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February 1, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

Benefit Consultant
for Gallagher Retirement Services in NC

Account Manager II or III
for Lincoln Financial Group in IL, IN

Benefits Consultant, Small Group & Mid Market
for Northwestern Benefit Corporation of Georgia in GA

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Webcasts and Conferences

"Examining the Challenges Facing PBGC and Defined Benefit Pension Plans" Hearing
Nationwide on February 2, 2012 presented by U.S. House Education and Labor Committee

401(k) Questionnaire Interim Report IRS Phone Forum
Nationwide on March 6, 2012 presented by Internal Revenue Service (IRS)

MEWAs - A New Look at Old Problems
Nationwide on February 28, 2012 presented by ABA Joint Committee on Employee Benefits

Ongoing IRS Guidance on Form W-2 (PPACA) — Practical Tips for Complying
Nationwide on February 9, 2012 presented by International Foundation of Employee Benefit Plans

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[Guidance Overview]
IRS to Hold Phone Forum March 6: '401(k) Questionnaire Interim Report'
"The 401(k) Questionnaire Interim Report, its next steps, and current issues found in 401(k) audits will be discussed by Monika Templeman, Director of Employee Plans Examinations . . . Email specific issues that you would like addressed to by February 17." (U.S. Internal Revenue Service)

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[Guidance Overview]
What Is a Fiduciary (and Why Should We Care)?
"Advisers, as fiduciaries, have a legal mandate to place client interests first. Advisors, on the other hand, must only provide 'suitable' investments to clients while placing their firm's interests first. This means a lot of those 'self-dealing' types of transactions." (BenefitsPro)

New Tool to Clearly Disclose 403(b) Fees
"[A]n industry task force, including the National Education Association, today will unveil a tool [called the 403(b) Model Disclosure Form] that will clearly disclose 403(b) plan fees." (

New Fee Disclosure Solution Released By NEA, NTSAA & ASPPA Joint 403(b) Taskforce
"Partners of the 403(b) Transparency Taskforce including the National Education Association (NEA), the National Tax Sheltered Accounts Association (NTSAA) and The American Society of Pension Professionals & Actuaries (ASPPA) today launched the 403(b) Model Disclosure Form — the first ever transparency standards for disclosure of fees and services in the public school 403(b) marketplace." (American Society of Pension Professionals & Actuaries)

403(b) Model Disclosure Form (Jan. 2012)
"This form is designed to provide [you, a 403(b) plan participant,] with the ability to easily compare detailed information regarding the investment options available to you. It is designed to provide you with a snapshot of the critical information needed when selecting an investment, including the services to be provided to the participant, the fees to be charged to the participant, investment information, the commissions payable to the persons who provide services to the plan, and other payments to third parties." (ASBO, NEA & NTSAA Joint 403 (b) Taskforce)

Kodak Employee Sues Company Directors Over Stock
"[The plaintiff, an Eastman Kodak employee,] said in the lawsuit, which seeks class-action status, that the directors and officials did not disclose to stock-plan participants complete information about Kodak's dire financial condition and kept its investments in the company's equity when it was no longer prudent." (Reuters via the New York Times; free registration required)

Long Term Outlook of Stock Market Likely Attractive
"The long-run outlook for the global stock market is likely to be attractive despite a backdrop of elevated market volatility, below-average growth expectations, and near-0% short-term interest rates, according to Vanguard's Long-Term Economic and Capital Markets Outlook." (

PBGC Intends to Revise 2013 Filing Procedures and Instructions, Requests Comments
Includes a summary of the proposed revisions. "The Pension Benefit Guaranty Corporation (PBGC) proposed submission of information collection regarding payment of premiums. Comments are due April 2, 2012." (International Foundation of Employee Benefit Plans)

PBGC Files Liens Against Assets of American Airlines
The PBGC has filed $91 mil.lion in liens against assets of American Airlines, which has hinted that it might freeze or terminate its four defined benefit pension plans as part of its bankrup.tcy reorganization, according to the Associated Press. (AP via the New York Times; free registration required)

Guide to the 404a5 Opportunity for Retirement Advisors, Part I: Counseling Plan Participants
"Mark down May 31, 2012 in your calendar. That's the date by which 483,000 U.S. retirement plans must send to their participants the initial disclosures required by new Department of Labor rules under Section 404a5 of ERISA. . . . DOL estimates that the rule will affect 72 mil.lion active participants who hold $3 tril.lion of plan assets. . . . It is your job, and opportunity, to help them anticipate, interpret and act on information contained in 404a5 disclosures." (Benefits Pro)

House Panel to Examine Financial Health of PBGC This Thursday
"The House Education and Workforce Health, Employment, Labor and Pensions subcommittee hearing comes at a time when the PBGC has a record $26 bil.lion deficit in its insurance programs that are used to pay benefits promised by financially struggling or failed employers whose pension plans the agency has taken over." (Business Insurance)

Alaska Senator Advocates Creation of Optional Defined Benefit Plan for State Employees
"The bill calls for a new defined benefit plan tier following backlash from 2006 legislation that made Alaska the first state to switch to an all defined contribution plan structure for new employees. . . . [M]unicipalities are concerned with the potential of training and employing police officers for five years, only to see them bolt with their [defined contribution plan] assets to another state that can offer a pension." (Pensions & Investments, reprinted in Business Insurance)

