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September 12, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

IRT Relationship Manager 3 - Core Market
for Wells Fargo in GA

401k Plan Administrator
for Ascensus in PA

Payroll and Benefits Manager
for Ascensus in PA

Compliance Manager
for Ascensus in PA

Year-End Services Consultant
for Ascensus in PA

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Webcasts and Conferences

Hourly Workforces and Health Care Reform - Angst or Opportunity? Webcast
Nationwide on September 13, 2012 presented by Mercer

Introduction to Cafeteria Plans Webinar
Nationwide on September 26, 2012 presented by WEB (Worldwide Employee Benefits Network)

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[Official Guidance]

Text of PBGC Technical Update 12-2: Effect of MAP-21 on Section 4010 Reporting
"This Technical Update 12-2 provides PBGC guidance on the effect of the Moving Ahead for Progress in the 21st Century Act (MAP-21) on annual financial and actuarial reporting under section 4010 of ERISA and part 4010 of PBGC's regulations ... ERISA section 4010(b)(1) provides that 4010 reporting is required if any plan sponsored by a member of the controlled group has a FTAP, "as determined as defined in subsection (d)," below 80 percent (80% Gateway Test). Because section 4010(d), as amended by MAP-21, requires that the FTAP be determined without regard to the MAP-21 stabilization rules, the FTAP used for the 80% Gateway Test is also determined without regard to such rules.... For all other 4010 requirements involving minimum funding-related determinations affected by the MAP-21 stabilization rules, ERISA section 4010(d)(3) does not apply. Thus, filers are to make such determinations using the same assumptions used for minimum funding or benefit restrictions purposes (as applicable)" (Pension Benefit Guaranty Corporation)


Learn about Safe Harbor Plans and Earn CE Credit!

Sponsored by ftwilliam.com

Wolters Kluwer Law & Business Ė 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.

Brokerage Windows Should Not Be Used to Sidestep Fee Disclosure, says DOL Spokesman
"'We don't like the idea that people might be using brokerage windows as a way to evade the rule,' [said] Michael Davis, deputy assistant secretary for the DOL ... Davis cautioned those who may be advising clients to add brokerage windows to retirement plans in order to avoid having designated investment alternatives (DIAs) and thus avoid fee disclosure.... While the revised FAB does not prohibit brokerage-window only plans, Davis stressed that not having any DIAs raises concerns. 'We think that it is better to have designated a suite of options,' he added." (PLANADVISER.com)

Advocates Step Up Campaign for Uniform Fiduciary Standard
"Despite a push by some industry heavyweights, including [SEC Chairman Mary] Shapiro, to include these requirements as part of Dodd-Frank, the larger regulatory reform mandate, the rule remains optional and may not go into effect. In the meantime, the president and founder of IFS, Knut Rostad, who is also a regulatory and compliance officer at RIA Rembert Pendleton Jackson, is hoping that the lull will give advocates a chance to build their campaign and garner support." (On Wall Street)

New Online Retirement Tools and Studies Help Individuals Decide How Much is Enough
"Are you saving enough for retirement? A new tool from Fidelity Investments aims to give savers a rough guide to let them know whether they're on track—but, as with all retirement tools aimed at a broad audience, take the information with a grain of salt.... while Fidelity says that having saved eight times your salary by the time you retire is a good rule of thumb to reach an 85% replacement rate, consulting firm Aon Hewitt says you'll need 11 times your salary saved to pay for retirement costs.... For still another take on how much to save, Boston College's Center for Retirement Research reports that a 25-year-old worker earning a 'medium' salary (about $43,000), who starts saving at age 25 and wants to replace 80% of his salary when he retires at age 67 needs to save 12% of salary annually, assuming a 4% rate of return on investments." (MarketWatch.com)

Working Until 70 May Not Solve Savings Shortfall
"[S]ome studies have suggested that by working to age 70—five years past the traditional retirement age of 65—nearly 80 percent of preretirees, including lower-income Americans, could have adequate retirement income. But such models ... don't fully take into account changes in the retirement system, such as the shift away from pension plans and toward 401(k) accounts, or the potential for a catastrophic health event that would require a stay in a nursing home." (The New York Times; free registration required)


SWBA / IRS Employee Benefits Conference for Practitioners and Plan Sponsors

Sponsored by SWBA (SouthWest Benefits Association)

Staying up to date in the challenging world of employee benefits has never been more critical for benefits professionals and plan sponsors. Changes in regulations, technology, workforce and the economy continue to influence company benefits. Stay informed.

