[Official Guidance]
Text of Proposed IRS Regs: Reporting and Notice Requirements for Deferred Vested Benefits Using Form 8955-SSA
"This document contains proposed regulations that would provide guidance relating to automatic extensions of time for filing certain employee plan returns by adding the Form 8955-SSA, 'Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits,' to the list of forms that are covered by the Income Tax Regulations on automatic extensions.... These regulations are generally proposed to be effective on or after [June 21, which will be the date of publication in the Federal Register].... A signature is not required for an automatic extension of time to file Form 5500 (series) and Form 8955-SSA."
(Internal Revenue Service)
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[Official Guidance]
Text of Proposed IRS Regs: Prohibited Payment Option under Single-Employer Defined Benefit Plan of Plan Sponsor In Bankrup.tcy
"These proposed regulations would provide [a] limited exception to the anti-cutback rules to permit a plan sponsor that is a debtor in a bankrup.tcy proceeding to amend its single-employer defined benefit plan to eliminate a single-sum distribution option (or other optional form of benefit providing for accelerated payments) under the plan if certain specified conditions are satisfied.... These regulations are proposed to apply to plan amendments that are adopted and effective after August 31, 2012."
(Internal Revenue Service)
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[Guidance Overview]
IRS Issues Guidance Reporting Requirements for Deferred Vested Benefits
"The signature requirement on Form 5558 to extend the due date to file Form 8955-SSA caused confusion and missed deadlines for plan administrators. Now the ability to submit one Form 5558 without signature to extend both Form 8955-SSA and Form 5500 provides consistency and administrative convenience for plan sponsors and practitioners."
(Practical Law Company)
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[Guidance Overview]
Investment Advisers to ERISA Plans and Plan Asset Funds Becoming Subject to New Disclosure Obligations on July 1
"Investment advisers to ERISA-covered pension plans (either directly or as investors in funds deemed to hold plan assets) rely on the necessary services exemption under ERISA to provide investment related services to ERISA-covered pension plans for compensation without engaging in a 'prohibited transaction' under ERISA and the Internal Revenue Code.... [This article provides] a brief summary of the material provisions of the Final Regulations that apply to investment advisers to funds deemed to hold plan assets."
(Proskauer Rose LLP)
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403(b) Advocate Named as One of Four 'Money Heroes'
"Why he's a hero: Hired in 1992 as a fourth-grade teacher in California, [Dan] Otter soon learned that his 403(b), a 401(k)-like retirement plan for nonprofit and public-sector workers, held poor investment options—mainly high-cost annuities. In 2000 he co-founded 403bwise.com, where teachers and others can learn about their plans, and how to fight for better ones."
(CNNMoney.com)
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Why 403(b) Plans for Teachers Often Flunk, and How to Raise the Grade
"[The] 403(b) marketplace for elementary and high school teachers in public schools is frequently described as the 'Wild West' because of the lack of oversight.... Regulations that took effect in 2009 require school systems to keep better records of the 403(b)s being offered to their teachers. Now that many have adjusted to the new rules, they're considering additional steps to improve disclosure and review product offerings."
(Kiplinger)
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$24.5 Mil.lion Contribution to Guam Retirement Fund Ends Decade of Litigation
"Guam Memorial Hospital and Department of Education employees whose retirements have been placed on hold while their agencies owed contributions to the Government of Guam Retirement Fund may soon be able to retire and receive [pensions].... Failure to timely pay retirement contributions has led to the near-collapse of the Northern Marianas government retirement fund, and the GovGuam Retirement Fund board looks to that as a lesson to fully commit to preserving the GovGuam Retirement Fund's assets."
(Guampdn.com)
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In the 401(k) Era, 70 Could Be the New Age to Retire
"[A]according to a [recent] study ... fewer than half of US workers will have enough money saved to retire at 65. But if those same people keep working until they are 70, the picture improves dramatically, with 86 percent likely to be financially comfortable in retirement."