Record High Pension Assets Hit By Rising Liabilities
"Global pension assets hit a record high at the end of last year, but burgeoning liabilities meant funding ratios were in a worse state than 12 months earlier, a survey has shown. . . . [L]ower interest rates and changes to other accounting measures around the world's major economies meant liabilities also hit record highs compared to a benchmark date at the end of 1998, Towers Watson said." (aiCIO)

How Index Trading Increases Market Vulnerability
"The popularity of index funds and ETFs . . . comes at the cost of 'trading commonality,' or 'basket trading,' across the market. Many stocks within an index being traded are simultaneously bought and sold. As a consequence, the stocks in an index tend to move together throughout the trading day." (Morningstar Advisor)

Lower Your Earnings Assumption, Milliman Tells Second-Largest Public Pension Plan
"'There is a less than 50 percent probability that the current assumption' of 7.75 percent will be met [by the California State Teachers' Retirement System] 'over the long term,' Milliman actuaries wrote in their report." (Bloomberg)

Public Pensions Pile on Risk to Beat Underfunding
"Public sector pension fund investors and their fund managers react differently to an underfunded status than their private sector peers, Nancy Mohan and Ting Zhang at the University of Drayton found in research . . . [G]overnment accounting standards 'strongly affect risk-taking behavior', as most pension plans used higher return assumptions to discount their pension liabilities." (aiCIO)

Finding Trustworthy Financial Advice for Retirement and Avoiding Pitfalls (PDF)
"Many older people say they would like to have the assistance of a good advisor, but they do not know how to locate one. They can look to large institutions like Fidelity, Vanguard, or Schwab or they can utilize smaller firms or individuals who provide advisory services. Employers sometimes offer advice as part of their benefit programs. Here are some factors to help guide the search." (Society of Actuaries)

Pushback from Disclosure of Costs: Too Much 401(k) Sunshine?
"[R]ecord keepers for some plans are already experimenting with new ways to explain fees to retirement savers. And in at least one case, those disclosures are raising more questions than employers or investment advisers want to answer." (Wall Street Journal)

Setting the Record Straight on 12 of the Biggest Myths Over Public Pensions
"One of my pet peeves in the ongoing debates over public pension reform is the way partisans on each side try to pitch half-truths and myths to support their arguments. . . . There's an old saying in politics that if you tell the same lie long enough, the public will eventually believe it — and that apparently is the mentality of lobbyists on both sides. . . . . I'd like to set the record straight on a dozen of the most glaring fallacies and silly slogans." (

The Savings Crisis of Working Americans: The Retirement Industry Call to Action
"[I]f our society does not acknowledge and address the coming retirement savings shortfall, the American dream of retirement will most certainly become a nightmare. . . . Americans must save more for their retirement." (Legg Mason Retirement Advisory Council)

Setting Interest Rates Too Low: The Fed's New Tax on Retirees
"Last week, the Federal Reserve rolled out their inflation forecast and interest rate intentions through 2014 . . . . This financial repression will result in a tril.lion dollar transfer of real wealth from fixed income investors to the persons, businesses and governments borrowing at below free-market rates." (Forbes)

Benefits in General; Executive Compensation

Institutional Shareholder Services Releases FAQs Regarding 2012 U.S. Compensation Policy
"On January 25, 2011, Institutional Shareholder Services (ISS) published a set of FAQs regarding its 2012 US compensation policy. The FAQs cover: Pay for performance; Management's say on pay responsiveness; [and] Equity plans." (Practical Law Company)

Use of TPAs to Outsource Benefit Plan Administration Increased Substantially During Past Four Years (PDF)
"[R]oughly two in five plan sponsors (37%) say they are increasing the use of third party administrators (outsourcing benefits administration) to some extent in order to manage costs. Among those using this strategy, 65% indicate it has been successful in achieving desired cost savings." (Prudential)

Public-private Pay Gap Varies Greatly By Education Level
"Federal civilian workers with only a high school diploma or less fared much better than private sector employees with the same: They earned 21 percent more wages, 72 percent higher benefits and 36 percent more in total compensation. . . . In contrast, among employees with a professional degree or doctorate, federal workers earned 23 percent less in wages and 18 percent lower total compensation, while receiving about the same benefits as the private sector employees with identical degrees." (

Baby Boomers Are Reaching Age 65, But Are They Actually Retiring?
"Health care is another issue that is causing many baby boomers to delay retirement . . . especially for those who are under the age of 65 and not yet eligible for Medicare. For pre-Medicare retirees, although 80 percent of employers offer a pre-Medicare subsidy, 51 percent of those employers have a subsidy cap . . . ." (BenefitsPro)

New Book on ESPPs (Employee Stock Purchase Plans)
The Certified Equity Professional Institute just released a new book on employee stock purchase plans (ESPPs) as part of its GPS (guidance, procedures, systems) series, and you can order a copy from the NCEO. (National Center for Employee Ownership (NCEO))

Employee Benefits Developments, January 2012
Various rulings, opinions, and cases are summarized. (Hodgson Russ LLP)

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