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BenefitsLink Retirement Plans Newsletter
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[Official Guidance]
Present Value of PBGC Maximum Guarantee: Table Updated for 2012
"These values apply to benefits with annuity starting dates in 2012. The 2012 table was developed using the 417(e) segment rates for August 2011 (1.85%, 4.62% and 6.02% respectively) for plan years beginning in 2012 and the 417(e) applicable mortality table for 2012."
(Pension Benefit Guaranty Corporation)
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ERISA Litigation National Institute, Chicago, IL [Advert.]
A practical approach to ERISA, this program is designed for litigators who handle ERISA cases and want to enhance their substantive ERISA knowledge, and benefits practitioners who wish to further their knowledge of substantive and recent case law.
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[Official Guidance]
IRS: Filing of Extension Requests Is Limited to 3 or Fewer Plans Sponsored by Same Employer
"If the employer maintains more than one single employer plan and the plan years end on the same date, you may file a single Form 5558 to apply for extensions to file Forms 5500 series and/or Forms 8955-SSA for up to three of these plans. Do not list more than three plans on a single Form 5558. Do not attach lists of plans to a Form 5558, they will not be processed. Lists attached to the Form 5558 received through July 31, 2012, will be returned to the filer to submit a completed Form 5558 for all plans on the list requiring an extension."
(U.S. Internal Revenue Service)
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[Guidance Overview]
IRS Delays Compliance Deadlines for Cash Balance and Other Hybrid Plans
"The Notice also extends the deadline for cash balance and other hybrid plan sponsors to adopt amendments to comply with the market rate of return and other requirements enacted under the PPA from the last day of the 2011 plan year until at least the last day of the 2012 year."
(PricewaterhouseCoopers LLP)
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[Guidance Overview]
SEC Will Treat New ERISA Disclosures as Compliant
"Ultimately, the disclosures required under ERISA § 404(a) may provide fund performance information that is less current than what is required under Rule 482, and will utilize legends and a presentation format that differs from the Rule's requirements."
(Deloitte via BenefitsLink.com)
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Vegas is the place to (b)! [Advert.]
18 workshops to advance your career, "Washington Update" with Brian Graff, exciting networking opportunities, post-summit access to recordings and handouts, more affordable pricing and outstanding accommodations!
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[Guidance Overview]
10 Questions The DOL Wants 401(k) Plan Sponsors to Ask Their Investment Consultant
"[About 6 years ago,] the DOL put together a list of 10 questions to help the plan fiduciary determine if a conflict-of-interest may exist. We'll review these questions here and add any additional update that might have changed the nature and importance in the six-and-a-half years since the DOL first published them."
(Fiduciary News)
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[Guidance Overview]
Does Your Qualified Retirement Plan Need to Be Amended This Year? (PDF)
"'Cycle A' plans . . . will need to be amended to adopt certain required changes in the law no later than January 31, 2012. Note that if a Cycle A plan has discretionary amendments, those amendments still must be adopted by December 31, 2011 (for calendar year plans). Finally, all qualified retirement plans must adopt interim amendments no later than the due date of the plan sponsor's 2011 tax return (with extensions). Not every year has interim amendments that must be adopted, and 2011 appears to be a year when interim amendments are not required."
(Alston+Bird LLP)
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San Francisco's Pension Crisis
"[Proposition D, on this year's ballot] would postpone the impending pension crunch by stopping pension 'spiking,' limiting retirement benefits to 75 percent of salaries, and requiring city employees to contribute a greater percentage of their salaries to their pensions. Workers earning less than $50,000 would not be required to pay more than 7.5 percent, while those making over $200,000 could contribute as much as 16 percent in years when the pension fund was earning less than anticipated."
(City Journal)
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No Pension? You Might Still Owe $34,000 on One
"Pension accounts for state and local government workers are underfunded by $4 tril.lion, according to one recent analysis. If America's households were to split that tab today, each would have to kick in $34,000. . . . Pension abuses by workers might have helped create the problem. 'Nearly every fire house in the country saves the overtime pay for the guy who's about to retire,' says [Robert Novy-Marx of the University of Rochester]. That's because pensions often base retiree benefits on the highest year's pay workers achieve."
(SmartMoney)
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Sizing Up Trustee-Directed vs. Participant-Directed Retirement Plans
"[Two questions to answer: in a] trustee-directed DB plan where an advisor works with a plan sponsor on the pooled account, is the advisor an ERISA section 3(38) Investment Manager? (Such 'work' would include creating and supplying an Investment Policy Statement, documenting the investment review process, and managing the portfolio in which the plan's pooled assets are invested.) Second, is a plan sponsor and/or its advisor better off or worse off for choosing to stay with a trustee-directed plan instead of a participant-directed plan?"
(Morningstar Advisor)
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Retirement Crisis Hits Boomers
"In a recent Gallup poll, 66% of Americans ranked not having enough money for retirement as their top financial concern. That was up from 53% a decade ago and raised a red flag for U.S. policymakers concerned about distress and downward mobility in the middle class."
(Financial Post)
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Restyled Annuities Offer Fewer Investment Choices
"Insurers are also limiting the likelihood of taking big hits from these guarantees by requiring annuity investors to hold a fairly conservative mix of stocks and other assets -- as opposed to, for example, letting someone put 100% of the account balance in technology stocks or emerging-markets shares."
(The Wall Street Journal)
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Benefits in General; Executive Compensation
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[Guidance Overview]
Proskauer ERISA Litigation Newsletter, November 2011
"[W]e review the Department of Labor's decision to re-propose a controversial regulation expanding the definition of an ERISA fiduciary. . . . [Additional commentary addresses] high deductible health plan/health savings account re-design and planning for open enrollment; the constitutionality of the individual mandate under the Affordable Care Act . . . the Supreme Court's Decision in CIGNA Corp. v. Amara . . . and reconciling obligations relating to the production of documents under ERISA § 104(b)(4) versus the claims regulation . . . ."
(Proskauer)
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[Guidance Overview]
DOL Amends Prohibited Transaction Exemption Procedure
"In addition to consolidating existing policies and guidance on the exemption process into a single source, the regulations clarify the types of information and documentation that must be submitted and expand the method for transmitting filings to include electronic submissions."
(Thomson Reuters/EBIA)
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As States Shift to Contract Workers, Savings Are Not Clear-Cut
"What governments save in salaries and benefits often 'ends up on the government books through all sorts of programs,' said Paul C. Light, a professor at the Wagner School of Public Service at New York University, referring to unemployment insurance, Medicaid and other public assistance for workers earning low incomes."
(New York Times; free registration required)
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2011 Best Places to Work in Insurance
"Business Insurance this year honored 50 companies . . . But what makes these companies attractive employers? Is it their benefits and compensation programs? Their attention to work/life balance? Or is it other, more unusual perks? . . . [This article contains] profiles of the honorees, which are organized by type of company and size . . . . [F]ind out what it is that sets the leading insurance industry workplaces apart."
(Business Insurance)
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[Opinion]
More Necessary Pension Pain Ahead for Governmental Employees
"Sooner or later, state and local governments must further rein in benefits for current employees — so that the cost of providing for public servants tomorrow does not make it impossible to provide actual public services today."
(Washington Post; free registration required)
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Press Releases
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Holly Horton, Business Manager
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