ASPPA

Pension Administrator
GF Pension Corp.
in PA

Attorney
Sullivan, Ward, Asher & Patton, P.C.
in MI

Relationship Manager
Retirement Alliance, Inc.
in NH

Legal Counsel - ERISA - Title I
T. Rowe Price
in MD

Client Relationship Manager
Alliance Benefit Group of Michigan
in MI

Vested Interest Relationship Manager
PNC
in KY

Conversion/Retirement Plan Administrator
Access Retirement Services, LLC
in TN

Retirement Education Specialist
The Newport Group
in NC

Employee Benefits Attorney ‎
Schwabe, Williamson & Wyatt
in OR, WA

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10th Annual American Health Care Congress (AHCC)
December 2, 2013 in CA
(World Congress)

Employee Plans Technical Guidance Phone Forum
October 29, 2013 WEBCAST
(Internal Revenue Service (IRS))

ERISA Workshop 2013 - Nashville
October 24, 2013 in TN
(SunGard Relius)

2014 Regional Conference: Los Angeles
January 23, 2014 in CA
(American Society of Pension Professionals & Actuaries (ASPPA))

Year-End Retirement and Welfare Plan Issues and a Look Ahead to 2014: What to Do and Think About
October 29, 2013 WEBCAST
(ABA Joint Committee on Employee Benefits)

View All Webcasts and Conferences

[Guidance Overview]

IRS/Treasury and DOL Issue DOMA Guidance
"The IRS has not yet provided guidance on the application of Windsor with respect to qualified retirement plans before September 16, 2013 or if a same-sex spouse has any causes of action under ERISA for events occurring before September 16, 2013.... It is expected that future guidance will address plan amendment requirements (including the timing of any required amendments), and any necessary corrections relating to plan operations for periods before future guidance is issued." (Wolters Kluwer Law & Business / ftwilliam.com)  

[Advert.]

DATAIR! New Features – Flexible Pricing – Module Integration

Proposals, Testing, Administration, 5500s, 1099Rs, Plan Documents
401(k), New Comparability, 403(b), Non-qualified Plans
(888) 328-2474    Sales@DATAIR.com    www.DATAIR.com

What Fidelity Employees' 401(k) Fight Means For Your Retirement
"[Fidelity's] plan includes more than 150 different fund options ... But the employees in the lawsuit argue that every single one of those 150 funds is managed by Fidelity, and many of them carry higher fees than comparable funds from outside providers.... 84 percent of the assets invested in the company's plan by its employees were invested in actively managed Fidelity funds.... [E]ven though employees could have put 100 percent of their money into [other] low-cost choices, they didn't. They made their own affirmative decisions to pay more for Fidelity's active management." (DailyFinance)  

Plan Administrator Breached Fiduciary Duty Despite Participant's Failure to Properly Request Plan Documents
"The US Court of Appeals for the Fifth Circuit held a plan administrator liable for breach of fiduciary duty under [ERISA] for failing to produce plan documents even though the participant did not submit a written request for the documents. The court also declined to adopt a bright-line rule that discovery requests for plan documents in unrelated litigation proceedings constitute written requests for documents under ERISA." (Practical Law Company)  

Implications of MAP 21 for DB Plan Finance, 2013 Update
"Last year [the author] ... concluded that if interest rates stayed flat (as of the summer of 2012), typical DB plan sponsors would have 'downside' funding protection under MAP-21 through 2020. Since last year's article interest rates have increased, and there is some talk that the long term downward trend in rates, which began back in October of 1981, may have ended. [This article updates the] analysis of the effect of MAP-21 on funding to reflect current interest rates." (October Three)  

Did Principal Overcharge for Target-Date Funds?
"Principal's LifeTime target-date funds, as with most in the industry, are structured as funds of funds, meaning that each target-date fund holds various underlying funds.... However, Principal differs from many by farming out the management of the underlying funds to outside parties. Principal retains control at the top level of each target-date fund, determining the fund's asset allocation. It then hires managers to subadvise the underlying funds. For this service, Principal charges almost nothing.... Of course, that is not what really happens." (Morningstar Advisor)  

[Advert.]

Compliance, Legislation and Litigation -- SWBA/IRS Annual Conference - Nov. 7-8 - Dallas, TX

Staying up to date in the challenging world of employee benefits has never been more critical to the success of benefits professionals and their companies. Attending the SWBA/IRS Employee Benefits Conference is the most cost-effective way to stay informed.

Observations on Actuarial Assumptions and Models for PBGC's Pension Insurance Modeling System
"The apparent stability of the deficit and funding ratio of the PBGC are partially dependent on a continued stream of premium payments from plan sponsors. However, derisking and other trends among retirement plans may change the pattern of premium income. Deterministic projections that supplement the stochastic simulations may enhance the understanding of the current deficit and the projected net claims over the next ten years." (Pension Research Council, Wharton School of the University of Pennsylvania; free registration required)  

Technical Review Panel for the PBGC's Pension Insurance Modeling System: Final Report
"The PIMS models are an important and valuable tool in modeling the [PBGC]'s liability risk.... Nevertheless, some improvements could be integrated in the Agency's approach to modeling.... a) Incorporating systematic mortality risk (i.e., treat mortality and longevity as stochastic variables); b) Including new asset classes increasingly found in defined benefit plan portfolios ... c) Developing a more complex model for the term structure of interest rates; and d) Incorporating an option value approach to pricing the insurance provided.... The Agency could also do more to communicate the range of uncertainty and potential for problems associated with the PBGC's financial status." (Pension Research Council, Wharton School of the University of Pennsylvania; free registration required)  

How Sensitive is Public Pension Funding to Investment Returns?
"[This] analysis projects funded ratios through 2042 for large public plans using: a stochastic model of year-to-year returns; and a median real return of 4.45 percent, the average used by plans in 2012. The baseline results show that the funded ratio for the 50th-percentile outcome does not reach 100 percent because: plans pay only 80 percent of annual required contributions (ARC); and amortization approaches produce inadequate contributions. Paying 100 percent of the ARC and using more robust funding approaches leads to near full funding by the end of the period. However, even under these more favorable scenarios, the variability of returns still poses risks of funding shortfalls." (Center for Retirement Research at Boston College)  

Economic and Financial Approaches to Valuing Pension Liabilities
"The valuation of defined benefit (DB) pension obligations involves choices revolving around deciding 1) what future benefit payments to recognize today (i.e., which liability concept to use); and 2) from whose point of view to value the liabilities. Moving towards modeling the distribution of future liabilities using a 'risk-neutral' framework would allow for calculating the present value of the future liabilities more accurately." (Pension Research Council, Wharton School of the University of Pennsylvania; free registration required)  

[Advert.]

Winston & Strawn Compensation and Benefits Training Programs

W&S offers more than 30 customizable Employee Benefits and Executive Compensation training programs. W&S partners are adjunct professors at 3 law schools and regularly provide on-site or web-based training. View this brochure for more information.

Next Evolution in Defined Contribution Retirement Plan Design: Retirement Income Programs (PDF)
88 pages. Excerpt: "[P]lan sponsors have the resources to carry out due diligence to offer retirement income solutions that provide reliable, lifetime income, meet various goals regarding protection from common risks, and minimize transaction costs and conflicts of interest.... Plan sponsors can [offer] a limited menu of options with the ability to combine retirement income generators and/or a few packaged solutions that combine different solutions and are designed to meet common goals and circumstances." (Stanford Center on Longevity)  

Retirement Security: Five Key Facts
"Americans are deeply worried about retirement.... Pensions are highly cost efficient.... Pension benefits provide critical economic stability ... Pensions reduce the risk of elder poverty and reduce public assistance costs.... Americans overwhelmingly support Congressional action to provide all Americans with access to a new type of privately run pension plan." (Pension Benefit Guaranty Corporation [PBGC])  

Preparing Assets for Pension Risk Transfer; Current Practices for Using Assets-In-Kind to Pay for a Pension Buyout (PDF)
"The survey ... found little consensus as to how [Assets-in-Kind (AIK)] transfers should be valued. No valuation method received the support of more than two of the six survey participants, which included American General, MassMutual, MetLife, New York Life, Pacific Life and Prudential... The survey, the first in the pension buyout space to focus on AIK, also covered other issues such as which asset classes would be acceptable and what would be the minimum transaction size for AIK to be considered." (Penbridge Advisors, LLC; free registration required for full report)  

CFP Board Offers Broad Amnesty to Rule-Breaking Advisors
"The surprise move prompted calls for the board to reconsider and possibly rescind recent sanctions of other CFP holders for similar transgressions. By unilaterally changing thousands of its certificants' profiles -- removing 'fee only,' regardless of the circumstances, and inserting 'none provided' -- it became temporarily impossible to definitively identify advisors based on their compensation. In addition, resetting the profiles without any forewarning also insulated the board from the prospect that it might receive thousands of complaints about rule-breakers." (Financial Planning)  

Eighth Circuit Oral Arguments Heard in Tussey v. ABB, Inc.
"[The judges] asked tough questions of both sides. Topics covered included whether an IPS is a plan document, when is the 6 year statute of limitations triggered, what is the proper measure of damages for a performance claim, how much discretion should a plan fiduciary have, what exactly is float, and whether target data funds are better than balanced funds because they are dynamic rather than static. It wasn't clear that the judges agreed with one side completely, or the other. Instead, the judges seemed to still be making up their minds as they sought additional information outside the briefs." [Audio of the arguments has been made available by the court.] (FRA PlanTools, LLC)  

Nearly Retired, Lugging a Mortgage
"About 40 percent of households who were between the ages of 56 and 61 in 1992 -- the Depression-era parents of baby boomers -- held mortgages at that age. This share had increased to 48 percent by 2008, as the front wave of baby boomers were reaching their late 50s and early 60s.... [A]nalysis also indicates some financial distress in this age group: 24 percent of households had less than $25,000 in savings in 2008, compared with 18 percent in 1992." (Center for Retirement Research at Boston College)  

What to Do With a Lump Sum?
"74% of baby boomers place some level of importance on tax deferral when selecting a retirement investment; 40% consider tax deferral a very important criterion. Three-quarters (76%) of boomers between ages 50 and 55 consider tax deferral an important feature of a retirement investment product. Nearly one-fifth (19%) of investors cited tax- deferred growth as the primary reason for purchasing annuities." (T. Rowe Price)  

[Opinion]

Risks to PBGC Worse Than Previously Thought?
"[T]he authors are right to point out that risks to a corporate pension plan increase significantly during a recession, placing more pressure on PBGC's insurance programs as it deals with 'clusters of corporate bankruptcies'.... [W]hile corporate America's pension time bomb has been defused for now, many corporate plans remain vulnerable to a substantial macroeconomic shock. It would make more sense to raise premiums during good economic times and decrease them during bad times to cushion the blow of a severe downturn." (Pension Pulse)  

[Opinion]

401(k) Target Date Funds: Set It and Regret It?
"If you have an employer-provided 401(k) plan, odds are that you've put at least some of your retirement assets in a 'target date' fund. And if you haven't specified your own 401(k) investment choices, the decision to automatically put all your assets in a target date fund has been made for you. Yet investing in these 'set it and forget it' funds is no guarantee that you will be financially able to retire in whatever year you've targeted -- it's certainly no more guaranteed than it might be with another package of investment options." (The Fiscal Times)  

[Opinion]

Text of Comments by ASPPA and ACOPA to PBGC on Proposed Rules for Premium Rates and Payment of Premium
"ACOPA commends PBGC for the proposed amended rule's focus on simplification and ease of administration. Once implemented, the uniform due date and look back rule for small plans will be a significant improvement over the current rule. ACOPA recommends that the final amendment to the rule extend the uniform due date to new and newly covered plans, provide transition year relief for small plans that will be required to make two premium payments in one calendar year, and extend the ability to file an estimated premium to plans of any size." (American Society of Pension Professionals & Actuaries [ASPPA] and ASPPA College of Pension Actuaries [ACOPA])  

[Guidance Overview]

More on the SEC's Proposed Rules on the CEO Pay Ratio Disclosure
"There are no more than 10 key points to understand in the proposed rules, divided between two components of the rule: (1) How to calculate the ratio and (2) How to report the ratio in the proxy statement.... Ironically, for 162 pages of proposed rules, most companies will likely disclose the CEO pay ratio in a single paragraph. The company must 'briefly disclose' the methodology and any material assumptions, adjustments or estimates used to identify the median, and clearly identify any estimated amounts as such." (Winston & Strawn LLP)  

[Guidance Overview]

SEC Proposes Dodd-Frank Pay Ratio Rules
"The proposal is controversial, and the final rule still may change. In a strongly worded dissenting statement, Commissioner Daniel Gallagher said: 'There are no -- count them, zero -- benefits that our staff [has] been able to discern [from the pay ratio disclosure].' ... He particularly criticizes the proposed rule's requirement of considering the company and all its subsidiaries (instead of only the 'issuer' as the statute requires) and of considering the global workforce, calling these interpretations of the statute 'unnecessary overkill.'" (Dentons)  

D.C. Circuit Signals Doubts on IRS Tax Preparer Regulations
"At oral argument before the federal appellate court, the IRS's counsel maintained that its regulation was lawful because it was not 'unambiguously foreclosed by the statute.' The panel of three judges, however, appeared to reject that standard, with Judge David Sentelle saying that the IRS's formulation would give agencies 'all the power in the world.' The proper standard, Judge Sentelle explained, was whether the IRS's action was supported by the statute, using the ordinary tools of statutory construction." (The Heritage Foundation)  

Settling ERISA Actions After a Decision on the Merits May Open the Door for Attorney's Fees
"The [Second Circuit Court of Appeals] explained that a party who obtains relief due to the voluntary conduct of another party after minimal litigation is unlikely to succeed in seeking attorney's fees. However, under this 'catalyst theory,' if the parties received a 'tentative analysis of their legal claims,' a party may recover attorney's fees if it is able to show that the court's discussion of the pending claims resulted in the obtained relief. This case demonstrates the importance of performing a careful risk analysis at the beginning of an ERISA action to determine whether a settlement can be reached." [Scarangella v. Group Health, Inc., No. 12-2750 (2d Cir. Sept. 10, 2013)] (Littler)  

[Opinion]

The CEO-To-Worker Compensation Ratio in 2012 Was Far Above That of the Late 1990s
"[F]rom 1978-2011, CEO compensation grew more than 876 percent, more than double the growth of the stock market and remarkably faster than the growth of annual compensation of a typical private-sector worker, up a meager 5.4 percent.... Though lower than in other years in the last decade following the stock market bubble, the CEO-to-worker compensation ratio in 2012 of 273 was far above that of the late 1990s and 14 times the ratio of 20.1 in 1965." (Economic Policy Institute)  

US Labor Department Obtains Limited Injunction Order Removing Pennsylvania-based Fiduciaries of Welfare Benefit Plans Sponsored by Employers Nationwide
Employee Benefits Security Administration (EBSA), U.S. Department of Labor

IRS Names Four New Members to ACT Panel
Internal Revenue Service (IRS)

Euclid Specialty Announces its Partnership with CEFEX and the Fiduciary Risk Management Program
Euclid Specialty Managers, LLC

Nationwide’s John Carter Named New Chairman of the IRI Board
Insured Retirement Institute (IRI)

Segal's Stuart A. Sirkin Appointed to IRS Advisory Committee
The Segal Group

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