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May 9, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

401(k) Plan Administrator
for Professional Capital Services, LLC in PA

Benefits Fulfillment Specialist
for Northwestern Benefit Corporation of Georgia in GA

Retirement Plan Administrator
for PENSYS, Inc. in CA

Associate
for White Horse Advisors, LLC in GA

Director of ERISA Consulting
for July Business Services in ANY STATE, TX

Director, Actuary - Valuation - Capital Markets Hedging - Annuities
for Prudential in NJ

Benefits Consultant, Small Group & Mid Market
for Northwestern Benefit Corporation of Georgia in GA

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Webcasts and Conferences

J. Mark Iwry discusses "Expanding Retirement Income Options in the Private Pension System" (NY CLE Program)
in New York on June 21, 2012 presented by WEB (Worldwide Employee Benefits Network) New York Chapter

Retirement Plan Insights Seminar
in Pennsylvania on June 12, 2012 presented by McKay Hochman Co.

Dealing with Protected Benefits Webcast
Nationwide on June 14, 2012 presented by Actuarial Systems Corporation (ASC)


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[Official Guidance]
11th Circuit Adopts Moench Standard in Suit Over Home Depot ESOP (PDF)
"Because the purpose of a plan is set by its settlors (those who created it), that is the same thing as saying that a fiduciary abuses his discretion by acting in compliance with the directions of the plan only when the fiduciary could not have reasonably believed that the settlors would have intended for him to do so under the circumstances. That is the test.... The defendants were not required to depart from the Plan's directives regarding Home Depot stock just because they were aware that the stock price likely would fall." (Justia.com)


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[Guidance Overview]
The Final 408(b)(2) Regulation: Impact on Investment Managers (PDF)
"The new disclosure rules apply to any discretionary asset manager for an ERISA-covered retirement plan who reasonably expects to receive $1,000 or more of direct or indirect compensation in connection with its services to a plan.... Discretionary managers include those hired directly by the plan to manage all or some of its assets, and also the fiduciary managers of 'plan asset vehicles'—investments that are themselves subject to ERISA, and in which a plan invests. Such investments include collective investment funds or trusts offered by banks, the separate accounts of insur.ance companies or certain other investment vehicles (e.g., hedge funds) if more than 25% of the funds being managed come from ERISA plans and other 'benefit plan investors.'" (Drinker Biddle)

[Guidance Overview]
More Welcome 403(b) Relief from DOL
"The DOL, in its final 408(b)-2 regulation, issued relief for 403(b) plans, under which information related to certain contracts would not be subject to the new fee disclosure rules. Though this was very helpful, it did not specifically address the 404a-5 participant disclosure regulations for the same type of contracts.... [The recently issued FAQs in Field Assistance Bulletin 2012-2 make] it clear in Question 2 ... that the 408b-2 relief for 403(b) plans also is extended to the 404a-5 requirements for said plans, on the same terms and conditions." (Business of Benefits)

[Guidance Overview]
DOL FAQs Address Retirement Plan Fee and Expense Disclosure Rules
"EBSA is working on a second set of FAQs that focuses specifically on the disclosure rules for covered service providers under ERISA Section 408(b)(2). However, these current FAQs are relevant to covered service providers as they offer guidance on what information covered service providers must give plan administrators to help the administrators comply with their disclosure requirements." (Practical Law Company)

Text of Spring 2012 Issue of 403(b) Advisor Magazine
Articles include 'Philadelphia Story: Affirming Choice in 403(b) Plans' and 'The Evolution of the K-12 403(b) Marketplace.' (American Society of Pension Professionals & Actuaries; National Tax Sheltered Accounts Association)

N.Y. State Pension Comptroller Continues Criticism of 401(k) Option for Public Employees
"[The Comptroller] repeated his criticism of 'anti-pension advocates' who try to blame public pension plans for damaging state and local budgets and for handing out allegedly inflated payments. 'Another well-worn line of attack on public pension funds—an argument that particularly disturbs me—is that they are bloated with retirees making six-figure pensions,' he said. 'The vast majority of retirees in our system are receiving modest benefits.'" (Pensions & Investments)

California Pension Nightmare Worsens: Thousands More Are Joining '$100,000 Club' Annually
"Juxtapose the recent headcount of 12,119 [retired California government workers receive pensions in excess of $100,000] next to the at 9,812 released in June 2011. That mental image of California sliding into the Pacific Ocean under the weight of these pension obligations is becoming ever more real. Look at these trend lines." (Wall Street Pit)

Public Pension Fixes Face Stout Legal Challenges
"Any quick fixes would be hard to carry out. Each state has its own constitution, courts, case law and retirement systems that affect how they can try to rein in pension costs.... There are at least eight lawsuits nationwide contesting attempted pension fixes, such as one in Florida that is aimed at saving $1 bil.lion a year by reforming public pensions. These lawsuits generally are brought by public sector unions." (Chicago Tribune)

State and Local Governments Belatedly Put Pension Deficits on Their Books
"The [GASB accounting] rules may raise government costs in the $3.7 tril.lion municipal market as investors demand more yield to compensate for higher pension risk and possibly lower ratings. Illinois became Moody's Investors Service's lowest-rated state in January because it hadn't dealt with its underfunded pensions." (Bloomberg BusinessWeek)

