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June 29, 2011 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

[Guidance Overview]
IRS Addresses Tax Treatment of Tax-Free Exchanges of Annuities
"The new rules are effective for exchanges that are completed on or after Oct. 24, 2011." (American Institute of Certified Public Accountants)


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[Guidance Overview]
Changes in Qualified Pension Plans for Puerto Rico Employees (PDF)
"Plans that fail to properly take into account these three provisions may inadvertently cause taxation to Puerto Rico employees, raise tax-qualification concerns, and in the United States, where there is an increased audit focus on international benefits, one should tread carefully through these waters." (Groom Law Group)

[Guidance Overview]
New Puerto Rico Tax Code Requires Big Changes to Retirement Plans for Puerto Rico Employees (PDF)
"The qualified retirement plan provisions found in the 2011 PR Code contain requirements that parallel the requirements found in Section 401(a) of the US Internal Revenue Code.' (The Wagner Law Group)

[Guidance Overview]
Court Owes No Deference to Plan Administrator in Crafting Cash Balance Whipsaw Correction
"At issue was the proper interest rate for projecting cash balance accounts to age 65 for pre-PPA lump sums. The US Supreme Court ruled last year that courts crafting ERISA remedies owe deference to fiduciaries' interpretation of plan terms. But this case didn't present an interpretative issue . . . ." (Mercer LLC)

[Guidance Overview]
End of First Five-Year Determination Letter Cycle Approaching for Qualified Retirement Plans (PDF)
"The chart . . . shows the remedial amendment cycle schedule for single employer individually designed plans. Plan sponsors should take note that the end of the first five year cycle is six months away (i.e., Jan. 31, 2012) for any plan in Cycle A that has a one or a six as the last digit of their EIN." (Schulte Roth & Zabel LLP)

Outside Review of Ohio's Public Pension Plans' Fixes Is Closer
"The request for proposals calls for a review of the 'reasonableness and accuracy' of funding plans proposed by the retirement systems. It asks bidders to recommend improvements in those plans, which would raise retirement ages, reduce cost-of-living adjustments and make other cost-saving moves." (The Columbus Dispatch)

Accounting for Pension Buy-In Arrangements
"The first pension 'buy-in' contract was recently purchased by a U.S. pension plan. This buy-in arrangement is similar to a traditional non-participating annuity (a 'buy-out'), where a plan transfers future responsibility for promised employee retirement benefits to an insurance company." (PricewaterhouseCoopers LLP)

Five Things You Need to Know about QDIAs
"Panelists at the PLANSPONSOR National Conference said that according to the Department of Labor, sponsors still have to do their due diligence in the selection and monitoring of QDIAs. Sponsors need to understand what they're buying, how it works, and how much it costs." (PLANSPONSOR.COM)

Analysis of Well-Funded Public Pension Plans that Weathered the Financial Storm
"The study was conducted via a comprehensive analysis of the funding policy, benefit design and economic assumptions for the . . . six public pension plans selected for analysis . . . ." (National Institute on Retirement Security)

Does It Ever Make Sense to Reduce Your 401(k) Contributions?
"[I]f you're going to reduce your 401(k) contributions, make sure you have the discipline to actually put that extra income in the Roth IRA and not spend it on something you don't need." (Forbes.com LLC)

Plan Terminations: Strategic Planning for 2012 and Beyond (PDF)
"This article discusses best-practice strategies associated with the defined benefit plan termination process and how best to establish the necessary fiduciary record to support the evaluation and purchase of irrevocable commitments for the existing plan obligations." (Thomson Reuters/West via Aon Hewitt )

Study Finds Common Traits of Solid Public Pension Plans
"The most important trait that allowed some public pension plans to weather the financial crisis better than others was full employer contributions made consistently over time . . . ." (Pensions & Investments; free registration required)

New Hampshire's Lame Duck Retirement System Board Challenges Pension Reform Law
"Just days before public employee unions lose their majority on the New Hampshire Retirement System Board of Directors, the Board has instructed its attorney to challenge a key aspect of the pension reform law from going into effect." (Franklin Center for Government & Public Integrity)

DOL's Borzi Fights Critics of Proposed Fiduciary Rule
"At the Insured Retirement Institute's . . . regulatory conference in Washington, Borzi . . . provided clarity on three areas that she said have drawn significant criticism under the proposed regulation: IRAs, broker commissions and EBSA's collaboration with other agencies, like the Securities and Exchange Commission . . . ." (AdvisorOne)

10 Costs That Can Ruin Your Retirement Savings
"Advisers say the account termination and annual maintenance fees are perhaps the most common of the lesser-known fees and other examples of these costs abound." (SmartMoney)

Rosy Wage Projection Now, Wilted Retirement Later
"Statistics are showing that 28 percent of people with 401(k) accounts have taken out loans against them, and salaries are peaking for workers in their 40s. Experts warn that many will face retirement woes due to overly optimistic projections of wages. Guest host Tony Cox speaks with money coach Louis Barajas about properly planning for retirement." (NPR)

