401(k) Plan Auditor
for The LBA Group in FL

Retirement Services - Client Services
for AUL/OneAmerica Financial Partners, Inc. in DC, MD

Client Relationship Manager /Pension Services Department
for Johnson & Dugan in CA

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DOL Reopens Comment Period for Target-Date Fund; Invites Comments on SEC Study (PDF)
"In November 2010, the [DOL] published a proposal to amend its qualified default investment alternative regulation (29 CFR 2550.404c-5) and participant-level disclosure regulation (29 CFR 2550.404a-5). The comment period for the proposal originally closed on January 14, 2011. The proposal includes more specific disclosure requirements for TDFs, based on evidence that plan participants and beneficiaries would benefit from additional information concerning these investments.... As part of its regulatory process, the [SEC] recently engaged a consultant to conduct investor testing of comprehension and communication issues relating to TDFs. A report presenting the findings of this research on individual investors' understanding of TDFs and related fund advertisements is publicly available on the SEC web site].... [DOL] invites additional comments on the TDF proposal in light of this new research." (Employee Benefits Security Administration)

Retirement & Benefit Compliance Customer Conference   [Advert.]

We are excited to announce our first annual Retirement & Benefit Compliance Customer Conference 2012 August 12th-14th in Chicago. Spend time learning how to best leverage your ftwilliam.com and Wolters Kluwer research tools investment. Click here for more information.

Final SEC Regs on Definition of 'Swap Dealer' and 'Securities-Based Swap Dealer' Under Dodd-Frank Act Including Swap Positions Maintained by an ERISA Plan or Governmental Plan (PDF)
July 23, 2012 effective date; 169 pages. Excerpt (at p. 30681 in the Federal Register): "[The Commissions] interpret the meaning of the term 'maintain'—in the context of the statutory provision that the swap or security-based swap position be 'maintained by' an employee benefit plan—not only to include positions in which the plan is a counterparty, but also to include positions in which the counterparty is a trust or pooled vehicle that holds plan assets. Thus, for example, the exclusion would be available to trusts or pooled vehicles that solely hold assets of the types of plans identified in the statutory definition. The exclusion further may be available to entities that hold such plan assets in conjunction with other assets, but only to the extent that the entity enters into swap or security-based swap positions for the purpose of hedging risks associated with the plan assets. The exclusion does not extend to positions that hedge risks of other assets, even if those are managed in conjunction with plan assets." (U.S. Securities and Exchange Commission)

DOL FAQs Address Implementation of Participant-Level Fee Disclosures
A detailed overview of the FAQs, nicely organized by topic. (Proskauer)

Revenue Sharing Payments: Some Tips for Retirement Plan Fiduciaries
"Plan sponsors may be inclined to choose plan investments with higher revenue sharing payments in order to reduce the net direct costs, but in many instances the mutual funds with larger revenue sharing payments also have higher fees. Litigation has been increasing in this area ... Determine whether revenue sharing payments received by that service provider would result in compensation beyond the 'market rate' for its services. If those payments would result in compensation beyond the market rate, consider requiring the service provider to 'rebate' the overpayments to plan participants' accounts." (Quarles & Brady LLP)

Text of GAO Report: Increased Educational Outreach and Broader Oversight Might Help Reduce Retirement Plan Fees
"GAO's survey and review of plan documents showed that some sponsors faced challenges in understanding the fees they and their participants were charged. Some sponsors did not know if their providers used complex fee arrangements, such as revenue sharing, or if their plans paid certain fees under an insur.ance contract, such as a group annuity contract. In addition, some sponsors reported knowing about arrangements, but did not fully understand how these fees were charged. For example, one relatively large plan underestimated recordkeeping fees by more than $58,000, because the sponsor did not include the fees charged to participants' accounts under its revenue sharing arrangement." (Government Accountability Office)

Text of Supplement to GAO Report: Results of Survey of 401(k) Plan Sponsors on Fees
"This e-supplement is a companion to [the GAO] report entitled '401(k) Plans: Increased Educational Outreach and Broader Oversight May Help Reduce Plan Fees,' GAO-12-325. The purpose of this e-supplement is to provide information from a survey of 401(k) plan sponsors." (Government Accountability Office)

