By: Russ Kamp, Managing DIrector, Ryan ALM, Inc.

I’m certainly no Gordon MacRae, who sang the original as part of the Oklahoma soundtrack in 1955, but I can tell you that I almost feel like belting that song out! Sorry to those that might be around me when I do! For those that might not know the song, the chorus goes:

Oh, what a beautiful mornin’
Oh, what a beautiful day
I’ve got a beautiful feelin’
Everything’s goin’ my way

Given the news of the last couple of days regarding defined benefit plans or hybrid offerings being reintroduced, I’ve got a beautiful feelin’ that we will certainly see brighter days ahead for the American worker. It has been a long and painful slog for so many tasked with trying to cobble together a retirement benefit. We are still at the starting gates, but as least there is a race to be run. Let’s hope that the current momentum can be continued.

As a reminder, both IBM and the City of Trumbull, CT, have taken action to support their workers with the relaunch of DB programs or quasi-DB funds. Here is what I produced on LinkedIn.com.

Is that a barn door that has just been opened?

News that IBM is eliminating the company’s 5% 401(k) match in lieu of a 5% of salary contribution into a company sponsored “Retirement Benefit Account” whether the employee contributes or not certainly sounds as if they are once again offering a cash balance plan. YES! The money will be invested within the current IBM Personal Pension Plan. No investment decision will be taken by the employee. There will be a guaranteed 6% return for the first 3 years of the program’s existence. An IBM spokesperson is quoted as saying, “The RBA adds a stable and predictable benefit that diversifies a retirement portfolio and provides employees greater flexibility and options.”

You don’t say! As I’ve said numerous times, asking employees to fund, manage, and disburse a retirement benefit without disposable income, investment acumen, and a crystal ball is just poor policy. I’m glad that IBM agrees. BTW, employees will still be able to fund their “supplemental” 401(k). Much more needs to be researched, but having IBM take this step is huge.

With regard to Trumbull: I’m currently in Santa Monica getting ready to teach the investment program for the IFEBP’s “Essentials” program, it is 6:31 am. I mention this only in the context that I want to “celebrate” but it is a bit too early! Not only have we had the IBM news come out, but Trumbull, CT, is reinstating its pension plan for police officers. The initial plan was frozen to new hires after 2014. Since that time, they have had great difficulty recruiting and retaining new officers (they’ve lost 15).
“I am pleased we are able to reach this agreement with our Police Union through the collective bargaining process,” said First Selectman Vicki Tesoro in a news release. “Based on feedback from Chief (Michael) Lombardo, the Police Commission, and the Union, this action will go a long way to restore Trumbull’s competitiveness in the hiring market.”

What a day!!! The restoration of DB and DB-like plans has begun, and “they” said that wouldn’t happen. It is time to get on board!