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September 25, 2012 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

New Plan Implementation Specialist
for American Pension Services, LLC in FL

DB Calculation Analyst
for New York Life Retirement Plan Services in MA

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Webcasts and Conferences

Current Challenges to Self-Funding: How to Be Prepared
Nationwide on October 10, 2012 presented by Thompson Publishing Group


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Another Tool Used by the IRS to Enforce Compliance by 401(k) Plans: 'Compliance Checks' (PDF)
"Compliance checks focus on areas of potential non-compliance related to recordkeeping and reporting requirements and is used to resolve discrepancies in information provided in the tax returns. A compliance check is not an audit and it does not directly relate to determining tax liability." [Ed. note: Article includes a list of current IRS compliance check projects relating to 401(k) plans.] (Ticse Group, LLC)


[Advert.]

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Sponsored by DATAIR Employee Benefit Systems, Inc.

Proposals, Testing, Valuation, IRS/DOL/PBGC Forms, Plan Documents
Includes Graded, 412(e)(3), Cash Balance, Combo Plans
(888) 328-2474Sales@DATAIR.comwww.DATAIR.com


Health Care Employers Embracing 403(b) Auto-Enrollment
"More than one-third (38%) of health care plan sponsors are taking advantage of automatic enrollment in 2012—up from 24% in 2006, according to the 10th annual survey of health care plan sponsors by Diversified and the American Hospital Association (AHA).Use of automatic deferral escalation increased to 24% in 2012 from only 9% in 2006. Both of these are record levels of usage since the questions were first asked in 2006. As a result, 73% of health care sector employees now participate in a 403(b) defined contribution plan—up from the 10-year low of 58% in 2006." (PLANSPONSOR.com)

What Will Actually Happen to 408(b)(2) Violators?
"The most frequent violation noted to date has been the disclosure of all possible compensation, without the inclusion of the compensation that the covered service provider 'reasonably expects to receive.' The erroneous interpretation of all possible compensation has been taken to a level of absurdity that makes it almost impossible for a responsible plan fiduciary to perform the required evaluation of the service arrangement." (Dalbar, Inc.)

Institutional Investors Say Alternative Investments Are Essential Because Volatile Markets Are Here to Stay
"Three in four U.S. institutional investors (74%) have changed their approach to risk management over the past five years and now consider the use of alternative investments essential to diversify portfolio risk (76%) ... [M]ost U.S. institutional investors say that traditional diversification and portfolio construction techniques need to be replaced (64%) and no longer consider conventional 60/40 portfolios to be the best way to pursue returns (72%). Approximately two-thirds believe that increasing allocations to non-correlated assets (64%) and increasing the use of liquid alternatives (68%) are effective strategies for managing portfolio risk." (Natixis Global Asset Management)

Pension Managers Become Opportunistic Amid Volatility
"Survey responses by personal financial consultants and by managers of defined contribution pension plans suggest that retail investors are favoring safer assets with the intent of preserving capital. But respondents from defined benefit pension plans, which are professionally run with minimal input from their end clients, were seen using innovative strategies to boost returns in an era in which traditional bonds are earning historically low yields." (The Wall Street Journal)


[Advert.]

University of Baltimore Retirement Plan Summit 2012 Oct 12th

Sponsored by Raymond James and University of Baltimore

Earn CE! Please join us for a half-day ERISA conference on retirement plan governance and fiduciary risk management. Presentations by U.S. DOL / U.S. GAO / Industry Roundtable / Breakout Sessions


Ford Offering $50,000 and New Car Voucher to Encourage Early Retirements in Canada
"Armed with a new collective agreement ratified over the weekend, Ford is offering a $50,000 incentive to about 1,000 [Canadian] employees eligible for early retirement in order to recall hundreds of laid-off workers.... Ford has about 800 employees on layoff." (The Daily Courier)

NY Pension Fund Invested in Controversial Private Equity Funds
"New York Attorney General Eric Schneiderman in July subpoenaed more than a dozen private equity firms ... over their practice of converting management fees paid by investors into fund investments. Schneiderman's office is investigating whether the practice, known as a 'management fee waiver', was exploited by private equity firms to reduce their taxes. But one issue for Schneiderman may be that the $150.6 billion New York State Common Retirement Fund is among the investors that has long agreed to management fee waivers[.]" (The New York Times; free registration required)

