ASPPA

Director, Actuary ~ Stable Value Actuarial, Prudential Retirement~ Woodbridge, NJ
for Prudential in NJ

Director, Actuary ~ Valuation ~ Newark, NJ
for Prudential in NJ

Associate Actuarial Manager ~ Stable Value Pricing ~ Woodbridge, NJ
for Prudential in NJ

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401(k) Rekon Advisor Symposium - Charlotte
in North Carolina on July 26, 2012 presented by 401(k) Rekon

Health Care Reform Decision: The Impact on Multiemployer Plans
Nationwide on August 9, 2012 presented by International Foundation of Employee Benefit Plans

Health Care Reform Virtual Conference—Next Steps and Resources for Implementation
Nationwide on August 16, 2012 presented by International Foundation of Employee Benefit Plans

Webinar: Supreme Court Decision on Health Care Reform Law
Nationwide on June 28, 2012 presented by Seyfarth Shaw LLP

The Supreme Court Has Spoken: What Does the Affordable Care Act Decision Mean for Your Business?
in Ohio on July 12, 2012 presented by McDonald Hopkins

Health Care Reform After the Supreme Court Decision
Nationwide on July 11, 2012 presented by Buck Consultants

Health Care Reform After The Decision - What Should Employers Be Doing NOW?
Nationwide on July 11, 2012 presented by Trucker Huss

Supreme Court Decision on Health Care Reform: Impact on Employer Plan Sponsors
in New York on July 13, 2012 presented by Chadbourne & Parke LLP

CFDD

Relaxing Pension Funding Requirements Might Be Way to Finance Roads and Student Loans
"Lawmakers looking for money to finance low-cost student loans and fix aging highways have found about $20 bil.lion in an unlikely place: company pension funds.... [T]he highway bill that Congress is rushing to complete by Friday contains a measure that would let companies slow their pension contributions again. Because the contributions are tax-deductible, permitting smaller contributions would mean that companies take fewer tax deductions—and as a result, create more federal revenue. The provision is expected to increase corporate income tax receipts by $9.4 bil.lion over the next 10 years." (The New York Times; free registration required)

DATAIR! Smart By Design – More Choices – Less Cost   [Advert.]

Proposals, Testing, Valuation, IRS/DOL/PBGC Forms, Plan Documents
Includes Graded, 412(e)(3), Cash Balance, Combo Plans
(888) 328-2474    Sales@DATAIR.com    www.DATAIR.com

Your Family Is Probably Losing $155k from 401(k) Plan, and Why New Rules Won't Help
"The Demos study, released last month, is just the latest in a long string of research showing 401(k) plans are a better deal for Wall Street than for you. Many show that people lose about one-third of their retirement money to fees that they don't even know they're paying. The actual lifetime impact of fees is a matter of widespread debate, but it shouldn't be. In one dramatic example, John Bogle, the inventor of index funds, demonstrated how fees can consume 80 percent of an investor's money through something he'd dubbed 'the tyranny of compounding fees.'" (msnbc.com)

Wealth and the American Dream Evaporate in a Poof!
"Spend a decade or two working hard, paying your bills on time and salting money away in your 401(k) at work. You've been hearing for years that this is the one formula that will allow you to achieve what you've always wanted—a golden retirement. Except that for many Americans, the shine is beginning to rub off.... Last week, the Federal Reserve announced that the typical American family's net worth had dropped back to where it was in the early 1990s." (Chicago Tribune)

GM, Ford Offer Buyouts to Jettison Pension Plan Liabilities
"GM and rival Ford Motor ... are eager to rid their balance sheets of the huge pension obligations that Wall Street views as onerous debts weighing on their credit ratings and stock prices. So this spring they came up with an ambitious solution: buy out the lifetime pension payments due 140,000 salaried retirees. With both carmakers suddenly flush with profits—GM and Ford made $9.2 bil.lion and $20.2 bil.lion, respectively, in 2011—it seems like a smart way to remove decades of uncertainty from their finances. Yet because the buyouts are based on actuarial assumptions about what each retiree's pension stream is worth using IRS projections about inflation, many ex-employees worry they may outlive their payments." (San Francisco Chronicle)

