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April 27, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

Cafeteria Plan/Office Administrator
for Expanding Benefits Brokerage in VA

401k-Defined Contribution Plan Administrator
for Lebenson Actuarial Services in NV

Savings Plan Manager
for Chrysler in MI

Benefits Consultant, Large Groups
for Northwestern Benefit Corporation of Georgia in GA

Sr Market Risk Analyst, Quantitative Methods - Capital Markets Hedging
for Prudential in NJ

VP, Sales Execution (East)
for Prudential in CT

ERISA Attorney
for Mid-size New York City Law Firm in NY

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Webcasts and Conferences

Ethics for Benefits Lawyers
Nationwide on May 31, 2012 presented by ABA Joint Committee on Employee Benefits

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[Guidance Overview]
Recent ERISA Fee Litigation: Key Lessons for Plan Fiduciaries
"A recent Federal District Court decision [out of Missouri] dealing with ERISA plan fees is generating substantial discussion in plan fiduciary circles, not only because of the significant liability imposed on fiduciaries (almost $40 mil.lion), but because of its discussion of some key fiduciary issues.... Tussey v. ABB, Inc. ... may provide significant guidance to plan fiduciaries in their determination of the 'reasonableness' of an arrangement when a service provider engages in revenue sharing. The Tussey case also contains some important general lessons for plan fiduciaries." (Orrick)

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[Guidance Overview]
Availability of Class Actions Narrows, Could Mean Fewer 401(k) Fee Cases
"[T]he U.S. Supreme Court's 2011 decision in Wal-Mart Stores v. Dukes ... and other recent cases have led to a more rigorous application of the rules for establishing a bona fide class. This has likely contributed to the waning of new excess fee cases and may have been a factor in recent settlements." (The Wagner Law Group)

[Guidance Overview]
OK to Levy Recordkeeping and Investment Management Fees Only on Certain 401(k) Participants? Federal Case Asks But Doesn't Answer
"A significant issue raised but not resolved in the ABB case—a matter that may very well be the next frontier in fiduciary oversight litigation—is, whether the record keeping costs of a 401(k) plan may be borne exclusively by those participants whose investment funds enjoy revenue sharing (also known as 12b-1 fees) while participants whose accounts are invested in investment funds with no revenue sharing pay little or nothing." (Troutman Sanders)

[Guidance Overview]
Another Question is Answered in the Who's the Employer Q&A Column
A lawyer friend of mine says the U.S. Department of Labor requires association-based Multiple Employer Plans to have "commonality" but does not require it generally, such as with open MEPs. Is that true? (

Qualified Plan Essentials Plus Series, Twelve 60-minute modules   [Advert.]

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Ford Offers Retirees a Lump Sum Pension Buy-Out
"Ford announced [April 27, 2012, that it is offering] a lump sum to its 90,000 salaried retirees as well as U.S. salaried former employees' due pensions to get them to voluntarily give up all rights to monthly payments. The company called its program a first of its type and scope by a major U.S. company." (USA TODAY)

Target-Date Funds Increasingly Popular Option in Self-Directed Retirement Plans
"While the foothold that TDFs has gained in retirement plans seems indisputable, the cause of this growth may be misinterpreted. Most attribute the popularity of TDFs to the increased use of automatic enrollment plan design as sponsors seek an autoenrollment default investment, and also to the fact that TDFs are eligible as qualified default investment alternatives (QDIAs) under the Pension Protection Act of 2006." (Vanguard)

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PSCA’s 2012 Eastern Regional Conference will be the most comprehensive retirement-focused, one-day meeting on the east coast. It's being held at the Westin Peachtree Plaza in Atlanta, Georgia on Wednesday, May 9. To register please click here.

Does ERISA's 6-Year Statute of Limitations Apply Only When Fiduciary's Alleged Fraud is Concealed?
"In a case of first impression, in Cataldo v. United States Steel Corporation, No. 10-3583 (April 12, 2012), the Sixth Circuit says that it will address whether ERISA's 6-year statute of limitations applies when plaintiffs have simply alleged an underlying breach sounding in fraud, or whether application of ERISA's 6-year statute of limitations only applies where the fiduciary has attempted to hide its breach from the injured party, and then sidesteps this question." (The Pension Protection Act Blog)

The State of Retirement Planning by Americans: Issues of Longevity and Preparedness
"The [study] is a series of research examining what kind of planners people are, how their plans may have changed over time, whether they feel they're moving in the right direction, how they assess their ability to stay on course, and how this all fits against the larger backdrop of what is taking place in America today.... Centers for Disease Control data shows that average life expectancy for Americans today is 78.2 years, with women living to more than 80 years old on average. The second phase of the State of Planning in America Study revealed that Americans are startlingly unprepared financially to live to these average life expectancies." (Northwestern Mutual)

Retirement Plan Sponsor, Union and Plan Administrator Sued by Hundreds of Former Employees; Fraud is Alleged
"Alleged violations of [ERISA] provisions involved a lawsuit with 225 plaintiffs, all current or former workers at an Ohio steel mill and members of the United Steelworkers of America ... They sued the union, their employer and the plan administrator.... The current and former employees filed suit in 2009, alleging eight counts: breach of ERISA fiduciary duty, equitable relief, equitable estoppel, failure to furnish requested plan documents, and four state-law charges asserting similar claims." (Human Resources Journal)

Get Proactive, Don't Wait for Legislation to Enhance 401(k) Savings Vehicle, Says Treasury Policymaker
"Mark Iwry, senior advisor to the Secretary of the Treasury for retirement policy, acknowledges that automatic 401(k) features have gone a long way to improve retirement saving opportunities for American workers.... Rather than settling for the standard 3% default rate for the initial salary deferral of new employees who are automatically enrolled in their company 401(k) plan, Iwry suggested starting at a higher level, perhaps 5 or 6%. And instead of limiting auto enrollment to new employees, why not expand it to existing employees who are not participating in the retirement plan?" (Investment News)