Name Changer: Fund Managers Seek Clarity
"Take a name like 'opportunities fund' or 'select strategic fund.' Don't all managers try to select their investments strategically? While the jargon may be obvious to money managers and plan sponsors, such vague terminology can be confusing to their ultimate customers, the participants—who probably don't have MBAs and who may not know the meaning of even more basic terms, like 'equity.' With the increasing emphasis on fund transparency these days, some managers and sponsors are starting to rethink what they call their products." (Institutional Investor)

How CarFax Can Help 401(k) Plan Sponsors and Investors
"Why don't we trust used car salesman? It's not necessarily because they lie, but because their advice comes courtesy of a huge (that's HUGE!) conflict of interest.... In a survey release last week, bankers (the proxy for the entire financial industry) were named the third least trusted professionals. Only politicians and journalists were trusted less.... [I]t appears the public equates the trustworthiness of financial providers with that of used car dealers in that the inherent conflict of interest cannot be avoided and is often hidden." (Fiduciary News)

Reimagining Pensions: Looming Retirement Crisis Prompts Proposals for New Kinds of Pension Plans
"Although [employees] have demonstrated that a 401(k) plan can be effective way to save for retirement—assuming you have access to a plan at work, can afford to earmark a portion of each paycheck for retirement, make wise investment decisions, hold down fees and stay invested when the stock market looks like a rollercoaster—most of these savings plans don't offer good solutions for creating steady income in retirement. Consequently, there is growing interest at both the state and federal level to harness the best features of traditional pension plans that provide professional investment management, economies of scale and income for life with the portability of a 401(k) for today's job-hopping workforce." (Investment News; free registration required)

UK Pension Schemes See Increasing Longevity As Biggest Risk To Funding Levels
"[W]ith the market for longevity insurance in its infancy and a variety of other risks facing schemes, trustees need to take care when making decisions about how to prioritize and manage risk. Before trustees decide to hedge these risks, it is important that they assess and quantify each risk facing the scheme and have a long-term plan in place to manage these risks. Trustees also should consider ongoing monitoring of their risks." (SEI)

Impossible Pension Expectations—Can Society Support a Retired Population in the Style to Which It Aspires? (PDF)
"The current consensus, among the practitioners if not the general population, is that people must save more for their retirement unless they are willing to work until they are very old. While a sensible course of action for an individual, [the authors] are skeptical this can be done in the aggregate." (Towers Watson)

When Should a Pension Fund Manager Consider an Investment's Environmental, Social and Governance (ESG) Aspects? (PDF)
An essay in which the author laments the practical and legal difficulties faced by discretionary pension fund managers in taking into account ESG factors, but he also complains of ESG "zealots" who see ESG as the "dominant, if not sole, issue." The essay is followed by several responses, including one from a Reinhart Boerner Van Deuren attorney who states, "[T]he popular understanding of fiduciary duty is once again at odds with economic reality and getting ready for a new transition." (Reinhart Boerner Van Deuren s.c.)

[Opinion]

The Future of Retirement Is Better 401(k) Plans
"[T]he share of retirees who receive retirement income from our private-sector retirement system (both defined contribution and traditional pensions) rose by almost half from 1975 to 2010, and the median benefit rose by almost one-third, adjusted for inflation. To improve Americans' retirement prospects, the answer is to build upon—not tear down—the 401(k) system." (San Francisco Chronicle)

Benefits in General; Executive Compensation

Creating an Unlimited Paid-Time-Off Policy
"Paid-time-off along with paid vacation and sick leave are on many HR executives' radars lately. As companies try to produce more with fewer employees, reducing paid absences appears to be a viable option to increase man-hours.... But, there is another option, which more employers are considering: unlimited PTO." (Human Resource Executive Online)

Press Releases

IRS Advisory Committee Solicits Your Suggestions and Comments on EPCRS Program
IRS Advisory Committee on Tax-Exempt and Government Entities



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