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September 23, 2011 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

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Webcasts and Conferences

Controlled Groups
Nationwide on October 13, 2011 presented by McKay Hochman Co., Inc.

How Providers & Payors are Collaborating to Design a Value-Based System
Nationwide on October 26, 2011 presented by MCOL

Multi-Employer Plans in Mergers & Acquisitions
Nationwide on November 10, 2011 presented by ABA Joint Committee on Employee Benefits

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[Guidance Overview]
Interest Rate for 401(k) Plan Participant Loans May Need To Be Prime Plus 2%
"During a recent phone forum, an IRS agent stated that the agency views an interest rate equal to prime plus 2 percent as a 'reasonable' interest rate—effectively establishing a safe harbor rate. This advisory reviews this guidance and what action plan administrators may want to consider." (Troutman Sanders Strategies)

The biggest event of the year!   [Advert.]

Sponsored by ASPPA

70+ interactive sessions on hot topics shaping the industry, up to 25 ASPPA CPE credits/23 ERPA and JBEA CPE credits, 80+ displays in the exhibit hall. Register now for best pricing.

[Guidance Overview]
Court Finds AT&T Lax in Pension Plan Change Disclosure Efforts
"The [court] concluded the plan abused its discretion in denying Francine Helton's claim for retroactive benefits because it did not engage in a reasoned and principled decision-making process, and the determination is not supported by substantial evidence." (PLANSPONSOR.COM)

[Guidance Overview]
IRS Establishes Church Plan Letter Ruling Procedures
"The IRS believes participants in a church plan seeking confirmation of nonelecting status should get advance notice, because of the fact that a nonelecting church plan is not subject to ERISA or [certain] tax code requirements." (National Underwriter Life & Health)

[Guidance Overview]
Disclosures about an Employer's Participation in a Multiemployer Plan
"FASB significantly scaled back the disclosure requirements from its draft version issued one year ago." (Lindquist LLP)

[Guidance Overview]
DOL Intents to Repropose Rule on Definition of 'Fiduciary'
"The open question is how effectively, and to what extent, the reproposal will address the significant concerns raised by the comments, including how flexible the terms and conditions will be in any new or amended exemptions designed to address those concerns, and whether IRAs will be treated differently from ERISA-covered plans." (Morgan, Lewis & Bockius LLP)

[Guidance Overview]
FASB Standard Broadens Disclosures on Multiemployer Pensions
"The new disclosures include [among others]: The amount of employer contributions made to each significant plan and to all plans in the aggregate. An indication of whether the employer's contributions represent more than 5% of total contributions to the plan. An indication of which plans, if any, are subject to a funding improvement plan." (American Institute of Certified Public Accountants)

Fed's 'Operation Twist' Another Reason for Pension Plan Liability-Driven Investment Strategy
"If long-term interest rates drop due to 'Operation Twist', then pension liabilities will likely increase and have a negative effect on many plans' funded status. This issue will be compounded by market turmoil that is lowering the value of equities in pension trust assets." (Van Iwaarden Associates)

Determining Reasonableness of Retirement Plan Fees
"[A new Vanguard commentary] looks at the steps and tools that can help sponsors understand and compare recordkeeping and investment management fees. The authors conclude that a disciplined and diligent approach to reviewing and negotiating fees will help sponsors secure plan services for a reasonable cost." (The Vanguard Group, Inc.)

Social Security in Simple Terms
"Increases in payroll taxes enacted during the 1980s exceeded current needs and thus extra funds were accumulated for future use. By law those trust funds must be invested in U.S. Treasury bonds. These Social Security trust funds will be spent by about 2036. This prospect underpins the false claim that the system is going bankrupt. Absent other changes, the program will simply revert to its former pay-go character." (The Century Foundation)

GASB Extends Comment Deadline on Pension Accounting and Financial Reporting Proposals
"The deadline, previously September 30, has been extended to Friday, October 14. In addition, the Board has changed the date of the pensions public hearing in New York City . . . ." (PLANSPONSOR.COM)

Six Things Your 401(k) Provider Doesn't Want You to Know
"[B]usinesses still need to be wary as they scrutinize the details behind the various offerings in the market. In other words: you need to be ready with the right questions because if you don't ask, some providers simply won't tell." ( LLC)

Labor Official Speaks on Fiduciary Issue
"The [DOL] will define the responsibilities of a fiduciary 'with as much vigorous debate as possible,' a top DOL official said Thursday at an industry convention in Las Vegas." (Business Insurance)

