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[Guidance Overview]
DOL Issues Final, Final Service Provider Fee Regulations
"Previously, the DOL had issued interim final regulations. The newly released 'final final' regulations reconfirm many things we knew from the interim final regulations but there are a number of significant changes. [This discussion] focuses on the changes and clarifications in the preamble."
(SunGard Relius)
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[Guidance Overview]
IRS Proposed Guidance on Simplifying Use of Annuities in Retirement Plans
"Employers generally have been hesitant to offer annuities in their defined contribution plans due to regulatory barriers, which increased costs and were administratively burdensome. Overall, this guidance should allow retirement plans to more easily offer their participants annuity options, which will give participants a wider range of choices in how they receive their benefits. It is still unclear whether this guidance will be enough to entice employers to provide for annuities in their defined contribution plans. Comments on both sets of proposed regulations must be received by May 3, 2012."
(Practical Law Company)
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[Guidance Overview]
Paying Employee Benefit Plan Expenses (PDF)
"This article describes the types of expenses that may and may not be paid from the assets of an employee benefit plan. It also explains the requirements that must be met before expenses can be paid from plan assets, the methods for allocating expenses between plans and among plan participants and the consequences of paying improper expenses from plan assets."
(Groom Law Group via Practical Law Company)
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[Guidance Overview]
Paying Employee Benefit Plan Expenses Chart (PDF)
"This Chart is a guide for employers to use in determining which types of expenses can be paid from the assets of an employee benefit plan governed by [ERISA] and the Internal Revenue Code of 1986 (IRC)."
(Groom Law Group via Practical Law Company)
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ERISA Investment Disclosures to Participants Will Satisfy NASD Rules
"The FINRA relief is similar to that issued earlier by the SEC. In an October 2011 No-Action letter, the SEC agreed to treat information provided by a plan administrator to participants that is 'required by and complies with' the ERISA § 404(a) disclosure requirements as satisfying the requirements of Rule 482 under the 1933 Act. The ERISA § 404(a) regulations include an optional Model Comparative Chart for making the required financial disclosures to plan participants."
(Deloitte via BenefitsLink.com)
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Boomers' Retirement Income Prospects
"Our projections show that lower - and moderate-income boomers will continue to rely on Social Security for most of their retirement income. While the projections reflect some good news — women will reap the rewards of working and earning more than previous generations — they also raise alarms. Between 30 and 40 percent of boomers will not have enough income at age 70 to replace 75 percent of their preretirement earnings, a common standard for measuring retirement income adequacy."
(Urban Institute)
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CalSTRS Funding Gap Widens, So Does Solution
"Closing a wider funding gap, the result of expecting less money from future investment earning, would require nearly doubling the current annual payments to CalSTRS if the goal is to reach full funding in the usual 30 years."
(Calpensions)
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Top 1,000 Retirement Funds Tread Water in 2011
"According to Pensions & Investments' latest annual survey, the combined assets of the top 1,000 U.S. retirement plans edged up 2.3%, or $148.6 bil.lion, to $6.71 tril.lion. The largest 200 plans, meanwhile, saw their assets climb 1.7% to $4.965 tril.lion."
(Pensions & Investments; free registration required)
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Top 200 Pension Funds Still Investing in Alternatives
"In the 12 months ended Sept 30, investments by defined benefit plans among P&I's Top 200 grew by double digits across all of the alternative asset classes, compared to the year-earlier survey . . . ."
(Pensions & Investments; free registration required)
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BofA Merrill Lynch Sees Increased 401(k) Savings in Q4 and 2011
"Bank of America Merrill Lynch said that it saw increased 401(k) participation through its plan sponsors both in the fourth quarter and 2011 year, signaling a positive outlook for the tweaks it has made to its offerings and confidence in the overall economy."
(On Wall Street)
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Facebook's Corporate Governance Rules a Concern for CalSTRS
"Facebook's corporate governance rules, which give shareholders little say in how the social networking website would be run as a public company, are raising the hackles of one of the largest U.S. investors, the California State Teachers' Retirement System."
(Reuters via The New York Times; free registration required)
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Video: Pension Funding Discussion on CNBC
"CNBC's 'Fast Money' interviewed John Ehrhardt . . ., with a focus on what the interest-rate-driven pension funding deficit means for corporate pension contributions."
(Retirement Town Hall)
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The Rise and Fall of Employer-Sponsored Pension Plans
"This [article] examines the history of employer-sponsored pension (defined benefit) plans with a focus on the turbulent 1930s, what's happening with those plans today, and what the future of employer-sponsored retirement looks like."
(Workforce)
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Training and Retirement
"This paper presents results on the effect of formal life-long learning on the decision to retire early. Specifically, I estimate an Option Value model based on individual employer-employee longitudinal data including comprehensive government co-sponsored training records dating back more than 30 years."
(Social Science Research Network)
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2nd Circuit Should Rehear 401(k) 'Stock Drop' Cases, DOL Argues in Recent Brief
"Last fall, a divided three-judge panel of the 2nd Circuit ruled that fiduciary decisions to offer company stock as a 401(k) investment option are entitled to a presumption of prudence and should be reviewed only for an abuse of discretion — not held to a stricter standard. Though the so-called 'Moench presumption' has been adopted by five appeals courts, it finds no support in ERISA and 'leads to absurd results,' DOL asserts."
(Mercer)
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Lawmakers in Nine States Target Own Pension Perks
"[Idaho, Iowa, Illinois, Kansas, Kentucky, Minnesota, Missouri, New Jersey and South Carolina] are advancing legislation to scale back their own pensions by closing loopholes and lucrative retirement plans that have let thousands of former lawmakers earn more in retirement than while in office."
(USA TODAY)
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Mitt Romney's IRA
"Can I invest my IRA funds like Mitt Romney? In theory, yes. In practice, no. There are mutual funds which invest in private equity deals of the sort Mitt Romney holds in his IRA. However, under the best of circumstances, these funds need to be scrutinized carefully as to their management fees and whether they really obtain the kinds of investment opportunities available to a Bain Capital partner. I'm skeptical."
(OUPblog)
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GAO Report on Federal Employees' Compensation Act: Benefits for Retirement-Age Beneficiaries
"[GAO] examined (1) the characteristics and associated compensation costs of long-term, full-time FECA beneficiaries, for USPS and non-USPS employees; (2) how wage compensation benefits for retirement-age, long-term, full-time FECA beneficiaries compare with federal retirees' annuities (not including USPS employees); and (3) the experiences of states that limit state workers' compensation benefits for workers at retirement age."
(U.S. Government Accountability Office)
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[Opinion]
Treasury and IRS Successfully Lay the Base for Lifetime Income: The '2012-3 Annuity' and the QLAC
"With just a relatively short regulation and a Revenue Ruling, Treasury simply and in a very straightforward way laid out the definitive structure for defined contribution plans (like 401(k) plans) to start providing lifetime income in a market friendly manner. The two pieces of guidance dealing with DB plans which were issued at the same time are very useful, but the meat of the matter is the critical guidance given under the proposed RMD regulation and the spousal consent Revenue Ruling, 2012-3."
(Robert J. Toth, Business of Benefits)
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Benefits in General; Executive Compensation
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ISS Issues FAQs on 2012 U.S. Voting Policies
"A new set of [FAQs] from Institutional Shareholder Services . . . clarifies its 2012 proxy-voting guidelines on pay-for-performance assessments, say-on-pay responsiveness and equity plans. The FAQs supplement ISS's white paper explaining the proxy adviser's quantitative and qualitative approach to identifying pay-for-performance disconnects. The updated guidelines apply for shareholder meetings on or after Feb. 1."
(Mercer)
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Press Releases
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