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January 25, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Plan Compliance Specialist
for Lincoln Financial Group in ANY STATE, IL, IN

Pension Analyst (DB)
for Long Island Employee Benefits Group, Ltd. in NY

Defined Benefit/ERISA Client Relationship Manager
for Goldleaf Partners in MN

Vice President, Benefits Strategy
for Fidelity Investments in MA

DC Plan Specialist
for Acuff & Associates, Inc. in TN

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Webcasts and Conferences

The New HIPAA Omnibus Rule & Your Liability Webinar
Nationwide on January 30, 2013 presented by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

The Impact of the Recent Elections and Legislative Updates on Employee Benefit, Health and Retirement Plans: A Professional’s Perspective
in California on February 7, 2013 presented by Western Pension & Benefits Conference, San Francisco Chapter

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Preretirement 401(k) Distributions on the Rise
"[T]he report advises against further prohibiting distribution options for participants. 'Nearly all households that breach are financially unhealthy even after they receive distributions from their retirement savings,' the authors point out. Prohibiting access to retirement funds, in these cases, would 'exacerbate the basic money-management problems that are strongly associated with breaching in the first place'." (Society for Human Resource Management)


[Advert.]

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In this January 29 webinar, Wolters Kluwer – ftwilliam.com experts will cover topics such as top heavy plan fundamentals, identifying your plan's key employees, and other related issues. Join our webinar and earn CE credit.


Rethinking Diversification in Defined Contribution Plans
"Traditionally, DB plans have created diversified investment programs that extended beyond asset classes typically held in DC plans, such as [TIPS] and real assets like commodities and global real estate. These extended asset classes not only broaden a plan's diversification, they also provide a level of inflation hedging that can help DC plan participants maintain purchasing power in retirement." (Northern Trust)

Low- to Moderate-Income Taxpayers May Be Missing Out on Saver's Credit
"The [IRS] Retirement Savings Contributions Credit, also known as the Saver's Credit, is available to low- to moderate-income workers who are saving for retirement, yet just 20 percent of American workers with annual household incomes of less than $50,000 are aware of the credit ... The Saver's Credit may also benefit unemployed and underemployed workers who have contributed to a 401(k) or 403(b) plan or IRA and have taxable income to report for 2012." (Transamerica Center for Retirement Studies)

Louisiana Judge Rules Legislation Shifting Employees to 401(k)-Style Plan Unlawful Due to Procedural Flaw
"Gov. Bobby Jindal's plan to shift future rank-and-file state workers to a 401(k)-style retirement plan is unconstitutional because it didn't receive enough support from lawmakers, a judge ruled Thursday.... [S]tate District Judge William Morvant ... sided with the Retired State Employees Association of Louisiana, which argued the pension plan change required the supermajority vote because the legislative actuary who analyzes retirement bills deemed it carried a price tag." (Seattle Post-Intelligencer)

Is Apple Hiding in Your 401(k)?
"]I]f you own any U.S. equity funds in your retirement portfolio, chances are that Apple's 12% slide [in a single day this week] took a piece out of your nest egg.... [The author] looked at two huge target funds that have 2025 retirement dates -- meaning they're intended for investors who are in their early to mid-50s today.... So how much Apple was there in each barrel?" (MarketWatch)

Road Map to Buying an Annuity
"Before you buy an annuity, [Anna Rappaport, chair of the Committee on Post-Retirement Needs and Risk for the Society of Actuaries,] emphasizes taking these initial steps. [1] Set aside a robust emergency fund.... [2] Consider Social Security as an annuity replacement.... [3] Pay off your mortgage." (Bankrate.com)

The Last Private Industry Pension Plans: A Visual Essay
"In 2011, only 10 percent of all private sector establishments provided defined benefit plans, covering 18 percent of private industry employees.... [This] essay focuses on what remains of defined benefit plans in private industry. In addition to the decline in coverage, recent trends among these plans reflect employer decisions to convert to cash balance plans or limit future accruals." (U.S. Bureau of Labor Statistics)

Benefit Enhancement in Public Employee Pension Plans: Evidence from Three Sources
"This study examines the prevalence, costs, and deferred compensation levels associated with pension plan benefit enhancement provisions often referred to as pension padding or spiking.... [E]vidence suggests a strong principal-agent conflict circumventing a primary advantage of defined benefit pension plans, the ability to retain personnel with low costs during the near retirement period." (Mannino and Cooperman, University of Colorado)

Philadelphia Pension Board Sets Reform Standards for Continued Investment in Gun Industry Stocks
"The board established procedures to track whether the companies are complying with the principles, and to dump its investments within 15 months if the companies fail to comply. Between its direct investments and holdings in hedge funds that invest in gun makers, distributors and retailers, the city owns about $15 million in gun-related investments, about one-quarter of 1 percent of its total portfolio, according to a staff analysis. Besides well-known gun makers like Smith & Wesson, the list extends to major retailers like Walmart." (Philadelphia Inquirer)

