EmployeeBenefitsJobs.com logo BenefitsLink.com logo

BenefitsLink Retirement Plans Newsletter

August 28, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

Part Time On Call Retirement Planning Consultant
for Diversified in AR, CA, DC, GA, HI, MI, NC, OH, UT

Post Your Job on EmployeeBenefitsJobs.com

View All Jobs

RSS feed for jobs RSS Feed: All Jobs

Webcasts and Conferences

Those MLR Rebate Checks: What To Do - Live FutureOffice Network Smartcast
Nationwide on September 18, 2012 presented by FutureOffice Network

We also publish the BenefitsLink Health & Welfare Plans Newsletter (free): Subscribe


[Guidance Overview]

MAP-21 Means September 15 Pension Contributions for 2011 Will Affect Contributions for 2012
"For calendar year plans, September 15, 2012 is generally the last day on which contributions may be made for the 2011 plan year. The Moving Ahead for Progress in the 21st Century Act (MAP-21) changed the rules for calculating liabilities for plan funding, effective for the 2012 plan year, and that change may affect decisions about contributions for the 2011 year. Plan funding for 2012 is, generally, based on end-of-2011 liability and asset numbers. For instance, the 2012 shortfall (which generally must be amortized over seven years) is based on end-of-2011 liabilities minus end-of-2011 assets. And, for instance, a plan's 2012 AFTAP (for benefit restriction purposes) is based on end-of-2011 assets divided by end-of-2011 liabilities. Thus, contributions made for 2011 will affect how much a sponsor has to contribute for 2012 and whether benefit restrictions will apply." (October Three)


Retirement Plan Professionals: Attend the ASPPA Annual Conference

Sponsored by ASPPA

Get ready for what lies ahead for the retirement plan industry in 2012 by attending The 46th ASPPA Annual Conference: Attend more than 70 interactive sessions on hot topics shaping the industry & network with over 1,500 retirement plan professionals.

Amicus Brief of Secretary of Labor in Appeal of Stock Drop Case
"The questions that the Secretary addresses are: 1. Whether the district court erred in concluding that Plan language mandating that [company] stock be maintained as an investment option relieved defendants, as plan fiduciaries, of their statutory duties with regard to the decision to continue offering [company] stock as an investment option. 2. Whether the district court erred in concluding that it was proper to apply the 'presumption of prudence' adopted by this Court in Kirschbaum v. Reliant Energy, Inc. ... when deciding defendants' motion to dismiss the case at the pleading stage." [Kopp v. Klein (Case No. 12-10416, 5th Cir.)] (U.S. Department of Labor)

Evaluating Retiree Cash-out Windows (PDF)
"Pension plans that make these types of offers—whether made for a retiree window, for a plan termination, or because benefit distribution restrictions are lifted when plan funding improves—need to comply with other technical requirements applicable to pension benefit payments. These include requirements such as the minimum present value requirements for lump sums, the maximum benefit limitations under Section 415, the funding-based prohibited payment restrictions, and the nondiscrimination rules." (Buck Consultants)

North Carolina Pension Fund's Facebook Investment Raises Concerns
"The state reported losing $4.1 mil.lion on its $26 mil.lion investment in the social networking company's initial public offering in May, but the actual damage could be much larger. The state's 618,137 remaining Facebook shares are now worth half the $38 it paid for each." (Governing)


Cool, Calm & Collected….

Sponsored by ASC

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.

Advisor Practices of the Future 2012-2015
"According to [a recent] report, the market share of professional retirement plan advisors in the $10 mil.lion to $500 mil.lion market, a targeted segment, will grow to 40% from 25%, and the number of plan advisors will increase by nearly 50% during the next three years. To support this growth, firms will need to focus on recruiting and developing talent, as the pool of qualified candidates may not be large enough to meet demand." (Diversified via 401kHelpCenter.com)

More Employers Add 401(k) Match, Advice and Automatic Features to Drive Participation and Savings
"Key statistics for 2011 include: 73 percent of employers provided a 401(k) matching contribution, up from 68 percent in 2010. 83 percent of employers made 401(k) advice available to plan participants, compared to just 42 percent in 2005. 42 percent of employers automatically enrolled employees into their 401(k) plan, up dramatically from just five percent in 2005." (Charles Schwab)

Distribution of Investments in the 403(b) Market
Chart illustrating the distribution of investments in the 403(b) market as of December 31st of each year, from 2007 through 2011, in billions of dollars. (403bWise.com)

