Retirement Planning Consultant
for Diversified in IN

Pension Specialist
for BeneSys, Inc. in MI

Compensation and Benefits Specialist
for Swarthmore College in PA

Regional Sales Director
for Goldleaf Partners in ANY STATE, AZ, CO, NC

Defined Contribution/401k Relationship Manager
for USI Consulting Group in NY, TX

Peer Reviewer - Temporary Assignment
for The Angell Pension Group, Inc. in ANY STATE

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The Merits of Passive Investing for DC Plans
in New York on October 30, 2012 presented by S&P Dow Jones Indices

Health Care Reform in the Wake of the Election
Nationwide on November 20, 2012 presented by ABA Joint Committee on Employee Benefits

ERISA Current Development Update Webcast
Nationwide on November 15, 2012 presented by Actuarial Systems Corporation (ASC)

Taking The Mystery Out Of Retirement Planning Workshop
in Massachusetts on December 5, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

 

[Guidance Overview]

Elective Deferral Limits for 2013 for Employees of Non-Profit and Governmental Employers (PDF)
"Generally, contributions made to 403(b) and 401(k) plans are aggregated when applying the contribution limits, while those made to section 457(b) plans are subject to separate limits." [Editor's note: The article includes an extensive chart that includes the aggregate limits where multiple plans are in effect.] (Prudential)

[Advert.]

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The 15-Year Catch-Up Election: Is it Becoming the Dinosaur of 403(b) Plans? (PDF)
"[T]he sentiment to continue the 15-year catch-up election as a stalwart provision of a 403(b) retirement plan is changing. In fact, since the issuance of the final 403(b) regulations, a number of plan sponsors have eliminated, or plan to eliminate, the provision. Why is this the case? This article will attempt to address the trend." (Cammack LaRhette Consulting)

Before It's Too Late: A Retirement Security Update From Assistant Secretary Phyllis C. Borzi
The Assistant Secretary's Newsletter for Oct. 22 promotes National Save for Retirement Week -- which is this week, Oct. 21 through 28 -- and suggests: "First -- if you work for an employer offering a 401(k) plan, are you signed up for it? In addition to the tax benefits, many employers also offer a matching contribution. If you are already enrolled, how much are you contributing? For individuals younger than 50 years old, the 2012 maximum 401(k) annual contribution limit is $17,000. If you are over 50, you can contribute an additional $5,500 in catch-up contributions. Even if you can't afford to max out to your 401(k), you should at least make sure you are putting in enough to meet your employer's match. Don't leave free money on the table! Second, take 15 minutes to review those retirement plan fee disclosures that have been sitting in your mail pile! Open the envelope and take a look at how much you are paying in fees for your retirement accounts." (Employee Benefits Security Administration)

UK Pension Funds May Rank Fund Investment Managers on Efforts to Improve Corporate Governance
"Britain's pension funds are weighing up plans to rank fund managers based on their efforts to improve performance at the companies they back, in the latest sign of institutional investors flexing their muscles. Umbrella body The National Association of Pension Funds is leading a campaign to develop a framework that would rate fund managers according to their work towards, for example, improving governance at companies." (Reuters)

Plan Sponsors Should Monitor 'Float' Income Earned by Trustees and TPAs
"[Because] fee disclosure rules require third party providers, who are ERISA fiduciaries, to disclose any direct or indirect compensation that they receive from plan assets ... if a provider is a fiduciary of a retirement plan, it must disclose float compensation. In addition, if the provider is a non-fiduciary third party, it is now obligated to estimate how much float income it might receive." (Smith, Gambrell & Russell, LLP)

[Advert.]

Join Sutherland for a Free Webinar -- October 23 -- Register Now

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.

