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June 4, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

Implementation Partner
for Lincoln Financial Group in ANY STATE, IN

Pension Operations Liaison/Supervisor
for Associated Pension Consultants (APC) in CA

Director, Retirement Key Account Management
for Prudential in IL

Pension Administrator
for Benetrends, Inc. in PA

Senior Retirement Plan Analyst and Supervisor
for Boutique NYC Administration Firm in NY

Assistant General Counsel - Retirement Plans
for Nationwide Mutual Insurance Company in OH

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Webcasts and Conferences

ERISA for Bankruptcy Trustees and Practitioners Workshop
in Tennessee on June 13, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Fiduciary Education, DOL & IRS Correction Programs and Apprenticeship Plans Workshop
in Tennessee on June 12, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Health Benefits Coverage under Federal Law Workshop
in Tennessee on June 12, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Managing your 401(k) Plan: A Day in the Life of a Healthy 401(k) in 2012
Nationwide on July 11, 2012 presented by Lorman Education Services

COBRA: A Little of Everything
Nationwide on July 19, 2012 presented by Lorman Education Services

"ERPA Test Review - Part I" Web Seminar, A 3-part Program
Nationwide on June 26, 2012 presented by SunGard Relius

A Conversation About DOL Advisory Opinion 2012-04A
Nationwide on June 5, 2012 presented by Erisafile Inc.

"ERPA Test Review - Part II" Web Seminar, A 3-part Program
Nationwide on July 10, 2012 presented by SunGard Relius

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[Official Guidance]

IRS Retirement News for Employers, Spring 2012 Edition (June 1, 2012) (PDF)
EP Exam Director Monika Templeman discusses common contribution limit errors in Form 5500EZ filers; discussion of the submission kit for plans that missed the April 30 deadline to adopt for EGTRRA; article explaining how SIMPLE IRA owners can may transfer funds from a designated financial institution to another one of their choosing; and article explaining requirements for making RMDs from rollover contributions. (Internal Revenue Service)

Learn all about Definitions of Compensation and earn CE Credits!   [Advert.]

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Compensation is used and defined in numerous ways. Sign up for our FREE webinar and we will explore common definitions of compensation used in retirement plans for allocations and testing. We will also discuss compensation for self-employed persons.

Lump Sum Offerings to Hourly Retirees Most Likely on GM's Agenda
"While announcing it will offer 42,000 of its 118,000 U.S. white-collar retirees a lump-sum of cash if they agree to stop taking monthly benefits, GM will continue to look at ways of reducing its balance sheet, according to company officials.... [A company spokesman] would not directly say what the Detroit-based automaker's future plans are for lowering pension obligations, but said they were 'a significant topic of discussion' during last year's contract negotiations with the union.... The current four-year contract between the UAW and GM will expire in 2015." (mLive.com)

Pennsylvania GOP Wants Pension Reform for Future State Workers
"Republican leaders say they want to change Pennsylvania's costly pension system for government and school workers from a defined benefit plan to a 401(k)-style program before the end of 2012. Their legislation, which is expected to be introduced in early June, will be designed to save taxpayers money and tamp down soaring public pension costs—a critical issue facing the state's financial future. The proposal ... would do nothing to cut the obligations already in place following the Legislature's 2001 vote to boost lawmaker pensions by 50 percent and state employee plans by 25 percent." (Lancaster Online)

Participating Payout Life Annuities - Lessons from Germany
"Overall, participating life annuity schemes may be an efficient way to deal with risk factors that are highly unpredictable and difficult to hedge over the long run, such as systematic mortality and investment risks." (Pension Research Council, Wharton School of the University of Pennsylvania; free registration required)

GM Plans Big Buyouts for Retirees in Pension
"General Motors said Friday that it would offer lump-sum payments to thousands of white-collar retirees to reduce its pension obligations, which are the biggest in the nation, and would pay Prudential Insur.ance to take over its pension payments to other retirees. The changes, which will eliminate about one-fifth of the automaker's pension obligations, are intended in part to increase its appeal to investors." (The New York Times; free registration required)

GM Announces Major Pension Settlement Actions
"On June 1, General Motors Co. (GM) announced a program that will eliminate approximately $26 bil.lion in pension liabilities for salaried retirees and beneficiaries by the end of 2012. This reduction in GM's pension obligation will be accomplished through a combination of (1) offering lump sums to 42,000 of its 118,000 salaried retirees and beneficiaries impacted by the program, and (2) purchasing annuities from The Prudential Insur.ance Company of America for those retirees and beneficiaries who did not receive a lump sum payment. The size of the transaction alone makes it unique within corporate America and the pension industry. In the United States, the entire volume of pension liabilities annuitized in recent years has not exceeded $1 bil.lion per year, and no single annuity transaction has exceeded $1 bil.lion since the 1980s." (Aon Hewitt)

