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The biggest event of the year! [Advert.]
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.
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What to Know about Multiple Employer Plans
"An intriguing new use of a long-established concept is catching the attention of small to mid-size plan sponsors seeking a way to simplify 401(k) plan oversight: multiple employer plans (MEPs). By merging their plan into a properly structured MEP, employers cease to be a plan sponsor and effectively transfer many of the responsibilities and liabilities associated with being a named fiduciary to the MEP."
(planadviser; free registration required)
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[Guidance Overview]
Sub-IRAs Created by Trustee-to-Trustee Transfer Were Inherited IRAs
"Two sub-individual retirement accounts (IRAs) created by a trustee-to-trustee transfer for two non-spousal beneficiaries who acquired their sub-IRAs because of their parent's death are inherited IRAs within the meaning of Code Sec. 408(d)(3)(C), according to an IRS letter ruling."
(Wolters Kluwer Law & Business / CCH)
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[Guidance Overview]
Bank of America Wins Suit Regarding Use of Proprietary Funds in Its 401(k) Plan
"A federal court has dismissed all charges against Bank of America for allegedly breaching its [ERISA] fiduciary duties by using proprietary funds in its 401(k) plan investment lineup. Several participants claimed Bank of America favored its own funds and the fees for the funds increased unreasonably after Bank of America acquired Nations Bank. Most of the claims were dismissed as time-barred under ERISA's six-year statute of limitations on fiduciary breach claims."
(PLANSPONSOR.COM)
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[Guidance Overview]
Nortel Settles ERISA Stock Investment Lawsuit
"According to Dow Jones Daily Bankrup.tcy Review (09/02/11), Nortel agreed to a $21.5 mil.lion settlement in a lawsuit that alleged the company violated [ERISA] when it offered company stock as an option for the employee benefit plan without allegedly disclosing the risks associated with company stock as an investment."
(Online Legal Media)
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[Guidance Overview]
Another Plan Sponsor Prevails in a Revenue-Sharing Case
"This time the case was Loomis v. Exelon, a case argued before the 7th U.S. Circuit Court of Appeals, which had previously weighed in on the case that appears to be setting the tone in most of these cases: Hecker v. Deere & Co."
(PLANSPONSOR.COM)
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Three More Ways 401k Plan Sponsors Can Help Employees Make Better Investment Decisions
"The Bateman paper points to three ways 401k plan sponsors can help employees make better investment decisions. When expressing returns in terms of frequency, use the word 'gain' or a similar positive frame; Use graphs when showing returns or probability ranges of returns; and, Avoid one-sided measures since investors cannot infer that a high probability of losses also implies a high probability of gains and vice versa."
(Fiduciary News)
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State-by-State: Benefits Available to State Legislators
"USA TODAY's investigation is based on an analysis of public records in the 40 states that provide pensions to state legislators. Reporter Thomas Frank analyzed thousands of pages of pension laws, financial reports and retirement handbooks for each of the states to determine benefits available to state legislators and to track the evolution of legislative pensions over the past four decades."
(USA TODAY)
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Massachusetts Senate Passes Pension Reform Bill
"The Pension Reform Bill . . . increases the retirement age for all new employees. This increase reflects the fact that people now live and work longer than when the Commonwealth originally set the retirement ages in the 1950s and 1960s. The change will bring the state system closer to the retirement ages already set by the federal government for Social Security benefits."
(Patch)
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Retirement Reality Not As Rosy As Expectations
"The survey results suggest the main problems people encounter are money and health. A third of retirees say their finances are worse than before retirement; even more report deteriorating health."
(NPR)
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Social Interaction Effects and Individual Portfolio Choice: Evidence from 401(k) Pension Plan Investors
"This paper explores whether social interactions influence investors' decisions to hold equity and allocate their portfolios, in the context of defined contribution retirement savings accounts. Using a rich dataset of 401(k) plans, we provide empirical evidence that participants are influenced by their coworkers when they make equity investment decisions."