Putin Being Held to Pension Promise by Aging Russians: Age 60 NRA for Men, 55 for Women
"[T]he legion of Russians who grew up with the cradle-to-grave state care of the Soviet Union -- are holding Putin, 60, hostage to his election promise to keep the retirement age unchanged ... Putin is resisting pressure from within his Cabinet and from investors to raise the retirement age, threatening to boost state debt, hobble growth and undermine a rally in government bonds that has led to record-low borrowing costs. He is considering a plan he received this month from the government, which calls for tapping into savings channeled to individual nest eggs to pay for current obligations." (Bloomberg BusinessWeek)

State Pension Plan Debt: Ticking Time Bomb or Myth?
"A new study of the 100 largest U.S. public pension funds shows CalSTRS reports a below-average funding level and the CalPERS funding level is a wobbler -- higher than average if its assets are radically 'smoothed,' much lower if assets are at market value." (CalPensions)

U.S. Companies Take Aim at Pension Risk with Lump-Sum Offers
"Corporate America is finally ready to deal with a monkey on its back: massive pension obligations.... [T]he most common trend in corporate America is to offer lump-sum payouts to thousands of retirees now -- these voluntary buyouts could cost companies millions of dollars upfront, but they eliminate the risk of obligations soaring out of control in the future." (Chicago Tribune; free registration required)

IRS Announces 2013 Retirement Plan Dollar Limits and Thresholds
"Many of the retirement plan dollar amounts have increased for 2013, although some remain unchanged. Those working with 401(k) plans will want to carefully note when the new limits and thresholds apply, especially in determining the HCE threshold for the look-back year." (Thomson Reuters / EBIA)

Initial Quarterly Fee Disclosures for Participant-Directed Individual Account Plans Due Nov. 14 for Calendar Year Plans (PDF)
"Beginning November 14, 2012, for calendar year plans, a sponsor of a Participant-Directed Plan must provide a participant or beneficiary with information regarding the actual dollar amount of any administrative fees or expenses charged against his or her accounts during the preceding plan year quarter. The information must contain a description of the services to which the charges relate, the basis on which such charges will be allocated (e.g., pro rata or per capita) and, if applicable, an explanation of whether any portion of such charges was paid from the annual operating expenses of one (or more) of the plan's designated investment alternatives." (Reid and Riege, P.C.)

Going Down on the Credit Elevator: Moody's Sends Loud Message to Voters in Oceanside, California
"Moody's told Oceanside officials on Oct. 10 that it would downgrade the city's credit rating on its $36.8 million in pension obligation bonds. It also warned that it was reviewing $14.2 million in older bonds that have already been refinanced once. In practical terms, this no-confidence vote may raise the city's borrowing costs. More broadly, it signals that Wall Street has realized that a devastating transfer of wealth from taxpayers to public employees will burden local governments for decades." (San Diego Union-Tribune)

Fiduciary Best Practices When Issuing a Request for Proposals by Plan Service-Provider Candidates (PDF)
"As a plan fiduciary, your fiduciary liability extends to selecting and monitoring the providers who service your plan. You must be able to show that you have engaged in meaningful analysis and comparison of your providers and their fees. While not regulatorily essential, issuing a vendor RFP and engaging in the analysis of the responses has tremendous benefits in terms of reducing fiduciary liability." (Arnerich Massena)

Individual Investment Advice for 401(k) Participants Becomes More Available But Employer Contributions Drop
"[W]hile more companies are contributing to retirement accounts, they aren't as generous as they were before the financial crisis. The average company contributed 4.1% of pay in 2011, up from 3.7% in 2010, but still below the peak of 4.7% seen in 2006. Instead, experts say some employers are throwing in another perk that often doesn't cost them anything: 401(k) advice." (MarketWatch)

In Most Countries, People Working Longer Before Retiring
"The length of work lives has risen in most developed countries over the last decade, as some countries pushed up minimum retirement ages. But in some countries, including the United States, the proportion of people in their early 60s with jobs has declined, reflecting the poor economy since the financial crisis." (The New York Times; free registration required)