401(k) Fee Disclosure Leaves Small Employers Puzzled
"The goal of the fee disclosure, which was mandated by the U.S. Department of Labor, was to help employers better understand the fees they pay. But a new study ... shows that 83 percent of small business owners, or those with 100 employees or fewer, have more questions about what the fee disclosures mean. Sixty-three percent of companies surveyed said they were not prepared to answer employees' questions about 401(k) fees. Under the rules, employers were required to begin disclosing plan fees to employees in August." (terra.com)

Benchmarking 'To' and 'Through' Target-Date Funds
"How can well-meaning 401(k) plan executives prudently select and monitor target-date funds? A big part of the answer can be found by determining proactively whether a target-date fund's asset allocation and glidepath are consistent with a plan's particular needs. Target-date fund style benchmarks, a "to" index and a "through" index, can help throughout the process -- from screening candidates to monitoring performance and asset allocation." (Pensions & Investments)

How Are Baby Boomers Spending Their Money?
"For a number of years now, retirement and financial experts have bemoaned the fact that baby boomers and others who should be thinking about retirement saving are nowhere near ready to retire.... What, if anything, changed over the past 20 years? Real incomes for these age groups have not changed much.... Baby Boomers Are Spending More on Education.... Adult Children.... Mortgage Debt.... Baby Boomers Are Not Spending More on Entertainment." (National Center for Policy Analysis)

Should the 401(k) Be Reformed or Replaced?
"[M]illions of Americans [have] suffered losses from [their] 401(k) even as such plans have largely supplanted traditional pensions and become the central pillar of America's employer-sponsored retirement system, with 60 million workers participating in them. Now, although Social Security and Medicare generate far more political heat, a quieter, more nuanced debate of large consequence engulfs 401(k)'s, the voluntary, privately financed plans that some see as a savior of American retirement and others see as an impediment: Should 401(k)'s be fine-tuned and expanded or should they be replaced entirely? And for many looking to retirement after the Great Recession, there is this pressing question: What to do about woefully underfunded 401(k)'s now." (The New York Times; free registration required)

Baltimore County Seeks to Borrow $255 Million to Fund Pension System
"Baltimore County Executive Kevin Kamenetz wants to borrow $255 million and repay it over the next 30 years to help fund the county's retirement system, a move that would carry risk but that the administration says could benefit taxpayers in the long run. [The county's] Administrative Officer ... told the County Council ... that the administration would introduce legislation next week to allow the county to issue pension obligation bonds. The bond issue would not have to be approved by voters. In July, the county lowered its projections on the assumed investment earnings for its retirement system, meaning taxpayers must contribute an additional $15 million annually to the retirement system starting next year." (Baltimore Sun)

27% of Government DC Plans Offer Guaranteed Income Option
"Just over one-fourth of government defined contribution plans already offer some form of guaranteed retirement income solution, and nearly half aren't considering adding such an option next year, according to a survey by the National Association of Government Defined Contribution Administrators.... Among those plans offering such an option, 43% of respondents said they didn't know how many participants were using it, while 38% reported that fewer than 1% of participants used the option, the survey said." (Pensions & Investments)

