White Papers and Research

Actuarial Cost Methods: A Review (3rd Edition, 1999)

This textbook provides a review of actuarial cost methods for defined benefit pension plans. It was originally prepared by William Farrimond and Duane L. Mayer to assist students studying for the enrolled actuary exam covering cost methods, and was last updated in 1999 by David Farber and George Matray. While some of the content is outdated, requests for this publication continue. ACOPA is making it available for download at no charge as a service to the actuarial community.

Another Penny Saved: The Economic Benefits of Higher U.S. Household Saving

Oxford Economics has released a study, commissioned by ASPPA and other retirement-related organizations and financial firms (including AARP, the U.S. Chamber of Commerce, Financial Services Roundtable, and more), highlighting the importance of the employer-based retirement system in the United States. After ramping up their savings efforts during the recession, Americans are returning to their free-spending ways; this paper examines the dangers of this trend, and what policymakers can do to encourage workers across the socioeconomic spectrum to make responsible choices.

Making Sense of the Uncashed Retirement Plan Check Dilemma 

This white paper by Lowell M. Smith of Inspira looks at the problems posed by uncashed pension checks, which include handling interest on the funds awaiting transfer, notification requirements and how appropriate corrective actions are, not to mention the added complication of there being no clear guidance from the IRS and the Department of Labor on the subject. This paper examines the regulatory issues surrounding uncashed checks as well as possible solutions for handling them.

Does Your Approach to Monitoring and Communicating Your Target-Date Funds Need Rethinking?

This paper, by Richard Glass of Investment Horizons, Inc., looks at how 401(k) fiduciaries exercise the fiduciary duties of prudence and disclosure regarding target date funds. It argues that Congress’ assumption that generally accepted investment principles and modern portfolio theory are widely accepted and understood, and the Department of Labor’s ambiguity on selecting and monitoring TDFs, have created inconsistency in how information is provided about them and participants receiving incomplete information. This paper discusses these issues and provides suggestions for addressing them. 

Employee Engagement, Corporate Profitability, and Retirement Readiness 

This paper, by Richard Glass of Investment Horizons, Inc., discusses the importance of employers exercising their fiduciary duties of monitoring and communicating about their retirement plans and — especially in light of recent studies that show that majority of employers are disengaged regarding their benefits and planning for the future. 

The Equitable Allocation of Revenue Sharing to Participants

In this white paper prepared for Paychex, Fred Reish discusses equitable allocation of revenue sharing and its spread to smaller plans. Though equitable allocations are not required, he argues that it is a methodology that affords a plan some added security. Reish also addresses whether equitable allocation is a fiduciary obligation.

Reducing Volatility in Defined Contribution Plans: The Fiduciary Considerations of Incorporating Downside Risk Management

F-Squared Investments has published a white paper on how plan fiduciaries of 401(k) and other retirement plans can address growing participant concerns about market risk and volatility in their retirement savings accounts. Written in conjunction with former Assistant Secretary of Labor Bradford Campbell, the paper addresses the significant losses that can occur during market crashes and explains how plan fiduciaries can incorporate new defensive strategies into their menu of investment options in order to better meet the needs of their participants.

Implementing Automatic Features in Defined Contribution Plans: Answers to Frequently Asked Questions

This white paper presents best practices in implementing automatic features in DC plans and discusses questions that plan sponsors and their advisors may have when putting auto features into practice. It seeks to dispel DC plan sponsors’ confusion regarding automatic enrollment and contributions, which it argues may prevent plan sponsors from taking full advantage of those features. 

Loans, Loans, Everywhere! Addressing the Loan Utilization Issue

In this white paper, Cammack Retirment Group President Mike Webb examines the phenomenon of loans made from retirement funds, the increasing number of plan participants who borrow regularly, and the problems excess loan utilization poses. He also offers practical solutions for plan sponsors. 

The Paternalization of Participant-Directed Plans

In a this white paper published by Arnerich Massena, Inc, Scott Dunbar; Jake O’Shaughnessy, CFA; and Jillian Perkins review a variety of research studies that look at the investment returns of DC participants’ accounts compared with the returns of index funds, market returns, committee- or trustee-directed defined benefit accounts and asset allocation accounts. They conclude that participant-directed accounts, in aggregate, consistently under-perform over long periods. They also discuss studies that take a close look into participants’ asset allocation strategies. 

Borrowing from the Future: 401(k) Plan Loans and Loan Defaults

In this white paper, Olivia S. Mitchell and Timothy (Jun) Lu, Stephen P. Utkus and Jean A. Young of the Wharton School examine the option of borrowing from a retirement account, and show that employers' loan rules have a strong effect on borrowing patterns. They found that for plans allowing multiple loans, participants are more likely to borrow and take out larger loans. Their results show that defined contribution plans, while designed mainly to support old-age financial security, include important features for financing current consumption.

A Better Methodology for Monitoring Target Date Funds

This white paper by Cammack Retirement Group provides an overview of the increasingly important role target date fund (TDFs) play in retirement plans. It also describes the methodology and classification system Cammack uses for monitoring TDFs. It argues that monitoring a plan’s TDF options is one of the most important fiduciary obligations plan sponsors face in managing their retirement plan investment lineup.