Bill Revising Pension Benefits Goes to Alabama Governor for Signature
"[Alabama Governor Robert Bentley], legislative leaders and David Bronner, chief executive officer of the Retirement Systems of Alabama, worked together on the proposal ... Most state employees would have to work until they are 62 to begin receiving benefits ... Currently, a state employee may retire after 25 years of service, no matter the age of the employee, or retire at 60 after 10 years of service and begin receiving benefits." (The Montgomery Advertiser)

Louisiana Governor's Pension Reform Proposals Watered Down by Senate Committee
"Watered down versions of the most controversial portions of Gov. Bobby Jindal's proposed retirement overhaul are headed back to the Senate floor after passing their second committee Monday. The bills increase the amount employees contribute to the pension plans, delay the retirement age for many workers and increase the number of years used to calculate an average salary for retirement purposes." (The Times-Picayune)

Actuaries Recommend a $213 Mil.lion Increase in Annual State Pension Payments to CalPERS
"But $149 mil.lion would be added to the increase if the impact of a lower earnings forecast, dropped by the board in March from 7.75 percent to 7.5 percent a year, is not phased in over 20 years. Either way, the annual state payment to CalPERS next fiscal year would still be less than the $3.9 bil.lion payment expected two years ago when major investment losses began to push up rates from $3.3 bil.lion." (Calpensions)

Funded Status of U.S. Pensions Declines to 76.3 Percent in April
"The drop was due to a 4.5 percent rise in liabilities, resulting from falling interest rates, and a decline in the equity markets, according to the BNY Mellon Pension Summary Report for April 2012. BNY Mellon attributed the increase in liabilities to the 29-basis-point drop in the Aa corporate discount rate to 4.29 percent. The decline in the equity markets was the primary reason for the 0.1 percent drop in plan assets during the month, BNY Mellon said." (BNY Mellon)

[Opinion]
401(k)s Are Too Risky for Retirement
"Retirement experts find that [401(k)-style defined contribution] plans have numerous shortcomings, including high operation costs and low investment returns. The biggest problem with defined contribution plans is that alone they do not provide retirees with guaran.teed retirement income. If employees don't make the right large contributions into the right investment mix at the right time, they are at high risk for poverty during retirement." (CNN)

[Opinion]
Text of Comments by Committee of Annuity Insurers on Proposed Qualifying Longevity Annuity Contract Regs (PDF)
"First, [the Committee suggests] certain modifications to the regulations that would increase flexibility in QLAC designs.... Second, [the Committee offers] suggestions for modifying the limits that the proposed regulations place on QLAC premiums.... Third, [the Committee asks] for several technical clarifications to the regulations in anticipation of questions that may arise in the future as taxpayers and the government implement the final rules. Finally, [the Committee asks] that the [IRS] coordinate with [DOL] on certain reporting and recordkeeping issues." (Committee of Annuity Insurers)

[Opinion]
Text of Comments by Investment Company Institute on Proposed Required Minimum Distribution Exception for Longevity Annuity Contracts (PDF)
"[ICI does] not believe it would be appropriate to expand the exclusion beyond strict longevity insur.ance, within the parameters outlined in the proposal. [The ICI's] comments also include some general concerns relating to incentivizing the use of annuities." (Investment Company Institute)

[Opinion]
Text of Comments by ASPPA on Proposed Changes to IRS Regs on Purchase of Qualifying Longevity Annuity Contracts Under DC Plans
"While [ASPPA appreciates] the desire to be consistent with the intent of Code Section 401(a)(9) and not to permit greater deferral of distributions than would otherwise be permitted under the required minimum distribution rules, ASPPA believes that increasing the percentage limitation would provide greater flexibility and encouragement for participants to utilize longevity annuity options. As proposed, only participants with account balances of $400,000 or larger would be able to pay premiums up to the full dollar limit for a QLAC. The result may be that those participants with smaller account balances, who may be the people most in need of income security in the later years, will not have the ability to secure a significant income stream through a QLAC and may not take advantage of this opportunity." (ASPPA)

Benefits in General; Executive Compensation

Employee Benefits Are Good for Employers, Too
"Harvard Business Review Analytic Services surveyed 58 of the 100 companies named to 'The Principal 10 Best' list over the past decade ... Three quarters of those polled reported that benefits contributed to employee retention and 72 percent said they impacted employee loyalty.... When asked to identify the most significant thing they are doing to impact employees' financial security, nine out of 10 respondents mentioned retirement programs and cited generous employer contributions." (MSNBC)

North Carolina Voters Approve Same-s.ex Marriage Ban
"North Carolina voters on Tuesday approved a state constitutional amendment that bans same-s.ex marriage and civil unions ... North Carolina law already blocks g.ay and les.bian couples from marrying, but the state now joins the rest of the Southeast states in adding the prohibition to its constitution." (Yahoo! News)

Benefits Administration: To Outsource or Manage In-House?
"The goal of the survey was to gain insight into what employers views are on the topic of benefits administration to include: What employers are thinking about the various trade-offs inherent to insourcing and outsourcing benefits administration? What employers are actually doing—what functions are they outsourcing and which are insourced? What employers are planning on doing—in light of the changing technological and legal landscape, are employers planning on insourcing or outsourcing more functionality?" (ADP; free registration required)

[Opinion]
Time to Control Runaway Military Personnel Costs
"[W]hile the military's retirement program serves only a small minority of the force, it provides an exceedingly generous benefit, often providing 40 years of pension payments in return for 20 years of service. As a result, the program now costs taxpayers more than $100 bil.lion per year, an exceedingly steep price tag for a program hampered by serious flaws. This number is projected to double by 2034." (Tuscon Sentinel)

Press Releases



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