ASPPA

Healthcare Analytics
for Cammack LaRhette Consulting in NY

Installation Coordinator
for Ascensus in PA

Analyst-401(k) & Savings Programs
for US Airways in AZ

Senior Analyst/Principal Analyst I
for University of California Office of the President in CA

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Participant Fee Disclosures and Investment Basics
Nationwide on August 8, 2012 presented by National Institute of Pension Administrators

Creditor Protection of Retirement Assets
Nationwide on September 12, 2012 presented by National Institute of Pension Administrators

RMDs for a DB
Nationwide on September 26, 2012 presented by National Institute of Pension Administrators

Strategic Benefits Management Amidst Health Care Reform
in Ohio on August 16, 2012 presented by Lake / Geauga Area Chapter of SHRM (LGA SHRM)

CFDD

 

[Official Guidance]

Text of IRS Notice 2012-53: Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
IRS-updated figures for pension plan administration as prescribed by Code sections 412, 417, 430 and 431 (the corporate bond weighted average interest rate for April 2012, the three corporate bond segment rates for April 2012, the 30-year Treasury securities weighted average interest rate for April 2012, and the three minimum present value transitional segment rates for March 2012). The notice does not reflect changes to segment rates required under the Moving Ahead for Progress in the 21st Century Act (MAP-21). (Internal Revenue Service)

PPA DC Restatements – What to Expect – Earn FREE CE Credit!   [Advert.]

On Aug 22, learn what's changed with the determination letter process; interim amendment processes and a summary of possible changes to the interim amendment process; and the current state of the 403(b) pre-approval process and remedial amendment period.

[Guidance Overview]

Responsible Plan Fiduciaries: Formalize Response to Service Provider Fee Disclosures
"Plan fiduciaries with responsibility to enter into, extend or renew a contract or arrangement with a covered service provider now must (1) review such disclosures to determine whether they satisfy the content requirements under the 408(b)(2) regulations, (2) request missing or inadequate disclosure information from the covered service providers, (3) determine whether the fees are reasonable and the services necessary for the establishment or operation of the plan, (4) report any disclosure failures to the DOL, and (5) terminate the service contracts in some cases." (Perkins Coie LLP)

[Guidance Overview]

Pension Funding Relief 2012—Benefit Restriction Issues
"Because of the way the benefit restriction rules work—with presumptions applicable until there is an actuarial certification—and because MAP-21 is effective for 2012 but was not adopted until half way through the year, the application of the benefit restriction rules in 2012 may, especially for plans that were less than 90% funded in 2011, be somewhat complicated." (October Three)

Foes Assail California Bill to Start Low-Income Workers' Retirement Plan
"[Proposed California] legislation to start a retirement plan for low-income workers who get no pensions and rely only on Social Security has run into a storm of opposition from business groups ... The controversial proposal would require private employers to withhold about 3% of the wages of employees who participate. The state would collect the money, invest it and eventually provide a modest sum to retirees who don't have traditional company pensions or 401(k) retirement plans. But opponents contend that the state has a poor record of managing its existing public pensions[.]" (Los Angeles Times)

Lack of Clarity on DC Pension Fees Prevails in UK As Additional Costs Increase Total Charges by As Much As 50%
"[United Kingdom] Trustees and company management are increasingly unaware of DC pension scheme costs, as an alarming lack of transparency continues to surround the fees associated with pension funds, a new LCP report has found. It adds further weight to industry calls for greater clarity and openness on fees and charges and to [a] recent review of UK equity markets and long-term decision making where a lack of transparency was highlighted as a major theme." (Lane Clark & Peacock, LLP)

Don’t Miss the Premier Plan Sponsor Conference of the Year!   [Advert.]

Join DC industry experts at PSCA’s 65th Annual National Conference. You’ll learn new perspectives, groundbreaking views, and innovative insights all focused on one thing: helping Americans retire better.