Retirement Across the Ages (PDF)
"When offered the opportunity, most workers of all generations choose to participate in an employer-sponsored retirement plan.... [G]enerally, mature workers are slightly less likely to contribute than are younger workers.... [but they] are significantly more likely to be eligible for a traditional pension payment. Those who do participate in an employer savings plan also report the highest contribution levels of all generations, and are quite significantly more likely to report that they are contributing the maximum allowed. They are also more likely to report that they have additional retirement savings." (ING)

Why the Fiduciary Standard Can't Live in Harmony
"[T]he set of laws governing the SEC are not the same set of laws governing the DOL. To require harmonization would either dilute one set of laws (i.e., those governing the DOL) or place a burden beyond what's currently required by the other set of laws (i.e., those governing the SEC). Still, in the best of all possible worlds, even those who believe it might be better to avoid harmonization believe the higher standard would be in the best interests of all clients." (Fiduciary News)

Gen X, Y Start Retirement Savings 10 Years Earlier than Parents
"Nearly 60 percent of Gen X (59%) and Gen Y (56%) make regular, automatic contributions toward their retirement savings, compared to 46 percent of non-retired Baby Boomers. And when it comes to getting a jump on their nest egg, younger generations are eager to get started—both Gen X and Gen Y started saving for retirement, on average, in their mid- to late-twenties. That's nearly a decade earlier than Baby Boomers who, on average, stared saving at age 35." (TD Ameritrade via InsuranceNewsNet)

Traditional Pension Eligibility Declines for Younger Workers (PDF)
Infographic. Results of survey of defined benefit pension eligibility, by age and gender. (ING)

Asset Retention: What Every Plan Sponsor Should Know (PDF)
50 slides from webcast, covering three aspects of this topic: The Importance of Asset Retention in Public Plans; Creating a Successful Retention Framework; and Plan Sponsor Perspective: Asset Retention Challenges and Recommendations. (NAGDCA)

Pension Costs and Retirement Decisions in Plans that Combine DB and DC Elements: Evidence from Oregon (PDF)
"The Oregon Public Employees Retirement System (PERS) uses benefit formulas drawn from both [DB] and [DC] plans and automatically pays retirees the maximum benefits for which they are eligible.... The expected present value of the benefits owed to employees retiring under the hybrid plan during their sample period is 57 percent higher than it would have been under a traditional DB plan [and] the hybrid plan distorts employees' retirement decisions." (National Bureau of Economic Research)

Louisiana Pension Plans Batten Down Hatches for Hurricane Isaac
"Three of Louisiana's state pension funds will be closed Tuesday and Wednesday because of Tropical Storm Isaac. The pension funds are the $13.7 bil.lion Louisiana Teachers' Retirement System, $9.3 bil.lion Louisiana State Employees' Retirement System and $1.4 bil.lion Louisiana School Employees Retirement System, all of Baton Rouge." (Pensions & Investments)

Meeting Will Push SEC for Higher Fiduciary Standards
"Twelve well-known U.S. financial services industry figures will meet Sept. 11 with the chairman of the [SEC] to discuss their 'Fiduciary Declaration,' which will urge Congress and the agency to heighten protection for those receiving investment advice. The declaration, to be signed by Paul Volcker, John C. 'Jack' Bogle, Sheila Bair and Arthur Levitt, among others, has not been released. Its sponsor, the nonprofit Institute for the Fiduciary Standard, supports an SEC idea that would widen the definition of 'fiduciary' to anyone providing investment advice to retirement plans. The institute said ... that the declaration 'seeks to urge policymakers and industry participants to faithfully apply and uphold the fiduciary standard for investment advice.'" (Thompson SmartHR Manager)

2012 Shaping Up As Another Challenging Year for Defined Benefit Plans
"The funded status of pension plans sponsored by companies in the S&P 1500 declined from 81% on December 31, 2010, to 75% on December 31, 2011. Funded status continued to decline in 2012, as these plans hit a record low of 70% as of July 31, representing a shortfall of $689 bil.lion." (Mercer)

Many Americans Don't Fully Read Retirement Plan Disclosures; Few Know What Fees They Pay
"Only 12 percent of plan participants said they could estimate the amount of fees and expenses they paid on their retirement plan account. Three-quarters of these participants said they felt the fees and expenses were reasonable. Interestingly, 56 percent of those who estimated the fees and expenses thought their fees were more than two percent, which is more than double the all-in median fee for a defined contribution plan participant." (LIMRA)

