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December 27, 2011 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

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[Official Guidance]
Cost Accounting Standards 412 and 413-Cost Accounting Standards Pension Harmonization Rule (PDF)
"The Office of Federal Procurement Policy, Cost Accounting Standards Board, is publishing this final rule to revise Cost Accounting Standard (CAS) 412, 'Composition and Measurement of Pension Cost,' and CAS 413, 'Adjustment and Allocation of Pension Cost.' This revision will harmonize the measurement and period assignment of the pension cost allocable to Government contracts, and the minimum required contribution under [ERISA] as required by the Pension Protection Act (PPA) of 2006. The PPA amended the minimum funding requirements for qualified defined benefit pension plans. The Board issues this final rule to revise CAS 412 and CAS 413 to include the recognition of a 'minimum actuarial liability' and 'minimum normal cost,' which are measured on a basis consistent with the liability measurement used to determine the PPA minimum required contribution, and accelerate the recognition of actuarial gains and losses. These and other revisions will better align both the measurement and period assignment of pension cost allocable to a contractor's Government contracts and other final cost objectives in accordance with CAS, and the measurement and period assignment requirements for determining the contractor's minimum pension contribution under the PPA." (Federal Procurement Policy Office)

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[Guidance Overview]
PBGC Updates: Expected Retirement Age and Reportable Events in 2012
"The PBGC announced that the expected retirement table for plans undergoing a distress or involuntary termination will be updated for valuation dates occurring in 2012, while the existing guidance on reportable events will continue." (Deloitte via

Minnesota: Large Public Pension Plan Investment Report for Year Ended December 31, 2010 (PDF)
"This report reviews the investment performance of Minnesota's large public pension plans for the 2010 calendar year. These pension plans and the State Board of Investment held nearly $47.8 bil.lion in assets as of December 31, 2010, and represent the retirement savings of hundreds of thousands of public employees." (State of Minnesota, Office of the State Auditor)

CalSTRS Director Discusses Challenges of Governmental Defined Contribution Plans
"Julia Durand, the president of NAGDCA and a director at CalSTRS, discusses the unique challenges facing public defined contribution plans with P&I [magazine]." (Pensions & Investments; free registration required)

Payroll Tax Cut Bill Includes Recapture Tax
"The [IRS] said the 'recapture' provision applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount). This provision imposes an additional income tax on these higher-income employees in an amount equal to 2% of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100)." (PLANSPONSOR.COM)

When Divorce Unravels Retirement Plans
"For starters, both parties in a divorce are likely to face a drop in their living standard. But women tend to fare worse . . . . On average, they work fewer years than men since they are more likely to take time off to raise the children. This means they haven't built up as many assets and therefore have less negotiating power." (The Wall Street Journal)

Florida Legislators Target Extra Pension Benefits for Police and Firemen
"Cities throughout Florida would no longer be required to fund extra pension benefits for police and firefighters under a proposed bipartisan bill. Instead, cities could apply those funds to basic pension benefits in the future, or avoid having to increase property taxes to pay for the enhanced benefits, proponents of the bill say." (Bradenton Herald)

Economic Analysis in ERISA Litigation over Fiduciary Duties
"The purpose of this paper is to discuss some of the important economic issues that arise in ERISA litigation, both in establishing liability and in calculating damages. From an economic point of view, the question of liability involves three related questions. First, what should investors do? Second, what do they do? And third, what should fiduciaries do about these facts?" (The President and Fellows of Harvard College)

Arizona May Pay More Into Workers' Funds for Retirement
"A plan to return state retirement-account contributions to their prior level could amount to an extra $20 to $40 per pay period for state workers . . . ." (

'Double Dipping' Retirees Eyed by Governor of California
"[R]eformers say public employee retirement systems can't afford years of pension payouts to those who stay on a government payroll, and that reforms would save money in an era of steep budget cuts." (The Fresno Bee)

