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March 3, 2011 Health & Welfare Plans Newsletter  |  Advertise  |  Unsubscribe  |  Past Issues

[Guidance Overview]
Court Gives Final Approval to Settlement of 401(k) Fee Case
"The agreement ends proceedings in Kanawai v. Bechtel Corp. . . . in which two former Bechtel employees alleged the company violated its [ERISA] fiduciary responsibilities by not using its size to get lower fees from vendors." (PLANSPONSOR.COM)

Register for ASPPA’s Spring Exams! (advert.)

Sponsored by ASPPA

ASPPA’s Education and Examination programs provide affordable and convenient ways of earning credentials and Continuing Professional Education (CPE) credits. Register before April 14 at to save money with the "early bird" discount

[Guidance Overview]
The New Puerto Rico Internal Revenue Code: Plan Sponsors May Need to Take Action in 2011 (PDF)
"Though any of the changes from the 2011 PR Code for pension plans take their cues from current US Internal Revenue Code governing US Code Section 401(a) plans, including increases to the pre-tax contribution limits for Puerto Rico plans, many important differences remain." (Groom Law Group)

[Guidance Overview]
IRS's Final and Proposed Regulations for Hybrid Plans (PDF)
"These developments affect sponsors of and participants in hybrid plans, such as cash balance plans and pension equity plans. They also affect plan sponsors that are considering converting a traditional defined benefit plan to a hybrid plan design." (Prudential Retirement)

[Guidance Overview]
What if Your 401(k) Plan Failed the ADP and ACP Tests?
"The failure to address ADP and ACP problems will likely mean that an employer will have to come out-of-pocket with an unanticipated, but required, contribution into the 401(k) plan." (Constangy, Brooks & Smith, LLP)

EBSA Faces More Criticism on Definition of Fiduciary Proposal
"The Securities Industry and Financial Markets Association . . . and the Investment Company Institute . . . both agreed with previous witnesses that [EBSA's] proposal is too broad . . . and may disrupt established business practices of financial institutions interacting with employee benefit plans." (PLANSPONSOR.COM)

Don’t Miss Pensions & Investments 401(k) Investment Lineup Summit (advert.)

Sponsored by Pensions & Investments

Join P&I and an elite group of your peers for this informative conference that will provide the most up-to-date thinking on how to best design a DC investment lineup and present you with valuable networking opportunities. Plan sponsors attend FREE.

National Institute on Retirement Security Blames DB Decline on Funding Volatility Concerns
"A new research brief by a Washington, D.C. trade group blames 'an onerous regulatory environment' for the trend away from defined benefit and toward defined contribution plans." (PLANSPONSOR.COM)

Wells Fargo/Gallup Investor and Retirement Optimism Index Shows Retired Americans Twice As Optimistic As Non-Retired
"Among retirees, 61% have a 'great deal' or 'quite a lot' of confidence that they will be able to fund their health care needs in retirement beyond what Medicare covers, compared to only 35% of non-retirees." (PLANSPONSOR.COM)

401(k) Balances and Changes Due to Market Volatility: Data to March 01, 2011
"The 'full sample' includes every 401(k) participant in the EBRI/ICI database that year . . . regardless of whether they appeared in the data base in previous years." (Employee Benefit Research Institute)

Five Reasons Your Business Is Not Too Small for a 401(k)
"[I]t's estimated that only about 15-20 percent of businesses with less than 50 employees have a retirement plan. Why the resistance?" ( LLC)

DOL's Proposal on Broadening the Fiduciary Standard Problematic for Legacy 401(k) Providers
"The fiduciary regulation under discussion . . . has particularly high stakes, because it could open so many more service providers to legal liability." (RIABiz LLC.)

Calculators No Substitute for a Qualified Retirement Planner
"Real life doesn't fit neatly into most static retirement savings models. Even the best-laid plans are complicated by disability, providing for aging parents, college financing or second marriages. There's also the prospect of working in retirement. If you choose to work, that could change your picture as well." (The New York Times; free registration required)

Shifting Strategies for Target-Date Funds
"[The fund managers are now] de-emphasizing stocks and adding investments that are more diversified, less likely to make sharp moves and more likely to provide a steady income." (The New York Times; free registration required)