(Boston.com)
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U.K. Doctors Stage First Strike Since 1975 over Pension Cutbacks
"Doctors are angry that the government has renegotiated a 2008 agreement on their state-funded pensions and are fighting plans for them to retire at 68, in line with other workers.... 'Doctors are now being asked to work even longer, up to 68 years of age, and contribute even more, meaning doctors have to pay up to twice as much as civil servants on the same pay for the same pension,' [said] the chairman of ... the doctors' labor union[.]"
(Bloomberg Businessweek)
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Lingering Cleanup of CalPERS Pay-To-Play Scandal
"Middlemen who help investment funds get money from CalPERS received $1.85 mil.lion in fees during the past two years, a sharp drop from the $58 mil.lion collected by a former CalPERS board member in a pay-to-play scandal. A report on 'placement agent' fees given to the CalPERS board last week was the first required by reform legislation."
(CalPensions)
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Louisiana State Employees' Pension System Disputes Dour Report on Pension Underfunding
"The Louisiana State Employees' Retirement System said the Louisiana section of the report by the Pew Center on the States, which analyzed public pension systems across the country, was inaccurate and did not credit the state's efforts to put its retirement systems on more solid footing in recent years. A news release from the retirement system Wednesday said that despite investment losses in 2008 that reduced the system's assets, the fund is recovering and receiving all payments needed to keep it sound. That includes a 24 percent return on investments in the past year, which was not covered by the report."
(The Times-Picayune)
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How Would Your Defined Benefit Plan Fare in an IRS Audit?
"In its June 8, 2012 edition of the Employee Plans News, the Internal Revenue Service gave interesting insight into areas of non-compliance revealed in a targeted audit of defined benefit pension plans. These audit findings create a helpful checklist for defined benefit plan sponsors to review the status of plan compliance efforts."
(Benefits Bryan Cave)
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California's Riverside County Prepares to Implement Pension Changes
"Riverside County supervisors moved ahead [on June 19] to enact pension reforms expected to save the county millions of dollars annually, despite warnings from the sheriff that his recruitment efforts might be undercut because of the changes.... Since 2010, the county Executive Office has successfully negotiated collective bargaining agreements with unions representing more than 16,000 workers to establish new retirement formulas for new hires and have all employees cover their own monthly pension contributions to CalPERS."
(PalmDesertPatch)
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In Europe, 'Flight to Safety' by Pension Funds Skews Market
"Take some pity on the pension fund managers of northern Europe. They're not facing deep cuts in their own pensions like retirees in Greece, but they are struggling to cope with an unprecedented drop in interest rates as investors flee weak euro zone countries and pile into safe-haven bonds."
(The New York Times; free registration required)
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Assessing Today's Retirement Landscape
"Longevity poses a challenge for retirees with defined contribution plans, because there is always risk of someone outliving his or her savings. A new application for defined benefit plans as a supplement to defined contribution plans may help provide longevity protection."
(Retirement Town Hall)
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[Opinion]
Conservatively-Invested DB Plans Beware: Europe Just Might Get Its Act Together
"[M]ost funds who are too conservatively positioned, will be chasing the reflationary melt-up. Importantly, the biggest risk going forward is a market melt-up unlike anything you've ever seen before. This might sound crazy now, but when it happens, it will be violent and a lot of euro bears and market skeptics will be caught off-guard."
(Pension Pulse)
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[Opinion]
Public Pensions and the Verdict of the Voters
"Just as voters nationwide have reached a state of extreme anxiety about the increasing likelihood of fiscal calamity at the national level, governors and mayors, who are constrained in their ability to pile on debt and are more directly accountable to voters for competence in financial management, are making substantial progress.... [T]he ironic result of efforts such as the ones in California is that local governments will be able to afford more critical labor, not less."
(Governing)
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Benefits in General; Executive Compensation
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[Official Guidance]
SEC Final Rule Requiring Listing Standards for Compensation Committees and Compensation Advisers
"The Securities and Exchange Commission has approved a rule that directs national securities exchanges to adopt listing standards for public company boards of directors and compensation advisers. The new rule, required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, requires exchange listing standards to address: The independence of the members on a compensation committee The committee's authority to retain compensation advisers The committee's consideration of the independence of any compensation advisers and The committee's responsibility for the appointment, compensation, and oversight of the work of any compensation adviser. Once an exchange's new listing standards are in effect, a listed company must meet the standards in order for its shares to continue trading on that exchange."
