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May 23, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

DB Pension Administrator/Consultant
for Polycomp Administrative Services, Inc. in CA

Retirement Benefits Manager
for Contra Costa County Employees' Retirement Association in CA

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Webcasts and Conferences

Employee Leaves of Absence and Benefits Compliance: Legal Rules and Compliance Traps
Nationwide on June 14, 2012 presented by Thomson Reuters / EBIA

65th Annual National Conference
in Louisiana on September 11, 2012 presented by Plan Sponsor Council of America (PSCA)

What Every Fiduciary Needs to Know About How to Mitigate Investment Fraud Risk Webcast
Nationwide on June 13, 2012 presented by FTI Consulting

Evaluating the Reasonableness of Plan Fees in Light of the New Disclosures
Nationwide on June 27, 2012 presented by University Conference Services

Retirement Plan Compliance Assistance Seminar
in Illinois on August 14, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)


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[Guidance Overview]
The Day After the 408(b)(2) Effective Date: What Happens on July 2, 2012? (PDF)
"[There are] three reasons why a fiduciary may find their July 2, 2012 occupied with the preparation of written requests for information from their [covered service provider, or 'CSP'] including: 1. The CSP failed to provide any disclosures, 2. The CSP provided incomplete disclosures, or 3. Additional information is necessary to determine if the contract or arrangement is prudent and/or conflict free." (Fiduciary Risk Assessment LLC)


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By 3-to-1 Margin, Small Employers in California Support Proposed Admission of Private Employers Into State-Run Retirement Plan (PDF)
"Under this proposal, people who work for private companies would have the opportunity to participate in a Secure Choice Pension, a new retirement plan modeled after the public employee pension system, and receive a guaran.teed monthly pension benefit, like many public employees do, when they retire. Unlike a 401(k), employees would receive a guaran.teed pension benefit of at least the amount they put in over time, plus any investment return. Employers could choose to simply give access to their employees, or contribute to the plan, or both. Instead of an individual account, the contributions would go into a large fund managed by a team of experienced investment professionals and overseen by an administrative board." (National Conference on Public Employee Retirement Systems)

VCP Submission Kit Now Available for Pre-Approved DB Plan Non-Amenders
"Pre-approved defined benefit plans that missed the April 30, 2012 deadline for adopting IRS-approved plan documents that reflect the changes made by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) now have a streamlined submission kit for correcting the failure under the IRS's Voluntary Compliance Program (VCP)." (Deloitte)

More Than Two-Thirds of Plan Sponsors With DB Plans for New Hires Will Keep Them
"[More than] two-thirds (68%) of respondents that currently offer a DB plan to new salaried employees remain committed to offering a DB to new hires over the next two to three years. Just over one-third (36%) of respondents currently offer a DB plan to new employees. The survey [by Towers Watson] also found that support for DB plans is strongest at companies that cover the most participants: Among the largest 10th percentile of respondents, 45% still offer a DB plan to new hires." (MarketWatch)

Has the DOL Really Taken a Stand on Open MEPs?
Attorney Suzanne Wynn comments on recent industry discussion about the Matthew Hutcheson case, as to whether a brief filed by a DOL attorney indicates the DOL has made any new decision about the ERISA status of open multiple employer plans. Excerpt: "[A] Memorandum in Support of [an] Application for a Temporary Restraining Order and For an Order to Show Cause why a Preliminary Injunction Should not be Granted is just that -- a memorandum supporting a request for a TRO filed with a trial court. It can not add language to the Internal Revenue Code (only Congress can do that). It cannot change Treas. Reg. 1.413-2 (only the IRS can do that). And it is not official guidance from the [DOL]." (The Pension Protection Act Blog)


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Michigan's Long History of Government Pension Problems
"Michigan policymakers set aside $133 mil.lion to reform the school pension fund in the budget last year and convened a workgroup to brainstorm curbing the system's growing $17.6 bil.lion unfunded pension liability. The workgroup's report only reaffirms the earlier underfunding warnings: There is no easy way out of this mess. What's especially disappointing is that the drafters of the state's constitution clearly wanted to avoid accruing liabilities, period.' (Michigan Capitol Confidential)

Lawmaker Presses on with Part-Time Retirement Plan Proposal for Federal Employees
"A proposal to allow [federal government employees] to ease into retirement and to roll over unused leave into their Thrift Savings Plan accounts is still alive despite being dropped from a inclusion in a defense authorization bill, according to its author.... Under phased retirement, retirement-age federal employees would continue working part time while receiving partial annuities and could earn additional retirement benefits proportional to the amount of time they work. Proponents say the plan would save millions and encourage mentoring between older employees and newer hires to help preserve agency knowledge." (Government Executive)

Paterno's Penn State Pension to Top $13 Mil.lion
"As head coach for 46 of his 61 years, [former Penn State Coach Joe] Paterno earned the maximum salary for pension calculations, which were made using a state formula and which were not influenced by Paterno's surviving family members, [family spokesman Dan McGinn] said. (The New York Times; free registration required)