Pensions & Investments' 11th Annual Databook
"[Contains] a collection of charts, tables and statistics on a variety of investment management subjects. This compilation is a reference book for tax-exempt fund executives as well as executives of money management firms, consulting firms and other vendors." (Pensions & Investments; free registration required)

Rhode Island Cities and Towns May Gain Power to Revamp Pensions
"Mayors around the state warn that without the ability to cut pensions, their cities will have to raise taxes or slash services to keep up with the ever-escalating cost of providing the retirement plans for municipal employees." (LIN Television Corporation)

Saving for Retirement Used to Be Simple; Now It's Rife with Contingencies
"The problem is that there's no safe-yet-lucrative way to save anymore. The broad stock market has had several epic rallies and nosedives in the past decade, and many experts say that wild swings are here to stay. All the while, inflation will inevitably eat away at the value of people's savings. What's more, the safe, fixed-income investments — from bank CDs to government bonds — are paying next to nothing these days." (National Journal Group Inc.)

California Pension Reform Hindered by Limits of Contract Protections
"Note: Benefits already earned for past labor are protected, as they should be. The issue is the future rate of accrual. Smart business people know that when they are in a financial hole, they should stop digging. The California public-sector rules are different. Once employees start working, they usually are guaranteed that initial multiplier their entire careers, many lawyers say. If, for example, that 2 percent per year is increased to 3 percent, it cannot be subsequently reduced." (San Jose Mercury News)

Don't Go After Military Pensions
"The Pentagon has reportedly been considering replacing the guaranteed pension that, for more than a century, has been a fundamental compact between the United States and its soldiers, in favor of a market-based 401(k) approach. But this would be a grave mistake, a disincentive to future volunteers and a threat to national security." (The New York Times; free registration required)

Five Hidden Retirement Trends of 2011
"1. New products and services to generate retirement income . . . 2. The Department of Labor issues regulations on expert advice in 401(k) plans . . . . 3. High unemployment and the consequence of boomers working longer . . . . 4. Many more children in poverty than the number of retirees . . . . 5. More and more people looking for a 'good death.'" (CBS Interactive Inc.)

Benefits in General; Executive Compensation

[Guidance Overview]
ISS Issues Technical Paper on Evaluating Pay for Performance and Updated Burn Rate Tables (PDF)
"Under its Burn Rate Policy, ISS recommends against stock plan proposals if a company's three-year average burn rate exceeds its industry group's mean by more than one standard deviation or two percent of weighted common shares outstanding, if higher." (Frederic W. Cook & Co., Inc.)

[Guidance Overview]
DOL Releases Form 5500 for 2011 Plan Year
"Given the numerous changes made to the 2009 and 2010 Form 5500, it is not surprising that the changes this year were fairly limited. In fact, most of the changes took the form of clarifications and enhancements to the Instructions. But plan administrators and service providers nonetheless should familiarize themselves with the revisions to ensure that their 2011 Form 5500 filings are complete and accurate." (Thomson Reuters/EBIA)

Philadelphia Tells Its Large Contractors to Extend Benefits to Life Partners
"Companies that score a big contract with the City of Philadelphia will soon be forced to amend their employee benefit plans to comply with the City's requirement that the benefits offered to the spouses of employees also must be offered to same-s.ex life partners of employees." (Ballard Spahr LLP)

Investigator Says No Wrongdoing in Screen Actors Guild Plans
"'Based on the results of the investigation, we can assure you that the fiscal integrity of the [Screen Actors Guild -- Producers Pension and Health Plans] remains sound and your benefits are secure,' [a letter to plan participants] said. 'In plain English, your pension plan is safe; your health plan is safe.'" (Chicago Tribune)

Screen Actors Guild Whistleblower Alleges $5-$10M Benefits Theft
"The Labor Department has yet to comment on whether it has begun an investigation. Lawyers for the [Screen Actors Guild -- Producers Pension and Health Plans], which controls about $2.5 bil.lion in plan assets, are denying all charges." (National Legal & Policy Center)

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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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