Shifting Income Sources of the Aged
This article discusses the importance of 401(k)-type defined contribution plans and individual retirement accounts in providing retirement income for current and future retirees. The rising prevalence and importance of this type of income creates measurement errors in the Current Population Survey and other sources of data on the income of the aged because those sources substantially underreport the distributions from such retirement plans. (U.S. Social Security Administration)

Income Replacement Ratios in the Health and Retirement Study
"Income typically falls in retirement, and the timing and extent of that decline concerns policymakers. If income from Social Security, pensions, and savings do not allow retirees to maintain their desired standard of living, they will face difficult and perhaps unexpected choices about reducing or eliminating certain kinds of expenditures. The income replacement ratio—retirement income expressed as a percentage of preretirement income—has become a familiar metric for assessing the adequacy of retirement income. This article presents the income replacement ratios experienced by members of the original sample cohort of the Health and Retirement Study (HRS), who were born between 1931 and 1941. Median replacement ratios among this sample fall as the retirement period grows longer." (U.S. Social Security Administration)

Iwry Outlines Guidance on Lifetime Income Options in Retirement Plans
"As the baby boomers approach retirement there is a growing concern that most Americans will outlive their retirement savings. According to J. Mark Iwry, Senior Advisor to the Secretary of the Treasury and Deputy Assistant Secretary for Retirement and Health Policy, the key is to replace the paycheck with a pension paycheck, and have it cover not only the life expectancy, but the 'out years' as well (years beyond life expectancy)." (Wolters Kluwer Law & Business / CCH)

The Role and Responsibilities of the Individual Trustee
"It's not so easy to mitigate fiduciary liability. It's sort of a sticky kind of nuisance. That's why most people don't want to go near it.... As a fiduciary, you may be responsible for any one of many types of assets.... In all these situations, the buck stops with you. And it's not even your buck." (Fiduciary News)

ETFs Prepping 401(k) Offensive -- For Better or Worse
"Coming soon to your 401(k) plan: trading vehicles that will allow you to buy and sell baskets of stocks, commodities and even more obscure financial instruments in the blink of an eye. Providers of exchange-traded funds (explain this) are readying a major lobbying effort to push aside mutual fund firms and make inroads into the more than $5 tril.lion currently held in retirement savings accounts." (CNBC)

Public Pension Investments Post Losses in Second Quarter
"Public retirement systems, already hobbled by the financial crisis and recession, saw their investments dip in the second quarter, with a median loss of 1.73 percent, largely because of their reliance on equities ... Public pension investments only eked out a median return of 1.15 percent over the year ended on June 30, according to Wilshire Associates, which analyzes institutional assets." (The New York Times; free registration required)

San Diego Can Move Ahead with City DC Plan
"The City of San Diego can go ahead with creating a defined contribution plan for new hires after a trial court judge lifted a stay that put the plan on hold ... The measure, known as Proposition B, that passed in June creates a DC plan for new city workers, except police officers. San Diego Superior Court Judge Luis Vargas on July 31 declined to issue a preliminary injunction barring the city from implementing Proposition B." (Pensions & Investments)

Thousands of Postmasters Take Early Retirement, Buyouts
"Nearly 3,800 postmasters accepted incentives to leave the U.S. Postal Service as of July 31, and hundreds more plan to join them in the coming weeks.... An additional 95 plan to separate from the agency at the end of August, and another 233 will leave at the end of September. Saunders also said more postmasters could opt into the early retirement and buyout program in the coming weeks. The agency estimated that 7,400 total employees, including the postmasters, would take separation incentives granted in May." (GovExec.com)

Today's Retirees First to Pay More Into Social Security Than They'll Get Back
"For a person retiring in 1960, Social Security presented a pretty great deal: Pay in during your working years and you could expect to receive about seven times more in benefits during retirement. But today's retirees won't reap nearly the same return on investment. In fact, they're part of the first generation of workers who have paid more in Social Security taxes than they will get back in benefits." (AARP)

Longevity Risk and Insur.ance Solutions for U.S. Corporate Pension Plans (PDF)
"[W]hile freezing or closing a plan signals an employer's intent to shed pension risk, this has only a minimal impact on funded status and the related cash flow and earnings volatility in the short term. Plan sponsors need effective longer-term solutions. Corporations sponsoring defined benefit pension plans assume the real risk of participants living longer than anticipated by valuation mortality tables. For those with large plans, it could be said that these employers are running a substantial life insur.ance operation alongside their stated business." (Prudential Retirement)

Judge Supports Employee Request for Benefit Details
"The company maintained 'nothing in ERISA required the plan administrator to provide plaintiffs with details about their individual service calculations,' but [a federal district judge in Ohio] disagreed. His decision supports a broad reading of ERISA disclosure provisions by employers and plan sponsors. The employees ... made at least five inquiries requesting information from the company that would allow them to determine whether their pension benefits had been calculated properly. Specifically, [they] asked for 'a breakdown of hours awarded for each year and an explanation of why years that were credited less than one were not credited as full years.'" (Thompson SmartHR Manager)