Philadelphia Orchestra Challenged on Funding Pension
"In connection with its April 16 bankrup.tcy petition, the Philadelphia Orchestra Association has claimed that its $120 mil.lion endowment cannot be used to satisfy the estimated $23 mil.lion cost of withdrawing from the current musicians' pension plan." (PLANSPONSOR.COM)

Middle Market Retirement Plan Sponsors Looking for More Plan Features
"The study report . . . says that in an effort to appeal to employees, these sponsors moved to plans with additional features such as more frequent on-site visits by provider representatives (49%), automatic deferral increases (48%), the services of a fiduciary investment adviser (48%), an open architecture platform with multiple fund families (47%), and personalized rates of return on statements (44%)." (PLANSPONSOR.COM)

Submit Your Ideas on Labor Department Regulations
"On May 26, 2011 the Labor Department published its Preliminary Plan for Retrospective Analysis of Existing Rules. [DOL invites] you to participate in the discussion concerning the Department's plan . . . . In providing input on the Preliminary Plan, the Department requests that submitters please provide as much detail as possible and provide empirical evidence and data to support your response whenever possible." (U.S. Department of Labor)

With Nationwide Survey of Working Adults, Putnam Investments Has Debunked Several Perceptions About American's Level of Retirement Readiness
"The survey used Putnam's recently developed 'Lifetime Income Score' (LIS) to analyze the results . . . . [T]he median LIS was 64%, meaning that the average U.S. household can expect to replace 64% of its current income in retirement (including Social Security)." (PLANSPONSOR.COM)

GAO Report: A Federal Certification Process for Financial Literacy Providers Would Pose Challenges
"Financial literacy program evaluations are most reliable and definitive when they track participants over time, include a control group, and measure the program's impact on consumers' behavior. However, such evaluations are typically expensive, time-consuming, and methodologically challenging." (U.S. Government Accountability Office)

[Opinion]
Key to Pension Costs Is Realistic Assumptions
"Some corporations . . . used unrealistically high assumptions to keep pension costs artificially low in the short term but at great cost down the road. As a result, company pension costs rose sharply even though their pension funds earned money." (The Sacramento Bee)

[Opinion]
Defending Public Pensions
"Public plans are not relying only on investment returns to mitigate the shortfall. In 2010, more than 20 states made changes to their pension plans to bring down future costs. Over time, these revisions, combined with employee and employer contributions and investment returns, will restore stronger funding for most pension plans." (ABC News Internet Ventures)

[Opinion]
DOL Looks to Increase Fiduciary Standards without Following Procedure Standards
"The proposed rule change expands fiduciary duties by removing the language of primary and regular, leaving anyone who gives investment advice liable for losses to the plan. Besides the increased costs to the financial industry to comply with the rule change and loss of service to small and medium investors, DOL has not performed its duties as a department to justify the rule change." (OpenMarket.org)

Benefits in General; Executive Compensation

[Guidance Overview]
IRS's Proposed New Regulations on Sec. 162(m) Performance-Based Compensation Exception
"[T]he proposed regulation would clarify that the transitional relief provided under §1.162-27(f)(1) applies to any compensation received pursuant the exercise of a stock option, SAR, or restricted stock award granted under a properly disclosed plan during the transition period." (Michael S. Melbinger via Winston & Strawn LLP)

[Guidance Overview]
Texas Supreme Court Holds Stock Options Award to Valuable Employee Provides Necessary 'Nexus' to Protection of Company's Goodwill
"[T]he court ruled by a 6-3 majority that stock options granted to a valuable employee are sufficient consideration to support a post-employment restrictive covenant because they are 'reasonably related' to the company's interest in protecting its goodwill." (Littler Mendelson P.C.)

Social Security and Medicare Taxes and Benefits Over a Lifetime
"How much will you pay in Social Security and Medicare taxes over your lifetime? And how much can you expect to get back in benefits? It depends on whether you're married, when you retire, and how much you've earned over a lifetime." (Urban Institute)

Press Releases


Employee Benefits Jobs

Benefits Analyst
for Summit Retirement Plan Services in OH

Director Defined Contribution Analyst
for Central Ohio Full Service Qualified Plan Administration Firm in OH

Relationship Mgr I
for The Standard in CA

Post Your Job on EmployeeBenefitsJobs.com

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Webcasts and Conferences

"Fundamentals of 401(k) and Other Qualified Plans" - Chicago
in Illinois on July 27, 2011 presented by SunGard Relius

401(k) Rekon Advisor Symposium - Larchmont
in New York on July 28, 2011 presented by 401k Rekon

5th Annual Congress on On-Site Employee Health Clinics
in Illinois on July 25, 2011 presented by Global Media Dynamics


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