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Attorneys must financially prepare for life during retirement

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Indiana Lawyer Focus

Retirement is nothing new, but what attorneys do once they leave fulltime practice is changing.

When partners were given the gold watch in the past, they usually kept their office at the firm, maybe taking an of counsel position. They came in regularly and attended all the partner meetings.

Now retirement can mean continuing to practice law, or quitting completely and traveling, or starting another career in a different field. Some young attorneys are setting savings goals so they can retire early to pursue other passions.

“I don’t think there is a normal anymore,” said Ken Kobe, executive director of Barnes & Thornburg LLP. “It all kind of depends on people’s personal situation.”

While life after retirement may vary, one primary tool used to save for the golden years has remained the same. Many law firms, like many businesses and nonprofits across the country, offer a defined contribution plan like a 401(k) plan to their employees to help them tuck money away for life after they exit the workforce.

BrightScope, a financial information and investment research company based in San Diego, looks at 401(k) plans in several sectors including the legal industry. The company recently released a report identifying the Top 25 law firms with the highest-ranked 401(k) plans containing more than $100 million in assets.

Barnes & Thornburg LLP, headquartered in Indianapolis, ranked 24th. Taft Stettinius & Hollister LLP, which has an office in the Circle City, ranked 10th on the list.

Despite the economic recession which decimated many retirement savings, financial experts and attorneys who handle financial matters maintain defined contribution plans are good vehicles for preparing for life after work. They are likely here to stay and unlikely to undergo any significant alterations.

If anything has changed, it is the increasing importance for employees to participate in their company’s plans and pay attention to their own investments. Workers need more sophistication than just following such often-heard advice that employees nearing retirement should become more conservative in their financial decisions.

Individuals have to plan through retirement, said Nadine Givens, Indianapolis Director of PNC Wealth Management. Retirees do not want to outlive their income – the financial industry advises to plan for a life expectancy of 95 years of age.

Largely, law firms have an employee base who better understands the complexity of 401(k) plans. Still, firms are proactive in both monitoring their plan offerings and educating their workers so when retirement comes, the attorneys and staff members can do what they want and not what their savings allows them to do.

Shifting attitudes

In compiling the list, BrightScope mined Form 5500s filed with the U.S. Department of Labor and audited financial statements of 401(k)s with 100 or more participants, according to Brooks Herman, head of research at the California company. It then analyzed things such as company generosity in matching contributions and plan administration fees to determine how quickly or how slowly participants in a particular 401(k) could meet their retirement goals.

The Top 25 are the plans that BrightScope’s methodology has indicated will get participants to retirement quicker.

Defined contribution plans put the onus on the participant. Historically the pension plans that were in vogue 50 or 60 years ago placed all the investment risk on the employer. The employer assumed the liability, and the worker got a periodic statement about their retirement benefits.

However, with 401(k) plans, participants have to take an active role. They decide how much income to defer into the plan and how that money is allocated among the options available.

As a group participating in 401(k)s, lawyers are distinctive, Herman said. They tend to be intelligent, well-compensated and typically save a tremendous amount for retirement. On their own, they may possess a lot of financial savvy or they work with financial advisers.

Bob Hicks, Indiana partner-in-charge at Taft, has noticed a change in attitudes toward 401(k)s that mirrors the larger shift among workers in all industries. His firm, then Sommer Barnard, introduced its 401(k) and profit sharing plans in the 1990s.

Taft came to Indiana when it merged with Sommer Barnard in 2008.

Years ago, contributions to 401(k)s, in general, were low because people were of the mindset that someone else would take care of them, Hicks explained. Today, employees understand the need to save for their own retirement, especially with the continued questions about the long-term stability of Social Security.

“It has been a sea change,” Hicks said, as workers have ceased to think about defined benefit plans like pensions and shifted their focus to 401(k)s.

Education

Hicks described his firm’s plan as generous but quickly noted the business is not being benevolent solely for altruistic reasons. Having a solid retirement savings plan available helps attract and retain talented attorneys and staff members.

“It’s a good business decision for your employees to have a plan to be able to retire,” he said.

Barnes & Thornburg has structured its retirement plan to make attorneys and staff members want to participate, Kobe said. The firm provides access to consultant services, primarily through meetings and webinars, to help employees understand and navigate the 401(k) options.

Taft also educates its employees. Written notices and seminars help the participants make informed decisions about their retirement savings. Hicks noted the firm works to strike the balance between helping its employees maneuver the 401(k) and pushing them into participating.

Education is vital, said PNC’s Givens, because today’s 401(k) plans are not your father’s plans. Earlier choices of where to allocate retirement funds were traditionally limited to stocks and bonds, but now the options have exploded to include commodities, emerging markets, real estate and Treasury Inflation-Protected Securities.

