SOURCE: Longfellow Benefits

Longfellow Benefits

February 17, 2010 14:08 ET

Success Factors for Defined-Benefit Plan Sponsors: Longfellow Benefits Convenes Top Experts on 2010's Challenges

PowerPoint Available Online

BOSTON, MA--(Marketwire - February 17, 2010) - Defined-benefit plan sponsors face tough investment, legislative and administrative challenges in 2010. Longfellow Benefits, a Boston employee benefits consultant, brought together three experts to offer guidance.

Don't assume growing government debt will drive up bond yields in the short term, said Thomas Higgins, PhD, chief economist at Payden & Rygel Investment Management.

"Debt levels are not closely correlated with interest rates in the short-term," he said. "Instead, inflation and central bank policy are the primary drivers of government yields over periods of less than three years. With inflation rates still very low across the G-7 and central banks likely sidelined for the first half of 2010, the risk of a sharp rise in government bond yields seems remote at this stage."

But in the long term, countries that continue to run up big fiscal deficits will be forced to give investors higher yields, Higgins added.

Higgins covered the economic outlook for the United States, United Kingdom, Euro Zone and other major nations.

Jeffrey Bauer, QPA, CPC, president of Angell Pension Group, noted that there are new rules for 2010 that plan sponsors must adhere to. All qualified plans must be restated for Economic Growth & Tax Relief Reconciliation Act by April 30, 2010.

Furthermore, plan sponsors should explore the ramifications of:

--  The asset-smoothing relief available to them for 2009 and 2010
--  The permanent election of yield curve methodology in 2010

Larry Karle, senior consultant with Longfellow Benefits, said the primary focus in asset allocation is no longer determined by an actuary; instead, risk tolerance is the determinant. Run models to see the effect an asset allocation would have on cash flow.

Controlling costs is crucial this year. "An experienced advisor should advocate for his or her client and help trim unnecessary costs," he said.

For instance, using less expensive share classes can make a big impact on the bottom line.

A detailed PowerPoint on the presentation is available at http://longfellowbenefits.com/site under Longfellow News.

Serving organizations in New England and nationally, Longfellow Benefits provides employee benefits, retirement plans and executive benefits.

Its staff includes experts carrying top professional designations: Registered Employee Benefit Consultant (REBC), Chartered Life Underwriter (CLU), Registered Health Underwriter (RHU), Licensed Insurance Advisor (LIA), Master of Business Administration in Taxation (MBA), Certified Employee Benefits Specialist (CEBS), Certified Financial Planner (CFP®), Chartered Financial Consultant (ChFC) and Accredited Investment Fiduciary (AIF®).

For more information, visit www.longfellowbenefits.com or call 617-351-6000.

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