Steps Women Must Take for a Better Retirement
"While women continue to outlive men, the consequences of their longevity often include serious physical and financial disabilities. Many older women confront chronic illnesses with limited financial resources, according to recent studies. They are also more likely to live alone and, when their husbands die, many widows are unprepared for a likely drop in retirement income." (U.S.News and World Report)

Reversing Precedent, Pennsylvania High Court Rules Voluntary Early Retirees Entitled to Unemployment Benefits
"Overruling more than 30 years of precedent, the Pennsylvania Supreme Court has ruled that the 'voluntary layoff' provision of the Pennsylvania Unemployment Compensation Law permits employees to receive unemployment compensation benefits when they accept an early retirement incentive offered as part of a reduction in force. Earlier case law held that employees who received early retirement incentives in a reduction in force were not eligible to receive unemployment compensation." [Diehl v. Unemployment Compensation Bd. of Rev., No. 51 MAP 2011 (Pa. Dec. 28, 2012).] (Jackson Lewis LLP)

Diversification Pays Off for Target-Date Funds
"Target-date funds boomed in 2012 on both the growth and performance fronts. In many respects, of course, these investments -- key tools in so many investors' 401(k) plans--were just partaking in the general success of the markets. But the funds' highly diversified nature also gave the offerings an additional edge last year, and true disappointments were in a distinct minority." (Morningstar Advisor)

The 2013 Market for Insurance to Protect Multiemployer Plan Fiduciaries (PDF)
"Although 2013 is expected to be another challenging year for trustees of multiemployer plans that are purchasing or renewing insurance coverage, there is also some good news to report. This [article] presents an overview of the 2013 market for each of the following types of insurance that provide protection for multiemployer plan fiduciaries: Fiduciary liability insurance, Fidelity bonds, Cyber liability insurance, and Employment practices liability insurance. While pricing will remain important, for many clients the main focus in 2013 will be coverage options." (Segal)

[Opinion]

Why the Alarm Over 401(k) Withdrawals and Loans?
"[A recent Washington Post] article incorrectly states that 'in 1980, four out of five private-sector workers were covered by traditional pensions;' in fact, only about half that many actually were at that point ... The article notes that the 'most common way Americans tap their retirement funds is through loans, although U.S. Department of Labor data indicate that loan amounts tend to be a negligible portion of plan assets and that very little is converted into deemed distributions in any given year." (Nevin Adams via EBRI)

[Opinion]

Pension Panic Fueled by Anti-Worker Politics?
"[D]ifferent political actors have different motives for expressing alarm over pension gaps. In some cases, dubiously calculated figures have inflated public concern. Sometimes, politicians frame cost-cutting proposals as if 'generous' benefits themselves are the problem, as opposed to officials failing to uphold the commitments they've made to civil servants." (In These Times / Institute for Public Affairs)

[Opinion]

Text of ICI Comments to Financial Stability Oversight Council on Proposed Money Market Mutual Fund Reforms (PDF)
"We remain firmly committed to working with regulators on this important issue. We submit, however, that this process should be guided by two principles. First, we should preserve those key features of money market funds that have made them so valuable and attractive to investors. Second, we should preserve choice for investors by ensuring a continued robust and competitive global money market fund industry.... [S]hould regulators continue to believe further actions are necessary, the use of gates and liquidity fees by 'prime' money market funds can provide further stability to money market funds consistent with these two objectives." (Investment Company Institute)

[Opinion]

Tax the Rich -- and Limit Retirement Contributions? It Doesn't Add Up
"[C]urrent conventional belief supports that people should be saving 11-15% of their pay, including matching contributions, every year throughout their working careers in order to save enough to be retirement ready ... However, what about the person making $250,000 per year? Contributing a maximum of $17,500 only equates to 7% of pay. When the match is included it's still short of the target necessary for retirement readiness -- yet as the numbers show, these limitations currently in place put these people at a disadvantage for retirement savings. In addition, one of the alternatives under consideration is limiting qualified plan contributions even further." (The Principal Blog)

Benefits in General; Executive Compensation

Cypen & Cypen Newsletter for January 24, 2013
Covers employee benefit developments with an emphasis on governmental plans. Topics in this issue include: GIGO Adds To Public Pension Woes; BLS Reveals Defined Benefit and Defined Contribution Retirement Plan Costs; Pension Fund Trustees Shoot Themselves in the Foot?; NHLers Achieve Hat Trick With New Pension Plan; Potential Macroeconomic Consequences of an Aging Population With Insufficient Savings. (Cypen & Cypen)

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