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October 25, 2012          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Account Relationship Manager
for Beneco in AZ

DC/DB Pension Plan Administrator
for Feldman Benefit Services, Inc. in NJ

Client Communications Consultant
for The Newport Group in FL

Manager, Operations
for The Newport Group in FL

Relationship Manager II
for Wilmington Trust - M&T Bank Corporation in AZ

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Webcasts and Conferences

Mergers and Plan Terminations Webcast
Nationwide on November 5, 2012 presented by American Society of Pension Professionals & Actuaries (ASPPA)

The Trials and Tribulations of Auto Enrollment Webcast
Nationwide on November 13, 2012 presented by American Society of Pension Professionals & Actuaries (ASPPA)

RMDs for DB Plans Including Cash Balance and Other Distribution Issues Webcast
Nationwide on November 15, 2012 presented by American Society of Pension Professionals & Actuaries (ASPPA)


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Should You Accept a Lump Sum Pension Buyout?
"Should you accept a lump sum cash-out of your pension from a former employer? ... If you have a sizable pension, this is one of the most important financial decisions you'll make, so it pays to carefully consider the pros and cons." (CBS MoneyWatch)


[Advert.]

Fast, Integrated, Affordable Form 1099 Software

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Wolters Kluwer Law & Business - ftwilliam.com offers web-based 1099 Software that will help simplify the 1099 preparation process. Need help with all that printing, mailing and e-filing? Ask about our Service Bureau. We'll take care of that for you.


The EPCRS and Audit Test of the 403(b) Regulations
"Now with EPCRS ... being on the verge of release, and with 403(b) audits beginning to enter a new ... stage, the 2007 regs will truly be put to the test.... At the heart of the problem is the statute itself: Code Section 403(b) is still more like an IRA in many ways than a qualified plan. The tax impact and benefits are fully directed at the individual not the employer." (Business of Benefits)

Disbursement of Participant's Account Balance Incident to Fraud by Former Spouse Did Not Constitute Forfeiture
"[The Tenth Circuit Court] explained that, under ERISA Sec. 203(a), an employee's right to his or her 'normal retirement benefit' is nonforfeitable upon the attainment of normal retirement age. However, the court noted that the nonforfeitability rules of ERISA Sections 3(19) and 203(a) do not entitle a participant to a fixed amount of benefit regardless of any and all later-occurring conditions, such as the theft of savings plan funds by a participant's former spouse in possession of a participant's Social Security Number." [Foster v. PPG Industries (CA-10)] (Wolters Kluwer Law & Business)

How Will Variable Annuities Evolve As Boomers Seek Retirement Income?
"[T]he recent uptick in risk aversion highlights the paradoxical dilemma of these complex instruments: right at the time risk-shy advisors and investors are most interested, the product providers pull back because of the risks involved. In protecting themselves, they limit the options within the contracts, or increase the cost of riders." (Employee Benefit News)

Wave of 401(k) Lawsuits Tells RIAs What to Worry About
"One target-rich area proved to be providers and employers who used expensive share classes when lower-cost share classes were available. In addition, attorneys have attacked employers and providers for failing to monitor record-keeping costs and for failing to negotiate rebates from investment providers -- which may be required by plan documents. now that the industry is spelling out all of its fees, it will be a breeze for participants and employers to benchmark fees, which could put a bull's-eye on advisors who blatantly charge more than their fellow RIAs." (RIABiz)


[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.


Would Tax Increases Prompt Small Business Owners to Reevaluate Their Retirement Programs?
"If tax rates increase and small business owners look at different alternatives to manage their tax liabilities, will we see changes to their retirement programs? In particular, will there be interest in adding a tax-advantaged cash balance plan to their existing 401(k) profit sharing plan, or perhaps adding a newly minted DB(k) plan for those without retirement programs?" (Retirement Town Hall)

What You Should Know About Mutual Fund Share Classes and Your 401(k)
"[M]any fund families offer multiple share classes for their funds used in 401(k) plans, and those share classes come with different costs. While the underlying holdings of a fund may be identical, investor's returns will vary based on the expense ratio of each individual share class." (U.S. News & World Report)

Beware of Investing Your Retirement Account in Your Company's Stock
"Many firms encourage their employees to purchase stock inside their 401(k) or other qualified plans ... But while this strategy does have a few advantages, it can also pose some substantial risks to employees, and these risks are not always explained adequately." (Business Insider)