The complexity of these plans makes determining the right asset allocation more arduous. Although many participants do not have the competency to understand how they should invest, law firms tend to do a better job of assisting their employees in gaining the necessary knowledge, Givens said.

In addition to giving the employees resources to handle their 401(k), Barnes & Thornburg also pays attention to the plan itself. The firm meets with an outside investment adviser quarterly to review the plan’s performance by looking at such aspects as the options in the plan and the associated fees. Two times a year, the committee meets with the plan administrator to go over what Kobe called the “nuts and bolts” of the plan, which includes whether account information is being given to the employees in a timely manner.

A challenge for businesses has been keeping employees participating in 401(k) plans, especially as the economy tanked. To benefit from the market’s rebound, workers have to have their money invested, Givens said. Otherwise they are sitting on the sidelines just watching.•

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  1. A high ranking Indiana supreme Court operative caught red handed leading a group using the uber offensive N word! She must denounce or be denounced! (Or not since she is an insider ... rules do not apply to them). Evidence here: http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

  2. A high ranking bureaucrat with Ind sup court is heading up an organization celebrating the formal N word!!! She must resign and denounce! http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

  3. ND2019, don't try to confuse the Left with facts. Their ideologies trump facts, trump due process, trump court rules, even trump federal statutes. I hold the proof if interested. Facts matter only to those who are not on an agenda-first mission.

  4. OK so I'll make this as short as I can. I got a call that my daughter was smoking in the bathroom only her and one other girl was questioned mind you four others left before them anyways they proceeded to interrogate my daughter about smoking and all this time I nor my parents got a phone call,they proceeded to go through her belongings and also pretty much striped searched my daughter including from what my mother said they looked at her Brest without my consent. I am furious also a couple months ago my son hurt his foot and I was never called and it got worse during the day but the way some of the teachers have been treating my kids they are not comfortable going to them because they feel like they are mean or don't care. This is unacceptable in my mind i should be able to send my kids to school without worry but now I worry how the adults there are treating them. I have a lot more but I wanted to know do I have any attempt at a lawsuit because like I said there is more that's just some of what my kids are going through. Please respond. Sincerely concerned single parent