401(k) Investors: If Your Employer Can't Sort Out Plan Fees, How Can You Be Expected To?
"Federal disclosure requirements taking effect this summer should make it easier to see how much is being shaved off the top of investment returns. Yet workers will continue to be at the mercy of others. That's because it's employers who hire mutual fund companies and other plan providers. They're also the ones selecting the funds and other investment options that workers choose from. So it hardly inspires confidence that many of those employers are ill-informed about basic information on the fees paid to providers—costs which are primarily borne by workers, not employers." (The Republic)

San Jose Referendum on Pension Plan Cutbacks: a Precedent for Other U.S. Cities?
"A radical plan to slash public employee pension benefits gets voted on by the residents of Silicon Valley's San Jose on Tuesday—a decision that could set an important precedent for many other cities, not only in California but across the nation." (The New York Times; free registration required)

DOL Stands Firm on Propriety of Using 'FAQs' to Roll Out Guidance Details on Self-Directed Brokerage Accounts
"Representatives from several retirement industry trade associations pressed their case to DOL officials that DOL guidance issued May 7 about self-directed brokerage accounts failed to follow the traditional process of proposing a new rule, seeking public comment and then issuing a new rule. The DOL representatives disagreed. They declined to withdraw the guidance and resubmit it through a formal regulatory process, according to attendees at the meeting." (Pensions & Investments; free registration required)

Retirement Market Data: Fourth Quarter, 2011
"Total U.S. retirement assets were $17.9 tril.lion as of December 31, 2011, up 4.9 percent in the fourth quarter of 2011 and about unchanged for the year. Retirement savings accounted for 36 percent of all household financial assets in the United States at the end of 2011." (Investment Company Institute)

Illinois Pension Reform Faces Uncertain Path Forward
"After a short break, lawmakers are poised to start meeting again, trying to find a compromise that again is likely to include scenarios that cost suburban schools more. They'll do it over the heavy protests of unions that represent teachers and state workers ... A proposal to cut a yearly increase in pension benefits for working and retired teachers, university employees, state workers and lawmakers was embraced by at least some Republican and Democratic lawmakers, providing some common ground in the debate." (Chicago Daily Herald)


Text of ASPPA Comments to IRS on Notice 2012-25 2012-2013 Guidance Priority List
"[ASPPA believes] that guidance for each of the items listed [in this Comment Letter, in priority order] ... (1) Will resolve significant issues relevant to many retirement plan sponsors and practitioners (not just a small group); (2) Will promote sound tax administration by helping plan sponsors and practitioners to maintain retirement plans in compliance with tax code qualification rules; and (3) Can be drafted in a manner that can be easily understood and applied by plan sponsors and practitioners." (American Society of Pension Professionals & Actuaries)


It's Time for Congress to Share Pension Pain
"All federal workers, elected and unelected, enjoy retirement benefits better than the bulk of the private sector, including continuation in a relatively low-cost health-care plan. Ex-senators and representatives do especially well, even after reforms in the 1980s mandated them to pay into Social Security, among other tightening. Now, Congress is busy trying to bring federal workers' retirement contributions and benefits more in line with the private sector, a change that is warranted financially and useful politically even if it does bring some pain. There does not seem to be widespread enthusiasm in Congress for taking on some of that new pain." (IndyStar.com)


New White Paper Misstates 401(k) Plan Fees
"A white paper... recently released by the liberal think tank Demos is claiming that fees in 401(k) plans are 'hidden and excessive.' Although the paper's findings certainly sound sensational, the reality is much different. [Among other flawed assumptions, the] expense ratios for index funds are typically significantly lower than the 95 basis points stated in the white paper." (American Society of Pension Professionals & Actuaries)


Text of Comments by ASPPA to IRS Requesting Additional Guidance on Permitted Mid-Year Changes to Safe Harbor Section 401(k) Plans
"The lack of guidance on midyear amendments [to a safe harbor 401(k) plan] has created confusion among plan sponsors and practitioners and, in some instances, may have resulted in plan participants losing out on benefits that otherwise would have been provided to them through mid-year amendments. ASPPA urges the IRS to issue guidance on the following important issues soon.... (1) Plan Modifications After Start of Plan Year ... (2) Whether and When Supplemental Notice is Necessary ... and (3) Exceptions for Plan Amendments Made Early in the Year[.]" (American Society of Pension Professionals & Actuaries)


Testimony of American Council of Life Insurers to IRS at Hearing on Longevity Annuity Contracts (PDF)
"Participants benefit from an option to choose lifetime income for a portion of their retirement savings..... ACLI supports Treasury and the IRS's efforts to permit a retiree or participant to elect to use a portion of his or her benefit to obtain a longevity annuity. [The ACLI suggests believes] a few refinements to the proposal ... will make the rule easier for workers and retirees to understand, simplify administration and lower compliance costs for plans, providers and individuals." (American Council of Life Insurers)


