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March 5, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

DC Plan Administrator
for TPA Firm in Maryland in MD

Senior Compliance Consultant
for Lincoln Financial Group in ANY STATE

Sales Professional
for Matthews Benefit Group, Inc. in FL

Qualified Pension Plan Specialist
for Pen-Cal Administrators, Inc. in CA

Associate Actuarial Manager - Financial Reporting - Pension Risk Transfer
for Prudential in NJ

Implementation Partner
for Lincoln Financial Group in ANY STATE, IN

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Webcasts and Conferences

401(k) Rekon Advisor Symposium - Salt Lake City
in Utah on April 3, 2012 presented by 401(k) Rekon

DOL and IRS Audits: What to do when the government is on your doorstep.
in California on March 15, 2012 presented by Western Pension & Benefits Conference - Orange County Chapter

Health Benefits Laws Compliance Assistance Seminar
in New Jersey on April 10, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)


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[Guidance Overview]
Revised IRS Procedures for Determination Letters
"[I]t remains to be seen whether employers that have historically sought and obtained their own individual determination letters will be content to rely on the opinion letter issued to the sponsor of the preapproved plan, or whether they will opt for a volume submitter plan ... in order that they can modify the document just enough that it will qualify for filing on Form 5307. Care would need to be taken in those situations to make sure that the changes are not so significant as to cause the plan to be treated as an individually designed plan, since those plans require the more expensive Form 5300 filing, and must be filed during the appropriate 12-month period to be considered an 'on-cycle' filing." (Spencer Fane)


SunGard’s Omni Data Validation Web   [Advert.]

Sponsored by SunGard Omni

SunGard’s Omni Data Validation Web helps improve the efficiency of payroll contribution and streamline the process from data submission to automate the funding and posting of the recordkeeping system.


[Guidance Overview]
Transferred Employees Not Entitled to Pension Benefits under Successor Employer's Plan
"On February 29, 2012, the [court] held that employees who were transferred to a new employer (Siemens) from a prior employer (Westinghouse) pursuant to an asset purchase agreement ... were not entitled to receive pension benefits from Siemens. The court held that Siemens did not establish a 'plan' under [ERISA] for the transferred employees during the 13-day period after they became employed by Siemens because Westinghouse continued to maintain the plan." (Practical Law Company)

[Guidance Overview]
New York's Highest Court Holds Employer's ERISA Settlement Ineligible for Coverage by Insurer (PDF)
"[This case] highlights the potential for disconnect between primary and excess insurers, even when 'follow form' policies are used.... In addition, the dollar amounts at stake ... highlight the importance of clearly defining what costs will be covered under an ERISA fiduciary liability policy.... Finally, the case illustrates the risk of leaving key policy terms (like 'fiduciary') undefined[.]" (Jenner & Block)

New Data on the Substantial Value of New York City Employee Pensions and Their Costs to the City (PDF)
New York City pension costs have risen more than fivefold to $8 bil.lion since 2002. (NY Leaders for Pension Reform)

The Ins and Outs of Roth 401(k) Plans
"Although fund companies say they have aggressively marketed Roth 401(k)s, the adoption rate has been slow. Fidelity Investments, which administers retirement plans for 12 mil.lion workers, found that only 6% of plan participants with the option of enrolling in a Roth choose to do so. At Charles Schwab Corp., that figure is 15%, and at Vanguard Group it is 9%." (The Wall Street Journal)

IRA Owners Turning to Alternative Investments
"Although IRAs have been allowed to hold a variety of assets since Congress first authorized them in 1974, most investors opted for conventional stocks and bonds during the bull markets of the 1980s and '90s. They still do: The Retirement Industry Trust Association, a group of alternative-asset IRA providers, estimates that such accounts make up just 2% to 5% of the $4.6 tril.lion held in IRAs overall." (The Wall Street Journal)

Footing the Bill for Pensions at Law Firms
"At some of the country's top firms, younger lawyers will foot the bill for deluxe pension plans that could drag down their own earnings for years to come. These pensions are largely unfunded: there is no money saved to pay retirees. Instead, most law firms with such plans pay the benefits as they go, using a portion of their current profits." (The Wall Street Journal)

FAA Funding Law Permits Rollover of Amounts Received in Airline Carrier Bankrup.tcy
"The Federal Aviation Administration ... Modernization and Reform Act of 2012 (P.L. 112-95), signed by the President on February 14, 2012, contains provisions permitting qualified airline employees to roll over to an IRA amounts received in an airline carrier bankrup.tcy.... However, top executives cannot take advantage of these rules." (Wolters Kluwer Law & Business / CCH)

Heterogeneity in Target-Date Funds and the Pension Protection Act of 2006
"This paper studies the evolution of the market for target-date funds (TDFs) between 1994 and 2009 ... TDFs with the same target date have delivered very different returns because of differences in systematic risk in the stock allocations, and because of differences in the stock versus bond allocations." (The National Bureau of Economic Research; paid subscription or individual purchase required to retrieve full text)

Professionally Managed Allocations: Participant Usage and Impact
"[A] new study finds that use of these strategies varies by age and plan account balance, and is influenced by plan design and other factors. Importantly, the research suggests that these strategies can help remedy potential participant portfolio construction errors by eliminating extreme equity allocations and improving portfolio diversification." (Vanguard)

