ASPPA

Legal - Counsel
for Great-West Life & Annuity in CO

Senior Defined Benefit Calculation Analyst
for Diversified in MA

Conversion Project Manager
for Sentinel Benefits & Financial Group in MA

Client Service Manager
for Milliman in WA

401(k) Compliance Testing Consultant
for The Savitz Organization in PA

401(k) Relationship Manager
for EBA Consulting in NJ, PA

Account Executive II - Retirement Services
for Principal Financial Group in MD

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ICPAS Employee Benefits Conference
in Illinois on May 22, 2012 presented by Illinois CPA Society

Final SBC Guidance for Employer Health Plans: Getting Ready for New Open Enrollment Disclosures
Nationwide on April 4, 2012 presented by Thomson Reuters / EBIA

Regulations and Enforcement: An Update from the DOL
Nationwide on May 3, 2012 presented by ABA Joint Committee on Employee Benefits

National Institute on ERISA Basics
in District of Columbia on October 22, 2012 presented by ABA Joint Committee on Employee Benefits

CFDD

IRS Notice 2012-28: Monthly Update for Weighted Average Interest Rates, Yield Curves and Segment Rates (PDF)
IRS-updated figures for pension plan administration as prescribed by Code sections 412, 417, 430 and 431 (the corporate bond weighted average interest rate for April 2012, the three corporate bond segment rates for April 2012, the 30-year Treasury securities weighted average interest rate for April 2012, and the three minimum present value transitional segment rates for March 2012). (Internal Revenue Service)

Discover Innovative Solutions at NIPA’s 2012 Annual Forum & Expo   [Advert.]

NIPA’s Annual Forum & Expo provides the most up-to-date information to expand your industry knowledge. Join us April 29-May 2 at The Cosmopolitan of Las Vegas to take advantage of 25 sessions focused on the most pressing issues you face each day.

What Plan Sponsors Should Know About Fiduciary Status Under ERISA
A splendid nutshell description of a complicated topic. "[This presentation] concisely describes the basic concepts of fiduciary status under ERISA, as well as the implications of being a fiduciary. Equally importantly, the presentation focuses on the differences in the types of investment fiduciaries — both investment advisory fiduciaries under Section 3(21) and investment manager fiduciaries under Section 3(38).... ERISA recognizes four categories of fiduciaries: Named Fiduciary, Investment Manager, Trustee and Investment Adviser." (Principal Financial Group)

ERISA Violated When Construction Company Failed to Make Promised 401(k) 'Fringe Benefit' Contributions Under Government Contract
"[T]he now-defunct construction company was required to pay its workers an hourly prevailing wage rate, including a fringe benefit for each participant in the form of contributions to the retirement plan, when it was contracted to perform work on projects financed by government agencies [but] the company failed to remit more than $300,000 to the plan, choosing instead to use the money for general operating expenses. In addition to that amount, the judge's order requires the company to restore lost earnings [of approximately $200,000] to the plan." (Employee Benefits Security Administration)

Another Question is Answered in the Who's the Employer Q&A Column
When calculating a sole proprietor or partner's earned income for retirement plan purposes, the reduction for "deductions for retirement plans allowed under Code 404" would INCLUDE the salary deferrals contributed for common law employees. Correct? (BenefitsLink.com)

The Importance of a 'Deliberative Process': Plan Fiduciaries Found Liable for Breach of Fiduciary Duty in Important Revenue-Sharing Case
"The Court in [Tussey v. ABB Inc. (W.D. Mo. Mar. 31, 2012)] explained that while the methods the fiduciaries used were not per se breaches of any fiduciary duty, the fiduciaries? failure to conduct basic research and follow the plan's own Investment Policy Statement — coupled with their failure to make decisions based solely on the merits of the investments — resulted in a breach of fiduciary duty.... As is often true in ERISA fiduciary litigation, the decision is less about the propriety of any particular action in the abstract (e.g., the use of revenue sharing to pay for plan fees and costs), and more about the importance of using careful process and investigation, with an eye towards the best interests of the plan and its participants." (Dorsey & Whitney LLP)

Time is Running Out... Are you ready to mail the required notices?   [Advert.]