Middle-Income Retirement Preparedness Study (PDF)
"Almost two in three (63%) middle-income Americans age 55 to 75 are unsure if they have saved enough to live comfortably in retirement. Of this group, thirty-nine percent (39%) are only somewhat confident in the adequacy of their retirement savings and one-fourth (24%) are not too or not at all confident." (Bankers Life and Casualty Company Center for a Secure Retirement)

Judge Declines to Cap Damages in Chicago-Based Tribune Co.'s ESOP Lawsuit
"Greatbanc Trust Co. asked the court to limit its damages to $15 mil.lion after [the] District Court ruled last year that the trustee violated [ERISA] when it let the ESOP buy $250 mil.lion in shares as part of Tribune's 2007 leveraged buyout by Chicago real estate mogul Sam Zell." (Crain Communications, Inc.)

J.P. Morgan Asks for Clarification on Redefinition of Fiduciary
"J.P. Morgan believes that the proposed regulations to change the definition of fiduciary should be modified to eliminate unnecessary and subjective standards." (PLANSPONSOR.COM)

Planning for Clients with Traditional Defined Benefit Plans May Become More Complicated As Public Pensions Come Under Fire
"Retirees with benefits may indeed be better off-if their pensions and related health plans survive. Some states are already pulling back on promises to public employees, while some companies have pared down their pensions. In response, planners may have to rethink and in some cases revise strategies for clients covered by DB plans." (Financial Planning)

Baby Boomers Will Be the First Generation That Will Do Worse in Retirement Than Their Parents
"Americans planning to retire in five to 10 years could see their golden years tarnished by a confluence of circumstances, including depressed housing prices, soaring health costs and a fitful stock market that has pummeled 401(k) plans." (The New York Times; free registration required)

New Hampshire Committee Recommends Repealing Divestment Law
"New Hampshire's public pension systems would no longer have to divest holdings in any company doing business in the Sudan under a bill backed by a House committee." (The Boston Globe)

State Worker Retirements Soaring Across the Country
"Many employees of cash-strapped states, such as New Jersey, California and New York, appear headed for the exits -- trying to get out while they still have pensions -- as governors pressure workers and their unions to contribute more toward their health care and retirement." (AOL Inc.)

Florida Town's Pension Investigation Faults Morgan Stanley
"The preliminary results of the Longboat Key firefighters pension fund forensic investigation, performed by Benchmark Financial Services Inc., implicates Morgan Stanley as operating with financial conflict of interest and in violation of Florida law." (Longboat Key News)

ASPPA Calls DOL Disclaimer for Broker-Dealers 'Unduly Harsh'
"The Labor Department's proposed expansion of the definition of 'fiduciary' treats broker-dealers that work with retirement plans too harshly -- or so says the American Society of Pension Professionals and Actuaries." (Investment News; free registration required)

Policy Makers Considering Scrapping Guaranteed Retirement Benefits for Public Workers in Favor of 401(k)-Like Plans
"Many say 401(k)-style plans can yield meaningful cost savings over time if employer contributions are substantially reduced from what they were, and relieve governments of the obligation to make guaranteed payouts. Yet shorter-term pain can result from such a switch." (The Wall Street Journal)

Better Business Bureau to Honor Investor Protection Trust's CEO Don Blandin
"Don Blandin, President and CEO of Investor Protection Trust (IPT) located in Washington, DC, will receive the Torch Award for Consumer Leadership, given to 'a leader who has significantly advanced marketplace trust through consumer advocacy, protection or education, or through a specific action or lifetime achievement.' Blandin is being recognized especially for his demonstrated skill, commitment and passion for financial education and protection for consumers of all ages. As president of IPT, he has developed and sponsored numerous programs that have helped Americans become wise and safe investors . . . ." (Better Business Bureau)

Who Killed the Private Sector DB Plan? Answer: Volatility
"In recent decades, defined benefit pension coverage has declined for private sector workers. This issue brief finds that funding volatility is the primary culprit, not pension costs. It also identifies opportunities to reverse the trend. " (National Institute on Retirement Security)

Four Red Flags in the SEC's Fiduciary Report
"[W]ithin the Dodd-Frank Act was enacted one measure, which if applied correctly could largely correct the excesses of unfettered capitalism and shrink the financial services sector. It is a measure so feared by financial services companies that they have engaged in an all-out war against it - first by fighting its application, then by seeking to 're-define' it, and now by seeking to delay it." (RIABiz LLC)

