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October 9, 2012          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Pension Proposal & Installation Specialist
for CUNA Mutual Group in WI

Compliance Advisor/Specialist
for NRECA in DC, VA

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Webcasts and Conferences

ACOs Summit: A Transitional Model to Full Risk Care Management
in Texas on January 14, 2013 presented by Opal Financial Group

408(b)(2) Disclosures - A Plan Sponsor Call to Action Webcast
Nationwide on October 24, 2012 presented by Drinker Biddle & Reath LLP

Health vs. Wealth: Are Employees Making the Right Benefits Choices?
in New York on November 1, 2012 presented by Prudential Retirement

8th Annual Value-Based Benefits & Wellness Forum and Vendor Fair
in Texas on November 29, 2012 presented by Dallas-Fort Worth Business Group on Health

SWBA/IRS 23rd Annual Conference for Practitioners and Plan Sponsors
in Texas on November 15, 2012 presented by SouthWest Benefits Association

SWBA 38th Annual Conference - Astor Crowne Plaza New Orleans
in Louisiana on May 8, 2013 presented by SouthWest Benefits Association

Pay or Play: Understanding the Affordable Care Act Rules
Nationwide on October 18, 2012 presented by International Foundation of Employee Benefit Plans

Service Provider and Participant Fee Disclosures: Lessons Learned and Next Steps
in California on October 18, 2012 presented by Western Pension & Benefits Council - Orange County Chapter

Improving Participant Outcomes Through Investment Menu Design Webinar
Nationwide on October 16, 2012 presented by Multnomah Group

Equity Effectiveness: Creating Alignment and Value with Your Equity Compensation Plans
Nationwide on October 25, 2012 presented by Buck Consultants, A Xerox Company


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[Guidance Overview]

Participant Fee Disclosures Under the DOL's '404a-5 Regulations' Explained and Analyzed (PDF)
"The [DOL] has embarked on an expansion of the reporting and disclosure requirements for individual account pension plans in the area of fees being paid by the plans to service providers.... The regulations [require] that, when the documents and instruments governing an individual account plan provide for an allocation of investment responsibilities to participants or beneficiaries, the plan administrator must take steps to ensure that the participants and beneficiaries are made aware, on a regular and periodic basis, of their rights and responsibilities with respect to the assets in their individual accounts." (Paul Hastings LLP)


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[Guidance Overview]

Are Self-directed Brokerage Accounts Subject to the Participant Fee Disclosure Regulations?
"The reasons for the confusion are manifold as practitioners are struggling to absorb and understand two difficult sets of fee disclosure regulations (service provider and participant fee) and a complicated Form 5500, Schedule C. To further complicate matters, in FAB 2012-02, the DOL mandated new disclosure responsibilities on plans with self-directed brokerage accounts. In response to heavy criticism from financial institutions and pension organizations, the DOL ... withdrew most of the new disclosure responsibilities for self-directed brokerage accounts." (SunGard Relius)

CalSTRS Considers Asset Risk Factors
"The $152.5-billion Californian State Teachers Retirement System (CalSTRS) is undertaking an asset-allocation review that will consider the underlying risk factors of assets for the first time.... In the past the fund has only considered capital-market mean optimisation in making asset-allocation decisions, but now it will look at allocations according to risk factors as well. 'We will look at the drivers of risk -- including inflation, interest rates and GDP -- and what the fund is willing to include and exclude. We will optimise our allocations from a capital and risk perspective,' [said Chris Ailman, chief investment officer of CalSTRS.]" (top1000funds.com)

Retirement Plan Access More Widespread Than Many Believe
"For U.S. workers most likely to be able to save and to be focused on preparing financially for retirement, coverage by an employer-provided retirement plan is common.... [A recent] report said that 50 percent of private-sector wage and salary workers aged 21 to 64 reported that their employers sponsored retirement plans; however, this access is not distributed randomly across the workforce." (Thompson SmartHR Manager)

Plenty of Disclosure; Not Enough Information
"The service provider disclosure requirements of 408(b)2 should have a positive effect on the retirement plan marketplace, allowing sponsors a better understanding of the underlying fee components and fee assessment methodologies, and making them better prepared to compare their fees with market rates. Increasingly prevalent and accurate benchmarks should lead to lower and more equitable fees, lower-cost investment options, and improved retirement savings for many participants." (Retirement Town Hall)


[Advert.]

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Sponsored by Sutherland Asbill & Brennan LLP

We will provide an overview of the 3 components of the EPCRS program, including when to determine if self-correction is appropriate versus when a filing should be made with the IRS and methods for identifying and correcting common plan errors.


