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October 10, 2012          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Account Manager II/III Small Markets
for Lincoln Financial Group in ANY STATE, IN

Plan Administrator
for Nationwide in OH

Plan Analyst
for Retirement Planning Services, Inc. in CO

Installation Administrator-Los Angeles, CA
for Transamerica Retirement Services in CA

Daily Valuation Operator
for Fringe Benefits Design in MN

Director, Benefits
for ScanSource, Inc. in SC

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Webcasts and Conferences

Terminating 401(k) and Other Defined Contribution Plans
Nationwide on October 17, 2012 presented by McKay Hochman Co., Inc.

Rehires, including HEART and USERRA
Nationwide on October 24, 2012 presented by McKay Hochman Co., Inc.

Required Minimum Distributions
Nationwide on November 1, 2012 presented by McKay Hochman Co., Inc.

Health Benefits Coverage Under Federal Law Workshop
in Massachusetts on November 15, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Live FutureOffice Network Smartcast - Best Practices in Termination
Nationwide on October 16, 2012 presented by Davidson Marketing Group -- FutureOffice Network


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Don't Let the DOL Auditor Posse Hang You
"For a number of years, the DOL and Congress have been increasingly concerned about the lack of fee transparency in 401(k) plans, and believe that too few plan sponsors and plan participants know enough about the fees they are paying and what services those fees cover.... [T]he DOL reported that it had collected more than $1 billion in fines in FY 2010. In addition, some 700 new agents have been hired in order to beef up enforcement and audit efforts. So, what do you do?" (Greater Lansing Business Monthly)


[Advert.]

NEW! Introducing ASPPA's Specialized Defined Benefits Education

Sponsored by ASPPA

The Defined Benefit Administration (DBA) Certificate is for entry level to intermediate DB administrators who want to expand their skill set into consulting & basic actuarial skills. Earn up to 7 ASPPA & ERPA continuing professional education credits.


Do Default and Longevity Annuities Improve Annuity Take-Up Rates? (PDF)
"When participants were offered a life annuity first (as the default option), with a lump sum as the alternative, the demand for the annuity increased. When faced with choice of different types of annuities, participants showed particular interest in a deferred or longevity annuity where payments do not begin shortly after the contract is signed, but as many as 15 years in the future." (AARP)

IRS Advisory Committee Solicits Your Suggestions and Comments on EPCRS Program Before Oct. 31 Deadline
"The Employee Plans subgroup of the IRS Advisory Committee on Tax Exempt and Government Entities ('ACT') is conducting its 2012/2013 project on the Employee Plans Compliance Resolution System ('EPCRS'). Specifically, we are focusing on the current program, the aspects that are working well and those with areas for improvement or expansion. As part of the project, the ACT has prepared a very short online survey we are using to solicit practitioner feedback on their experiences with EPCRS. The survey does not require that you identify yourself, and the responses go directly to the ACT members, not the IRS. Please participate in the survey!" [Editor's note: click on the headline, above.] (IRS Advisory Committee on Tax-Exempt and Government Entities)

Retirement Plan Types of Fortune 100 Companies in 2012
"In 2012, the number of Fortune 100 companies offering new salaried employees only a defined contribution (DC) plan rose, as it has for many years. Today, less than a third of these companies offer any DB plan to newly hired salaried workers, and only 11 still offer a traditional DB plan to new hires." (Towers Watson)


[Advert.]

SWBA / IRS Employee Benefits Conference for Practitioners and Plan Sponsors

Sponsored by SWBA (SouthWest Benefits Association)

Staying up to date in the challenging world of employee benefits has never been more critical for benefits professionals and plan sponsors. Changes in regulations, technology, workforce and the economy continue to influence company benefits. Stay informed.


Art Institute of Chicago Borrows $100 Million for Pensions
"The Art Institute of Chicago, the home of paintings by Henri Matisse and Pablo Picasso, is selling about $100 million of taxable and tax-exempt bonds partly to shore up unfunded pension obligations.... The Art Institute is rated A1 by Moody's, its fifth-highest grade, in part reflecting the museum's pension and retirement liabilities. The benefits totaled $64.5 million in the 2012 fiscal year, according to the Moody's report." (Bloomberg)

Games States Play with Underfunded Pensions
"[Bob Williams, a former Washington state legislator, gubernatorial candidate and auditor with the Government Accountability Office,] notes that state legislators are misusing pension obligations on purpose to fund other projects. He found a number of states that 'game' the system and divert funds that should be going to pensions to fund other projects,' including Illinois, California and New York." (FoxBusiness.com)

Love Your Company, Not Its Stock
"A common investing error is to own way too much stock of the company your work for. Not only does this practice ignore the principle of diversification -- spreading your stock investments over a wide variety of industries and company sizes -- but sets you up for potentially falling severely short of your reaching your retirement goals." (ABCNews)

Former NY Pension Fund Officer Sentenced Over Corruption
"David Loglisci, former chief investment officer at the New York state pension fund, was sentenced to a conditional discharge Tuesday for allowing a 'culture of corruption' at the fund. Loglisci is among eight people who pleaded guilty in a probe of 'pay-to-play' at the New York state Common Retirement Fund under Alan Hevesi, the comptroller from 2003 to 2006, whose job it was to manage the fund. Hevesi, who admitted to abusing his position, is serving up to four years in prison." (The New York Times; free registration required)

Social Security Recipients Will See Smaller COLA in 2013: Probably 1.5 to 1.7 Percent
"[American Institute for Economic Research] economists estimate the 2013 increase to be between 1.5% and 1.7%, two percentage points below the 3.6% increase seniors received for 2012. The Social Security Administration will announce the official cost-of-living adjustment for 2013 on October 16." (Investment News; free registration required)

