A proliferation of staff-leasing, executive-leasing and co-employment arrangements all work to muddy the waters and raise the question of whether “these employees” are yours, mine or ours.  Continue reading

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How Is Liability-driven Investing Different?

By Jeff Chang

The more you read about what has been going on in the private sector (in the U.S.) and in the public sector (in Europe) with respect to pension plan investing, the more you come across the concept of “liability-driven investment strategy.” Although there are many ways to describe LDI, a good starting place is the notion that LDI attempts to manage plan assets and risks in relation to plan liabilities. By contrast, many pension plans, particularly in the public sector, still utilize a so-called “benchmark-driven strategy” – one which aims to equal or beat a pre-established rate-of-return on plan assets using a target asset allocation model (such as a 60 percent/40 percent portfolio). What are some other differences between these approaches, and how might they be important to the success of public pension funding, OPEB funding, and individual retirement planning?  Continue reading

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