Testimony of Norman Stein Before DOL Hearing on Proposed Regulations Defining Fiduciary
"My statement today will cover five points: first, that the current regulations improperly constrict the statutory definition of fiduciary; second, that the current regulations were promulgated in a different economic and legal environment than today and as a result sometimes fail today to shield unsophisticated participants in retirement plans from investment advice tainted by conflicts of interest; third, that the proposed regulations should not condition fiduciary status on whether a person provides 'individualized' investment advice; fourth, that the 'sales' limitation on the definition of fiduciary status should not apply to advice given to participants; and fifth, that advice about distributions should be considered investment advice." (Pension Rights Center)

Benefits in General; Executive Compensation

[Guidance Overview]
Proposed Rules on Incentive Compensation from the SEC
"Like the rules proposed for 'covered financial institutions' by the SEC and six other agencies last month . . . the proposed rules have three main sections . . . ." (Michael S. Melbinger via Winston & Strawn LLP)

Wisconsin One of 41 States Where Public Workers Earn More
"Still, the compensation of Wisconsin's government workers ranks below the national average for non-federal public employees and has increased only slightly since 2000." (USA TODAY)

ERISA Bonding Requirements (PDF)
"[ERISA] bonding requirements are quite voluminous and complex, so it is important that all plan sponsors and fiduciaries understand the requirement in order to make sure their current fidelity bond is in compliance with the current rules and regulations." (WithumSmith+Brown, PC)

Insurance and Pension Costs Hit by European Court of Justice Gender Ruling
"Insurers cannot charge different premiums to men and women because of their gender, the European Court of Justice (ECJ) has ruled." (BBC)

What Public Employees Really Cost
"If we seize upon this crisis to make basic changes -- to start rewarding public employees in part on the basis of how effective they are, for example -- we could do more than just stabilize our budgets; we could raise our entire economy." (Time Inc.)

Press Releases

Joseph LoCicero Elected to Board of Trustees
(The Segal Company)

Report: Affordable Care Act Controls Costs for Early Retiree Coverage
(U.S. Department of Health & Human Services)

New Database Gives Quick Access to State and Local Pension Data
(Center for State and Local Government Excellence)

Colonial Life Survey Shows Personal Benefits Counseling Rates High With Employees
(Colonial Life)

Teamsters Joint Council 32 Representing Minnesota, Iowa, North Dakota and South Dakota Supports Fight for Workers' Rights
(Teamsters Joint Council 32)

Vanderbilt University CMO to Speak on Fixing Failing Wellness Programs at Spring Managed Care Forum
(National Association of Managed Care Physicians (NAMCP))

National TPA Incorporates VIIAD Technology
(HealthFirst TPA)

Shape Up The Nation’s Social Networking Wellness Platform Achieves Record Employee Engagement at Health Insurer
(Shape Up The Nation)

Alere Previews Findings from Key Research Study on Medication Adherence at Integrated Benefits Institute Conference
(Alere Health)

Employee Benefits Jobs

Pension Administrators in NJ for Northern NJ Mid-Size Pension Consulting Firm

Defined Contribution Practice Leader in NY for Segal Advisors, Inc.

Retirement Planning Specialist in CA for e3 Financial

Marketing Manager, Participant Experience in CT for Prudential

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Webcasts and Conferences

Cafeteria Plans and Flexible Spending Accounts: Navigating the Complex Maze of Rules and Guidance
Nationwide on April 6, 2011 presented by Thompson Interactive

Complex RMD Issues
Nationwide on March 17, 2011 presented by McKay Hochman Co., Inc.

Form 5500 and EFAST2 -- Applying Lessons Learned to This Year’s Filing Season
Nationwide on March 9, 2011 presented by Thompson Interactive

Health Reform in 2011: Dealing With Present Challenges, Planning for Future Changes
Nationwide on March 22, 2011 presented by Thompson Interactive

Healthy, Wealthy And (Un)Wise - Using Behavioral Economics Processes, Tools And Techniques To Improve Workers’ Benefits Decision Making
in California on March 31, 2011 presented by No. Calif. Chapter of Certified Employee Benefits Specialists (ISCEBS)

Wellness on a Budget: No-Cost & Low-Cost Ways to Improve Employee Health
Nationwide on March 29, 2011 presented by Thompson Interactive

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Jeanette Hull, News Editor
David Rhett Baker, J.D., Editor and Publisher

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