Top 100 Public Pension Plans' Assets Up 5.6% in First Quarter of 2012
"The assets of the 100 largest public employee retirement systems rose 5.6%, or $146.9 bil.lion, in the first quarter, the U.S. Census Bureau reported Thursday. The 100 largest public pension plans, which comprise 89.4% of total public plan assets, had total assets of $2.8 tril.lion in the quarter. [But] Erika Becker-Medina, chief of the bureau's employment and benefits statistics branch, cautioned against comparing some asset class results with their previous quarterly or annual performance because the Census Bureau changed some classifications in this latest survey." (Pensions & Investments)

New Jersey Pension Funds Cut Investment Return Assumptions
"Four pension funds within the $72.1 bil.lion New Jersey public pension system reduced their investment return assumptions to 7.95% from 8.25% ... The actions included reduced assumptions about public employee wages in the future." (Pensions & Investments)

Democratic Lawmakers Appeal to DOL to Coordinate with SEC on Regulation of Financial Industry
"The Department of Labor is failing to coordinate with the SEC in their parallel efforts to improve regulation and regulatory overview of the financial services industry. And this lack of coordination threatens to undermine efforts to enact reforms to protect investors. This is according to 33 Democratic members of Congress who, together, sent a letter this week to Department of Labor Secretary Hilda Solis requesting that her department start working closely with the SEC." (On Wall Street)

Another Question is Answered in the Who's the Employer Q&A Column
"What affect does the recent DOL Advisory Opinion on open MEPs have on MEPs sponsored by PEOs (professional employer organizations) or other staffing firms?" (BenefitsLink.com)

PSCA Survey Reports Increase in Use of Target Date Funds, Roth Option by 403(b) Plans
"The survey ... shows more stability and less uncertainty among 403(b) plan sponsors. 'The engagement of 403(b) plan sponsors is much higher than in years past. They're adjusting to the new regulatory environment, and show a much better understanding of ERISA,' said David Wray, president of the PSCA. 'In many ways, sponsors of 403(b) plans are catching up to the 401(k) system.' ... The survey found that nearly three fourths (72.5%) of plan sponsors offer target date funds as an investment option, an increase from 69.1% in 2010. ... The number of 403(b) plans permitting Roth after-tax contributions has doubled in the past four years. In 2011, 21.7% of 403(b) plans allowed Roth contributions, up from 16.9% in 2010 and 10.9% in 2007." (Wolters Kluwer Law & Business / CCH)

States Consider Inviting Private Sector Employees Into the Pool
"[The California legislature is considering a proposal that would allow] businesses in the private sector that are unable to set up 401(k) plans for their workers—mostly small businesses—give their employees access to a retirement savings plan through a trust fund set up by the state. The state would establish a board to oversee the fund, and employees could contribute a portion of their earnings to an account in their name. Employers could administrate [sic] it through a payroll deposit or some other hassle-free mechanism. When the employee retires, their savings account would be converted to a lifetime annuity. Employee accounts would be modeled after an individual retirement account (IRA) rather than a 401(k). That means the amount each employee could put into the plan would be held to $5,000 a year or less, which self-limits the plan to lower-income workers[.]" (Governing)

Plain Talk About Cash Balance Plans
"For the typical cash balance plan, employers retain one key element of risk: matching the performance of trust assets to 'interest credits' under the plan. In what follows, we unpack this traditional cash balance plan risk, illustrating just how serious this risk—the mismatch between the plan's interest credits and actual trust returns—can be. As we shall see, this risk is most problematic when interest rates are increasing and the yield curve is 'steep.'" (October Three LLC)

How Low Can You Go: Interest Rates and DB Plans
"Interest rates peaked in 1981—the high for Aaa long-term corporates came in September 1981 at 15.49%. Rates have been going down since then. It's worth considering that, even though it is axiomatic that no one knows which direction interest rates are going, interest rates have (with the exceptions the chart illustrates) generally gone steadily in one direction—down—for the last 30 years. And for the 30 years before that they went steadily up." (October Three LLC)

Disclosure Guidance for Plan Brokerage Accounts
"Until now, plan administrators had been preparing for fee disclosures based on the requirements of the participant-level fee disclosure rules. Brokerage windows are not considered to be 'designated investment alternatives' (DIAs) under the participant-level fee disclosure rules, thus, plan administrators had taken a more generalized approach to disclosing information on these types of arrangements. This article summarizes the five questions and answers that focus on what information must be disclosed related to brokerage windows and self-directed brokerage accounts." (McKay Hochman Co., Inc.)

