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August 27, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

Defined Benefit Operations Specialist
for Charles Schwab in OH

Litigation Associate
for Mid-Size Benefits Boutique Firm in DC

Manager of ERISA Compliance Department
for Retirement Alliance in NH

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Webcasts and Conferences

"Cross-Tested/Safe Harbor 401(k) Plan Design and Troubleshooting" Workshop - Charlotte
in North Carolina on September 27, 2012 presented by SunGard Relius

"Cross-Tested/Safe Harbor 401(k) Plan Design and Troubleshooting" Workshop - Atlanta
in Georgia on September 28, 2012 presented by SunGard Relius

"Cross-Tested/Safe Harbor 401(k) Plan Design and Troubleshooting" Workshop - Jacksonville
in Florida on October 2, 2012 presented by SunGard Relius

"Cross-Tested/Safe Harbor 401(k) Plan Design and Troubleshooting" Workshop - Cincinnati
in Ohio on October 3, 2012 presented by SunGard Relius

"Cross-Tested/Safe Harbor 401(k) Plan Design and Troubleshooting" Workshop - Appleton
in Wisconsin on October 4, 2012 presented by SunGard Relius

"Cross-Tested/Safe Harbor 401(k) Plan Design and Troubleshooting" Workshop - Chicago
in Illinois on October 4, 2012 presented by SunGard Relius

Retirement Savings: Saving More for Tomorrow by Paying Less in 401 (k) Fees Today
Nationwide on September 13, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

401(k) Rekon Advisor Symposium - Baltimore
in Maryland on September 25, 2012 presented by 401(k) Rekon

Employee Benefits Committee Meeting
in Ohio on September 6, 2012 presented by Columbus Bar Association


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Timing of 404(a)(5) Disclosure to 'Non-Participating' Participants
"[T]he mere eligibility to make a deferral into an individual account plan doesn't trigger the right to the 404(a)(5) disclosures. Instead, it is the right to direct investments under the plan which triggers the right to those disclosures." (Business of Benefits)


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Implementing Lump Sum 'Sweeps' for a DB Plan: Considerations for Plan Sponsors
"Many defined benefit (DB) plan sponsors are in the process of considering whether to offer a lump sum 'sweep' to terminated deferred vested participants. Essentially, a 'sweep' is a plan amendment that offers lump sums to terminated vested participants during a temporary period. By removing these participants from the plan in 2012, sponsors may accomplish the following ..." (Retirement Town Hall)

What Should Plan Sponsors Do with the Recently Received Fee Disclosures?
"In multiple cases, [the authors] have seen service providers 'find' cost-savings in the arrangement, resulting in lower asset-based fees and a benefit to all participants. These cost savings may be lower-priced mutual fund share classes or an identification of revenue sources that can be rebated to participants or used for other plan expenses.... [P]lan administration committees and responsible managers [should] evaluate or 'benchmark' the fees being charged to the plan." (Bond, Schoeneck & King, PLLC)

The Best Practices of Retirement Plan Committees (PDF)
"This article provides a step-by-step process for starting, structuring and managing a 401(k) plan committee. Even if your company already has a similar committee, you may find that some of the suggestions described on the following pages offer more effective use of this group's collective time." (RidgeWorth Investments)

Best Practices for Investment Committee Members (PDF)
"As fiduciaries, committee members are ... responsible for managing the plan in the best interests of the participants; failing that will give rise to potential personal liability. These Best Practices ... are designed ... to transfer the potential liability to either 'prudent experts' or to the participants themselves. Committee members, however, will still retain the potential liability for selecting the 'prudent expert.'" (Brightscape)

Informing the Debate on Oregon PERS Reform
"Further reforms to the Oregon Public Employees Retirement System are certain to be a key topic in the 2013 legislative session. Without additional reform, Oregon's public employers are facing a $900 mil.lion increase in PERS costs in the 2013-15 biennium. This is on top of the $1 bil.lion increase in the current biennium. Both increases are primarily related to the 2008 market meltdown." (StatesmanJournal.com)

Narrow Majority Supports Raising Taxes, Retirement Age to Save Social Security
"Most Americans say go ahead and raise taxes if it will save Social Security benefits for future generations. And raise the retirement age, if you have to. Both options are preferable to cutting monthly benefits, even for people who are years away from applying for them." (The Washington Post; free registration required)