900th Q&A Published in BenefitsLink Column: 'Stop, Look and Listen: Railroad Retirement Benefits Q&A'
BenefitsLink is proud to announce the publication of the 900th question-and-answer posted by author Robert S. Kaufman, a former official with the United States Railroad Retirement Board. No doubt Bob's answers have helped many thousands of rail workers, spouses and former spouses understand their eligibility for benefits under the Railroad Retirement Act, which is a federal program that covers railroad employees in lieu of Social Security. (BenefitsLink.com)


Preserving the Fiduciary History and Legislative Intent of the Investment Advisers Act and ERISA
"The SEC standard under the Investment Advisers Act is the product of years of court decisions and administrative findings and is intended to cover a broad range of client relationships; the DOL standard under ERISA covers a narrow subset of that range—the relationship between an adviser and a pension fund. Truly harmonizing the rules could undo valuable legal precedent and undermine important investor protections for retirement plans and could restrict flexibility provided by design in the Investment Advisers Act." (fi360 Blog)


Defusing Japan's Pension Time Bomb?
"The government is implementing the right measures, raising the age that private sector workers can keep on working but will it be enough? Even Japan's giant pension fund is struggling to solve its funding problems." (Pension Pulse)


An Excessively Gloomy View of Retirement Outcomes
"[A] recent New York Times op-ed suggested that 'downward mobility in retirement is a looming reality for both middle- and higher-income workers,' with half of middle-class workers expected to be 'poor or near poor.' This kind of observation flies in the face of the observed facts. Federal Reserve and academic economists have estimated that 18% of Americans will live in poverty or near-poverty in retirement. This is not half the middle class." (Vanguard)

Benefits in General; Executive Compensation

ERISA Advisory Council to Hold Teleconference Meeting on September 25, 2012 (PDF)
"The purpose of the open meeting is to discuss reports/recommendations for the Secretary of Labor on the issues of (1) Managing Disability Risks in an Environment of Individual Responsibility; (2) Current Challenges and Best Practices Concerning Beneficiary Designations in Retirement and Life Insur.ance Plans; and (3) Examining Income Replacement During Retirement Years in a Defined Contribution Plan System." (Employee Benefits Security Administration)

'After' Math: The Impact and Influence of Incentives on Benefit Policy (PDF)
Summary of EBRI's 70th biannual forum on benefits issues, which examined implications of budgetary, deficit and tax reform pressures on employer-provided health and retirement benefits. Article includes link to individual presentations and webcast of the entire forum. (Employee Benefits Research Institute)

Long-Term Incentives for CEOs Increased in 2011
"[L]ong-term incentives, including restricted stock, stock options and performance awards (cash or equity) increased from 59% of total direct compensation in 2010 to 62% in 2011. Among S&P 100 companies -- which often are leading indicators of trends in the marketplace -- the proportion increased from 60% to 63%, respectively. Moreover, long-term incentives increased in value, from a median $5.42 mil.lion in 2010 to $6.19 mil.lion in 2011." (Mercer)

Seattle Paid Sick/Safe Time: Ten Tips and Traps
"Employer Location Is Irrelevant ... Employer Size Is Highly Relevant ... Any Employee Who Works in Seattle at All Is Potentially Covered ... PSST Accrues Differently Than Paid Leave Accrues Under Some Employer Policies ... There Are Rules About Using PSST ... There Are Rules About Pay During PSST ... Attendance Policies Do Not Apply to PSST ... Most Reasonable Notice Requirements Are Permissible ... Some Reasonable Documentation Requirements Are Not Permissible ... Tier Three Employers Must Evaluate Potential PTO Policies" (Perkins Coie LLP)

Press Releases

Burnham Benefits Welcomes New Vice President, Scott Aston
Burnham Benefits Insurance Services Inc.

BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Phone (407) 644-4146
Fax (407) 644-2151

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright © 2012 BenefitsLink.com, Inc. All rights reserved, but feel free to forward this newsletter if done without modification in any way.

All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

Links to Web sites other than those owned by BenefitsLink.com, Inc. are offered as a service to readers. The editorial staff of BenefitsLink.com, Inc. was not involved in their production and is not responsible for their content.

Useful links: