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May 21, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

In-House Assistant General Counsel
for OneAmerica Financial Partners in IN

Retirement Services Manager
for CUNA Mutual Group in WI

Director of Operations
for retirement advisory services corp in PA

Retirement Plan Administrator
for Fringe Benefits Design in MN

Director, Retirement Key Account Management
for Prudential in NJ

Plan Implementation Manager - Retirement Plan Services
for John Hancock Financial Services in MA

Account Manager II/III Small Markets
for Lincoln Financial Group in IN

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Webcasts and Conferences

"Fundamentals of 401(k) and Other Qualified Plans" - Dallas
in Texas on June 20, 2012 presented by SunGard Relius

Social Media at Work Seminar
in Massachusetts on June 14, 2012 presented by New England Employee Benefits Council

Health Benefits Laws Compliance Workshops
in Texas on June 29, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

COBRA Compliance Webinar
Nationwide on May 24, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Understanding Your Fiduciary Responsibilities under ERISA Webinar
Nationwide on May 24, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Health Benefits Laws Compliance Assistance Seminar
in Missouri on June 13, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Cafeteria Plan Nondiscrimination Rules: Design and Testing Fundamentals (Session I)
Nationwide on May 17, 2012 presented by Thomson Reuters / EBIA

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[Guidance Overview]
DOL Makes Small Changes to Field Assistance Bulletin 2012-02 (Participant Disclosure FAQs)
"DOL revised its response to Q-19 regarding website performance information, making clear that a website in connection with a variable return DIA should be updated to show 1-, 5-, and 10-year performance information for the period ending on the most recently completed calendar quarter." (Groom Law Group)

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[Guidance Overview]
Common Plan Mistake: Miscalculating Matching Contributions
"If your 401(k) plan document calls for an annual matching contribution, you should consider one of the following options: Waiting until year-end to make the matching contribution; Contributing each pay period, but then making a true-up contribution at year-end (if necessary); [or] Amending the plan to provide for the calculation of matching contributions on a pay-period basis." (Spencer Fane)

[Guidance Overview]
ERISA Preempted State Claim That Employment Contract Promised Benefit Under Pension Plan
"[The Second Circuit Court of Appeals] rejected the employee's contention that the employment agreement created a right to the [pension plan's previous benefit formula in effect at the time of separation from service] separate and independent from the plan. The employment agreement did no more than describe the benefits ... that the employee would acquire upon his return to employment. The agreement made clear that such benefits arose from, and were governed by, the terms of the plan. Thus, ERISA preempted the breach of contract claim." (Wolters Kluwer Law & Business / CCH)

CalPERS Looks at Investments in Job-Creating Infrastructure
"In a happy convergence, pension funds are moving into infrastructure to reduce inflation and market risk, while deficit-ridden governments are deep in bond debt and looking for new ways to rebuild and expand crumbling public works.... Part of the 'fiduciary' duty of pension boards to protect pension recipients may extend to preserving the financial health of governments, the pension plan sponsors, through infrastructure investments needed to maintain and improve the economy." (Calpensions)

McDonald's Recognized for its Strong Benefits Programs and 'Compelling' 401(k)
"McDonald's has achieved a wildly successful 401(k) plan, with 98 percent participation for restaurant managers and above. This broad coverage is the result of several initiatives: Automatic enrollment; A unique and generous, front-end loaded match, which provides for an employer contribution of 3 percent for the first 1 percent contributed by the employee and increases to a 11 percent employer contribution for employee contributions of 5 percent; Multi-layered communication approaches to targeted affinity groups; Educational seminars on topics ranging from retirement to investment advice; [and] Permitting only one loan at a time from the plan." (HR Policy Association)

How Did the Recession of 2007-2009 Affect the Wealth and Retirement of the Near-Retirement-Age Population?
"The retirement wealth held by those ages 53 to 58 before the onset of the recession in 2006 declined by a relatively modest 2.8 percentage points by 2010.... Although most of the loss in wealth is due to a fall in the net value of housing, because very few in this cohort have found their housing wealth under water, and housing is the one asset this cohort is not likely to cash in for another decade or two, there is time for their losses in housing wealth to recover." (University of Michigan Retirement Research Center)

