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

Employee Benefits Jobs

DC Plan Administrator
for Acuff & Associates, Inc. in TN

Retirement Plan Implementation Analyst
for Great-West Life in NJ

Retirement Plan Compliance Processor
for The Paragon Alliance Group, LLC in PA

Client Service Manager, Defined Benefit
for The Newport Group in WI

Retirement Plan Associate, Daily Recordkeeping-Entry Level
for Rains Plan Group in ANY STATE, WA

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Webcasts and Conferences

Advanced COBRA: Top Compliance and Litigation Traps
Nationwide on September 27, 2012 presented by Thomson Reuters / EBIA

401(k) Litigation and the Aftermath of Fee Disclosure
in California on September 18, 2012 presented by Western Pension & Benefits Conference - San Diego Chapter

DROs, QDROs, and Divorced Participants Live Web Seminar
Nationwide on September 6, 2012 presented by Erisafile Inc.

First Dates, Deadline Dates and Safe Harbor Dates: Rules to Remember When Creating a Plan 2012 Live Web Seminar
Nationwide on September 20, 2012 presented by Erisafile Inc.

Ethics for Retirement Plan Professionals Live Web Seminar
Nationwide on September 27, 2012 presented by Erisafile Inc.

Professionalism for Retirement Plan Professionals Live Web Seminar
Nationwide on September 27, 2012 presented by Erisafile Inc.

403(b) Plans - New Plan Documents, Compliance Programs, and EPCRS Procedures 2012 Live Web Seminar
Nationwide on October 1, 2012 presented by Erisafile Inc.

Taking the Mystery Out of Retirement Planning - A Focus on Women & Retirement Webcast
Nationwide on September 11, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

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To Close Retirement Plan Deficit, Bankrupt San Bernardino Closes Libraries, Buys Fewer Bullets
"San Bernardino, California, the second-largest U.S. city to enter bankruptcy, will close its branch libraries, dismiss school crossing guards and buy fewer bullets while under court protection. The reductions are part of a plan to reduce a budget deficit by two-thirds, to $16.4 million from $45.8 million ... The city's retirement costs are projected to rise from $20 million in the year ended June 30 to $24 million five years from now ... Estimated pension obligations exceeded assets by about $320 million as of June 2010, according to the document." (Bloomberg BusinessWeek)


Learn about Safe Harbor Plans and Earn CE Credit!

Sponsored by ftwilliam.com

Wolters Kluwer Law & Business – ftwilliam.com will be hosting a FREE webinar on Wednesday, Sept 26th at 1:00pm CT for a review of the safe harbor plan rules, as well as a discussion on designing safe harbor plans on ftwilliam.com's plan documents.

Largest Retirement Plans See Small Gains
"The world's largest 300 retirement funds grew 1.9% in 2011 to $12.7 trillion ... This was the third positive year in a row following the global financial crisis, even though 2011's modest increase lagged those of 10.9% and 8.2% in 2010 and 2009, respectively." (Pensions & Investments)

Sharper Tools in the Box? Retirement Income Programs Getting Better
"In the past, online tools available to consumers—and even more sophisticated versions available to advisers—mostly focused on a single dollar amount ... needed to accumulate to live comfortably in retirement.... 'The full-service tools available through both large and small broker-dealers are getting much closer to meeting people's needs,' said [a financial advisor] ... 'The best tools allow people to measure the odds of success and look at the trade offs' ... For example, a good tool lets you model how taking Social Security early rather than later would affect a couple's retirement income goals or what would happen if they worked a few years longer." (Investment News; free registration required)

Kick Off Pensions
"Replacement officials will referee NFL games because, according to reports: A wedge also continues to exist over the NFL's proposal to revise the officials' defined pension benefit, with the league rejecting a counter-offer to include a 'grandfather clause' provision. The NFL has proposed to freeze pensions, with further retirement benefits incorporated into a 401(k) plan. Interesting because that's exactly what the NJ Taxpayers Association is proposing for the state plan. Why would NFL officials balk and what is the lesson here?" (Burypensions)

CalSTRS Estimates $22.7B Savings from Pension Reform
"The pension reforms ... will save the California State Teachers' Retirement System $22.7B over 30 years, according to a preliminary analysis [from] CalSTRS ... But CalSTRS administrators cautioned that most of the savings won't be achieved for decades, because reduced pension benefits will affect only employees hired after Jan. 1, 2013. And the savings won't reduce the Legislature's need to deal with the current $65B deficit, caused when returns on investments tanked in 2008 and failed to fully recover." (EdSource)


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.