Bank of England's Quantitative Easing Hit Underfunded Pensions Badly
"Quantitative easing has increased the size of deficits for many of the U.K. defined benefit schemes already suffering substantial shortfalls when the program began in 2009, the Bank of England has acknowledged. Its admission that a central bank program has hit some pension funds increases the onus on the U.K. government, including its pensions regulators, to ease the short-term pressure on schemes to make up their deficits—though it is unlikely to make any difference to the pressure exerted in the longer term." (Institutional Investor)

Contribution of Single Parcel of Real Property to Pension Trust Not Prohibited Transaction
"A contribution of a single parcel of employer real property to a Master Pension Trust established by the employer would meet the 'geographic dispersal' requirement for 'qualified employer real property' if, immediately after the sale, the remaining parcels in the Master Pension Trust would together meet that requirement, [EBSA] has advised." (Wolters Kluwer Law & Business / CCH)

Former Los Angeles Mayor: Pension Reform or 'Disaster'
"Retirement costs continue to climb as the deficit-ridden city, already hit by four years of deep cuts in the workforce and services, faces another major budget shortfall next fiscal year that could balloon to more than a quarter bil.lion dollars. How unusual is the size of the growing bite taken by pensions and retiree health care costs from funds needed for other government services? In San Jose and San Diego, where voters in June approved sweeping pension reforms now opposed in the courts by public employee unions, retirement costs were about 20 percent of the general fund." (CalPensions)

House Bill Would Insure, Toughen Retirement Plan Borrowing
"Concerns are mounting in the United States about the increase in retirement plan 'leakage'—hardship early withdrawals and loans being taken against such plans during tough economic times.... Money withdrawn for crisis spending is rarely replaced in workers' retirement plans and studies have found a rising rate of default on retirement savings loans." (Thompson SmartHR Manager)

DOL's Focus on Brokerage Windows Implicates Hecker v. Deere Precedent
"While the position taken in Q&A 30 may have surprised many, it is consistent with positions DOL has taken in its amicus program. Hecker, et al. v. Deere & Co., et al., was one of the first 'excess fee' cases to reach judgment, and provided a significant early boost to the defense bar facing such cases." (Schiff Hardin LLP)

Boilermakers Union's Pension Funds Have a Long Record of Federal Scrutiny
"More than six years ago, the U.S. Department of Labor told Boilermakers union pension officials that they had to make some changes.... Rank-and-file union members, who in the past decade have watched their pension fund go from a classification of 'healthy' to 'endangered,' want to know why federal officials have taken so little action." (Kansas City Star)

Single Fiduciary Standard from SEC, DOL Would Create Multiple Problems, Says Consultant
"The financial industry and members of both parties of Congress have urged the agencies to combine their efforts and 'harmonize' the controversial rule making in order to produce consistent guidance for investment firms. That would be a bad idea, according to an Aug. 16 letter to lawmakers from fi360, a firm that provides fiduciary-duty training. SEC and Labor Department investor-protection rules operate under different statutes, with the SEC giving advisers more latitude in working with clients and DOL being much more prescriptive when they work under [ERISA]." (Investment News; free registration required)

California Widens Audit of Pension Abuse, Controller Says
"The review to determine whether educators improperly received late-career raises to boost their pensions has widened from the second-largest pension itself, known as CalSTRS, to also include five school districts[.]" (Bloomberg)

UPS Sees $896 Mil.lion Cost Redoing Pensions for 10,200 Teamsters
"United Parcel Service (UPS) reached an agreement with Teamsters union to overhaul the pension plan for 10,200 workers that will freeze liabilities and preclude cash contributions for 10 years.... The agreement freezes Atlanta-based UPS's liabilities under the old program and allows it to move workers to a new plan." (Bloomberg)

Common Mistakes Made by Pre-Retirees
"A single financial misstep right before retirement can mean the difference between peace of mind and constant money worries in later years. Misinterpreting a spouse's retirement dreams, failing to plan for emergencies and spending too much are just a few of the mistakes folks approaching retirement may make." (The Wall Street Journal)

