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July 28, 2014          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Pension Document Coordinator/Pension Administrator
Pension Review Services
in NY

Distribution Specialist
PenSys, Inc.
in CA

Pension Administrator
Growing Suburban Philadelphia TPA Firm
in PA

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Webcasts and Conferences

Review Findings of New Study -- Pensionomics 2014: Measuring the Economic Impact of Defined Benefit Pension Expenditures
July 30, 2014 WEBCAST
(National Institute on Retirement Security)

Midwest ESOP Regional Conference
September 11, 2014 in IL
(ESOP Association)

2014 Private Health Insurance Exchange Congress
October 27, 2014 in NV
(Global Media Dynamics)

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  LinkedIn   Twitter   Facebook Hand-picked links to the web's best news articles,
official guidance, jobs, webcasts and more.

The Required Minimum Distribution Rules Do Not Work Well with Longevity Annuities
"[Actuary Steve Vernon] has his hypothetical 65-year-old woman buy a Qualified Longevity Annuity Contract (QLAC), work half-time in retirement until age 70, defer Social Security commencement until age 70 and use some of her accumulated savings from age 65 until she commences Social Security to supplement her employment income until then.... But then Steve inexplicably has her run off the train tracks on her smart retirement train ride by using the RMD rules to determine her annual withdrawals from her accumulated savings. The RMD rules just don't coordinate well with her decision to buy the QLAC." (Ken Steiner, FSA Retired)  


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The Pitfalls for Participants of Choosing Longevity Annuities in 401(k)s
"[If] you are offered a longevity annuity, be sure to do your homework before signing on the dotted line. Ask the following questions. What insurance company is guaranteeing this plan? What happens if that company goes bankrupt? ... What happens if I die before my first payment? ... Will my payments keep pace with inflation?" (Motley Fool)  

Target Date Funds: An Investment Fiduciary's Checklist
"In addition to standard due diligence on the underlying holdings, the investment fiduciary's checklist should include factors relating to the manager's philosophy and practices regarding portfolio composition, and strategic and tactical asset allocation. These include the use of active versus passive funds, correlation among holdings, glide path trajectory, volatility of the TDF's returns over time and whether a 'to' versus 'through' approach is used." (InvestmentNews)  

Employers Must Appeal to Needs of Savers, Not Investors, to Boost Retirement Readiness (PDF)
"[P]articipants are pursuing a new vision of retirement. In the new vision, an individual's priorities and daily activities shift gradually over time, rather than changing drastically from full-time work to full-time retirement.... Plan sponsors should consider taking some or all of the following steps to help participants make the choices that are appropriate for their own unique paths toward retirement readiness: [1] Connect your Plan Design to retirement readiness... [2] increase employee engagement... [3] Address work force management implications." (State Street Global Advisors)  

An Article of Faith: The Gratuity Theory of Pensions and Faux Church Plans
"This article ... concludes that the IRS position is inconsistent with the statute's unambiguous text and that the legislative history establishes that the 1980 amendments [to ERISA's definition of 'church plan'] were designed only [1] to allow plans established by churches to continue to cover employees of church-affiliated agencies and [2] to clarify that a church plan did not lose its status as such if it were maintained by an organization controlled or affiliated with a church whose purpose was to fund or administer the plan.... There are, however, two district court opinions taking the opposite position. At present, it seems possible if not probable that the Supreme Court will have to resolve the issue." (Prof. Norman Stein, via Employee Benefits Committee, Section of Labor and Employment Law, American Bar Association [ABA])  

Dudenhoeffer Decision: Securities Laws Affect Prudence of Buying More Stock or Disclosing Negative Nonpublic Information
"[W]hile fiduciaries may have lost the protection of the 'presumption of prudence,' they may have gained something more valuable -- a set of principles that recognizes that, with respect to publicly traded company stock, the idea that prudence compels a sale (or discontinuance of purchase) at market prices must overcome [1] some basic principles of economics ... and [2] a preference for regulating the issue of insider information under the securities laws." [Fifth Third Bancorp v. Dudenhoeffer, No. 12-751 (U.S. June 25, 2014)] (October Three Consulting)  

Distribution Planning for Beneficiaries: Why It's Important to Check IRA Agreements and Retirement Plan Provisions
"Most employer plans do not offer a stretch option to a non-spouse beneficiary because they do not have to.... On the IRA side, a custodian does not have to offer a direct transfer option.... Other items to check for are the ability to use a trust as a beneficiary, the ability to use a power of attorney and the ability to disclaim inherited retirement assets." (The Slott Report)  

Detroit-Style Pension Cuts: Could It Happen in California?
"In California, pension debt is an unresolved issue in two cities that declared bankruptcy in 2012 about five weeks apart -- Stockton on June 28 and San Bernardino on Aug. 1. But the state law in California and the financial pressure on the two cities, both members of the California Public Employees Retirement System, are different from the situations in Detroit and Central Falls." (Calpensions)  

[Opinion]

California Pension Reforms Don't Go Far Enough
"Only in California could a bill that requires 32 years to catch up and fund parts of the California State Teachers' Retirement System's current $74 billion in unfunded liability be hailed as a major reform.... In reality, [Gov. Jerry] Brown's reforms are weak and don't fix the pension mess." (Orange County Register)  

Benefits in General; Executive Compensation

Executive Compensation: Governance and Litigation Considerations
"[C]ompany officers and directors have an obligation to make themselves aware of regulatory mandates as well as the activities of the plaintiffs' bar.... [It] is critical that they track what is going on in large shareholder land. Certain pension plans have been far from shy in taking their complaints to court.... Non-retirement plan investors are proving themselves to be no less active." (Good Risk Governance Pays)  

IRS and Treasury Officials Provide Informal Views on Various Employee Benefits Issues
"While some of the answers [to questions posed by the Joint Committee on Employee Benefits (JCEB) of the American Bar Association] clearly have broad significance, others are highly dependent on the factual scenarios presented ... For example, the remarks regarding stock fund investments do not mention the regulations that permit restrictions on the divestiture of stock fund investments when such restrictions are 'reasonably designed' to assure compliance with the federal securities laws. In addition to health care reform, the report also includes items of interest to sponsors of defined benefit plans, 403(b) plans, 457(b) plans, ESOPs, and nonqualified deferred compensation arrangements." (Thomson Reuters / EBIA)  

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