NIPA (National Institute of Pension Administrators)

Part Time On Call Retirement Planning Consultant
for Diversified in CA, HI, MO, NC, UT, WA

Defined Benefit Client Consultant
for Diversified in MA

Defined Benefit Calculation Analyst
for Diversified in MA

Participant Education and Enrollment Specialist
for MBM Advisors, Inc. in TX

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[Official Guidance]

Disaster Relief Relating to PBGC Deadlines in Response to Hurricane Sandy in Maryland
"[PBGC] is waiving certain penalties and extending certain deadlines in response to Hurricane Sandy that began on October 26, 2012, in Maryland.... The disaster area consists of Somerset County. If IRS adds additional areas in connection with those filing extensions, any person responsible for meeting a PBGC deadline that is located in those additional areas will also be a Designated Person." (Pension Benefit Guaranty Corporation)

[Advert.]

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2012 Year-End Tax-Free Charitable Distributions From IRAs Uncertain
"As 2012 draws to a close and Congress' primary focus is avoiding the fiscal cliff of automatic tax increases and federal spending cuts, the extension of some 60 expiring tax provisions has become a back burner issue. Included in these expiring tax provisions is the IRA qualified charitable distribution (QCD) option, which allows taxpayers age 70-1/2 or older to contribute up to $100,000 per year tax-free to qualifying charitable organizations. This tax provision expired the end of 2011, but is among the tax provision extensions being considered by Congress this year." (Ascensus)

Hurricane Sandy Tax Relief Legislation Is Introduced
"The Hurricane Sandy Tax Relief Act (H.R. 6683) has been introduced in the House of Representatives, modeled after 2005 legislation enacted in the wake of Hurricane Katrina in the Gulf.... [Among other provisions, the] Act proposes the following for qualifying victims of Hurricane Sandy: [1] Up to $100,000 could be withdrawn without penalty from IRAs and employer-sponsored retirement plans. [2] 20 percent withholding would not apply to such distributions. [3] Such amounts could be recontributed within a three-year period. [4] Three-year ratable taxation (if not repaid) would apply to such distributions, unless otherwise elected." (Ascensus)

Applicability of New Medicare Tax on Net Investment Income to 404(k) Dividends
"[E]mployers may be less familiar with the entirely new imposition of a 3.8% Medicare tax on net unearned income for high-wage earners ... However, one potential impact this new Medicare tax may have on the benefits an employer provides is if their ESOP plan (including a 401(k) plan with an ESOP component) has a "dividend pass-through" feature as permitted by Internal Revenue Code Section 404(k), through which plan participants can elect to either 1) have cash dividends on employer stock paid to them in cash, or 2) keep those dividends in the plan and have them reinvested in additional shares of employer stock." (Faegre Baker Daniels)

Public Pension Funds Nationwide Reconsidering Investments in Gun Makers
"From California to New York, teacher and public-worker retirement funds are reconsidering their investments in gun makers and confronting an uncomfortable fact: Their pensions have supported the manufacture of deadly weapons, in some cases the same type of gun used in the Connecticut school shooting. For years, the gun industry has been a reliable investment, attracting tens of millions of dollars from some of the nation's largest retirement funds." (The New York Times; free registration required)

Total Assets Held by Retirement Plans Now $19 Trillion
"As of September 30, retirement assets were up 3.5% from the $18.7 trillion recorded on June 30. ICI reports that the increase in retirement assets can be attributed to the rise in corporate equity values -- the S&P 500 total return index grew by 6.4% in the third quarter. At the end of the third quarter, retirement savings made up 36% of all household financial assets. Individual retirement accounts (IRAs) swelled 4.3% since the end of the second quarter to reach $5.3 trillion, 46% ($2.4 trillion) of which was invested in mutual funds." (PLANADVISER.com)

Ameriprise Loses Bid to Dismiss Suit Alleging Fiduciary Breach Due to 401(k) Fund Selection Favoritism
"In ruling for the plaintiffs, the judge reminded that ERISA's duty of loyalty requires fiduciaries such as Ameriprise to act with an eye solely to the interests of participants. She said plaintiffs plausibly argued that Ameriprise did not do this when discharging its duties to participants and beneficiaries of the plan. 'Perhaps the most fundamental duty of a [fiduciary] is that he must display ... complete loyalty to the interests of the beneficiary and must exclude all selfish interest and all consideration of the interests of third persons.'" [Krueger v. Ameriprise Financial Inc., No. 11-cv-02781 (D. Minn., Nov. 20, 2012)] (Thompson SmartHR Manager)