Income For Near Retirees Fell More Than Any Other Group
"A new report says boomer households (ages 55 to 64) are earning nearly 10 percent less than they did three years ago, when the economic recovery officially began. What's more, no other age group has suffered financially as much as this one. [M]edian annual household income for near-retirees declined from $61,716 in June 2009 to $55,748, in today's dollars.... The one bright spot: older households. Only those with people 65 and older showed an increase in income, from $39,548 to $42,113. The report doesn't explain why that might be." (AARP)

Sixth Circuit Concludes Participants Have Plausible Fiduciary Breach Claim for Investments in Employer Stock
"This case highlights the procedural differences between the Sixth and Eleventh Circuits about when, in a lawsuit, the Moench presumption should apply. Unlike the Sixth Circuit's ruling that the presumption is evidentiary and therefore does not apply on a motion to dismiss, the Eleventh Circuit recently ruled that participants must allege facts sufficient to overcome the presumption (see our article). It is likely there will be more litigation on this procedural issue, which often can determine whether a case proceeds to trial." [Griffin v. Flagstar Bancorp, Inc., 2012 WL 2989231 (6th Cir. 2012)] (Thomson Reuters / EBIA)

San Jose Police Department Losing Some of Its Best After Pension Reform
"[F]or the first time in the department's history more police officers are resigning—primarily for jobs with other departments—than are retiring.... After pension reform and pay cuts, officers can make more money and better benefits elsewhere, even at smaller departments." (Silicon Valley MercuryNews)

Why Do Individuals Choose Defined Contribution Plans? Evidence from Participants in a Large Public Plan (PDF)
"[The authors] find sensible patterns with regard to economic and demographic factors: DC plan choice decreases with age, rises with the level of education, and is less frequent among groups (e.g., police officers) for whom there are additional financial benefits to the DB plan. [But the authors also found that] beliefs, preferences, and financial skills nearly triples the amount of variation in plan choice [they] are able to explain [by] standard economic and demographic variables alone. Especially important are respondent attitudes about risk/return trade-offs, self-assess investment skills, general and choice-specific financial literacy, and beliefs about plan parameters." (National Bureau of Economic Research; no purchase required)

The Distributional Effects of the Social Security Windfall Elimination Provision
"This paper analyzes the distributional implications of the WEP, and finds that it reduces benefits disproportionately for households with lower lifetime covered earnings. It discusses an alternative method of calculating the WEP that preserves the intended redistribution of the system." (National Bureau of Economic Research; purchase required)

[Opinion]

Why Traditional Pension Plans Are Disappearing
"Was the traditional pension plan killed by greedy corporate executives? No, it was killed by laws, accounting rules, and a changing workforce.... The result of all of these demographic, financial, and regulatory pressures was unsurprising: There was no downside to freezing the pension plan and replacing it with a 401(k) plan. There was, however, plenty of upside." (The Philadelphia Inquirer)

Benefits in General; Executive Compensation

Cypen & Cypen Newsletter for August 23, 2012
Covers employee benefit developments with an emphasis on governmental plans. Topics in this issue include: CalPERS Approves Five-year Strategic Plan; Court Upholds Miami Chief of Police's Removal; Deputy Fire Chief Applicant Who Was Not Given Required Veterans' Preference Has No Claim Where City Hired Best Qualified Applicant; FICA's Impact Upon Public Pensions; Civil Grand Jury Tells Pension System To Make Changes? and State Pension Forfeiture Laws. (Cypen & Cypen)

Bankrup.tcy Judge Nixes Plan for $5.3 Mil.lion in Bonuses for Eight Top Hawker Beechcraft Executives
"Senior management would have likely earned bonus pay under the proposed incentive plan merely by remaining at their jobs, regardless of the road the company takes to emerge from bankrup.tcy, and must therefore be denied, [the judge] noted.... The decision came down amid voting Friday by machinists union members on pension changes." (The Washington Post; free registration required)

Unemployment Statistics on Older Americans: Updated August 10, 2012
"The recession has increased joblessness among older Americans. These graphs and tables report unemployment rates and how they have varied by age, se.x, race, and education since 2007." (Urban Institute)

Press Releases



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