Co-Fiduciary Liability under ERISA
"Although Department of Labor enforcement efforts and heightened scrutiny by retiring baby boomers are causing plan fiduciaries to pay more attention to their own fiduciary duties, those fiduciaries sometimes forget that they also have an obligation to police the conduct of other fiduciaries." (Spencer Fane)

The Party-in-Interest Threshold to the 'Edges' of 408(b)(2)
"This whole area of party in interest status under ERISA was a hot topic a few years back in the Mertens and Harris Trust ... Supreme Court cases, where the Court was deciding whether or not to allow ERISA lawsuits against non-fiduciary parties-in-interest. But it's important now, once again, because it really does serve as a threshold issue to the new 408(b)(2) regs." (Business of Benefits)

The Influence of Public Policy on Health, Wealth and Mortality
"[T]his project ... explore[s] the effects of stylized versions of Medicare and Social Security on wealth and longevity. While most models assume that households will respond to an absence of social insurance in old age by engaging in precautionary saving, our model shows that poor households largely run down their health capital in response to an absent or withdrawn safety net.... With fewer lifetime resources households will both consume less and die earlier." (University of Michigan Retirement Research Center)

Salary 'Spiking' Drains Public Pension Funds, Analysis Finds
"'[S]alary spiking' was banned in 1993 by CalPERS, the state's largest public employee retirement system, to help control spiraling costs. But 20 of California's 58 counties ... do not participate in CalPERS and their employees may legally continue to spike their salaries.... [P]artial data from Ventura and Kern counties ... shows that spiking is affecting pension systems already staggered by massive obligations." (Los Angeles Times)

Economic Downturn Spurs Efforts by State and Local Governments to Address Costs and Sustainability
"Since 2008, the combination of fiscal pressures and increasing contribution requirements has spurred many states and localities to take action to strengthen the financial condition of their plans for the long term, often [reducing benefits, increasing employee contributions, or introducing hybrid plans].... [S]ome states and localities have also adjusted their funding practices to help manage pension contribution requirements in the short term by changing actuarial methods, deferring contributions, or issuing bonds, actions that may increase future pension costs." (Government Accountability Office)

Most Public Pension Plans Have Enough Assets to Last At Least 10 Years
"Most state and local public retirement systems 'currently have assets sufficient to cover their benefit commitments for a decade or more,' despite suffering significant investment losses from the recent economic downturn, according to a [GAO] report released March 2.... '[E]ven if these plans received no more contributions or investment returns, most large plans would not exhaust their assets for a decade or longer, since they hold assets at least 10 times their annual expenditures[.]'" (Pensions & Investments; free registration possibly required)

Give Your Retirement Plan an Annual Checkup
"Don't underestimate the importance of reviewing 401(k) and similar plans on an annual basis to check for common operational failures. Plan sponsors need to assure employees that they are monitoring retirement plan operations closely to maximize and protect these benefits. Moreover, fiduciary duties are a significant responsibility that is monitored closely by government agencies and under constant scrutiny." (SHRM)

Corporate DB Plan Funded Status Ticks Up in February
"Reports ... show the funded status of corporate defined benefit plans continued to improve in February, boosted by strong equity returns while discount rates remained low.... It was the fifth straight month equities have posted a positive return." (Pensions & Investments; free registration possibly required)

Comparing Retirement Income Across Generations
[R]etirement incomes will increase over time, and poverty rates will fall. Projected income gains are larger for higher than for lower socioeconomic groups, leading to increased income inequality among future retirees. Boomers and GenXers are less likely to have enough postretirement income to maintain their preretirement standard of living compared with current retirees." (The Urban Institute)

[Opinion]
DOL's Brief to 9th Circuit Court of Appeals in Barboza v. California Association of Firefighters, on Failure to Hold Disability Plan's Assets in Trust
"The Secretary's brief addresses the following issues: 1. Whether the district court erred in excusing defendants from the statutory requirement ... to hold plan assets in trust based on its conclusion that defendants acted prudently when they relied on undocumented advice allegedly given by an unidentified [DOL] employee in 1987. 2. Whether the district court correctly held that defendants breached their ERISA duties by failing to undertake annual actuarial reviews of the Plan's reserves [as required by the plan document]." (Department of Labor, Office of the Solicitor)

[Opinion]
Cash-Balance Plan Design Had Promise
"Bank of America certainly is not the first employer to freeze a cash balance plan or, for that matter, other defined benefit plans. But as it was such an enthusiastic pioneer of the plan, [the author] couldn't help but think: Is there really much of a future for defined benefit plans?" (Business Insurance; free registration required)

[Opinion]
How to Pay for New York State's Pensions
"New York State has taken a reasonable approach that allows public employers to pay a portion of their yearly contributions to New York's $140 bil.lion public pension fund and to pay the remainder in installments, with interest, over a decade." (The New York Times; free registration required)

Benefits in General; Executive Compensation

Winter 2012 Edition of Statistics of Income (SOI) Bulletin Published by IRS
"This issue of the [Bulletin] includes articles on the following: Individual income tax rates and shares. Split-interest trusts. Domestic private foundations. Unrelated business income tax returns. Personal wealth. Projections of federal tax return filings." (Internal Revenue Service)

What Does Maryland's Same-S.ex Marriage Law Mean for Employers?
"Employers in Maryland have 10 months to adjust their employee benefit policies, plan documents and plan language regarding dependents before a law legalizing same-s.ex marriage goes into effect.... The new law contains protections for churches and religious groups and officials." (Thompson / SmartHR Manager)

Press Releases



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