Missing addresses... no problem! Get the addresses you need to perform the mandatory AFN mailing on time.
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Click HERE or call 415-482-9611

Denial of Retirement Benefits Not Arbitrary Where Lack of Evidence of Eligibility
"A retirement plan administrator's denial of benefits was not arbitrary or capricious because the claim for benefits was 'largely based on speculation and hearsay,' there was a lack of evidence as to the former employee's eligibility for benefits, the plan demonstrated a substantial effort in researching the claim, and the plan supplied a plausible explanation for the former employee's ineligibility, according to the U.S. Court of Appeals [for the First Circuit]." (Wolters Kluwer Law & Business / CCH)

Case Challenging Public Pension Plan Reforms Moves Directly to Florida Supreme Court
"The Florida Supreme Court accepted a public pension case last week that challenges a law passed in July that requires public employees to contribute 3 percent of their paychecks toward their retirement.... Cutting 3 percent from a teacher's salary is a big hit. In Florida, a teacher earns $10,000 less than the national average and retirement benefits are also lower." (StateImpact Florida)

Retirement Planning in 2012 and Beyond
"Enjoying golf and the good life in retirement may seem, for many, to be more like a long shot than a hole in one.... [T]he key to financial security in retirement is to save as much as possible as early as possible, consider stocks and diversify among asset classes.... [Here is some] advice — not on how to perform on the green, but how to save enough 'green' to someday retire comfortably." (Fox Business)

Anti-Alienation Rule Won't Apply to Corrupt Congressional Representatives; No Federal Pensions for Future Blagojeviches
"The federal STOCK Act [signed by President Obama on Wednesday includes language] that would take away the federal pensions of people convicted of certain corruption crimes.... Though his state pension was stripped, [former Illinois Governor Rod] Blagojevich's family can continue to receive his pension from his time in Congress because his conviction didn't pertain to his time in the U.S. House. The [STOCK Act] doesn't take Blagojevich's pension away. But it would prevent pensions from being handed out in similar future cases." (Daily Herald)

Federal Government's Thrift Savings Plan Has Appeal, and a Few Holes, Too
"Whereas some 401(k) plans feature overwrought menus of options, extra layers of administrative fees, and costly, also-ran funds, the TSP is a marvel of rock-bottom costs and a utilitarian lineup. At the same time, however, the TSP doesn't offer exposure to a handful of important asset classes, and the lineup also features a few additional quirks of which participants should be aware." (Morningstar)

HR Directors Need to Prepare for DOL Fee Disclosure Rules
"While the disclosures to plan participants don't begin until August, HR leaders should be communicating now with employees to make sure they understand that such fees already exist -- even if they haven't been disclosed before.... [And] HR leaders should plan to communicate with service providers as soon as possible, reminding them about the deadline; and create a punch list that includes who they expect to receive the information from, including fiduciaries, advisers, recordkeepers, etc." (HR Executive)

Legislators Trying to Limit University of California Employees' Covered Compensation to a Quarter-Mil.lion Dollars
"[A] two-house [California] legislative committee on pension reform ... is expected to include a [cap of $250,000 on covered compensation for employees in the University of California pension plan] ... [The UC plan,] which went two decades without employer or employee contributions, was 132 percent funded in 1999 when the regents delegated authority to exceed [the Internal Revenue Code 401(a)(17) cap,] a move deemed 'critical' for retention and recruitment.... [F]ederal approval came in 2007[.]" (CalPensions)

Public Pension Funds: Tens of Billions at Significant Risk
"To meet ambitious investment return targets, some public pension funds must now swing for the fences. But many are down two strikes already, due to their previous big bets with hedge funds." (Elliott Wave)

Inspect the Fees in Your 401(k)
"It isn't easy to find that information, yet those fees can amount to hundreds of dollars a year or more and significantly reduce what you'll have when you retire. An AARP survey of plan participants 25 and older found that seven of 10 didn't know they were paying any fees at all.... That will change this summer when new disclosure requirements from the Department of Labor take effect." (The Wall Street Journal)

Are ETFs and 401(k) Plans a Bad Fit?
"'When the average employee understands more about performance and the fees they're paying, you'll start seeing more plan providers, especially smaller ones, include ETFs,' says Tom Lydon, CEO of Global Trends Investments, an advisory firm that publishes the ETF Trends website. 'But there are some plumbing issues in getting ETFs into 401(k) plans.'" (The Wall Street Journal)

Public Pension Pitfalls: What Municipal Budget Troubles Mean for Bond Investors
"Retirement benefits for public workers are at the heart of the conflict between state and local governments and the unions representing their workers — and how that conflict gets resolved will affect investors in the municipal bonds issued by those states and cities." (The Washington Post)