  5. California Sex Offender Management Board (CASOMB) End of Year Report 2014. (page 13) Under the current system many local registering agencies are challenged just keeping up with registration paperwork. It takes an hour or more to process each registrant, the majority of whom are low risk offenders. As a result law enforcement cannot monitor higher risk offenders more intensively in the community due to the sheer numbers on the registry. Some of the consequences of lengthy and unnecessary registration requirements actually destabilize the life’s of registrants and those -such as families- whose lives are often substantially impacted. Such consequences are thought to raise levels of known risk factors while providing no discernible benefit in terms of community safety. The full report is available online at. http://www.casomb.org/index.cfm?pid=231 National Institute of Justice (NIJ) US Department of Justice Office of Justice Programs United States of America. The overall conclusion is that Megan’s law has had no demonstrated effect on sexual offenses in New Jersey, calling into question the justification for start-up and operational costs. Megan’s Law has had no effect on time to first rearrest for known sex offenders and has not reduced sexual reoffending. Neither has it had an impact on the type of sexual reoffense or first-time sexual offense. The study also found that the law had not reduced the number of victims of sexual offenses. The full report is available online at. https://www.ncjrs.gov/app/publications/abstract.aspx? ID=247350 The University of Chicago Press for The Booth School of Business of the University of Chicago and The University of Chicago Law School Article DOI: 10.1086/658483 Conclusion. The data in these three data sets do not strongly support the effectiveness of sex offender registries. The national panel data do not show a significant decrease in the rate of rape or the arrest rate for sexual abuse after implementation of a registry via the Internet. The BJS data that tracked individual sex offenders after their release in 1994 did not show that registration had a significantly negative effect on recidivism. And the D.C. crime data do not show that knowing the location of sex offenders by census block can help protect the locations of sexual abuse. This pattern of noneffectiveness across the data sets does not support the conclusion that sex offender registries are successful in meeting their objectives of increasing public safety and lowering recidivism rates. The full report is available online at. http://www.jstor.org/stable/full/10.1086/658483 These are not isolated conclusions but are the same outcomes in the majority of conclusions and reports on this subject from multiple government agencies and throughout the academic community. People, including the media and other organizations should not rely on and reiterate the statements and opinions of the legislators or other people as to the need for these laws because of the high recidivism rates and the high risk offenders pose to the public which simply is not true and is pure hyperbole and fiction. They should rely on facts and data collected and submitted in reports from the leading authorities and credible experts in the fields such as the following. California Sex Offender Management Board (CASOMB) Sex offender recidivism rate for a new sex offense is 0.8% (page 30) The full report is available online at http://www.cdcr.ca.gov/Adult_Research_Branch/Research_Documents/2014_Outcome_Evaluation_Report_7-6-2015.pdf California Sex Offender Management Board (CASOMB) (page 38) Sex offender recidivism rate for a new sex offense is 1.8% The full report is available online at. http://www.google.com/url?sa= t&source=web&cd=1&ved= 0CCEQFjAA&url=http%3A%2F% 2Fwww.cdcr.ca.gov%2FAdult_ Research_Branch%2FResearch_ documents%2FOutcome_ evaluation_Report_2013.pdf&ei= C9dSVePNF8HfoATX-IBo&usg=AFQjCNE9I6ueHz-o2mZUnuxLPTyiRdjDsQ Bureau of Justice Statistics 5 PERCENT OF SEX OFFENDERS REARRESTED FOR ANOTHER SEX CRIME WITHIN 3 YEARS OF PRISON RELEASE WASHINGTON, D.C. Within 3 years following their 1994 state prison release, 5.3 percent of sex offenders (men who had committed rape or sexual assault) were rearrested for another sex crime, the Justice Department’s Bureau of Justice Statistics (BJS) announced today. The full report is available online at. http://www.bjs.gov/content/pub/press/rsorp94pr.cfm Document title; A Model of Static and Dynamic Sex Offender Risk Assessment Author: Robert J. McGrath, Michael P. Lasher, Georgia F. Cumming Document No.: 236217 Date Received: October 2011 Award Number: 2008-DD-BX-0013 Findings: Study of 759 adult male offenders under community supervision Re-arrest rate: 4.6% after 3-year follow-up The sexual re-offense rates for the 746 released in 2005 are much lower than what many in the public have been led to expect or believe. These low re-offense rates appear to contradict a conventional wisdom that sex offenders have very high sexual re-offense rates. The full report is available online at. https://www.ncjrs.gov/pdffiles1/nij/grants/236217.pdf Document Title: SEX OFFENDER SENTENCING IN WASHINGTON STATE: RECIDIVISM RATES BY: Washington State Institute For Public Policy. A study of 4,091 sex offenders either released from prison or community supervision form 1994 to 1998 and examined for 5 years Findings: Sex Crime Recidivism Rate: 2.7% Link to Report: http://www.oncefallen.com/files/Washington_SO_Recid_2005.pdf Document Title: Indiana’s Recidivism Rates Decline for Third Consecutive Year BY: Indiana Department of Correction 2009. The recidivism rate for sex offenders returning on a new sex offense was 1.05%, one of the lowest in the nation. In a time when sex offenders continue to face additional post-release requirements that often result in their return to prison for violating technical rules such as registration and residency restrictions, the instances of sex offenders returning to prison due to the commitment of a new sex crime is extremely low. Findings: sex offenders returning on a new sex offense was 1.05% Link to Report: http://www.in.gov/idoc/files/RecidivismRelease.pdf Once again, These are not isolated conclusions but are the same outcomes in the majority of reports on this subject from multiple government agencies and throughout the academic community. No one can doubt that child sexual abuse is traumatic and devastating. The question is not whether the state has an interest in preventing such harm, but whether current laws are effective in doing so. Megan’s law is a failure and is destroying families and their children’s lives and is costing tax payers millions upon millions of dollars. The following is just one example of the estimated cost just to implement SORNA which many states refused to do. From Justice Policy Institute. Estimated cost to implement SORNA Here are some of the estimates made in 2009 expressed in 2014 current dollars: California, $66M; Florida, $34M; Illinois, $24M; New York, $35M; Pennsylvania, $22M; Texas, $44M. In 2014 dollars, Virginia’s estimate for implementation was $14M, and the annual operating cost after that would be $10M. For the US, the total is $547M. That’s over half a billion dollars – every year – for something that doesn’t work. http://www.justicepolicy.org/images/upload/08-08_FAC_SORNACosts_JJ.pdf. Attempting to use under-reporting to justify the existence of the registry is another myth, or a lie. This is another form of misinformation perpetrated by those who either have a fiduciary interest in continuing the unconstitutional treatment of a disfavored group or are seeking to justify their need for punishment for people who have already paid for their crime by loss of their freedom through incarceration and are now attempting to reenter society as honest citizens. When this information is placed into the public’s attention by naive media then you have to wonder if the media also falls into one of these two groups that are not truly interested in reporting the truth. Both of these groups of people that have that type of mentality can be classified as vigilantes, bullies, or sociopaths, and are responsible for the destruction of our constitutional values and the erosion of personal freedoms in this country. I think the media or other organizations need to do a in depth investigation into the false assumptions and false data that has been used to further these laws and to research all the collateral damages being caused by these laws and the unconstitutional injustices that are occurring across the country. They should include these injustices in their report so the public can be better informed on what is truly happening in this country on this subject. Thank you for your time.

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