ASPPA

Account Manager
for National Retirement Services, Inc. in NC

Benefits/ERISA Attorney
for Brucker & Morra, APC in CA

Medicare Benefit Advisor
for Northwestern Benefit Corporation of Georgia in GA

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"Streamlined VCP: The No-fuss Way to Stay Compliant" Web Seminar
Nationwide on August 23, 2012 presented by SunGard Relius

"Real Estate and Other Unusual Investments" Web Seminar
Nationwide on September 11, 2012 presented by SunGard Relius

Leap Forward: Retirement Industry Trust Association, AZ, Oct 1
in Arizona on October 1, 2012 presented by Retirement Industry Trust Association (RITA)

 

[Guidance Overview]

IRS Releases Pension Funding Stabilization Interest Rates
"For 2012, sponsors are required to use the new rates summarized in line 2 of the table [in the linked article] unless they affirmatively elect to use the pre MAP-21 rates in line 1. (As an example, the rates in line 1 are the IRS's 24-month average segment rates ending in December 2011. Other 24-month periods may apply for 2012 plan years.) In future years, use of the MAP-21 rates will be mandatory. The IRS will publish updated rates as necessary." (Retirement Town Hall)

[Advert.]

PPA DC Restatements – What to Expect – Earn FREE CE Credit!

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.

The 'Tussey Twist' to the DOL's Disclosure Rules
"The DOL has long treated the revenues sharing programs (such as 12b-1 and sub-transfer agent fees) related to investment funds in the same manner as the SEC: as an integral part of the funds' operating expenses. This choice, however, has the side effect of the actual amount of the revenue sharing not ever having to be disclosed under ERISA's various disclosure schemes.... [A] growing number of respected practitioners and advisors have been taking the position that the Tussey case stands for ... the notion that—beyond just following the plan documents—fiduciaries should affirmatively seek information regarding how much revenue sharing will actually be generated by their plan." (Business of Benefits)

A Look at Providing Investment Advice Services to Participants in Governmental Plans
"[G]overnmental plan sponsors examining whether or not to provide investment advice services to participants need to first look to their state laws before making a final decision to offer advice to participants. If a plan decides to move forward with providing advice services, the plan sponsor can select the investment advisory service which is best for their plan participants whether it fulfills the PPA or the DOL Advisory Opinion and the plan sponsor will receive the same exemption from advice under a service provider using either approach.... [T]hese provisions are specific to plans covered under ERISA, but government sector employers can use the guidance as a best practice if they decide to provide advice services." (NAGDCA)

Eighth Circuit Rules Airline's Post-Bankrup.tcy Money Purchase Plan Did Not Illegally Reduce Benefits Due to Age
"An airline's money purchase plan for pilots, created after a bankrup.tcy, did not violate ERISA or the Age Discrimination in Employment Act (ADEA) by illegally reducing or eliminating the benefits of older pilots due to their age, the U.S. Court of Appeals in St. Louis (CA-8) has held.... Contributions would be allocated so that, when combined with the frozen DB plan, all pilots would receive 'aggregate replacement income' equal to approximately 50% of their final average earnings, or the frozen benefit, if higher. Based on a pilot's age and years of service, the new money purchase plan would calculate a 'target percentage' of the pilots' projected final average earnings to be provided as a retirement benefit.... The airline sought a declaratory judgment from the district court that this approach passed muster under ERISA and the ADEA. A group of older pilots argued that it did not, because this method for calculating final average earnings was inextricably linked to age." (Wolters Kluwer Law & Business / CCH)

Many U.S. Employers Want Boomers to Continue Working Past Retirement Age
"[A recent survey of retirement plan sponsors found] nearly half expect U.S. companies to benefit from baby boomer employees who prolong their careers past age 65. Only 4% of respondents believe employees who postpone retirement will be a negative for companies, whereas 45% anticipate that protracted careers will yield a positive result for employers.... [C]lose to a quarter of surveyed employers estimate that the percentage of working boomers who postpone retirement could exceed 50% in the years ahead. Nearly half of respondents predict that more than 30% of boomers will fall into this category." (BMO Financial Group)

[Advert.]