Testimony of American Benefits Council on Proposed Regs for Minimum Present Value Requirements for Partial Annuity Distributions (PDF)
"[The preamble to the proposed regulations states that,] when one portion of a retirement benefit distribution subject to the section 417(e) factors is a 'decreasing' benefit, both portions of the distribution are subject to the minimum present value requirements of section 417(e)(3). The Council believes that the current regulation does not clearly require that, and can be reasonably interpreted to reach the opposite result. Due to this uncertainty, the Council believes that the clarification of the rules, as provided by the proposed regulations, should apply prospectively, and that Treasury and the Service should clearly state that no inference should be drawn regarding the law prior to the effective date of the final regulation." (American Benefits Council)

Benefits in General; Executive Compensation

Linking Executive Compensation to Sustainability Performance
"Sustainability issues are becoming increasingly common in the boardroom, particularly as the volume of shareholder proposals regarding environmental and social policies has grown in recent proxy seasons.... This [article] discusses corporate directors' increasing interest in sustainability matters, progress toward a notion of performance assessment that incorporates nonfinancial elements, and companies' efforts to explain how they link incentive awards to sustainability targets in response to shareholder proposals filed on this topic since 2009." (The Conference Board)

IRS Seeks to Narrow Definition of Substantial Risk of Forfeiture
"It appears that the proposed rule would prevent decisions such as Robinson v. Comr., which the IRS specifically cited in the preamble. In Robinson, the court held that a sell-back provision created an SRF because it served a substantial business purpose. Under the proposed rules, such a condition would likely not create an SRF, unless the recipient successfully argued that the condition was related to the purpose of the transfer." (Bloomberg BNA)

Barney Frank Introduces Bill to Prohibit Insur.ance Policies Against Compensation Clawbacks at Financial Institutions
"Importantly, this proposed Act only applies to financial institutions and only clawback or personal liability required by federal financial regulatory law or agency rule. Thus, it would apply to FDIC clawbacks under Dodd-Frank Act Section 210, but would not apply to clawbacks from executives outside the financial industry under Dodd-Frank Act Section 954." (Winston & Strawn LLP)

Is Beer In the Workplace an Employee Benefit?
"Mark Torres [is] senior vice president of people and culture at The Rubicon Project. One of his first acts was to survey employees about benefits—which resulted in a strong staff request to retain the 24/7 beer refrigerator on the premises under the category of 'the one thing we shouldn't change.' ... Employee perks are rapidly becoming as important to workers as employee benefits. Start-up companies such as The Rubicon Project are leading the way by defining the company's culture with the perks they offer." (Human Resource Executive Online)

Defense of Marriage Act Unconstitutional, First Circuit Says
"Although employers should be aware of the First Circuit's conclusion that DOMA is unconstitutional, this decision is stayed for now pending Supreme Court review of DOMA, which would seem likely. A Supreme Court decision on DOMA could have far-reaching consequences for employers that offer same-s.ex benefits, especially as to tax issues, given the number of federal laws that affect benefits (which include the Internal Revenue Code, ERISA and HIPAA)." (Practical Law Company)

Sixth Circuit Says ADA Requires 'But For' Causation (PDF)
"In reaching this holding, the Sixth Circuit: (1) abandoned its precedent that required plaintiffs to show their disabilities were the 'sole' reason for any adverse action; and (2) joined the Seventh Circuit in adopting the 'but for' standard over the 'motivating factor' test from Title VII." (Winston & Strawn LLP)

Employee Ownership Update for June 1, 2012
NCEO Executive Director Loren Rodgers discusses employee stock in Facebook and RSU taxation; job creation from private equity vs. ESOPs; a call for documents and tools for effective employee-owner communication; and a survey finding that one in three younger Americans plans to transfer investments out of stock. (National Center for Employee Ownership)


Text of Comments by American Academy of Actuaries to Actuarial Standards Board on Proposed Revisions to Actuarial Standard of Practice (ASOP) No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions (PDF)
"While some of the recommended practices of ASOP No. 4 may have applicability to retiree group benefit measurement, others may not. The interests of practitioners and the ASB will be served best by having separate standards for each practice area[.]" (American Academy of Actuaries Joint Committee on Retiree Health)


Text of Comments by American Academy of Actuaries to Actuarial Standards Board on Proposed Revisions to Actuarial Standard of Practice (ASOP) No. 27, Selection of Economic Assumptions for Measuring Pension Obligations
"There are numerous instances in which the exclusive use of the word 'pension' makes the application of the standard to retiree group benefit practice tenuous. We encourage the ASB to clarify in this ASOP that mastery of pension practice is not the same as mastery of retiree group benefit practice (or vice versa).... In addition, Section 1.1.c. indicates that the purpose of the standard is to enhance those provisions of ASOP No. 6 that relate to the selection and use of economic assumptions.... There are a number of economic assumptions important to retiree health benefit measurement (most obviously, health care cost trend) that are not mentioned in ASOP No. 27." (American Academy of Actuaries Joint Committee on Retiree Health)

Press Releases

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