PBGC's Gotbaum: There's a Place for Pension Plans Other Than DB
"'We think that traditional pension plans serve people better,' [Gotbaum said]. 'But — and this is where I think it is important to recognize the realities — it is also important to offer alternatives so that, as circumstances change, as companies change, as lifestyles change, we still have those kinds of plans.'" (Pensions & Investments)

SEC Study Suggests More Disclosures Needed For Target-Date Funds
"Most American investors mistakenly believe that target-date funds provide guaranteed income in retirement, among other misconceptions of how the instruments work, the SEC found in a recent investor survey.... Fewer than 30% of all survey respondents were able to identify the correct meaning of the year in a target-date fund's name ... [and] just 30% of respondents knew that the funds do not provide guaranteed income in retirement[.]" (Financial Planning)

Great Recession Causes More People to Claim Social Security Early; Who Are They? How Much Do They Lose?
"[This study projects] that high unemployment rates during the Great Recession led to a 5-percentage-point increase in the probability of claiming [Social Security retirement benefits] early relative to a less severe recession such as the 2001-2003 downturn, and this increase was nearly uniform across socioeconomic groups.... [E]stimates also suggest that while the Great Recession did impact the claiming decision, it did not cause a dramatic change in benefits." (Center for Retirement Research at Boston College)

Alternative Investments in Your Portfolio: It's Time to Ditch the 10% Allocation Rule
"The rapid growth of liquid alternative mutual funds and exchange-traded funds, both in number and asset size, has challenged all definitions of alternatives, the perception of who should invest in them, and most important, how much should be invested in them.... Advisors and retail investors can now choose from a bewildering array of investments touted as alternative, [including] mutual funds and exchange-traded products invested in commodities, Treasury Inflation-Protected Securities, REITS, emerging- markets equities and bonds, listed private equity, infrastructure securities, equity volatility, and active strategies used by hedge funds." (Morningstar)

Section 414(d) Advance Notice of Proposed IRS Regs Raises Issues for Governmental Pension Plans
"[P]lans of purported governmental agencies or instrumentalities that have long complied with the governmental plan rules previously articulated and administered by the IRS could, if their sponsors fail the new factor test for determining governmental entity status, have thrust onto them the costly burdens of ERISA and PBGC compliance at a time when they can ill afford them. [Further,] individual participants in qualified retirement plans sponsored by governmental entities of all types whose personal status as governmental employees may be in question, for example some charter school teachers, could, absent adjustments to the draft proposed regulations, find themselves excluded from future participation in such plans because of the requirement of the draft proposed regulations not to include any nongovernmental employees." (Strasburger)

American Benefits Council's Position Paper on Defined Benefit Plan Funding Stabilization Legislation (PDF)
"Over the last few years, the government has made a concerted effort to keep interest rates artificially low in order to stimulate the economy. Unintentionally, this effort is having an extremely adverse effect on pension plan sponsors by inflating pension plan liabilities and funding obligations.... The Senate-passed Moving Ahead for Progress in the 21st Century Act (S. 1813) addresses this issue effectively in the short-term by basing pension plan interest rates on historical averages.... This paper addresses several policy questions have been raised concerning this proposal." (American Benefits Council)

Highway Bill's Pension Language Makes Taxpayer Bailout of PBGC More Likely
"Taxpayers are already likely to have to send $23 bil.lion to the PBGC, and the Senate's Highway Investment, Job Creation, and Economic Growth Act of 2012 (S. 1813), which reauthorizes transportation programs for the next two years, would almost certainly increase that amount significantly." (The Heritage Foundation)

New EEOC Regs Ramp Up Burden of Proof on Employer Defenses under ADEA
"While it is too early to predict how courts will apply this regulation, the new rule prompts employers to ask [the questions listed in this article] when implementing a reduction in force or any other employment practice that may have an adverse impact on older workers[.]" (Wilson Sonsini Goodrich & Rosati)

FATCA Filing Requirements Apply to Employees Due to Employer-Sponsored Plans
"FATCA's reach is broader than you might think, as 'foreign financial assets' include ... an interest under a foreign pension or deferred compensation plan.... [I]t is strictly the employee's responsibility to make the required filing. However, [because penalties for failure to file are significant,] companies with a multinational and mobile workforce should consider alerting their employees to the possible filing obligation, if they have not already done so." (Winston & Strawn)