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October 15, 2012          Get Retirement News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Client Service Representative
for Associated Pension Consultants in CA

Supervisor, Retirement
for Amalgamated Life in NY

Advisor Marketing Manager
for New York Life Retirement Plan Services in MA

Retirement Plan Coordinator
for Hefren Tillotson in PA

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Webcasts and Conferences

Rehires, including HEART and USERRA
Nationwide on October 24, 2012 presented by McKay Hochman Co., Inc.

Pensions and Corporate Finance: How to Avoid Buyer's Remorse
Nationwide on November 15, 2012 presented by FTI Consulting

Terminating 401(k) and Other Defined Contribution Plans
Nationwide on October 17, 2012 presented by McKay Hochman Co., Inc.

Letís Talk! Healthcare, the Economy and Retirement Webcast
Nationwide on October 17, 2012 presented by Wells Fargo

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Funds Transferred by Employer to TPA of Self-Insured Health Plan Were ERISA Plan Assets, Making TPA Liable as an ERISA Fiduciary for Deducting Undisclosed Fees
"Indeed, according to the DOL, the question of whether a plan has been given a 'beneficial ownership interest' in particular funds (such that they become plan assets) is determined by formal contracts and other legal instruments, as well as the actions and representations of the parties involved -- particularly the employer. Based on these principles, service contracts often provide that employer funds do not become plan assets simply because they are transferred to a TPA.... The decision in this case may ultimately be appealed, of course, yet this is not the first case to hold (albeit uncritically) that TPA-held funds are plan assets." [Borroughs Corp. v. Blue Cross Blue Shield of Michigan, 2012 WL 3887438 (E.D. Mich. 2012)] (Thomson Reuters / EBIA)


West Coast Defined Contribution Conference Ė San Francisco Nov. 4-6

Sponsored by Pensions & Investments

Free registration for qualified plan sponsors. Sponsored by Pensions & Investments - learn how to develop a defined contribution plan that helps ensure your participants lifetime income.

Health Care Cost Surge Takes a Breather But Not Due to Providers
"Iowa's skyrocketing costs for employer-provided health care insurance moderated this year, posting their smallest gains since at least 2001. Among the reasons: Consumers delayed care and turned to less expensive generic drugs, and employers rewarded their workers for leading healthier lives[.]" (Des Moines Register)

SC Lawmakers Struggle to Afford Health Insurance for Public Retirees
"In June, [South Carolina] Gov. Nikki Haley signed a law that will help reduce the retirement system's costs.... But the new law has nothing to say about the health insurance costs of state retirees, quickly becoming one of the largest deficits in state government. As of June 30, 2010, officials estimated the state's future health care costs for its retirees at $9.6 billion. But the state only has set aside $487.5 million to pay those costs, about 5 percent of what is needed." (HeraldOnline.com)

Shift of Costs to Employees Is on Rise as Healthcare Reform Takes Effect
"[W]hile politicians continue to debate whether to keep or repeal the controversial law, employers and insurers keep making adjustments. The solution for many: controlling health care expenses by placing more of the burden on employees." (Tampa Tribune)

Debating the Pros and Cons of Health Savings Accounts
"Morningstar.com readers ... [recently held] a wide-ranging discussion about the pros and cons of high-deductible plans, the tax benefits of HSAs, and the high fees and limited investment options on some HSA menus. For many posters, the HDHP's lower premiums, combined with the triple tax advantage and flexibility of the HSA, are major selling points, but other readers said the HDHP's potentially high out-of-pocket costs outweigh the benefits. And even dyed-in-the-wool HDHP/HSA proponents acknowledged that there's room for improvement on the investment front." (Morningstar)

Sixth Circuit Allows 'Reasonable' Modifications of Retiree Health Benefits
"The Court listed three considerations for the district court to examine in making its reasonableness determination: (1) Does the modified plan provide benefits 'reasonably commensurate' with the old plan? (2) Are the proposed changes 'reasonable in light of changes in health care?' and (3) Are the benefits 'roughly consistent with the kinds of benefits provided to current employees?'" [Reese v. CNH Am. LLC, 11-1359, 2012 WL 4009695 (6th Cir. Sept. 13, 2012)] (Benefits Bryan Cave)

Unencrypted Laptop Leads to $1.5 Million HIPAA Security Settlement
"Plan sponsors and business associates should assume that any breach notification may lead to an investigation and that the investigation will be broader than the original incident, so it's crucial to have privacy and security compliance in order before a potential breach occurs. This settlement is also instructive on the question of encryption (which is supposed to be an addressable, rather than required, specification): The Resolution Agreement notes that the covered entity failed to adopt an appropriate alternative or document its rationale for not encrypting -- and then the CAP, without further explanation, requires encryption." (Thomson Reuters / EBIA)

The Impact of Health Insurance Coverage for Restaurant Employees
"[L]arge and small restaurants are seeing their health care costs rise. The insurance companies are not competitive, and the coverage costs are not going to be coming down anytime soon. San Francisco's Health Care Security Ordinance is mandated for all businesses in the City. The jury is out on the effectiveness of the ordinance but it has certainly impacted the cost of doing business in San Francisco." (Inside Scoop SF)

Picture of ACA's Newly Insured Starts to Develop
"State-based exchanges will create an irreversible shift in the insurance market that ultimately changes the way medical care is sold in the U.S. For the insurance industry, they represent a major business opportunity -- a market that will translate to $205 billion in premiums by 2021." (Wolters Kluwer Law & Business)

Most Retirees Fear Rising Health Care Costs But Don't Talk to Advisors About It
"[N]early three in four say health care costs going out of control is among their top retirement fears. However, according to [a recent] survey ... of 1,250 Americans with at least $250,000 in household assets -- including 625 who plan to retire by 2020 -- 38 percent of those nearing retirement say they have not discussed their retirement at all with a financial advisor. Of those who have, only one in five discussed health care costs in retirement not covered by Medicare." (Nationwide Financial Services, Inc.)

Benefits in General; Executive Compensation

[Guidance Overview]

Review Compensation Arrangements by Year End to Determine if Amendments Are Needed to Comply with Code Section 409A
"The most common scenario is a severance arrangement that conditions payment on the employee executing a release of claims in favor of the employer. The issue can also arise in the context of an offer letter, employment agreement, change-in-control agreement, nonqualified deferred compensation arrangement, noncompetition agreement, nonsolicitation agreement, or equity arrangement." (Perkins Coie LLP)

California's Retiring State Workers Cash in Accumulated Unused Vacations for Big Bucks
"An analysis of the last three years of government salary data shows state employees are continuing to store up massive banks of vacation, instead of heading to Big Sur or hitting the slopes at Lake Tahoe. They're cashing in by retiring with whopping final paychecks worth, in some cases, more than $500,000 in unused time off.... [I]n the private sector, employers cap vacation accruals and make workers take their time off before they can accumulate more." (Los Angeles Newspaper Group)

Stockpile of Unused Time by Los Angeles City Workers Could Be Costly
"As a snapshot in time, there are currently about 5.3 million hours of unused vacation time, 13.8 million hours of accrued sick leave, and 3.3 million hours of accumulated overtime on the books for sworn and civilian city employees. Those hours are not an immediate obligation of the city, but employees are entitled to the time or pay because of the hours they work." (Los Angeles Newspaper Group)

Press Releases

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