TSP Roth Implementation a Work in Progress
"The Federal Retirement Thrift Investment Board emphasized Monday that the Thrift Savings Plan's Roth option is an ongoing endeavor; fully verifying that all Roth transactions are working correctly will take years.... About three-fifths of federal employees have been unable to enroll since the option became available May 7. The Federal Retirement Thrift Investment Board was ready to enroll employees at that time, but payroll systems at many agencies were unprepared for the shift." (Government Executive)

JPMorgan Employees Allege Fiduciary Breach Caused 401(k) Plan Losses
"JPMorgan Chase & Co has been hit with a lawsuit brought on behalf of employees whose retirement holdings fell in value after the largest U.S. bank revealed a surprise $2 bil.lion trading loss earlier this month.... The defendants were accused of violating their duties to 401(k) and other retirement plan participants by including company stock as an investment option, hiding the stock's risk, and failing to move participants to safer choices." (The New York Times; free registration required)

Ten Charged in Long Island Rail Road Pension Fraud; U.S. Offers Immunity
"Ten Long Island Rail Road retirees were charged in a probe of pension fraud as the U.S. announced a program offering immunity to hundreds of other former workers at the suburban New York railway if they admit lying on disability applications and disclaim future benefits. The indictment unsealed today in Manhattan brings to 21 the number of people charged in the case. In October, U.S. prosecutors charged 11, including two doctors and a former union president, with taking part in a scheme in which retired LIRR workers falsely claim disability benefits from the Railroad Retirement Board." (Bloomberg)

California Teachers Fund to Vote Against Wal-Mart Board
"The move [by CalSTRS, a Wal-Mart shareholder,] shows mounting pressure against Wal-Mart, the world's largest retailer, over its corporate-governance practices in advance of the company's annual meeting on June 1 in Fayetteville, Arkansas. The New York City Pension Fund and a major adviser to investors have also urged investors to vote against some directors in the wake of bribery allegations." (Bloomberg)

Half of All States Now Have Pension Forfeiture Laws
"[H]alf of the 50 states now have policies that prevent convicted criminals from receiving a public pension.... [P]ension forfeiture laws are almost always the result of headline-grabbing controversies. They are also usually passed after it is too late to apply the policy to the official whose misdeeds led to its adoption." (Governing)

Should You 'Buy an Annuity' from Social Security by Waiting to Start Social Security Payments? (PDF)
"Households now retiring need to transform their 401(k) and IRA savings into retirement income. One way is to delay claiming Social Security to increase their monthly benefit, using savings to pay current expenses while they wait. In effect, they are buying an annuity from Social Security: The savings used is the 'price' and the increase in their monthly benefit the annuity income it 'buys.' Buying an annuity from Social Security is generally the best deal in town, especially in today's low interest-rate environment." (Center for Retirement Research at Boston College)

Pensions in Transition: Retirement Plan Changes Survey 2012 Report
"[E]ven though DC-only offerings are the most prominent offering to new hires today, many active defined benefit (DB) sponsors remain committed to offering a DB plan in the future. In fact, larger DB plan sponsors are less likely to move away from DB design than their smaller counterparts. And certain industries (e.g., utilities, health care) are more likely to depend on DB benefits as a vital component of reward packages to attract and retain skilled workers." (Towers Watson)

[Opinion]
Text of Letter to Congress by Mercer Urging Pension Funding Stabilization
"To be effective, stabilization reforms must address both the significant increases in minimum required contributions and the even larger—but more difficult to quantify—increases in contributions for sponsor funding to key Pension Protection Act thresholds, such as the 80% threshold to avoid benefit restrictions, at-risk status, and PBGC 4010 filings. Discount-rate stabilization would automatically adjust the funding thresholds without requiring changes in the existing PPA framework." (Mercer)

Benefits in General; Executive Compensation

[Guidance Overview]
Loss Causation in ERISA Lawsuits Alleging Breach of Fiduciary Duty (PDF)
"If a hypothetical prudent fiduciary could have made the same decision that the fiduciary actually made, the loss was not caused by the fiduciary's imprudence, and the fiduciary is not liable for the loss. The U.S. courts of appeal are divided on the question of whether the burden of proof regarding loss causation falls on the plaintiff or the defendant.... [Two] federal appellate courts have adopted a common-law rule under which the burden is on the defendant to prove that the loss was not caused by the defendant's breach of fiduciary duty. The application of this common-law rule is unjustified: although the courts are authorized to develop federal common-law rules under ERISA, ERISA does not authorize the courts to adopt common-law rules that conflict with the provisions of the statute." (John M. Vine, Esq. of Covington & Burling, in BNA Insights)

[Guidance Overview]
Proposed New York State Regs Could Limit Certain Executive Compensation Arrangements (PDF)
"On May 16, 2012, Governor Andrew Cuomo announced the issuance of proposed regulations by thirteen New York State ... agencies that would impose significant executive compensation and administrative expense spending limits on not-for-profit and for-profit entities (as well as certain individuals) that receive specified levels of State funds or State-authorized payments of funds ... These proposed regulations ... are scheduled to take effect on January 1, 2013 ... [and] would generally restrict covered entities and individuals from directly or indirectly spending more than $199,000 annually in State Funds on the 'executive compensation' of a covered executive [unless certain prescribed conditions are satisfied]." (Bond Schoeneck & King)

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