(Securities and Exchange Commission)
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[Guidance Overview]
Foreign-Based Multinationals Must Be Aware of Controlled Group Rules in U.S. Tax Code Affecting Employee Benefits
"For plan sponsors with U.S.-based operations and exclusively U.S.-controlled groups, there is generally a healthy awareness of the rules—this is in part because operations are typically centralized in the U.S., and frequently a single third-party administrator is used for all retirement plans of the controlled group. For foreign-based corporations with U.S. subsidiaries, the level of awareness and compliance with these rules is frequently not very high.... [E]ach company in the controlled group may have its own retirement plan and cafeteria plan with completely different benefits and separate third-party administrators, and none of the parties is aware that a controlled group exists."
(EisnerAmper LLP)
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SEC Requires Listing Standards for Compensation Committees, Advisers
"Listing standards will be required to address the independence of the members on a compensation committee. The standards also must address the committee's authority to retain compensation advisers and its consideration of the independence of any compensation advisers. In addition, the standards must address the committee's responsibility for the appointment, compensation, and oversight of the work of any compensation advisers."
(Journal of Accountancy)
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SEC Issues Final Rule on Compensation Committee Independence, Including Independence of Advisers
"The SEC's final rule confirms that 10C does not require compensation committees to retain or obtain advice only from independent advisers. A listed issuer's compensation committee may receive advice from non-independent counsel, such as in-house counsel or outside counsel retained by management, or from a non-independent compensation consultant or other adviser, including those engaged by management."
(Winston & Strawn LLP)
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Pay Is Top Reason Key Employees Quit
"A majority of respondents (83 percent) thought that failure to retain key talent is 'very costly,' and two out of three agreed that retention of key talent is a major concern of senior management, the study revealed. Survey participants reported that the top reason key talent quits is to get more pay elsewhere. Other reasons include a lack of promotional opportunities, the perception that pay is unfair and dissatisfaction with job and work responsibilities."
(Society for Human Resource Management)
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Retention of Key Talent and the Role of Rewards
"[T]he foremost challenge for management today is how to retain its key talent. Turnover is costly and directly impacts business performance, particularly during an economic recovery.... [R]ewards professionals will be under increased pressure to make counteroffers, increase new-hire offers, make more frequent exceptions to rewards policies and programs, and offer special deals to retain key employees.... [The authors] surveyed rewards professionals to learn what strategies they are using to retain key talent and to learn how effectively these strategies are working."
(WorldatWork)
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Illinois Debt for Retirees Pegged at $200 Bil.lion
"The state's pension debt often is reported to be $83 bil.lion, the amount owed by state government to the retirement systems for teachers, state workers, university employees, judges and lawmakers. However, the [Illinois Policy Institute] said, the state also owes $54 bil.lion for retiree health care and $15.5 bil.lion on bonds sold to make state pension payments. On the local level, cities, counties and other local governments owe $38.2 bil.lion for pensions, $10.7 bil.lion for retiree health care and $1.9 bil.lion for pension bonds."
(Northwest Herald)
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Cypen & Cypen Newsletter for June 21, 2012
Covers employee benefit developments with an emphasis on governmental plans. Articles in this issue include: Public Pension Plan Not Eligible for Relief Under Chapter 11; Boston Will Hike Retirees' Pensions; and Fiscal Survey of the States.
(Cypen & Cypen)
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Why the Large Increase in People on Disability Benefits?
"Entitlement reforms usually focus on changes in Social Security retirement benefits and Medicare. However, the disability component of Social Security is growing faster than retirement benefits and requires substantive reforms. Over the past three years, the number of Americans receiving disability benefits increased by more than 1 mil.lion, bringing the total number to 10.8 mil.lion. What is behind this surge?"
(National Center for Policy Analysis)
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Press Releases
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