Eleventh Circuit Adopts Rebuttable Presumption That Fiduciaries Act Prudently by Investing in Employer Stock
"[T]o date, the only courts that have dismissed duty of prudence claims by reasoning that they are really camouflaged duty to diversify claims have been district courts in the Northern District of Georgia ... The Eleventh Circuit's rejection of this approach to stock drop claims likely abrogates those earlier decisions.... [Further, this case] is a major step toward uniformity among circuit courts on this issue, as it marks the sixth out of 13 circuits to adopt the presumption expressly." [Lanfear v. Home Depot, Inc. No. 10-13002 (11th Cir. May 8, 2012).] (Jenner & Block)

'Plain English' on 401(k) Fees? More Like Gibberish
"[R]ather than give employers a transparent view of their 401(k) costs, many critics say, Wall Street seems intent on drowning them in paperwork and fine print. A recent study of 500 small-business owners ... found that 80% of those who remembered seeing the documents still had questions after reading them. In response, a cottage industry of consultants is springing up to help translate 'plain English' into actual English." (The Wall Street Journal)

A 401(k) Must Read: Mutual Fund Expense Ratio Myth Busted
"In the case of these actively managed funds, the scatter graphs show plenty of examples where higher expense ratio (x-axis) funds produced better performance (y-axis) -- the exact opposite conclusion of the August 2010 Morningstar Study. Indeed, the correlation of the Annual 2011 Returns was much less (-0.18) while the correlation was actually positive for the 10 year data (+0.16)." (Fiduciary News)

Showing Investors the Value of Professional Planning
"It is alarming that approximately 23% of Americans do not believe they will have a comfortable retirement and that 2 in 5 adults rank their knowledge of personal finance at a grade of C or below. [A]s was shown in recent research ... investors who are able to make better financial planning decisions do, in fact, achieve better outcomes." (fi360 Blog)

MEP Reflections Following the GAO Report
"The GAO issued its long awaited study on Multiple Employer Plans.... It pretty well summarizes the current state of affairs related to MEPs.... 1. MEPS, under current rules, operate best in a controlled environment.... 2. There are better arrangements.... 3. A MEP fix is a way off." (Business of Benefits)

[Opinion]

CalSTRS Consideration of Asset Risk Factor Could Result in More Illiquidity Risk
"It certainly doesn't make sense to pay 2 & 20 to some hedge fund 'hedging' against tail risk. These funds have gathered huge assets since the financial crisis erupted but their performance has been just awful (all too predictable!). What makes more sense is to adopt certain tail-risk strategies internally, especially if a fund is expanding it's private market investments, taking on more illiquidity risk" (Pension Pulse)

[Opinion]

Defined Contribution Plans & IRAs: Existing Tax Incentives Effectively and Efficiently Increase Retirement Savings (PDF)
"Some have argued that the current tax incentive system is not the optimal structure, finding fault with a retirement savings tax exclusion that provides a tax benefit proportional to an individual's income tax bracket. They have proposed replacing it with after-tax contributions paired with a tax credit (capped at a dollar or percentage level). As detailed [in this article], the critique of the current structure is misplaced, and the new proposed tax regime would represent a disruptive change posing unwarranted risks for individuals saving for retirement. It very likely would lead to a decline in savings levels and reduced plan sponsorship by employers, both of which would have detrimental effects for the retirement prospects of American families and for our economy as a whole." (Nationwide Financial Services, Inc.)

Benefits in General; Executive Compensation

Global Equity Incentives Survey 2012
"Although regulatory compliance is still the biggest concern with offering these plans globally, there is a sizable decrease in compliance review efforts and more reliance on outside advisors to alert companies to changes in the regulatory and tax environment. Companies have generally restored grant levels to 2009 levels, and seem to be coming out of the recession with a newfound comfort in making business decisions on where to allocate internal resources relating to employee equity plans and determining what types of plans work for them." (PricewaterhouseCoopers)

FAQs About RIFs and Possible FICA Refunds (PDF)
"The following Q&As demonstrate that seeking [a refund for FOCA taxes paid in connection with involuntary terminations of employment] is easy. (1) What are the key facts that could open the door for a FICA refund?... (2) What was the 6th Circuit's rationale?... (3) Will the 6th Circuit's decision come to apply nationwide?... (4) What are the steps to pursue a FICA refund?" (Nationwide Financial Services, Inc.)

Reinhart Employee Benefits Update, September 2012 (PDF)
Articles include: Select Compliance Deadlines and Reminders; Pension Plan Funding Stabilization Rates Under MAP-21; Seventh Circuit Upholds Arbitrator's Determination on Withdrawal Liability; IRS Issues Temporary Guidance on the 90-Day Waiting Period Limitation; IRS Issues Guidance Expanding Safe Harbor Methods for Determining Full-Time Employees for Purposes of the Employer Shared Responsibility Provisions; CCIIO Updates Technical Guidance on the Temporary Safe Harbor for Coverage of Contraceptive Services by Employers with Religious Objections. (Reinhart Boerner Van Deuren s.c.)

End of Year Action Items -- Plan Now for 2012-2013 Compliance
"With year-end fast approaching, now is the time for plan sponsors to review their employee benefit plans to ensure that they have been updated for any changes in the law, that required notices have been distributed, and to take other actions required by December 31, 2012. Here are a few items that you should be thinking about as the weather turns cooler and the days grow shorter." (Poyner Spruill LLP)

Unintended Consequences: Corporate Purchase Agreements and Amending ERISA Plans
"The Fifth Circuit Court of Appeals recently held that a corporate purchase agreement can constitute an amendment of the purchaser's retiree medical plan. Soon after, the Third Circuit Court of Appeals held to the contrary; a purchase agreement did not amend and did not create a purchaser's pension plan.... Although the law is unsettled, ERISA plans should speak clearly to avoid future conflict with purchase agreements." (Jenner & Block)

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