Freeing Boomers from Social Security Cuts Blows Up Math
"Retiring Baby Boomers are swelling the program's rolls, with 10,000 turning 65 every day ... By 2035, there will be only two workers paying taxes to finance benefits for every retiree. While lawmakers have no solution, they generally agree they can't make significant cuts for those in or near retirement. The longer Congress waits to act, the more people will be shielded -- and the more heavily cuts will fall on younger Americans. The result could be a two-tiered system raising questions about generational fairness[.]" (Bloomberg)

Bill Requiring Higher Employee Contributions Under Federal Retirement Plan Advances in House
"The legislation requires current federal employees to pay 5 percent more toward their retirement over the next five years, beginning in 2013. Members of Congress would have to contribute an additional 8.5 percent to their defined benefit plan during the same time period." (Government Executive)

CalPERS Releases First Report on Its Environmental, Social and Governance Work
"The report explains the fiduciary framework [CalPERS has] adopted to integrate sustainability across the total fund, illustrates achievements from the last few years, and outlines [the] vision for the future. [Contents include] CalPERS views on Sustainable Investing; The '3 Ps' of the CalPERS program: Priorities, Performance and Procurement; How CalPERS integrates ESG in its own operations; [CalPERS] strategic themes of alignment of interest, climate change and human capital[.]" (CalPERS)

Despite Proliferation of Service-Providers and Monitoring Firms, Plan Sponsors Can't Shed Ultimate Liability
"Consider the cautionary tale of several small plans that entrusted fiduciary responsibility to someone once considered a stalwart in the field. Matthew Hutcheson, who co-wrote the book 401(k) Ethos, was regarded as a go-to person for all things fiduciary and testified before Congress, recently was indicted for wire fraud after allegedly stealing money from the plans for which he acted as fiduciary." (Treasury & Risk)

Ten Real-World Tips for Retirement Plan Practitioners in Taming the Beast: Getting Your Continuing Professional Education (PDF)
"How to get the most out of conferences, webcasts, seminars, and your colleagues when fulfilling your continuing professional education requirements.... [Tip Number One:] Make recorded webcasts seem live. Watching recorded webcasts alone at your desk or on your iPad at home, no matter how riveting the subject matter, can be a CPE chore. Organize a group session of colleagues and watch the webcast together, stopping it every 15 or 20 minutes to discuss case studies relevant to the points presented in the webcast." (Simoneaux Consulting Services)

Text of GAO Testimony on Role of Federal Government in Promoting Financial Literacy Among Americans
"This testimony discusses (1) the federal government's role in promoting financial literacy, including GAO's role; (2) the advantages and risks of financial literacy efforts being spread across multiple federal agencies; and (3) opportunities to enhance the effectiveness of federal financial literacy education efforts going forward. This testimony is based on prior and ongoing work, for which GAO reviewed agency budget documents, strategic plans, performance reports, websites, and other materials; convened forums of financial literacy experts; and interviewed representatives of federal agencies and selected private and nonprofit organizations." (Government Accountability Office)

Company Stock Ought Not Be Legal as Defined Contribution Retirement Plan Investment
"It's time to end the tax deduction for a contribution of company stock to qualified retirement plans. It's bad for employees, bad public policy, bad accounting and bad tax policy. Here's a modest suggestion: If you hold your employer's stock in your 401(k) dump it; if you are a plan sponsor you should terminate any option for company stock in your plan. In fact, the SEC and Department of Labor should prohibit it." (Forbes)

Louisiana Pension Reform Opponents Proffer Misleading Arguments
"Critics of Governor Jindal's proposed 'cash balance' pension plan for state employees have made a number of inaccurate claims. The current retirement systems have amassed an astonishing $18.9 bil.lion in unfunded liabilities, but reform opponents defend the status quo with scare tactics while relying on a flawed report from the Legislative Auditor. These critics claim that switching from the current defined benefit plan to a cash balance plan would increase costs to the state, drive up taxes, and even force people into poverty. In fact, this reform would put Louisiana's retirement systems on a more sustainable path, protecting state employees and taxpayers alike." (The Pelican Post)

Benefits in General; Executive Compensation

[Guidance Overview]
SEC Issues FAQs on JOBS Act: Relaxed Disclosure Requirements for Emerging Growth Companies
"A company that qualifies as an EGC will be able to maintain that status until the earliest of: five years when annual gross revenues exceed $1 bil.lion when the issuer has issued more than $1 bil.lion of non-convertible debt in a three-year period, or the date on which the issuer is deemed to be a 'large accelerated filer' as defined in the rules promulgated under the Exchange Act[.]" (Ballard Sphar LLP)

Tennis, Anyone? Country Club Remains a Perk for Many CEOs
"While many companies are stripping away some of the costly perks bestowed on CEOs, one remains a staple of many executive compensation packages: the country club membership.... Of more than 130 companies paying for clubs, nearly 50% are local or regional financial firms. The cost can be eye-popping." (USA TODAY)

Clickable Cross-Reference Table for ERISA and United States Code Title 29
When ERISA became law in 1974, it was codified as part of Title 29 of the United States Code. By that time Title 29 already contained the codified version of many other labor laws. (Title 29 section 1 was already "taken," for example.) So the Title 29 section numbers assigned to the provisions of ERISA do not line up with the section numbering in the original Act. For example, the fiduciary duty provisions of ERISA section 404 are found in Title 29 section 1104. The table on the linked page shows the ERISA sections and their corresponding Title 29 section numbers, with clickable links to the text of each section. (

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