Cool, Calm & Collected….

Imagine: all your to-do lists are written down, organized and accessible! CATTS, Client & Task Tracking System, tracks any check-list you need to follow, associated with Safe Harbor, PPA restatements, compliance testing, new business. Watch a free demo.

A Few Extra Words Can Make a Major Difference for 401(k) Investors
"[O]ne of the biggest factors in achieving retirement comfort is to invest early and often in a retirement plan. This suggests 401k plan sponsors should adopt policies and procedures which encourage such behavior on the part of their employees. A Yale study released earlier this year suggests nudging employees towards such self-serving actions might be as simple as adding a few words to their quarterly report." (Fiduciary News)

Business Owners: Keep an Eye on Your 401(k) Administrator
"Often, employers use third party administrators to administer the plan, and once it is in place, they forget about it. This can be a costly mistake. Here are five of the most common mistakes small business owners should consider: 1. Failure to deposit contributions on time.... 2. Failure to properly include employees as participants.... 3. Failure to properly follow an employee's deferral election form.... 4. Failure to obtain spousal consent of plan distributions.... 5. Loan provision mistakes." (Pittsburgh Post-Gazette)

Survey Finds Most Canadians in Their 50s Will Work in Retirement Years
"A new survey [of Canadians] ... finds that 50-somethings are now expected to work in their retirement years.... 53 percent of those in their 50s are planning to work in their 60s, while most will work part-time to supplement their pension. Nearly two-thirds say they have fallen short of their savings goal and 45 percent noted they have less than $100,000 put away for their winter years. The survey did find that on average that Canadians in their 50s plan to retire at the age of 63." (The Examiner)

Retirement Savings Picture Improves a Bit
"Eighteen percent of Americans are saving more for retirement this year than last year. Another 18 percent are saving less than last year, but that's a big improvement. The median retirement savings balance is $120,000 for those between ages 55 and 64." (Bankrate.com)

Cash-Strapped U.S. Pension Funds Ditch Stocks for Alternatives
"Public pension fund managers have poured billions of dollars into alternative investments, ranging from Polish energy facilities to catastrophe bonds, as lackluster stock market returns and historically low interest rates have made it difficult for pensions to earn enough. Public plans with more than $1 bil.lion had a median of 15 percent in alternatives as of June 2012, the highest ever and up from 9.2 percent in June 2011 ...The increase carries risks of unstable performance and high fees amid a funding shortfall of $1.38 tril.lion as of 2010[.]" (Reuters)

Cramer on Retirement: Defending Your 401(k) If Your Company's Finances Are Faltering
"If you think your company may go bankrupt, more than your job is at risk. Your retirement account may also be in jeopardy. Bureaucratic snags, legal hassles, delayed deposits, frozen accounts and tumbling account balances can all mess up your retirement savings. Here's what to watch out for and what you can do to protect your nest egg if you think your company is failing." (TheStreet.com)

[Opinion]

U.S. Pensions Running Out of Alternatives?
"US pensions are listening to their brainless consultants, getting out of stocks at the worst possible time, plowing billions into all sorts of 'exotic' alternatives, getting raped on fees.... The truth is US public pensions need to nuke their governance model once and for all, hire talented managers that can manage portfolios in-house, cutting these fees significantly. In short, they need to adopt a governance model similar to those in (Can.ada), Denmark and the Netherlands." (Pension Pulse)

[Opinion]

With Retirement Costs Consuming One-Fifth of Discretionary Spending, California Must Reduce Un-Accrued Pension Benefits
"Pensions and other retirement costs will consume more than 23% of discretionary state spending in fiscal year 2012–13, according to the budget recently passed by the California State Legislature and signed by Governor Jerry Brown—nearly three times the share taken up by retirement costs just ten years ago. For Californians, rapid growth in retirement costs has meant less money for universities, parks, courts and other services as well as a temporary tax increase in 2009 and another being proposed currently." (Hoover Institution)

[Opinion]