How State Lawmakers Pump Up Pensions in Ways You Can't
"More than 4,100 legislators in 33 states are positioned to benefit from special retirement laws that they and their predecessors have enacted to boost their pensions by up to $100,000 a year, a USA TODAY investigation found. Even as legislators cut basic state services and slash benefits for police, teachers and other workers, they have preserved pension laws that grant themselves perks unavailable to voters they serve or workers they direct." (USA TODAY)

Individual Risk-Free Pension Schemes in the European Union: Macroeconomic Benefits, the Mobile Working Citizen's Perspective and 'Why Nots'
"The findings show that there are no reasons why the European Union and individual member states should not allow individual risk-free pension savings accounts." (Social Science Research Network)

Equity Floor Investments Increase Probability of Retirement Success for 401(k) Participants in Distribution (PDF)
"Numerous studies have shown that equity exposures are essential for maintaining a sustainable withdrawal rate over an extended period. This article explores the benefits of Equity Floor investments for a distribution phase portfolio and also incorporates the impact of possible future returns on the Equity Floor investment decision. [Originally published in 2008.]' (Aspen Publishers, Inc. via Unified Trust Company, NA)

Smart Tips for Spotting Retirement Scams (PDF)
"Don't let the promise of easy money lure you into an early retirement you weren't otherwise considering. Before you quit your day job (or night job) and invest your retirement savings, follow these tips: [1] Be skeptical of 'free lunch' seminars." (FINRA)

How to Make the Best of a Bad 401(k)
"You should also diversify with regard to tax treatment of your investments. In addition to the 401(k) plan, you should have a Roth IRA and possibly even a taxable investment account. When you set up these accounts and contribute to them regularly, you can make it so you have much better choices to take the place of some of the more expensive options in the 401(k)." (TheStreet, Inc.)

Looking at the Issue of the Return-Rate Assumptions of Pension Plans
"[I]f nothing else, the market's current malaise again highlights the lunacy of both public and private pension funds continuing to believe on average that they can generate annual returns of 8%." (The Wall Street Journal)

American Academy of Actuaries Comments to PBGC on Unfunded Vested Benefits for At-Risk Plans Calculation (PDF)
"We specifically believe that when a plan is subject to the 4 percent and $700-per-participant load (applicable when a plan has been at risk for two of the prior four years), that load should not be included in the premium funding target for purposes of determining the variable rate premium." (American Academy of Actuaries)

Pension Fund Investing in a Downturn: What the Research Reveals on Stocks, Bonds and Inflation
"Today's public pension trustees and OPEB plan overseers are re-thinking their assumptions about long-term investment returns, as well as their basic investment strategies. With long-term government bond yields touching record lows and stock markets jittery at best, prudent fiduciaries must ask hard questions of their investment consultants and advisors." (Governing)

Benefits in General; Executive Compensation

[Guidance Overview]
Guidance on the Tax Treatment of Employer-Provided Cell Phones and Similar Telecommunications Equipment
"Observation: Employers that reimburse the cost of an employee's personal cell phone that is also used for business purposes should ensure that the cell phone's service plan, or the portion of the service plan that is reimbursed, is reasonably related to the scope of the employer's business needs. This may require the employee to substantiate the type of coverage provided in the plan (domestic vs. international, flat-rate vs. set minutes)." (PricewaterhouseCoopers LLP)

Attorney Fee Awards under ERISA
"An ERISA litigant now must only achieve 'some degree of success on the merits of a case' to be eligible for fees. The Court did not, however, elaborate on the scope of the new standard, and left open questions regarding just how much success in an ERISA matter is enough to sustain a fee claim: (1) Is a court order remanding a case to a plan administrator for further review enough success? (2) How does the standard apply if the claimant loses on remand? (3) What if a case settles prior to a decision?" (GableGotwals Insurance Law Practice)

Best Hiring Practices at Employee-Owned Companies
Hiring practices are an important aspect of developing and maintaining an ownership culture at a company with an ESOP or another employee ownership plan. To optimize the effectiveness of the hiring process, it is important for employee-owned companies to understand how to recruit and retain candidates who have not only the core skills required but also the core values. This issue brief shows how successful employee-owned companies accomplish this. (National Center for Employee Ownership)

Press Releases, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Phone (407) 644-4146
Fax (407) 644-2151

Jeanette Hull, News Editor
David Rhett Baker, J.D., Editor and Publisher
Lois Baker, J.D., President
Holly Horton, Business Manager

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