August Rebound Takes Funded Status of U.S. Corporate Pensions Off Record Low Level
"The funded status of the typical U.S. corporate pension plan in August increased 1.8 percentage points to 73.2 percent on a slight rise in both interest rates and asset values, taking the typical plan off the record low levels of July ... In August, the Aa corporate discount rate rose eight basis points to 3.72 percent, sending liabilities for the typical plan 0.9 percent lower, according to the BNY Mellon Pension Summary Report for August 2012.... The funded status also was helped by rising equities in the U.S. and international developed markets, which boosted assets by 1.5 percent in the typical plan[.]" (BNY Mellon)

Connecticut Journal Register Is Bankrupt Again, Pension Costs Partly to Blame
"Journal Register said print advertising has dropped 19 percent since 2009 and that it represents more than half of total revenue. Additionally the New York-based company is saddled with too much debt stemming in part from pensions. A retirement plan trust with a $3.2 million pension-related claim is the company's second-largest unsecured creditor, trailing only the State of Connecticut, according to the bankruptcy petition." (Reuters)

Fifth Third Must Face Claims Over Employee Savings Loss
"Employees of Fifth Third Bancorp may pursue claims that the Midwest regional bank endangered their savings by putting company stock in their retirement plan ahead of the housing downturn, a federal appeals court ruled. Wednesday's decision by the 6th U.S. Circuit Court of Appeals in Cincinnati ... allows a lawsuit brought on behalf of current and former employees, who claim to have lost tens of millions of dollars, to move toward a possible trial. The decision came even though other banks' employees have had a tough time prevailing in similar litigation accusing employers of breaching their fiduciary duties in overseeing retirement plans." (Reuters)

Retirement Means Recruitment for Some Employers
"The rise of the older worker is cast sometimes as a problematic feature of the current job climate: a 'gray ceiling' in which the lingering of older employees leaves scant opportunity for younger workers to be hired, developed, and promoted. The challenge is genuine, as recent headlines about a 'lost' generation of youth imply. But take a larger and longer view, and the picture may be much more positive. There's the potential for ample demand for younger and older workers alike. Many seniors, for their part, are engaged in a righteous rebellion against artificial limits—against the notion that hitting 65 means one's contributions to society are largely in the rearview mirror." (The Motley Fool via MSNBC.com)

Surprise! Fiduciary Advocate Calls FINRA Best Hope for Progress
"A leading advocate for raising investment advice standards expressed frustration at the Securities and Exchange Commission's tortoiselike pace in imposing a regulation that would impose a fiduciary duty on brokers—and said that FINRA might do a better job of instituting tougher rules. Barbara Roper, director of investor protection at the Consumer Federation of America, said that the fiduciary duty rule 'seems to have become less and less relevant' at the SEC, as the commission struggles with the workload imposed by the Dodd-Frank financial reform law, which, along with dozens of new regulations, mandates a cost-benefit analysis before a universal fiduciary standard can be enacted." (Investment News; free registration required)

U.S. Corporate Pension Plans Bounce Back
"The aggregate deficit in pension plans sponsored by S&P 1500 companies decreased $58B during August, to $631B, according to new figures from Mercer. This deficit corresponds to an aggregate funded ratio of 72% as of August 31, 2012, compared to a record low funded ratio of 70% as of July 31, 2012, at which point the aggregate deficit was $689B. The combination of US equity markets rising over 2% during August and discount rates rising between 12 and 14 basis points helped spur the rebound. Rates had been at a record low at the end of July." (Mercer)

October Three Pension Finance Update, August 31, 2012 (PDF)
"Pension sponsors enjoyed modest improvement in funded status in August, due to solid stock market returns and interest rates stabilizing and creeping marginally higher during the month. Overall, sponsors saw funded status improve 1%-2% during August." (October Three)

Live Long and Prosper? Not If You Are Counting on a Healthy Pension Plan
"Everyone knows that pension plans, both public and private, are in trouble. But on closer examination, this isn't the apocalypse many people think it is.... Lady Barbara Judge, chairman of the U.K.'s Pension Protection Fund (PPF), and Joshua Gotbaum, director of the Pension Benefit Guaranty Corp. (PBGC) in the U.S. [recently discussed conditions in the U.S. and U.K.] The consensus: The U.K. fund, set up in 2005 with insight from lessons learned by the older U.S. system, established in 1974, is a more flexible, adaptable approach to the changing pension landscape. The U.K. fund is 100% funded, while the PBGC has a $26B shortfall that will be difficult to make up." (Wharton School of the University of Pennsylvania)