A 408(b)(2) Checklist for Reviewing the Non-Registered Group Annuity Contract 408(b)(2) Disclosure
"[T]he variable non-registered group annuity contract ... can, if so designed, serve merely as an efficient investment platform, or serve as a complete package of financial and administrative services, with flexible pricing and compensation. Most of these contracts have within them the fixed account, which typically has enhanced guaran.teed returns of the sort never available out of money market funds or the non-insur.ance 'stable value' funds.... These contracts, however, ... have a number of moving pieces, which can make them a challenge to review for 408(b)(2) purposes. And many of the insur.ance company disclosures ... are far more complicated than need be. So [here is a] list for these who need to look at the disclosure related to these products under 408(b)(2)[.]" (Business of Benefits)

[Opinion]

Pew Center Report Presents Flawed Picture of Current State of Public Pensions, Teachers Say
"[B]y relying on FY 2010 data, the dates the [recent Pew Center] study is using to measure the condition of many public pension plans are near the low point of the recent investment market decline.... [Further, in] order to arrive at the $1.38 tril.lion [shortfall] figure, Pew once again combines pensions with retiree healthcare. As NCTR and [the National Association of State Retirement Administrators] have noted in the past, retiree healthcare cost containment options, financing structures and benefit protections are entirely different from those of pensions. Pew's decision to couple retiree healthcare with pension liabilities distracts from the issues States face with these very different benefits." (National Council on Teacher Retirement)

[Opinion]

Text of Letter from 33 Members of Congress to DOL Regarding Regs Defining Fiduciary Status (PDF)
"Foremost, while we appreciate that the Department agrees that any significant regulatory overhaul must be justified by a thorough, data-driven analysis, it appears that the Department's approach to that analysis may not be on the right path.... Second, we see a lack of meaningful coordination between the Department and the SEC despite the fact the SEC is engaged in a parallel project.... Finally, we regret that the Department's data requests have been unrealistic in scope and timing." (The SPARK Institute)

New Reporting Requirement for Compensation Consultants Under Final SEC Rules for Compensation Committees
"With respect to the new requirement in Item 407(e)(3)(iv) to disclose compensation consultant conflicts of interest, the SEC uses the 'any role' disclosure trigger rather than the 'obtained or retained the advice' trigger included in Section 10C. Thus, the new requirement will apply to any compensation consultant whose work must be disclosed pursuant to Item 407(e)(3)(iii), regardless of whether the compensation consultant was retained by management or the compensation committee or any other board committee." (Winston & Strawn LLP)

2012 Q&As: Treasury and IRS Meeting with ABA Joint Committee on Employee Benefits, May 11, 2012 (PDF)
Some questions concern flexible spending accounts, HSAs and executive benefits, but most of the questions address 401(k) plan operation and distributions from tax-qualified retirement plans. "The statements contained herein cannot be relied on even though they are printed as statements of the IRS. The questions were submitted by ABA members, and the responses were given [orally at a meeting on May 11, 2012] after explicit statements that their responses reflect the unofficial, individual views of the government participants as of the time of the discussion, and do not necessarily represent agency policy." (American Bar Association)

DOL's New Employee Guide to the FMLA Issued: What's the Impact on Employers?
"[T]he U.S. Department of Labor issued a 16-page FMLA guide that the DOL says is 'designed to answer common FMLA questions and clarify who can take FMLA leave and what protections the FMLA provides.' Entitled 'Need Time? The Employee's Guide to the Family and Medical Leave Act,' the Guide apparently was created out of DOL's belief that 'too many workers don't know about their rights under the FMLA and fail to take advantage of its protections' ... [T]he Guide primarily is meant to answer 'common' questions about the FMLA, so it leaves unanswered all of the issues that continue to frustrate employers in their administration of the FMLA. However,... in a fairly plain-spoken manner, it impresses upon employees the obligations they have under the FMLA to cooperate with their employer when they need FMLA leave and what will be expected of them during this process." (FMLA Insights)

Stockton, Calif., Files Bankrup.tcy Petition
"Stockton, California, became the largest city to file for bankrup.tcy in U.S. history on Thursday, after years of fiscal mismanagement and a housing market crash left it unable to pay its workers, pensioners and bondholders.... Stockton, which officially declared insolvency and its desire to restructure its debt, also filed a separate list of its major unsecured creditors. The California Public Employees' Retirement System, which manages Stockton's pension plan, tops the list. The retirement system has a $147.5 mil.lion claim for unfunded pension costs." (Reuters)