[Guidance Overview]
Union Agreement to Indemnify Employer for Withdrawal Liability Is Upheld
"In Shelter Distribution Inc. v. General Drivers, Warehousemen & Helpers Local Union No. 89, ... the [Court of Appeals for the Sixth Circuit] held that nothing in ERISA prohibits a union from contractually agreeing to be held liable for an employer's withdrawal liability under the Multiemployer Pension Plan Amendments Act.... The Sixth Circuit thus joined the Third Circuit in enforcing such indemnity provisions."
(Littler)
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[Guidance Overview]
Municipalities Betting on Pension Bonds to Save the Day?
"The argument for the bonds is almost always that they will fill a short-term budget hole and allow the city to maintain benefits for retirees. But market experts say the risks and long-term costs are frequently ignored. Along with the interest rate payments and investment risks with which the bonds freight governments, they also provide another argument for opponents of public pensions, increasing the possibility that such benefits could be lost altogether."
(Pension Pulse)
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[Guidance Overview]
Participant Fee Disclosures in 401(k)/403(b) Plans (PDF)
"Plan sponsors must fully understand these new disclosure rules so they know if their disclosures to participants meet the requirements. There are four broad categories of disclosures: General plan disclosures; Administrative expense disclosures; Individual expense disclosures; Investment disclosures[.]"
(TRI-AD)
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[Guidance Overview]
Investment Disclosures under the Final 408(b)(2) Regulations
"[T]he issue that surprised practitioners was the change to the investment disclosures. The final regulations established a significant link between the service provider and the participant fee disclosure regulations. Under the final regulations, a covered service provider responsible for investment disclosures to a fiduciary in a participant-directed plan must provide the information that the plan administrator must disclose to participants."
(SunGard Relius)
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New Jersey Supreme Court Begins Retirement Contribution Case Involving State Judges
"[The New Jersey Governor] initiated a law requiring higher contributions from all government employees because the state pension system is underfunded by tens of billions of dollars .... The law hikes the judges' pension contributions from 3% of their salary to 12% after a seven-year phase-in period. The judges' contributions were increased more than other groups, which the judges' say is an illegal reduction in their salaries."
(PLANSPONSOR.com)
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Federal Thrift Savings Plan to Launch Roth Option Soon
"If ... tests are successful, the Roth option could come sometime in May or — if testing proceeds faster than anticipated — late April. The board has never given a firmer launch date than sometime during the second quarter of 2012."
(Air Force Times)
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DOL Might Sacrifice Fee Purity for Fee Transparency
"[DOL] has hinted it may allow certain normally prohibited transactions under its new fiduciary rule. Similar to current exemptions, self-dealing transaction fees such as 12b-1 fees and revenue sharing may be permitted as long as the service provider discloses those fees. While ostensibly legal, such an exemption does not necessarily remove — or even reduce — the fiduciary liability of the 401k plan sponsor."
(Fiduciary News)
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National Retirement Planning Week Announced
"National Retirement Planning Week 2012 will take place April 9 to 13, The Insured Retirement Institute announced ... The National Retirement Planning Week® and other coalition activities will demonstrate that it is possible to 'Retire On Your Terms' if comprehensive retirement plans are properly developed and managed."
(LifeHealthPro)
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Fees, Risk, Performance Should Be Considered for Target-Date Funds
"Not all investment professionals are thrilled about the target-date revolution. In fact, a number ... are warning their clients away from the red-hot products. Among common complaints: Fees can be relatively high, with an average expense ratio of more than 1 percent ... Performance can be lackluster. The average fund with a 2015 target date posted a loss in 2011 ... And then there's the basic premise: Slotting everyone of the same age into the same allocation defeats the purpose of financial planning, which is to design a portfolio appropriate to an investor's risk tolerance."
(Reuters)
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The Problem with Spending Too Fast: Retirement Savings Withdrawal Rates (PDF)
"The issue of withdrawal rates for retirement income is complicated by the fact that, in 401(k) plans, 403(b) arrangements and rollover IRAs, participants have account balances that they may view as a lump sum amount ... that is, as personal wealth. As a practical matter, those retirement savings are actually used to provide income over the participants' retirement years."
(The Institutional Retirement Income Council)
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[Opinion]
ICI Letter Responding to Comment Request for Study Regarding Financial Literacy Among Investors (PDF)
"The Investment Company Institute ... appreciates the opportunity to offer its views on certain issues the [Securities and Exchange Commission] must address as part of the financial literacy study required by Section 917 of the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010. As indicated in the Comment Request, several components of the study specifically reference mutual funds."
(Investment Company Institute)
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[Opinion]
Can Corporate Dividends Provide Retirement Security?
"[B]usinesses generate income, and they are quite capable, and increasingly willing, to dispense a fair portion of that income to shareholders. If we change the way we think about financial security and financial risk, and if we establish government policies that encourage more individuals to own well-diversified corporate shares and more of those corporations to pay dividends, we can provide a substantial source of income that can last indefinitely."
(Business Insider)
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Benefits in General; Executive Compensation
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[Guidance Overview]
IRS Extends Deadlines for Storm Victims in West Virginia
"The IRS has extended return-filing and payment deadlines for victims of severe storms, tornadoes, flooding, mudslides and landslides that started on February 29, 2012, in parts of West Virginia and resulting in the counties of Lincoln, Marion and Wayne being declared a federal disaster area."
(Wolters Kluwer Law & Business / CCH)
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Executive Compensation 2011: The Year in Review (PDF)
"2011 was the first year of mandatory Say-on-Pay [SOP], the non-binding shareholder advisory vote on the compensation of named executive officers as disclosed in the proxy statement, and the frequency of future SOP votes. Other executive compensation developments in 2011 were voting policy changes of certain institutional shareholders and their advisers, dominated by Institutional Shareholder Services ..., related to SOP and other executive compensation-related proxy statement proposals."
(Frederic W. Cook & Co., Inc.)
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Explaining the Lack of Non-Public Actors in the U.S. Public Social Insurance System
"[T]he paradox of the American social insurance system is that while disclaiming any desire for socialist-type programs, most Americans today believe that only the government should be responsible for providing the social insurance safety net.... [M]ost Americans are not yet ready to place their faith in these private actors, even if more efficiency, cost-savings, and activation could be achieved by doing so."
(Marquette University Law School)
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Mortality Study Points to Increasing Pension and Retiree Health Care Costs
"Traditional pension plan liabilities could rise by 2 to 4% and retiree health care liabilities 6 to 9% under a new mortality improvement scale published for comment by the Society of Actuaries (SOA). The new scale reflects the last two decades' better-than-expected mortality improvement after age 55."
(Mercer)
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Press Releases
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