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July 6, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

Transition Manager - Client Integration
for Diversified in NY

Account Executive - IRC31620
for Lincoln Financial Group in NJ, NY, PA

Retirement Plans Regional Sales Manager
for Mutual of Omaha in AZ, NM

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Webcasts and Conferences

Patient Protection and Affordable Care Act (PPACA) Legislative Update
Nationwide on July 10, 2012 presented by United Benefit Advisors

ERISA Disclosure Under 404(a)(5) and 408(b)(2)
Nationwide on July 20, 2012 presented by McKay Hochman Co., Inc.

Participant Loans
Nationwide on July 11, 2012 presented by McKay Hochman Co., Inc.

SCOTUS Ruling on PPACA: Now What?
Nationwide on July 13, 2012 presented by FutureOffice Network

EPCRS, Latest Release & Recent Years
Nationwide on July 31, 2012 presented by McKay Hochman Co., Inc.


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2012 Pension Plan Funding Stabilization Signed Into Law (PDF)
"Pension interest rate stabilization and PBGC premium hikes have been enacted with the 2012 student loan and transportation legislation titled Moving Ahead for Progress in the 21st Century (MAP-21) signed [on July 6] by President Obama. The interest stabilization changes apply to ERISA single-employer plans that base liability calculations on PPA segment rates and are predicted to trim 2012 contribution requirements by 15% to 25% or more for typical plans.... Instead of using the two-year average of corporate bond rates to determine pension liabilities, the law stabilizes the segment rates by adding a cap and a floor for the current year's rate. For 2012 plan years, the cap is set at 110% and the floor at 90% of the 25-year average of each segment rate calculated as of September 30, 2011. These percentages change over subsequent years." (Buck Consultants)


Managing your 401(k) Plan: A Day in the Life of a Healthy 401(k) in 2012   [Advert.]

Sponsored by Lorman and BenefitsLink.com

Live audio conference: identify and address major trends and challenges facing 401(k) plan sponsors in maintaining a benefit plan that will meaningfully prepare their employees for retirement. Discounted price for BenefitsLink readers.


IRS Procedures Provide Assistance to Low-Risk Overseas U.S. Taxpayers
"New procedures go into effect on September 1, 2012, that ... allow qualifying taxpayers to resolve certain concerns relating to participation in foreign retirement plans. The IRS provides the example that in some instances tax treaties allow for income deferral under U.S. tax law, but only if an election is made on a timely basis." (Haynes and Boone, LLP)

Should I Pay Someone to Manage My IRA?
"As long as you're willing to do a bit of research upfront, develop a simple but effective investing strategy and apply basic common sense, you should be perfectly capable of handling your IRA on your own. In fact, you may even have an advantage over a pro in that you should be able to manage your stash at much less than half the cost an investment firm or other adviser would charge." (CNNMoney.com)

What Fees Can Do to Your 401(k)
"[W]hen you get a letter about your 401(k) or 403(b) from your benefits office at work this month or next, look at it ... [Y]ou are likely to find a shocking tidbit of information—a revelation that you've been paying bills you probably never imagined paying.... [Y]ou are likely to see small numbers that appear inconsequential, but are not. When it comes to investing, tiny numbers pack a huge punch over many years. Consider, for example, the difference between paying 0.5 percent of your assets in your 401(k) toward fees, compared with 1.5 percent." (Chicago Tribune; free registration required)

Japan's Giant Pension Fund Sold $32 Bil.lion of Assets in 2011-2012
"The public pension fund, known as the GPIF, has become a net seller of assets to raise cash for pension payouts since 2009-2010, after inflows from loans being paid back by public entities stopped. The fund, under pressure to raise returns to cope with a rapidly ageing population, is closely watched by markets given the size of its $1.42 tril.lion portfolio, which is bigger than the economy of Spain, the world's 12th largest." (The New York Times; free registration required)

Re-Proposed Fiduciary Regs a Priority Project, Borzi Tells Conference
"New fiduciary rules are necessary, Borzi said, because 'since 1975 the marketplace has changed dramatically.' 401(k) plans didn't exist and IRAs were just starting up, she noted.... EBSA is working on a re-proposal that will address 'legitimate criticisms,' Borzi said. The re-proposal will come with 'robust economic analysis' and a 'more sharply focused text,' she stated." (Wolters Kluwer Law & Business / CCH)

Retirement Promises Prove Iffy Even Under Chinese Communist Rule
"By Chinese law, men can retire at 60; women in government and state-owned companies can leave at 55; and women in the private sector can start collecting pensions at 50. However, over the last year, the bureaucrats in charge of pensions have gone to lengths to telegraph that these thresholds are unsustainable for a country with a declining number of working-age people.... Retirement reform entered the public discourse quite suddenly, on June 6, at a symposium in which officials from China's Ministry of Human Resources and Social Security announced that reform was 'inevitable.'" (Bloomberg)