GM Blazes New Trail with Annuitization of Pension Obligations
"General Motors Co.'s annuitization of $26 bil.lion in pension obligations should be a game-changer for corporations in the way they finance and manage defined benefit plan risk. It also could take some pressure off the fragile financial condition of the Pension Benefit Guaranty Corp. while offering a creative, alternative way to insure retirement benefits.... Companies ought to give the technique serious consideration for a number of reasons." (Pensions & Investments)

[Opinion]

A Realistic Discount Rate for Pensions
"While an averaging period of five to 10 years might better reflect more 'normal' conditions, a 25-year averaging period, as enacted in the U.S., clearly goes too far. Interest rates in 1988 are unlikely to have much predictive value for the next 10 to 20 years. In any case, obligations that are payable in the next few years should not be afforded any higher discount rates. Even if current interest rates do not reflect long-term expectations, they do represent risk-free expected returns in the short-term." (Brookings)

[Guidance Overview]

IRS Issues Section 162(m) Guidance Regarding Deductibility of Dividends and Dividend Equivalents in Equity Awards
"In Rev. Rul. 2012-19 ... the IRS held that such dividends and dividend equivalents would qualify as performance-based compensation, provided that each of them separately satisfy Code Section 162(m)'s performance-based compensation requirements. In contrast, if dividends and dividend equivalents were paid to employees at the same time as dividends on common stock were paid to shareholders, regardless of whether the underlying awards were vested, the dividends and dividend equivalents would not be performance-based compensation. This conclusion is consistent with what most practitioners already believed, but it was still welcomed news to see the IRS confirm this conclusion." (Porter Wright Morris & Arthur LLP)

2011 Risks and Process of Retirement Survey Report: Working in Retirement (PDF)
"Financial concerns play a critical role in the decision to work during retirement. Respondents indicated they opted to work in retirement in order to: Earn supplemental income (74 percent of retirees and 87 percent of pre-retirees); Preserve or build up assets (59 percent of retirees and 80 percent of pre-retirees); Keep employee benefits (33 percent of retirees and 61 percent of pre-retirees)." (Society of Actuaries)

Among Many Aging Americans, Surprising Optimism
"Were the respondents in this survey being wonderfully upbeat? Or, less wonderfully, unrealistic? Though people did express some concerns when the questions got more specific, particularly those with lower incomes, on the whole these aging Americans envisioned buoyant futures." (The New York Times)

Longevity: Make It For Better, Not Worse
"Older Americans are paying attention to the steady stream of research findings and stories about impressive gains in longevity. In particular, we have a pretty accurate view of the increases achieved in average life spans ... There also are encouraging signs that this recognition is leading to changes in financial planning and preparation for a longer retirement. In particular, greater attention is being paid to the age at which people begin to collect Social Security." (U.S. News & World Report)

U.S. Department of Labor's ERISA Advisory Council to Hold Public Meeting Aug. 28-30
"The purpose of the meeting is for advisory council members to hear testimony from invited witnesses and to receive an update from Deputy Assistant Secretary of Labor for Employee Benefits Security Michael L. Davis. The council is studying the following issues: managing disability risks in an environment of individual responsibility; current challenges and best practices concerning beneficiary designations in retirement and life insur.ance plans; and examining income replacement during retirement years in a defined contribution plan system." (U.S. Department of Labor)

US Labor Department Sues To Restore More Than $34 Million To 2 Worker Pension Funds Of Michigan-Based Vehicle Parts Manufacturer
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Conrad Siegel Actuaries Mark Bonsall Honored with Central Penn Business Journal Forty Under 40 Award
(Conrad Siegel )

IRI Endorses Retirement Income Designation
(Insured Retirement Institute (IRI)

Senior Investment Consultant Dana Brown Joins Callan
(Callan Associates)

PBGC to Pay Pension Benefits at SP Newsprint Co., LLC
(Pension Benefit Guaranty Corporation (PBGC)

CPI Announces New Divisional Alignment for Sales Team
(CPI Qualified Plan Consultants, Inc.)