Milliman Pension Funding Index, August 2012
"Pension liabilities swelled by $133 bil.lion in July, swamping a $13 bil.lion investment gain and bringing the Milliman 100 PFI funded status deficit to $533 bil.lion and lowering the funded ratio to 70.9%. The favorable investment gain was battered by a continued decline of interest rates on high-quality fixed income investments, which are the standard upon which pension liabilities are measured. A 40-basis-point decrease pushed the monthly discount rate to 3.92%, which is the lowest ever recorded in the 12-year history of the Milliman 100 PFI." (Milliman)

Stable Value Options and Alternatives (PDF)
"The recent capital markets' global recession and resulting de-leveraging has impacted Stable Value Funds. Long accepted methods of structuring and delivering stable value products to defined contribution investors have been altered to accommodate a more 'risk averse' approach to investing. This article [reviews] how providers of stable value funds have changed their offerings and how plan sponsors are reacting to the changes." (NAGDCA)

[Opinion]

Investors Bolting Out Of Equities?
"[I]t's silly to blame computer glitches for the weakness in equities. [Andrew Ross Sorkin of the New York Times] is right to report on the general loss of faith in stocks as individual investors realize that these rigged markets only benefit the financial elite. In short the Knightmare on Wall Street isn't what caused America's 401(k) nightmare. Trading glitches sure don't help instill confidence but over the long-term, they're irrelevant and if, like most people, you're invested in mutual funds, you [need not] be worried about computers run amok." (Pension Pulse)

[Opinion]

Pension Plan Funding: Is 80% Healthy the Same Thing As 'Healthy'?
"[A]ll plans should aspire to being completely funded to their projected benefit obligations. However, even a funded ratio of 100% is only a measure of the plan's status at that given point in time. The overall health of a plan and its ability to meet all benefit obligations going forward is going to be dependent on a number of factors, including the time horizon, market and economic outlook, ability of the sponsor to contribute, etc. In short, there is no one-size-fits-all funded ratio threshold and for a figure of anything less than 100% to be held out as an acceptable target runs the risk of further damaging plans that are already largely in dire straits." (fi360 Blog)

[Opinion]

Lessons in Retirement Software Development: The Overpromise of Technology
"The Wall Street Journal today reports the slogan 'One Line Of Code' in its description of the massive software failure at Knight Capital Group, which resulted in nearly a half bil.lion dollars worth of losses and the collapse of a central player in the equities market.... [I]f you take a retirement plan from soup to nuts, with all of its different iterations, you'll likely not find a set of processes in the financial marketplace that has more massive and demanding systems requirements.... The problem Knight had is really one that has (usually quietly) been encountered by most major financial service firms in the retirement market, and has been outrageously expensive for those firms.... [S]oftware and computers are dumb. They will only do what you tell them to do, and at a very granular level." (Business of Benefits)

Triple Tax Advantages Touted for HSAs
"Are health savings accounts simply better than 401(k) plans? While there's so simple answer, a leading authority is quick to point out the unsung potential of HSAs as a long-term investment vehicle at a time when some critics have suggested the 401(k) plan model provides insufficient savings." (Employee Benefit News)

Improving All Types of Saving With the UK's Expanded Retirement Savings Platform
"Known in the UK under the term 'corporate platform' ... the development allows employees to use the employer's retirement savings mechanism to save and invest for additional nonretirement purposes.... Although the UK's platform is intended as an enhancement to employer-provided benefits, it can also be used for a wide variety of policy goals, as the basic structure can be easily adapted to meet almost any nation's specific tax and savings system. In the United States alone, policy experts have proposed dedicated savings accounts for nonretirement purposes ranging from unemployment benefits and retraining, home purchases, health care, and long-term health care coverage, to repaying student loans or building college balances for children or grandchildren." (Lincoln Institute of Land Policy)

Segal Co. Founder Martin Segal Dead at 96
(Segal Company)

U.S. Department of Treasury Unveils New Ready.Save.Grow. Facebook Page
(U.S. Department of Treasury)

Nation’s Largest Legal Service Plan Provider, Hyatt Legal Plans, Wins First Place Award in PACE Contact Center Incentive Contest
(Hyatt Legal Plans, a MetLife company)