Seeking Income Replacement in Retirement
"Interest rates also loom large in any consideration of [a single premium income annuity, or 'SPIA']. The current ultralow interest-rate environment has depressed what insur.ance companies can earn on their own portfolios, which cuts into SPIA payouts. But the yield on SPIAs do benefit from the so-called mortality credits baked into annuities." (Morningstar)

Polish Parliament Approves Higher Retirement Age
"The Polish parliament's upper chamber on Thursday approved Prime Minister Donald Tusk's flagship pension reform which raises the retirement age to 67 years, a move aimed at putting public finances on a more sustainable path." (The New York Times; free registration required)

Public Sector Defined Contribution Plans: Rising to the Challenge of the New Fee Disclosure Requirements
"According to the NAGDCA DC Survey about two-thirds (64.7%) of plan sponsors said they have or will develop a communication regarding plan fees, 25% were not sure, and 10% did not intend to (presumably relying on an outside source for this). More than a third (38.6%) said they didn't know whether such disclosures would cause participants to migrate to lower cost options, but the majority thought the disclosures would not result in a change to the fund lineup or a change to the fee structure. More than three quarters (77.9%) believed that their plan providers would comply with the new DOL regulations regarding fee disclosure for their non-ERISA plans, while the remaining (22.1%) were unsure." (National Association of Government Defined Contribution Administrators)

Global Institutional Annuity Market Update: Liability De-Risking / Plan Terminations (PDF)
"There were more single premium group annuity placements in 2011 than in 2009 or 2010, with a total of about 200 cases. This marks the first increase in the number of settlements since 2007.... The Aon Hewitt Pension Risk Tracker reported that the aggregate U.S. funded ratio of plans in the S&P 500 recovered somewhat during the fourth quarter but were down for the year." (Aon Hewitt)

401(k) Fees, Revenue Sharing and Fiduciary Duty (PDF)
"Over the last several years, a number of 401(k) fee cases have been decided by federal courts. Two of these cases, Tibble v. Edison and Tussey v. ABB, are especially interesting in their treatment of investment fund share classes and revenue sharing.... In light of the decisions in these cases, what should plan committees consider as they evaluate investment funds and plan providers?" (MJM401k)

Is Higher Retirement Age a No-Go in Illinois Pension Talks?
"As part of his proposal to ease the cost of the state's retirement programs, [Illinois Governor Pat] Quinn has called for the retirement age to be boosted to 67. But, a key Democratic negotiator Wednesday raised red flags about the concept, saying it could trigger a wave of retirements that could result in far less savings for the state." (The Southern)

Most Workers Say They Would Switch Jobs for Better Retirement Plan
"Shaken by the realities of the Great Recession, American workers have adjusted their visions of retirement, according to [a recent study]. And most said they would switch jobs for a better retirement plan. The survey ... conducted in January 2012 ... found that an overwhelming 90 percent of respondents cited an employee self-funded plan as important, and more than half (53 percent) would be likely to leave their current employer for a nearly identical job with a similar employer for better retirement benefits." (Society for Human Resource Management)

New York State Pension Fund Posts 5.96% Return for Fiscal 2012
"The fund's estimated value of $150.3 bil.lion is the highest since fiscal 2009, when the global financial crisis began[.]" (Bloomberg)

Retirement Income Adequacy for Boomers and Gen Xers: Evidence from the 2012 EBRI Retirement Security Projection Model (PDF)
"[F]or Early Baby Boomers (individuals born between 1948-1954), Late Baby Boomers (born between 1955-1964) and Generation Xers (born between 1965-1974), roughly 44 percent of the simulated lifepaths were projected to lack adequate retirement income for basic retirement expenses plus uninsured health care costs. These 'at-risk' levels are some 5-8 percentage points LOWER than what was found in 2003, largely due to the growing adoption of automatic enrollment by 401(k) plan sponsors." (EBRI)

