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BenefitsLink Retirement Plans Newsletter
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[Guidance Overview]
Final DOL Regs Address Fee Disclosures to Participants in Self-Directed Retirement Plans
"Plan sponsors of covered participant-directed individual account plans should review their summary plan descriptions, plan prospectuses, benefit statements, plan websites and other plan communications to determine what additional information must be provided under the final regulations and how they will comply with the information and disclosure requirement."
(Pillsbury)
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PBGC and Bendix Reach Settlement and End Litigation on Pension Liability
"Under the settlement, PBGC won't require Bendix to put up collateral for the remaining $8.4 mil.lion in pension liability, provided the company remains financially strong until the end of the year. If the company's financial position significantly weakens during that time, Bendix will provide a letter of credit for $8.4 mil.lion."
(Pension Benefit Guaranty Corporation)
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[Guidance Overview]
How to Protect Your Company's 401(k) Plan Committee under New Service Provider Fee Disclosure Regs
"First, consult with your company's attorney to find out if you are the fiduciary of your company's 401(k) plan. Second, get a fiduciary liability policy before the rule goes into effect July 1. These plans are typically not expensive and can cover all individuals, trustees and board members who act as fiduciaries of the company's retirement plan. Finally, get a new [third-party] administrator for your plan that has low fees and accepts fiduciary responsibilities."
(Smart Business)
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2012 Investment Company Fact Book (PDF)
"The growth of individual retirement accounts ... and defined contribution ... plans, particularly 401(k) plans, in conjunction with the important role that mutual funds play in these plans, explains some of households' increased reliance on investment companies during the past two decades. At year-end 2011, 9 percent of household financial assets was invested in 401(k) and other DC retirement plans, up from 7 percent in 1991."
(Investment Company Institute)
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IBM Phased Retirement Program Offers Benefits and Employment through 2013 in Exchange for Reduction in Hours
"IBM is offering employees who are nearing retirement—and may be worried about a layoff—a one-time voluntary program that would ensure their employment through Dec. 31, 2013. The program, called 'Transition to Retirement,' would cut a workers schedule and pay, but continue providing full benefits until the job guaran.tee's expiration date. The program, described in a letter addressed to IBM managers, 'offers participants 70% of their pay for working 60% of their schedule.'"
(Computer World)
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Stockton, California Bankrup.tcy Would Public Employee Pensions and Bondholders Nationwide
"Under a new California law governing municipal distress, Stockton has entered into a mandated mediation period before it can file for bankrup.tcy under Chapter 9.... Stockton faces an avalanche of obligations that it cannot meet. Foremost among them are contributions to public employee pensions, as well as debt service on bonds earlier sold to fund its pension contributions."
(Governing)
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Raising Household Saving: Does Financial Education Work? (PDF)
"This article highlights the prevalence and economic outcomes of financial illiteracy among American households, and reviews previous research that examines how improving financial literacy affects household saving. Analysis of the research literature suggests that previous financial literacy efforts have yielded mixed results. Evidence suggests that interventions provided for employees in the workplace have helped increase household saving, but estimates of the magnitude of the impact vary widely. For financial education initiatives targeted to other groups, the evidence is much more ambiguous, suggesting a need for more econometrically rigorous evaluations."
(Social Security Administration)
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The Sensitivity of Proposed Social Security Benefit Formula Changes to Lifetime Earnings Definitions (PDF)
"Several Social Security proposals have included benefit formula changes that apply to earners above a specified percentage of the combined ma.le and female (unisex) lifetime earnings distribution. The unisex distribution is an average of two disparate groups with large lifetime differences in labor market participation. This study finds that if Social Security's median unisex average indexed monthly earnings (AIME) amount is used to define an earnings threshold below which benefits will be held roughly unreduced, the percentage of fully insured men subject to benefit reductions (70 percent) exceeds the unisex estimate of the population subject to benefit reductions (50 percent) by 20 percentage points. If policymakers wish to adjust future benefits and focus benefit reductions on middle or high primary or full-time wage earners in a household, the ma.le, rather than unisex, AIME would come closer to achieving such a goal."
(Social Security Administration)
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For Some Boomers, Delaying Retirement Isn't Worth It
"[The first wave of baby boomers—Americans born between 1946 and 1964—have reached traditional retirement age and wasted little time before saying goodbye to the working world. It's a group that a new study by MetLife Inc says so far has defied the popular belief that baby boomers will be working longer than planned because their retirement savings got trashed in the stock market downturn."
(The Salt Lake Tribune)
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Employee Ownership Update for May 1, 2012
NCEO Executive Director Loren Rodgers discusses congressional testimony on defined contribution plans, record-breaking attendance at the NCEO/Beyster conference, the Innovations in Employee Ownership awards, the We the Owners film trailer, and upcoming employee ownership conferences. (National Center for Employee Ownership
(NCEO))
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[Opinion]
Text of ICI Comments on Proposed IRS Regs Under Foreign Account Tax Compliance Act (PDF)
"[ICI suggests an alternative approach for improving further on the many positive changes made by the Proposed Regulations in the treatment of retirement accounts. Specifically, the Final Regulations should state that, except to the extent provided by the Secretary, any retirement plan organized under a country's laws for the principal purpose of saving for retirement will be eligible for treatment as a certified deemed compliant FFI, will be treated as an exempt beneficial owner, and will be excluded from the definition of financial account[.]"
(Investment Company Institute)
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Benefits in General; Executive Compensation
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[Guidance Overview]
DOL Issues Final Regs on Pension Plan Service Providers; Health & Welfare Plan Service Providers Next in Line?
"Failure to comply with the final regulations will cause the plan and service provider arrangement to be a prohibited transaction and subject the service provider to certain excise taxes under Code section 4975.... In light of the DOL's intention to include welfare plans under these regulations in the future, it may be wise for service providers and plan fiduciaries to begin reviewing any service provider arrangements under these plans as well."
(Pillsbury)
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How to Benchmark Your Benefits Package to Ensure It Is Economical and Competitive
"Knowing how other employers plan to address these benefit decisions can be advantageous, as these decisions could mean the difference between maintaining a competitive benefits package to attract the best and brightest and declining ability to recruit and retain quality employees. Careful strategic planning includes ongoing evaluation of your organization to ensure that a comprehensive and competitive benefit package is offered to employees."
(Smart Business)
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DOL and IRS Intensify Focus on Worker Misclassification
"The [DOL's] employee misclassification initiative is making noticeable progress. Since September 2011, the Department has entered into agreements with twelve states (and is pursuing agreements with others) to reduce employee misclassification, help reduce the tax gap, and improve compliance with Federal labor laws. So far, agreements have been entered into with California, Colorado, Connecticut, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington."
(Deloitte)
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Press Releases
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Holly Horton, Business Manager
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