Complex Social Security Choices Present Opportunities for Advisers
"Most advisors are woefully unprepared to advise average Americans on their single most important source of retirement income: social security. [A recent conference speaker] urged advisors to educate themselves about social security and to use software to guide them and their clients through the dizzyingly complex task of optimizing benefits under the program." (Financial Planning)

Retirement and Total Rewards: A Shift in Benefit Plan Value
"Retirement benefits play an important role in attracting and retaining top talent. But to keep steadily rising benefit costs in check, employers are shifting the risk and responsibility of financing retirement to workers by moving from defined benefit (DB) to defined contribution (DC) and hybrid retirement plans. The hurdle organizations face is high: They need to control plan costs while offering retirement benefits as part of a total rewards program that attracts and retains the right people." (Towers Watson)

The UK Scandal of Lump-Sum Cash Payments
"Poor value pension commutation has long been conveniently ignored. Cash commutation terms have failed to keep pace with the increasing value of defined-benefit pensions, thanks to factors such as increased life expectancy and lower interest rates (or government bond yields). The impact varies widely between schemes. However, many schemes use factors offering cash of only 50% to 70% of the value of the annual pension forfeited." (Financial Times)

Corporate Pension Funded Status Improved in September
"Corporate pensions' September funding levels continued to recover, gaining ground on rising interest rates that reduced the funds' liabilities. Three benchmark measures of the funded status of typical corporate retirement plans all showed improvement from August and record-low levels recorded earlier this year." (Thompson SmartHR Manager)

Getting Into the Retirement Savings Habit
"If your employer offers a retirement plan, take advantage of it! There are many others who do not have this option. Remember, if that retirement plan offers a match, deciding not to contribute enough to earn it is like throwing away free money. Along those same lines, if you are a part-time employee check with your HR department to see if you can still meet the eligibility requirements to enter the plan." (Retirement Town Hall)

[Opinion]

How Will November Elections Affect the Fiduciary Debate?
"Although it took a financial panic to bring the fiduciary standard to the attention of Congress, the once backwater debate has been thrust front and center and shows no signs of ending.... Having opened the box by asserting legislative authority with the passage of ERISA, albeit with considerable deference to court interpretation at the time, Congress will continue to be urged by powerful interest groups to oppose or water down a new fiduciary standard." (fi360 Blog)

[Opinion]

Public Employee Pensions: Some Contracts Are More Sacred Than Others
"One reason that cities have chosen bankruptcy as a means of restructuring pensions, rather than choosing the more direct route of simply attempting to alter current pensions, is the widespread assumption that current public employee pensions are legally untouchable. However, even though widespread and oft-repeated, this assumption may be wrong. The only way to find out is to test it in court. Such a court battle would ... make plain the reality of the situation, which is that what seems to be a 'complex legal issue' is in reality a political issue -- nothing more, and, unfortunately, nothing less." (Cal Watchdog)

[Opinion]

Some Vendors are Scared to Let Participants Decide 403(b) Investments for Themselves
"Many states do not have fiduciary requirements for 403(b) plans and for valid reasons. These plans operate differently from 401(k) plans in that school districts are frequently less involved than private employers are in their 401(k) plans. These public schools do not have human resource departments and school districts typically do not have the resources to encourage savings and educate workers in the same way as the private sector. As a result, schools benefit from the advisors who meet with workers, educate them about their retirement plans and encourage them to save." (SaveMy403b)

Benefits in General; Executive Compensation

Multinational Companies Want Increased Control of Global Benefits Programs
"88% of companies say that employee benefits are on the agenda for boards and senior management of their companies due to the costs and risks of benefit programmes. Around 70% of companies say that they are leveraging their global scale to reduce costs of benefits operations and are implementing stricter controls and corporate oversight in both mature and emerging markets. More than 90% of companies expect to have corporate benefits policies in place over the next three years. However, less than 60% of companies are certain that their local benefit plans will be aligned with corporate guidelines." (Aon Hewitt)

Sixth Circuit Holds that Severance Pay is Not Subject to FICA Taxes (PDF)
"Even though section 3402(o)(2) covers income tax withholding, not FICA taxes, the Sixth Circuit concluded that any statutory exemption from 'wages' like that provided for in these involuntary severance benefits must be deemed to extend to FICA taxes as well, unless the IRS provides a different rule by regulation." (Winston & Strawn LLP)

Absence Policies and Leave Administration Lack Rigor
"Even though lost productivity due to unplanned absence is a primary business concern, only one-third of midsized companies (50 to 999 employees) and two-thirds of large companies (1,000-plus employees) are evaluating the impact of absenteeism on productivity[.]" (Thompson SmartHR Manager)

Time Off for Voting: State-by-State
"The 2012 elections are just less than a month away. Many states allow employees to take time off, sometimes with pay, so that they can vote. The chart [at the link] provides a general overview of each state's law as to time off, pay, and what, if any, advance notice is required before taking time off to vote." (Vorys, Sater, Seymour and Pease LLP)

One-Third of Public Sector HR Executives Report Making Changes to Retirement Plans Within Past Year (PDF)
"As of March 2011, 89 percent of local government workers had access to some form of retirement benefit, with 95 percent of those with access participating.... Eighty-six percent (86 percent) of local government employees had access to health care as of March 2011.... In 2009, 21 percent of local government human resource executives surveyed reported that their government had made changes to employee retirement benefits since the beginning of the recession; 53 percent reported having made changes to health care benefits. In 2012, 33 percent of local government human resource executives reported changes to retirement plans within the past year, and 59 percent reported making health care changes." (ICMA-RC and SLGE)

Press Releases



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