A Misguided Kennedy Offspring from the Third Circuit
"The Third Circuit, in Estate of William Kensinger, Jr. v. URL Pharma [March 20, 2012] recently held that a federal common-law waiver by a participant's designee may be used to force the designee to transfer her benefit payment to the person who would be entitled to the benefit, if the designee were not so entitled. The Third Circuit ... thereby entered the fray over whether a person with a superseded claim to an ERISA benefit may, after the plan has distributed the benefit, wrest the benefit in full, or in part, from the owner and recipient of such benefit. The paper argues that a person, with a preempted or superseded ownership benefit claim, may not wrest the benefit in full, or in part, from the owner and recipient of such benefit from the plan. In short, Kensinger was decided incorrectly." (Albert Feuer, Esq.)

Assessing the Success of a Retirement Program (PDF)
"For the purpose of determining the percentage of employees who are on track with their retirement savings, targeting 75% of the person's projected final year's compensation as the replacement ratio is reasonable.... The calculation of a participant's replacement ratio requires some indicative census data (date of birth, annual compensation), some current plan data (account balance, deferral percentage, asset allocation) and some assumptions for the future (age at retirement, future increases to compensation, inflation rates, future returns on investments)." (Cammack LaRhette)

Outreach Methods by Employers Failing to Motivate Employees to Save for Retirement
"Employers and their employees in the U.S. hold different perspectives on how to achieve retirement preparedness through 401(k) plans ... [D]espite efforts by employers to educate workers on the 401(k) offering, most workers remain disengaged and unprepared financially for retirement.... Relatively few 401(k) participants have the desire to manage their workplace savings plan ... [and] many employers are doubling down on outreach efforts that have not been effective:" (Society for Human Resource Management)

Firefighters Lose As Rising Pensions Spur Broken Promises
"While a Providence official in 1989 warned such giveaways could one day bankrupt the city, the arrangement bought peace with labor unions, a compromise made in town halls and state capitals across the country after stock market gains fattened pension funds. Now lawmakers are trying to rein in benefits." (Bloomberg BusinessWeek)

Text of Comments by Investment Company Institute to SEC on the Results of Investor Testing Regarding Target Date Funds in Connection with the Target Date Retirement Fund Names and Marketing Proposal (PDF)
"The Institute strongly supports the spirit and core of the Commission's Proposal that focuses on communicating key pieces of information about target date funds to investors and requires a prominent table, chart, or graph ('glide path illustration') to convey the idea of the changing asset allocation of the target date fund over the entire life of the fund, including at the target date and the point where the fund arrives at its final asset allocation. The Institute opposes, however, as unnecessary and potentially confusing to investors, a proposed requirement that a target date fund disclose, immediately adjacent to the first use of the fund's name, the fund's asset allocation at the target date ('tagline disclosure')." (Investment Company Institute)

Text of Letter by ASPPA to Congress in Support of Modifying the Defined Benefit Plan Funding Rules to Adjust for Artificially Low Interest Rates
"It is critical that the modifications to the funding requirements be adopted in time to be effective for 2012. However, because we are already five months into 2012 and actuarial calculations for 2012 have already been already been completed for many plans, we ask that application of the modifications to 2012 be elective." (American Society of Pension Professionals & Actuaries)

Retirement Planning More Challenging for Women than Men
"[T]he life expectancy ... at age 65, which is a generally accepted retirement age, is 17.6 years for men and 20.3 for women. A three to four year difference in life expectancy may not seem like much, but when the cost of medical expenses during retirement is considered, along with other living expenses, the cost of living for a few years can be relatively high." (SFGate)

IRS Names Seven New Members to ACT Panel; ACT to Submit Recommendations at June Meeting
(Internal Revenue Service (IRS))

Nationwide Financial Introduces Fee Disclosure 408(b)(2) Solutions Kit for Retirement Plan Advisors
(Nationwide Financial)

ERISA Pros Introduces Wrap-Tight(sm) Online SPDs
(ERISA Pros)

Brian Dunham Appointed Chief Actuary For Liberty Mutual Insurance’s Group Benefits Unit
(Liberty Mutual)

MassMutual Retirement Services Expands Relationship Management Team
(MassMutual Retirement Services)