(Pension Research Council; free registration required to download papers)
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Pension and Retirement Plan Enactments in the 2011 State Legislatures
"Even more state legislatures enacted significant retirement system changes in 2011 than did so in 2010: 27 in 2011, compared with 21 in 2010. Since some states revisited the topic, in all, 40 states enacted significant revisions to at least one state retirement plan in 2010 or 2011."
(National Conference of State Legislatures)
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Economic Preparation for Retirement
"The authors define and estimate measures of economic preparation for retirement based on a complete inventory of economic resources while taking into account the risk of living to advanced old age and the risk of high out-of-pocket spending for health care services."
(RAND Corporation)
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The Evolution of Social Security's Taxable Maximum
"Although the nominal value of the tax max has grown from $3,000 in 1937 to $106,800 today, in inflation-adjusted dollars the tax max declined from 1937 until the late 1960s, and then grew once it was indexed to wage growth in 1975. In wage-adjusted dollars, the tax max has remained roughly constant since the mid-1980s."
(U.S. Social Security Administration)
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North Carolina's Retirement Plan Is Sound, Isn't Cushy
"The Legislature's watchdog agency says North Carolina's pension plan for teachers and state employees is well funded and is not considered lavish when compared with similar retirement systems in other states."
(Hearst Communications Inc.)
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How Safe Is Your 401(k) Plan?
"Because qualified retirement plans—pension, profit-sharing, and more recently 401(k)—have been around a long time and often hold large amounts of money, history shows that too often they have been the target of abuse or neglect. So it is important to know they are now the most heavily regulated and closely protected assets under the law."
(Journal Sentinel Inc.)
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FASB Standard on Disclosures about Participation in Multiemployer Pension Plans
"A disclosure table will identify significant plans; provide basic, readily available information about them; and show the employer's total contributions to all multiemployer pension plans. Narratives must describe general features of multiemployer plans and any changes affecting period-to-period comparability."
(Mercer LLC)
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[Opinion]
Major Changes to Mississippi PERS Unlikely
"Since 1989, Mississippi's 174 legislators and the lieutenant governor have enjoyed a preferential state retirement system that is 1.5 times more lucrative than that provided 'regular' state employees like school teachers or highway workers. In a story this week, USA TODAY claimed that 'Mississippi legislators get two pensions that on average add up to 165 percent of their salary.'"
(www.clarionledger.com)
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Benefits in General; Executive Compensation
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[Guidance Overview]
IRS Cell Phone Tax Treatment Guidance (PDF)
"Accordingly, as long as the cell phone is provided 'primarily for noncompensatory business reasons,' there is no longer a requirement to track or substantiate the calls—the entire use of the phone is non-taxable to the employee (i.e., not reported on the W-2 as wages), and the employer should be entitled to the full deduction for the cost of the cell phone (and related data plans)."
(Groom Law Group)
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[Guidance Overview]
IRS Explains Effect of Tax Home Changes on Business Travel Deduction
"This simple information letter highlights a source of recurring confusion for employers and employees. Relocations that may be thought of as temporary by both the employer and the employee because the employee is fully expected to return to his or her previous location, are not considered temporary for business travel deduction purposes if they continue for more than one year."
(Thomson Reuters/EBIA)
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Should We Give Employees the Benefits They Want?
"Employees generally seek more lifestyle-related benefits, such as pet insurance and discounted day-care, as opposed to what the experts say they need—such as disability insurance. Isn't the purpose of employee benefits to benefit employees?"
(Human Resource Executive Online)
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A Tax Plan That Might Not Be So Painful by Utilizing Employment-Based Plans
"[You can significantly reduce any tax increase] by signing up for (and maxing out your set-asides in) those flexible spending and other accounts for health and dependent care plus public transportation or parking. With these accounts, your employer makes it possible to put aside money before it takes out income taxes (or to make a deposit in a way that qualifies you for a deduction)."
(The New York Times; free registration required)
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Press Releases
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