U.S. State Pension Funding Ratios Declined in 2011
"Public pension funds in 16 states and the District of Columbia last year had assets of 80 percent or more of what is need to pay promised benefits to retirees, down from 18 in 2010, Loop Capital Markets said. The median ratio of assets to liabilities for 149 state-level pensions dropped to 73 percent in 2011 from 76 percent the year before as a slowing global economy and the European debt crisis damped investment returns and more states failed to meet annual contribution requirements, Loop said today in a report." (Bloomberg)

Bogle Calls on Institutional Money Managers to Heed Fiduciary Duty
"Investment advisers at large mutual fund companies and other financial institutions often operate with conflicts of interest, John Bogle, founder and former chief executive of The Vanguard Group Inc., told Securities and Exchange Commission Chairman Mary Schapiro on Tuesday.... Even though the Dodd-Frank financial reform law gave the SEC the authority to proceed with a universal-fiduciary-duty rule that focuses on retail investment advisers, Mr. Bogle said that the commission should re-emphasize that mutual fund advisers must operate under the same standard of care. The giant financial conglomerates who own 38 of the 42 largest investment funds do what's best for themselves, rather than shareholders, according to Mr. Bogle." (Investment News; free registration required)

Federal Government Tries to Lend Hand to Retirement Readiness Goal, But Other Agendas May Get in the Way
"The middle class has taken a hit from the recession, and the least-understood repercussion of this has been the hit to retirement savings, according to Marcia S. Wagner, principal at The Wagner Law Group. 'Each leg of the three-legged stool is wobbly,' she [said], referring to the three sources of retirement income for Americans—Social Security, employer-sponsored retirement plans and personal savings. While lawmakers have gotten involved in efforts to solve the retirement crisis, with legislation and proposals to increase savings, promote better returns in retirement plans and facilitate decumulation planning, their efforts on tax reform to solve the nation's budget crisis threatens to undo it all, Wagner contended." (PLANADVISER.com)

The Reasonableness of Fees in Retirement Products: Consider Complexity of Transactions
"It is almost mind boggling to think of what is behind, for example, executing even the simplest 401(k) transaction: an electronic trade between two unrelated mutual funds on a trust platform.... These steps become geometrically more complicated when you have other services or platforms involved. ... [A] retirement plan product is really a package of financial and administrative services. This knowledge is especially important when one is tasked with understanding the reasonableness of fees related to retirement products and services. Purchasing investments through a defined contribution plan is so different than an individual making purchases for their own personal account, and it is horribly misleading to suggest otherwise." (Business of Benefits)

Inappropriate Confidence and Retirement Planning: Four Studies with a National Sample
"Financial decisions about investing and saving for retirement are increasingly complex, requiring financial knowledge and confidence in that knowledge. Few studies have examined whether direct assessments of individuals' confidence are related to the outcomes of their financial decisions.... [This study found that,] even after controlling for actual knowledge, individuals with greater confidence were more likely to report financial planning for retirement and to successfully minimize fees on a hypothetical investment task." (RAND Corporation)


Quantifying the Returns on Governance -- Good Luck With That
"[P]ension plan administration and investment managers are flying blind—they do not have the necessary data to effectively manage their plans. And without knowing what was going on the past, they will continue to make the same mistakes that brought the funding crisis upon us. The financial crisis did not cause the funding crisis of pension plans. It just exposed their structural flaws. If we won't address them by the time the next crisis—or a simple recession—comes around,... we will see many more DB to DC conversions in the public sphere." (Ehrentreich LDI Consulting & Research, LLC)

Benefits in General; Executive Compensation

Companies Beef Up Retirement Plans for Top Executives
"With traditional pensions disappearing, tax rates and the future of Social Security in flux and even well-known businesses facing financial trouble, many workers are worried that their company retirement plans will not provide enough income. But for the upper tier of executives, these trends could actually lead to richer corporate perks as management moves to compensate for the uncertainties. Companies are rethinking their special programs of executive retirement benefits by expanding the eligibility pool, adding investment choices, increasing their corporate contributions and even designing entirely new structures—all in an effort to keep top executives happy." (The New York Times; free registration required)

Press Releases

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