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March 20, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

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Part Time Onsite Participant Counselor - Retirement Services
for Diversified in MO

Data Conversion Specialist
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Director of Market & Competitive Insights - Retirement Services
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[Guidance Overview]
IRS's Minor Changes to the Determination Letter Process for 2012 (PDF)
"Defined benefit plans that use volume submitter documents must typically make modifications to accommodate special provisions. As a result, they are rarely able to use Form 5307 to request determination letters. Therefore, the changes to the basic Form 5300 and Form 5307 filing rules should have little impact on these plans. Sponsors of defined contribution plans that use prototype or volume submitter documents should review the revised basic Form 5300 and 5307 filing rules to determine if their plans are affected." (Prudential)

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[Guidance Overview]
Participant-Level Fee Disclosure for ERISA and Non-ERISA Plans
"Some have warned that disclosures by non-ERISA plans would be subject to the requirements of Rule 482 of the Securities Act of 1933 (governing advertising and marketing). This concern is based on an SEC no-action letter, coordinated by the SEC and DOL in response to questions from plan administrators and financial service providers regarding their obligations under ERISA and Rule 482, which does not specifically address non-ERISA plans. We hear that industry groups have requested clarification regarding this issue. Until the matter is resolved non-ERISA plan administrators might wish to hold off complying with the new rules." (Verrill Dana)

[Guidance Overview]
A Comparison of Disclosure Requirements: Section 408(b)(2) and Form 5500 Schedule C
"Upon closer inspection, there are major differences between 408(b)(2) and Schedule C disclosure requirements, including the scope of plans covered, fees covered by the disclosure, affected service providers, threshold amounts and consequences of non-compliance, as shown in the following chart." (Lindquist Solutions)

Modifying the Federal Tax Treatment of 401(k) Plan Contributions: Projected Impact on Participant Account Balances (PDF)
"A recent proposal to change the tax preferences for employment-based 401(k) retirement plans could result in an average reduction in 401(k) account balances of between 6 [through] 22 percent at Social Security normal retirement age for workers currently ages 26-35, according to new research by EBRI. Reductions could be even greater for participants in small 401(k) plans." (Employee Benefit Research Institute)

Who Killed the Private Sector DB Plan? (PDF)
Originally published March 2011; we're linking to this content-rich position paper from a DB plan advocacy organization in case you haven't seen it. "Although much attention has been paid to the fact that the private sector has been trending out of traditional pensions, substantially less attention has been given to the specific reasons for such sharp declines in private sector DB sponsorship and coverage. This issue brief addresses the reasons behind the trend[.]" (National Institute on Retirement Security)

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Why the Traditional Structure of Investment Policy Statements Won't Work for 401(k) Plan Sponsors
"In outlining the traditional structure for [a written investment policy statement], the CFA Institute retains language from the era preceding the dominance of 401k plans in the institutional realm. While this structure certainly continues to work well for private individuals and single portfolio institutions like endowments, traditional defined benefit/defined contribution plans (i.e., pension and profit sharing plans) and, yes, even split-interest trusts with multiple beneficiaries, it represents an awkward construct for 401k plans." (Fiduciary News)

New DOL Rules Will Soon Be Proposed to Provide Stronger Protections Against Fiduciary Negligence
"The biggest area the EBSA is targeting is fiduciary negligence. The DOL, after withdrawing a proposed regulation to expand the definition of a fiduciary investment adviser, has announced it will repropose the regulation in May, and said it will have even stronger consumer protections." (CFO)

Social Security: A Key Retirement Resource for Women
"Women are less likely to have other sources of retirement income, such as pensions and savings, making Social Security one of their few sources of retirement income. Moreover, three key features of the Social Security program — progressivity of the benefit formula, guaranteed benefits for life, and inflation-adjusted benefits — are particularly beneficial to women." (AARP Public Policy Institute)

JPMorgan Agrees to Settle ERISA Action for $150 Mil.lion
"The plaintiffs in Board of Trustees of the AFTRA Retirement Fund v. JPMorgan Chase Bank, N.A. agreed to settle and dismiss their claims against JPMorgan for [alleged] violations of its duties of prudence, care and loyalty under ERISA and New York common law for $150 million." (Practical Law Company)

Congressional Budget Office's March 2012 Baseline of the Railroad Retirement System (PDF)
The chart shows number of beneficiaries and total benefit outlays for the years 2012 through 2022. (Congressional Budget Office)

Retirement Planning Basic Rules Still Work: Cut Expenses and Save
"A general rule is that you'll need about 80% of your current income in retirement. After all, you won't be commuting to work -- or saving for retirement, for that matter. But many retirees find that they spend about the same amount in retirement as they did when they were working. They travel more, for example, and eat out with friends more often. As people get older, however, expenses decline[.]" (USA TODAY)

GAO Report on Defined Benefit Pension Plans: Recent Developments Highlight Challenges of Hedge Fund and Private Equity Investing
"As requested, to better understand plan sponsors' experiences with these investments, GAO examined (1) the recent experiences of pension plans with investments in hedge funds and private equity, including lessons learned; (2) how plans have responded to these lessons; and (3) steps federal agencies and other entities have taken to help plan sponsors make and manage these alternative investments." (Government Accountability Office)

Benefits in General; Executive Compensation

Employers' Accounting for Pensions and Other Retirement Plans Might Be on FASB's 2012 Agenda
"Employers' accounting for pension, retiree medical and other post-retirement benefits — specifically, the expected rate of return on plan assets and combining of various expense elements — tops a list of new concerns stakeholders want FASB to address, according to Chairman Leslie Seidman's March 12 webcast on 2012 priorities." (Mercer)

Some Companies Turning to Personal Concierge Services in Effort to Improve Productivity
"The idea is to let someone else plan employees' trips — both for work and leisure — find them a plumber or a dog sitter, or choose where to take their car for an oil change." (The New York Times; free registration required)

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