Why Teacher Pension Costs Will Keep Rising
"The closing bell on Wall Street last Friday also marked the end of the fiscal year for many public pension funds across the country, including the New York State Teachers' Retirement System (NYSTRS) ... During the 12 months ending June 29, the S&P 500 gained just 3.1 percent, excluding dividends.... [I]t seems unlikely, given the shaky state of global financial markets, that NYSTRS hit its return target of 8 percent in the fiscal year just ended. This is more bad news for the rest of us." (Newsday.com)

Livermore, Calif., Police Agree to Pick Up More Pension Costs
"The city and its police union have reached an agreement on a new two-year deal that will save the city close to $400,000 over the life of the contract and require officers to begin paying a portion toward their pensions.... The contract includes a 2 percent raise for officers starting March 1, 2013 and requires members to begin paying 2.5 percent toward the employee portion of the California Public Employees' Retirement System fund, the state retirement fund, as of July 1 and an additional 2.5 percent by March 1, 2013. The city had been paying the full 9 percent of officers' pay required by the fund for the city's police union members." (Silicon Valley MercuryNews.com)

AFSCME Preparing to Respond to Pressure for Pension Accrual Reductions
"Lee Saunders, the newly elected president of the American Federation of State, County and Municipal Employees [AFSCME], said Thursday that one of his top priorities is to encourage a discussion about 'the pension issue' unions are battling. Mr. Saunders and other labor officials are at odds with many GOP lawmakers—and some Democrats—who want to balance state budgets by cutting union members' pension benefits. A discussion of this 'tough issue' could help AFSCME counter the cuts and educate the public, Mr. Saunders said." (The Wall Street Journal Health Blog)

Four Key Items to Look For in New 401(k) Disclosures
"It's easy to overlook what's important when it comes to saving money. Many people would sooner clip a toothpaste coupon than review their retirement accounts to assess whether they can minimize investment fees. Consider the potential savings from choosing low-cost investments and having the good fortune to participate in a 401(k) plan that charges relatively low administrative fees" (The New York Times; free registration required)

Backlog Slowly Shrinking as Federal Employees Wait for Start of Retirement Benefits
"The agency has made slow but steady process in chipping away at a backlog that, until recently, it struggled to control. OPM reported a backlog of 49,473 retirement claims in May, a 19 percent decrease from January, when the pileup stood at 61,108 claims. Despite the progress, many federal retirees still wait several months for their applications to be fully processed and their entire annuity payments to kick in. On average, it takes 156 days to process a claim, but many retirees wait much longer than that for their full annuity payments." (Government Executive)

Even the Government Has Discovered Annuities
"Half of the people who have planned their pension distributions for 'life expectancy' will run out of money. Even the federal government has finally discovered this fact. We are now seeing releases from various segments of the government extolling the virtues of annuities as a solution to this longevity problem. Some government officials have even gone so far as to suggest that annuities be made mandatory for tax-qualified retirement plans." (Morningstar Advisor)

Pension Funds Stuck in the Doldrums According to 2012 Second Quarter Results
"Negative equity returns and a decrease in interest rates were the main reasons for the deterioration of the financial status of pension plans in the second quarter of 2012 ... The median solvency funded ratio of a large sample of pension plans has decreased from 69% at the end of March 2012 to 66% at the end of June 2012. This is a further decline of funding positions relative to the start of 2012[.]" (Aon Hewitt)

Who Really Killed Private Sector DB Plans?
"In recent decades, defined benefit pension coverage has declined for private sector workers. This issue brief finds that funding volatility is the primary culprit, not pension costs. It also identifies opportunities to reverse the trend." (National Institute on Retirement Security)

National Rural Electric Cooperative Association Agrees to Restore $27.3 Mil.lion to Benefit Plans
"The National Rural Electric Cooperative Association has agreed to restore $27,272,727 to three association-sponsored employee benefit plans covered by [ERISA]. This agreement follows an investigation by the [EBSA] that found the association selected itself as a service provider to the plans, determined its own compensation and made payments to itself that exceeded NRECA's direct expenses in providing services to the plans, in violation of ERISA." (Employee Benefits Security Administration)

[Opinion]

Will Companies Offload Pension Risk?
"[P]ension transfers to insurers aren't as simple as many companies are led to believe. And while it makes sense from a company to offload pension risk, [the author] worr[ies] about the long-term implications of such actions as they will only hurt retirees. Then there is a question of timing.... [I]nterest rates will not stay at these historic low levels forever.... As rates rise, insur.ance companies will make a killing in two ways: higher yields and they will be able to sell these pension assets at a nice premium above today's levels." (Pension Pulse)



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