CalSTRS Missed Chances to Catch Pension Spiking, State Controller Finds
"CalSTRS has missed opportunities to catch pension spiking and reduce unjustified or suspicious participant salary increases because it doesn't audit the personnel records of most of the 1,900 school districts and governmental entities that belong to the retirement system, a report by [California] State Controller John Chiang concluded.... In addition, the report found that CalSTRS failed to follow up when its system did detect possible cases of pension spiking, in which participants were given salary increases near retirement that increased their retirement compensation." (Pensions & Investments)

Results of 'Perspectives of Retirement' Survey of Individuals
"Almost two-thirds (64 percent) of Americans with $100,000 or more in assets say they are on target or ahead of their goal for retirement planning goals while a third (35 percent) say their retirement planning goals have not been adversely affected by the recession ... Asked the most important retirement-related decisions they have made in their lives, almost half (47 percent) of the 1,038 respondents pointed to 'living within my means' while more than a third (35 percent) say they 'started saving from an early or at a young age.' Forty-two percent say saving for retirement is their primary financial goal." (PNC)

Inflation Outlook Pushes Up U.K. Pension Fund Deficits
"Mercer's Pensions Risk Survey data shows that the accounting deficit of defined benefit (DB) pension schemes in the UK increased marginally over the month of August. According to Mercer's latest data, the estimated aggregate IAS19 deficit for the DB schemes of the FTSE350 companies stood at 63bn GBP (equivalent to a funding ratio of 89%) at 31 August 2012. This compares to a deficit figure of 61bn GBP at the end of July (funding ratio of 89%) and a figure of 61bn GBP at the end of December 2011 (funding ratio of 89%), on a like-for-like basis." (Mercer)

"Small business owners, who like the simplicity and low administrative costs associated with simplified employee pension (SEP) IRAs and savings incentive match plan for employees of small employers (SIMPLE) IRA plans, often find it hard to choose between the two. An understanding of the features and benefits of these plans can help to make the choice easier. [This] Quick Reference Guide provides a comparison of some of the key features and benefits of these plans." (Appleby Retirement Dictionary)


State Is Making Californians Cry 'Uncle'
"The city [of Stockton, California] is on the horns of a pension dilemma. On the one hand, funding these generous pensions—unheard of in the private sector—will keep the city under financial pressure for decades to come. Every dollar that goes to excessive pensions is a dollar that does not fight crime, battle fires, spray over graffiti, fill potholes, buy library books, save city trees, and so on. On the other hand, Stockton cannot be the Lone Ranger of pension reform, leaders believe. The stone-broke city already slashed so much from employee compensation that employees will trample each other on the way out the door if it unilaterally cuts pensions too." (Recordnet.com)

Benefits in General; Executive Compensation

Psychological Counseling Is a Medical Examination under the ADA, Rules the Sixth Circuit
"The Sixth Circuit noted that according to the EEOC's guidance, psychological tests designed 'to identify a mental disorder or impairment' are 'medical examinations,' while those tests that 'measure personality traits such as honesty, preferences, and habits' are not. Application of this guidance is not simple or a matter of labels, as 'personality' tests that reveal symptoms of diagnosable mental illness still may be medical examinations.... [The Court concluded that] the employer intended that the plaintiff would explore her possible affliction with depression or similar mental-health impairment so that she could receive appropriate treatment. 'This uncovering of mental-health defects at the employer's direction,' the court ruled, 'is the precise harm that [the ADA] is designed to prevent absent a demonstrated job-related business necessity.'" (Ballard Spahr)

Compensation for CFOs Increased in 2011
"Compensation for Chief Financial Officers of S&P 500 companies rose 5.9% in 2011 ... CFOs received a median $2.75M in total direct compensation (salary plus actual short-term incentive payout plus grant-date expected value of long-term incentives). CFOs of S&P 100 companies received a somewhat more modest increase of 5.5% to a median $4.34M, while those at the remaining companies ('Other 400') rose 6.1% to a median $2.56M." (Mercer)


Fourth Circuit Unfairly Limits Scope of ERISA Anti-Retaliation Statute
"While ERISA protects employees who report wrongdoings by their employers across most of the country, folks in the 2nd, 3rd and 4th federal court circuits are not protected when they report issues 'internally'—that means to their employers. Folks in all the other federal circuits are protected.... [T]he only way to now fix the problem is to amend ERISA so that it clearly protects people who file what are called 'internal reports'; that is, when a person files a report or sends an email to his or her supervisor or executive management that says, 'Hey, I think we have a problem here'." (Winston-Salem Journal)

Press Releases

Wellness Programs Save Employers $1 to $3 for Every Dollar Spent
International Foundation (of Employee Benefit Plans, or IFEBP)

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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

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