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Hand-picked links to the web's best news articles, official guidance, jobs, webcasts and more.
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[Guidance Overview]
New Law Includes PBGC Premium Hikes (PDF)
"[T]he Bipartisan Budget Act of 2013 ... signed into law ... on December 26 includes an $8 billion increase in PBGC premiums. The legislation also makes changes to access to the Social Security Administration's master death file and the charges that federal contractors can make for employee compensation.... [A] chart illustrates PBGC premiums for single employer plans before and after the $8 billion premium hike ... For present law, the chart incorporates the premium increases that were part of MAP-21."
(Buck Consultants)
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[Guidance Overview]
Anchors Away: IRS Finalizes Safe Harbor Reduction Regulations
"Safe harbor matching contributions can still be suspended or reduced for any reason, but effective January 1, 2015, the employer must provide participants with notice before the beginning of the plan year which discloses the possibility that contributions may be suspended or reduced mid-year. Suspensions or reductions as a result of operating at an economic loss are also permitted.... [A chart] highlights the main differences before and after the new final regulations:"
(Sutherland via Bloomberg BNA)
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California Judge Finds San Jose Pension Reforms Violate Rights of City Employees
"[Santa Clara County Superior Court Judge Patricia] Lucas rejected city arguments that workers have no vested right to city payment of all of the unfunded liability and that, at times, unions have regarded pension contributions as compensation, which the city can regulate. A lower pension, avoiding a contribution increase, was similarly rejected with a mention that the plan lacks IRS approval.... And a cut of San Jose retiree pension cost-of-living adjustments for up to five years, if the city council declares a fiscal emergency, was overturned by Lucas as a violation of vested rights."
(Calpensions)
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Frommert v. Conkright: The Saga Continues, or 'Strike Two for Xerox'
"The Second Circuit found that Xerox's annuity formula was unreasonable, apparently because ... [the guaranteed minimum benefit] would always be lower for a rehired employee than for a comparable employee who had not left and had not received a lump-sum payment. Of course, it would seem logical that an employee who already received a pension payment should receive less in the future than an employee who had received nothing. The Second Circuit did acknowledge that an ERISA plan could be written 'to change the risk borne by rehired employees or reduce such employees' benefits in a manner that treats them worse than newly hired employees[.]' But, the court held, the Xerox plan was not written to achieve that result. Which is sort of expected, given that the court had previously found that the provision written to address rehired employees (the phantom account provision) was unenforceable."
[Frommert v. Conkright, No. 12-67-cv (2nd Cir. Dec. 23, 2013)]
(Begos Brown & Green LLP)
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Illinois Teachers Sue in Effort to Block Pension Reform Law
"The lawsuit ... claims that changes to current and retired teacher pensions passed by the Illinois General Assembly and signed into law by Governor Pat Quinn ... violate protections for public sector worker retirement benefits in the Illinois Constitution.... The reforms, which take effect in June, are expected to save the state $160 billion over 30 years, while immediately reducing the unfunded pension liability by 20 percent."
(Reuters)
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Mandatory Retirement Incentive Programs
"An employer may require the retirement of an employee who is 65 years of age or older and who, for the two years preceding retirement, is employed 'in a bona fide executive or a high policymaking position.' If the retiring employee is eligible for an immediate, non-forfeitable annual retirement benefit from a pension, profit-sharing, saving or deferred compensation plan, or any combination of such plans, the aggregate retirement benefit must amount to at least $44,000. New York state and New York City provide for virtually identical exemptions from state and city age discrimination laws."
(Human Resource Executive Online)
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The World Braces for Retirement Crisis
"Many people will be forced to work well past the traditional retirement age of 65 -- to 70 or even longer. Living standards will fall, and poverty rates will rise for the elderly in wealthy countries that built safety nets for seniors after World War II. In developing countries, people's rising expectations will be frustrated if governments can't afford retirement systems to replace the tradition of children caring for aging parents. The problems are emerging as the generation born after World War II moves into retirement."
(Associated Press, via The Washington Post; subscription may be required)
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Cypen & Cypen Newsletter, December 26, 2013
Article titles include: [1] Public pension plan assets hit new highs; [2] Role of Social Security, defined benefits and private retirement accounts in face of retirement crisis; [3] Additional information on 2013 long term projections for Social Security; [4] Detroit bankruptcy may not be precedential, at least in California; and [5] How much would it take to achieve equivalency between DB accruals and voluntary enrollment 401(k)s in the private sector?
(Cypen & Cypen)
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[Opinion]
2014: Brave New Fiduciary World
"Even with the new all-public arbitration option, the use of binding arbitration clauses by fiduciaries raise serious legal questions.... There simply is no good faith justification for a fiduciary to require that a client give up their right to seek redress in the courts for tortuous conduct by the fiduciary. The arbitration process is promoted as being less expensive and producing quicker results. Often ignored is the fact that the arbitration process too often produces inequitable results, does not guarantee quick adjudications, and seriously restricts an investor's right to make effective discovery that might reveal evidence that proves his/her case."
(The Prudent Investment Adviser Rules)
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[Opinion]
When It Comes to Pensions, California Is No Detroit
"Most of the pension funds in extreme crisis (including those in Illinois, Kansas, Detroit and Chicago) got that way not because of the pension system itself but rather because elected officials failed to make the annual required contributions needed to keep funds solvent.... California has a different problem. Here, it is not possible for local agencies to defer or reduce their required contributions to [CalPERS]. California's pension problems have much more to do with pension enhancements. This was a major factor, but far from the sole cause, of bankruptcies in Vallejo, Stockton and San Bernardino."
(Los Angeles Times)
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Benefits in General; Executive Compensation
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Pension Legislation and Affordable Care Act Comparisons
"[ERISA and the ACA] affect private sector employers and their employees in many similar ways. Factors include those listed [in this article] in no particular order with footnotes referenced for explanations[.]"
(H.C. Foster & Company, Actuaries)
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Press Releases
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