Illinois Pension Plans on Road to Ruin
"Pension costs are projected to take up 25% of the state's budget in fiscal year 2015, up from 8% in 2008 and 20% in 2012. Each of the state's five pension funds, with an estimated $85 billion in combined unfunded liabilities, is less than 41% funded. More than 60% of the state's total outstanding debt is due to pension bonds." (Pensions & Investments)

Volcker-Ravitch Study Says Illinois Pensions Face Insolvency
"Illinois's retirement system has only 43.4 percent of assets needed to cover promised obligations, the lowest among U.S. states, according to data compiled by Bloomberg. It has borrowed $7.2 billion since 2010 to plug the gap, pushing the state's obligation to fund the systems out to 2019 rather than making the contributions out of current funds." (Bloomberg)

Many in Middle Class Guess on Retirement Needs
"Three-fourths of middle-class Americans say their estimate of what they'll need to live on in retirement is based on 'some sort of guess,' a new survey finds.... For instance, middle-class Americans say they believe the median cost of their out-of-pocket health care costs in retirement will be $47,000. But the Center for Retirement Research estimates a typical couple at age 65 can expect to spend $260,000 or more over the rest of their lives. Further, when asked what percentage of their nest egg they expect to withdraw annually in retirement, the median -- or typical -- withdrawal predicted by middle-class Americans is 10 percent. But most experts recommend annual withdrawals of 3 to 4 percent." (The New York Times)

DOL Helps You Keep an Eye on the Fees That Can Eat Away at Your 401(k)
"No matter how generous your employer is in helping you save for the future, your retirement plan isn't free -- you're paying for it -- and as a consumer you're entitled to know what you're being charged. Our new rules are designed to increase transparency and ensure your hard-earned savings are not diminished by hidden costs and excessive fees." (Phyllis Borzi via DOL Blog)

The Fiscal Implications of Massachusetts Retirement Boards' Investment Returns (PDF)
"Massachusetts has managed to preserve most of the benefits for its 500,000 retirees and active public employees, but its retirement system has been hit hard by the sharp decline and increased volatility of asset prices.... The 2010 financial reports of the 105 Massachusetts retirement boards listed combined pension liabilities of over $92bn, almost $31bn of which remained unfunded.... Present economic and asset-market conditions pose significant challenges to a system relying on investment returns to fund a large portion of retirement liabilities." (Pioneer Institute)

Russian Funds Band Together to Repel Government Pension Grab
"Russia's biggest retirement funds are uniting to scuttle a pension revamp they say would decimate an industry that's poised to amass more than $70 billion. Government proposals would divert taxes from future retirement plans to meet current pension payments and narrow the state system's deficit. The money managers that earn fees for investing the cash have appealed to President Vladimir Putin to block the plan, which is dividing the government." (Bloomberg BusinessWeek)

[Opinion]

Demonizing Public Pension Funds Is Misguided, Irresponsible
"The truth is that while public pension detractors are busy making headlines, the plans themselves are busy making progress. Any responsible party who bothers to check the pulse of public plans will find their vital signs are strong and their prognosis is good." (Pensions & Investments)

Benefits in General; Executive Compensation

Say on Pay: Takeaways from 2012 and Strategies for 2013
"First mandated for the 2011 proxy season, experience to date shows that say on pay is neither as dire nor as beneficial as some predicted. Say on pay has led to: [1] Increased efforts by boards to engage with shareholders and understand their concerns, not only on compensation-related matters but on other governance issues as well. [2] Less opposition by shareholders to board nominees generally. [3] Fewer shareholder proposals on executive compensation, with the number of proposals falling significantly to less than half the number in 2010 (the year before say on pay went into effect). However, while average levels of shareholder support remain high, failure rates for say on pay proposals in 2012 were about twice as high as in 2011." (Practical Law Company)

Cypen & Cypen Newsletter for October 25, 2012
Covers employee benefit developments with an emphasis on governmental plans. Topics in this issue include: U.S. Pension Gap Is "Good News"; Definition of "Convicted" in Forfeiture Statute Authorized by Constitution Does Not Impermissibly Broaden Constitutional Provision; Correctional Officer's Presumption of Occupational Causation for Disabling Heart Disease Not Rebutted by Presence of Viral Gastroenteritis; Colorado Appellate Court Reverses Retirees' Attack on Retroactive Cost-of-Living Adjustment; Roth IRA Not "Pension Plan?" (Cypen & Cypen)

Press Releases



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