Study Recommends Moving to 401(k) Plan for Arizona Public Employees
"Lawmakers should consider creating an optional 401(k)-style retirement plan and raising the retirement age for future public employees if Arizona is interested in changing its financially ailing public-pension system [according to a] 13-member pension-study committee [which] also recommended amending the law to prevent public employees from spiking their pensions.... [The] committee noted that the four state plans had unfunded liabilities of up to $39.6 billion, and the number of retired members in each of the systems is growing faster than the number of new workers entering the systems. The pension plan for elected officials has more retirees (992) than active members (845) paying into the system." (The Arizona Republic)

Non-Taxable Pension Amounts Under Code Section 72(d) (PDF)
"Generally, annuity payments from tax-qualified retirement plans are taxed by the federal government as ordinary income when the payments are received. However, a portion of the payment, representing the recipient's 'investment in contract,' is excludable from taxation. In a public-sector retirement plan, the investment in contract is usually the principal amount of a member's after-tax contributions." (Gabriel Roeder Smith)

Automatic Enrollment, Employee Compensation, and Retirement Security
"By boosting plan participation, automatic enrollment likely increases employer costs as previously unenrolled workers receive matching retirement plan contributions.... [D]ata shows a significant negative correlation between employer match rates and autoenrollment. [The authors] find no evidence that total costs differ between firms with and without autoenrollment or that DC costs crowd out other forms of compensation-suggesting that firms might be lowering their match rates enough to completely offset the higher costs of autoenrollment without needing to reduce other compensation costs." (Urban Institute)

The Wise 401(k) Participant's New Year Resolutions for 2013
"Here are some ideas to help get 2013 started on the right foot: Contribute enough to get the full employer match ... Sign up for advice ... Raise your contribution level ... Look for low-cost options ... Evaluate your beneficiaries ... Address old 401(k)s ... Don't touch that cash!" (Schwab)

401(k) Plan Asset Allocation, Account Balances and Loan Activity in 2011 (PDF)
"On average, at year-end 2011, 61 percent of 401(k) participants' assets was invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Thirty-four percent was in fixed-income securities such as stable-value investments and bond and money funds. Seventy-two percent of 401(k) plans included target-date funds in their investment lineup at year-end 2011." (EBRI)

DOL Files Suit Against Rockville, Md., Manufacturer to Restore Assets to Company's Employee Benefit Plans
"The [DOL] has sued Sun Control Systems Inc., the estate of former company president John Buckingham Sr., and current president Thomas Buckingham, to restore assets to the company's three employee benefit plans.... The suit alleges that from December 2007 through August 2010, the defendants permitted a series of transfers from the accounts of two profit-sharing plans and one 401(k) plan to satisfy corporate debt. Additionally, it is alleged that between January 2006 and November 2010, the defendants failed to remit employee contributions to the 401(k) plan and remitted certain contributions late, resulting in lost interest." (Employee Benefits Security Administration)

Court Orders Business Owners to Restore $69,000 in Retirement Funds, Health Care Premiums Withheld from Employees' Paychecks
"A federal court in Chicago has ordered John Dombek III and John Dombek Jr. to restore a total of $69,521.31 in health care premiums and retirement plan contributions withheld from the paychecks of employees at several companies that are part of the JJD Industries Group in Schiller Park, Ill. The judgment resolves a lawsuit filed by the [DOL] based on the findings of an investigation by [EBSA which] determined that both Dombek III and Dombek Jr. violated [ERISA] by improperly managing the company's benefit plans' assets.... Dombek Jr. and Dombek III have both previously filed for Chapter 7 bankruptcy protection.... [T]he U.S. Bankruptcy Court for the Northern District of Illinois .. [found] that the debts Dombek Jr. and Dombek III owed to the plans were not dischargeable in bankruptcy." (Employee Benefits Security Administration)

[Opinion]

More on Decoding the Fiscal Cliff: The Power of Doing Nothing and Other Ruminations on Opportunities for Cliff Maneuvers Inherent in New 3.8% Medicare Surtax and AMT Patch
"[New federal taxes to be paid by high-income taxpayers] should be taken into account, not just as a means of mediating the differences between the [fiscal cliff] negotiating parties, but because failing to do so undercuts the implied moral underpinning of the Obama position that one who does not pay a new, stipulated higher rate of federal ordinary income tax is not contributing his fair share to the public fisc, notwithstanding the payment of other new, higher federal taxes equivalently enhancing the fisc.... One tax in particular introduced in the health care reform legislation is especially well suited to the proposition, a 3.8% tax on net investment income (misleadingly labeled in the law as a 'Medicare contribution') that comes into force in 2013 at income levels matching exactly the $250k/$200k figures that have been the battle cry of Obama in the fiscal cliff war of words.... The AMT 'patch' also lends itself to being ready-made to contribute in much the same way to resolution of the current fiscal crisis deadlock." (Alvin D. Lurie, Esq. on BenefitsLink.com)

BeneTrac Wins eHealthcare Leadership Award for Benefits Management Platform
BeneTrac

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