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The ASPPA 401(k) SUMMIT is Bigger and Better in New Orleans! [Advert.]
Come to the Big Easy for the unparalleled 401(k) SUMMIT. Join over 1,500 attendees including Broker Dealer Registered Reps, Registered Investment Advisors, Plan Administrators (TPAs) and Product and Service Professionals. Register now and save!
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[Official Guidance]
FINRA Provides Guidance on Application of Communications Rules to DOL-Required Disclosures (PDF)
"To the extent that a firm provides information to plan participants that is required by and complies with the disclosure requirements set forth in the DOL rule, FINRA will treat the information as if it were a communication that satisfies the content and filing requirements of NASD Rules 2210 and 2211. Accordingly, firms are not required to file the information with FINRA pursuant to NASD Rule 2210(c), nor is the information subject to the content requirements of NASD Rule 2210(d), including the expense and performance related provisions of NASD Rule 2210(d)(3)."
(Financial Industry Regulatory Authority)
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[Official Guidance]
SEC Request for Comment on Study Regarding Financial Literacy Among Investors (PDF)
"[The SEC] is requesting public comment on the following: methods to improve the timing, content, and format of disclosures to investors with respect to financial intermediaries, investment products, and investment services; the most useful and understandable relevant information that retail investors need to make informed financial decisions before engaging a financial intermediary or purchasing an investment product or service that is typically sold to retail investors, including shares of registered open-end investment companies; and methods to increase the transparency of expenses and conflicts of interests in transactions involving investment services and products, including shares of registered open-end investment companies."
(U.S. Securities & Exchange Commission)
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[Guidance Overview]
Labor Department Offers Guidance on Electronic Disclosure But Not Much Relief
"The Release provides little relief to plan administrators who want to satisfy the disclosure requirements of the Regulation electronically but are stymied by the cumbersome requirements of the Safe Harbor as to Group 2 participants. Inexplicably, however, Method 2 in the Release is more difficult to implement than the consent procedures in the Safe Harbor for Group 2 participants."
(McGuireWoods LLP)
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[Guidance Overview]
Finally, a Final Regulation on Providing Investment Advice (PDF)
"The final regulation, effective for transactions occurring on or after December 27, 2011, is the culmination of a five-year effort by the DOL to implement a prohibited transaction exemption to allow fiduciary investment advisers to render investment advice to plan participants and beneficiaries while receiving compensation from investment funds."
(Trucker Huss, APC.)
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[Guidance Overview]
What to Do About IRA Charitable Donations in 2012
"Sixty federal tax provisions expired in 2011, but one stands out for causing older taxpayers trouble: the individual-retirement-account donation rule. This popular provision [allowed] IRA owners 70½ and older to contribute up to $100,000 of IRA assets directly to a tax-free charity. Such donations aren't tax-deductible, but neither do they count as income that might trigger higher taxes on Social Security payments or higher Medicare premiums. Now this benefit is gone, at least until Congress restores it."
(Wall Street Journal)
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[Guidance Overview]
In Re: Citigroup ERISA Litigation: Has The Death Knell Sounded for Stock Drop Cases?
"[The Court of Appeals for the Second Circuit] was not simply being asked to articulate the standard of review applicable to ERISA fiduciary conduct in the context of stock drop claims, but also to determine the pleading requirements sufficient to allow such complaints to proceed. . . . The decision is very favorable to the employer-fiduciary community."
(The Metropolitan Corporate Counsel)
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[Guidance Overview]
Coming Feb. 23: IRS Phone Forum on Funding-Based Benefit Restrictions
"Funding-based benefit restrictions under section 436 of the Internal Revenue Code will be discussed by Michael Spaid and Tonya Manning, IRS Actuaries with Employee Plans Rulings and Agreements. If you have a specific matter that you would like the speakers to address, [let them know] via e-mail at ep.phoneforum@irs.gov on or before January 28, 2012."
(U.S. Internal Revenue Service)
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New Pension Forecasts: What If Earnings Falter?
"For the first time, the annual California Public Employees Retirement System actuarial report last fall on state and non-teaching school pensions included a sensitivity analysis."
(Calpensions)
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Pension Funds Hit by Weak Returns in 2011
"Average investment returns in 2011 for pension funds in major markets globally were anemic at best, ranging between -3% and 3% . . . ."
(Pensions & Investments; free registration required)
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Public Pension Tensions Continue to Mount
"Whether it's at the state or the federal level, the debate revolves around a central question: Are public pensions too generous? The answer to that question is all over the map, figuratively and literally."
(GovExec.com)
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Sacramento's Pension Clock Is Ticking
"Over the last decade or two, companies butchered pension plans while many governments boosted theirs outrageously. That led to inevitable outcries of unfairness by private-sector taxpayers. Also, government pension plans face unfunded liabilities reaching into the hundreds of billions, depending on the study. So that's a time bomb ticking for taxpayers."
(Latimes.com)
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Bankrup.tcy a Pension Reprieve for Some Companies
"The most controversial feature of the latest round of bankruptcies is that Hostess, Kodak and AMR want to use bankrup.tcy to relieve them of their pension promises. . . . AMR is expected to start the process of canceling American Airlines' pensions that cover pilots, mechanics and other workers. The PBGC says the plan has a $10 bil.lion shortfall and wants AMR to fulfill its pension promise."
(USATODAY.com)
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'Spiking' Part of High Earnings in New Hampshire Retirement System for Vested Employees
"Among [recent New Hampshire legislative] changes are that new public employees who were not vested in the pension system (those with fewer than 10 years on the job) when the changes went into effect will no longer be allowed to include severance pay, unused sick and vacation pay, cash incentives to retire, or longevity pay in calculations used to determine their pensions."
(Fosters)
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The Case for Re-Enrollment
"When [Target Date Funds, or 'TDFs'] are added to a plan's investment lineup, adoption rates as a percentage of plan assets range from 1% to 5% (incremental to assets mapped). With re-enrollment as the strategy, TDFs jump to a 40% to 60% adoption rate. For sponsors interested in better asset allocation for their participants, but unsure how to drive TDF adoption in the face of participant inertia, effective implementation is key."
(JPMorgan Chase & Co)
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The Most Important Retirement Stories of 2011
"[T]he biggest stories of 2011 could play out for years to come. So let's take a look in that rear view mirror and see if there's anything we can learn from some of the key stories we tracked . . . in 2011."
(Retirement Town Hall)
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American Airlines Makes Reduced Pension Payment
"American Airlines' parent company has made only a small fraction of the roughly $100 mil.lion payment it was scheduled to contribute to the company's employee pension plans. AMR Corp. instead contributed just $6.5 mil.lion by the January 15 deadline, the [PBGC] said, according to the Wall Street Journal."
(PLANSPONSOR.COM)
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Oregon Public Employees Want to Stop Name Release
"Public employees asked the Oregon legislature to block the state's pension system from releasing the names of workers and retirees. A bill is expected to be introduced as a courtesy to a coalition of public employee unions, according to the Associated Press."
(PLANSPONSOR.COM)
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[Opinion]
Finally Retire New York's Overpriced Pensions
"Pension costs for state and local government employees in New York are among the highest in the nation and contribute significantly to our sky-high state and local tax burden. New Yorkers pay $574 per person per year in taxes for public employee pensions, more than twice the national average."
(NY Daily News)
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[Opinion]
Is ASPPA Really Interested in Disclosure to 403(b) Participants? Here Is Their Chance to Prove It
"While I think Single Vendor [for 403(b) programs] is the best route, I am also a realist and understand that a single vendor environment is not going to happen overnight . . . . It got me thinking about what can be done to protect current participants who are stuck in a non-oversight multi-vendor program or even a program that does have oversight but has multiple vendors. . . . I am calling on ASPPA to . . . require that those who want to work with public school employees and give 'advice' be a fiduciary and those that sell product must disclose they are NOT advice givers and NOT acting as fiduciaries."
(The Meridian Blog, authored by Scott Dauenhauer CFP, MSFP, AIF)
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[Opinion]
Legislation Would Patch Montana's Broken Retirement System Fund
"Association of Montana Retired Public Employees intends to request that HB632 be again introduced in the 2013 session. While not a perfect solution, this proposal and the changes made by the 2011 Legislature would significantly reduce the 'unfunded liability' of the retirement systems, making them healthy again without radical changes to those pensions already promised public employees."
(www.greatfallstribune.com)
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[Opinion]
Video: National Public Pension Coalition's Briefing on America's Public Pension Systems
"The NPCC is comprised of the Service Employees International Union, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the American Federation of State, County & Municipal Employees (AFSCME), the American Federation of Teachers, the International Association of Fire Fighters (IAFF), the National Education Association and the National Conference on Public Employee Retirement Systems (NCPERS). The Coalition engages in state-based activities in support of public employee defined benefit pension systems."
(C-SPAN)
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Benefits in General; Executive Compensation
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Federal Pay and Benefits Remain at Risk As Congress Returns
"House and Senate conferees are scheduled to begin discussions soon over how to finance a 12-month payroll tax cut extension past February, and those talks likely will include proposals to prolong the federal pay freeze and reduce the retirement benefits of government employees and lawmakers."
(GovExec.com)
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[Opinion]
Be Honest, Tell California Taxpayers How Much We Owe
"By one estimate, the statewide taxpayer burden for unfunded pension system liabilities alone is $180 bil.lion to $620 bil.lion. The latter number works out to $45,000 for each household in the state."
(ContraCostaTimes.com)
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Press Releases
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