Savings Fall Short for Most Retirees But Other Factors Can Compensate
"[Recent aggressive advertising and media attention to the importance of] asset allocation in misplaced, a new study argues. For the vast majority of savers, improved investment returns won't materially extend how long retirement money lasts. That's in large part because few investors have enough money in their retirement account to tilt the balance. Far more important, says the paper from the Center for Retirement Research at Boston College, are three variables that don't require a brokerage account: how long you work, controlling spending and tapping the value of your home." (The Wall Street Journal)

Retirement Savings Shocker: For a Secure Retirement, Better Get Going on Your Savings Program
"[W]aiting even one year can have dramatic effects. If you invest $5,000 every year beginning at age 30 instead of 31, you will have $109,000 in additional savings, assuming an 8 percent compounded annual interest rate." (The Washington Post; free registration required)

Actuarial Reality of 2003 Enhanced Pension Formula Comes Knocking at One California County
"Pensions for career Sonoma County government workers have more than doubled in the past decade, led by sheriff's deputies and other public safety workers who by 2011 were retiring with an average of more than $94,000 a year.... Taxpayer costs for county pensions, including payments on bond debt, meanwhile, have risen 401 percent in the past 12 years, to $87.2 mil.lion a year." (

401(k)s in The Crossfire
"Perhaps the most commonly cited concern about 401(k)s is the size of current account balances. The typical investor approaching retirement has around $100,000 saved in various tax-deferred accounts. That amount might generate $4,000-$5,000 a year in income. It's been 30 years since 401(k)s appeared on the scene, so the thinking is that older investors should have much more money in these accounts than they do. This argument, however, overlooks the rapid expansion of 401(k) plans over the past three decades. More people have come into the system over the years, and many who are ready to retire haven't spent their full working careers saving in these plans." (Vanguard Blog)

Public Sector Pensions: The Transition Costs Myth
"Public-sector employees—who enjoy their generous retirement benefits—and the pension industrial complex of plan managers, pension actuaries, and investment advisors don't like DC plans. They're pushing back with a novel argument: DB pensions' massive unfunded liabilities create 'transition costs' that make shifting to DC plans unfeasibly expensive. In other words, the more broke DB plans become, the more we have to stick with them.... Pension advocates rely on financial disclosure rules generated by the [GASB] regarding how quickly a DB plan must pay down -- or 'amortize' -- its unfunded liabilities." (The American Magazine)

Text of Morningstar Comment Letter to SEC on Need for More Disclosure to Investors in Target-Date Funds
"Target-date funds are quickly becoming Americans' primary—if not only—retirement-savings tool, so it's critical that investors understand how these dynamic funds are run. Also, plan sponsors, researchers, and fiduciaries need more data to evaluate target-date series side by side. Morningstar's specific suggestions for how to improve the funds' disclosure follows in the text of the letter." (Morningstar)

Benefits in General; Executive Compensation

[Guidance Overview]
Court of Appeals Rejects Equitable Remedies When SPD Promises More Generous Benefits Than Pension Plan Document
"In some ways, the Ninth Circuit's recent decision in Skinner v. Northrop Grumman Retirement Plan B is a garden-variety example of a classic fact pattern: the terms of a summary plan description ('SPD') promise better benefits than the plan document it summarizes, and participants sue for the difference. Skinner demands our attention, however, because it is the first decision by a federal court of appeals to interpret the Supreme Court's most recent high-profile decision on ERISA remedies: CIGNA Corp. v. Amara." (Spencer Fane)

DOL Releases Preliminary 2009 Versions of Pension and Health Plan Bulletins and Form 5500 Data
"Statistical summary of Form 5500 data on Direct Filing Entities (DFEs) including counts of DFEs, counts of private pension plans invested in DFEs, and asset counts." See the various links entitled "2009 - Preliminary," which appear under these headings: "Reports", "Excel Tables" and "XML Tables." (U.S. Employee Benefits Security Administration)

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Jeanette Hull, News Editor
David Rhett Baker, J.D., Editor and Publisher
Lois Baker, J.D., President
Holly Horton, Business Manager

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