AT&T Seeks to Stoke Pensions With $9.5B in Shares
"AT&T's pension plan was underfunded by about $10.2 billion at the end of last year. If approved by the Department of Labor, the move would extinguish most of that liability by transferring equity in the company from shareholders to the pension fund. The shares would entitle the fund to cash dividends of about $560 million per year." (The New York Times; free registration required)

CalPERS Threatens Suit Unless Bankrupt San Bernardino Makes $5.3 Million Contribution
"'These payments are required to be made under California law,' [said a CalPERS spokesman.] 'If we can't resolve the missed payments with the city, CalPERS will assert its rights and remedies available under the law.' The City of San Bernardino could be terminated from the CalPERS pension program and its contributions made to CalPERS until now placed into a special fund, [he] confirmed. The city would no longer make contributions and city employees' pensions would depend on how the special fund is invested." (Pensions & Investments)

For Business Owner Looking to Cash Out, 2012 Could Be Best Time to Create an ESOP But Clock Is Ticking
"Owners of small and midsize companies who want to take equity out of the business will save a lot of money if they do it before year-end, when the tax rate on long-term capital gains (which applies to assets held for more than a year) is scheduled to leap.... From a practical standpoint, it's too late for a cash-seeking business owner to sell to a third party by year-end unless the transaction is already well under way. But an ESOP can be done from start to finish in about 60 days[.]" (CFO)

[Opinion]

The Washington Post Tries to Scare You on Public Sector Pensions
"[I]t is almost impossible to construct scenarios in which stock returns will come in much below the levels assumed by the pension funds. The point is simple, it was absurd to project high returns in the stock market in the late 90s, when the ratio of stock prices to trend earnings was over 30 to 1 or even in the last decade when it was still over 20 to 1. However with a current ratio that is close to the historic average of 15 to 1, real returns of 7 percent are very reasonable." (Business Insider)

[Opinion]

Strengthening the 401(k) System
An edited transcript of a Sept. 27 speech by the president of the Investment Company Institute. Excerpt: "Conventional wisdom would have you believe that there was once a 'golden age of the golden watch,' when most American workers were covered by defined-benefit pension plans -- and that private-sector retirement benefits have declined since that time. In fact, the share of retirees who receive retirement income from private-sector plans rose by almost half from 1975 to 2010, from 21% to 31%. And the median benefit rose by almost one-third, after adjusting for inflation -- thanks both to improvements in DB pensions and the growth of 401(k) plans." (Investment News; free registration required)

[Opinion]

Our Real Investmark Benchmark Is Acting Responsibly to Investors
"How will [investment advisors] help the people we serve move beyond their financial anxiety and reach their retirement goals? First, by demonstrating integrity. [The authors'] research shows not just fear and anxiety on the part of investors. There is also real anger and frustration at the loss of savings among older Americans during the financial crisis and with today's low returns and volatility. In the face of recent scandals, many people think that the big players in financial services have stacked the markets against small investors." (Investment News; free registration required)

[Opinion]

Sure, Using RMDs as Distribution Method Works on Paper, But Does It Work for the Particular Participant?
"[U]ltimately the biggest shortcoming of the [required minimum distribution] schedule as a basis for withdrawal may be that it fails to take into account how much income is needed, much less when it is needed -- and it's based on a series of assumptions that may or may not apply to an individual's real-life circumstance." (Nevin Adams via EBRI)

[Guidance Overview]

Consider Communicating New 2013 Dollar Limits to Plan Participants Now
"Since plans generally incorporate COLAs by reference, no plan document amendments should be required on account of the 2013 limit increases. However, plans that are established or restated in 2013, and SPDs that are required to be updated in 2013, should reflect the updated dollar amounts. In addition, employers may wish to communicate some of these changes to employees before the end of 2012." (Drinker Biddle)

ISS Releases 2013 Draft Policy Changes for Comment; Executive Compensation Affected (PDF)
"In the compensation area, the most significant U.S. policy changes pertain to (1) a new approach to peer group selection for evaluating pay-for-performance alignment in connection with advisory Say-on-Pay proposals, and (2) new problematic pay practices for evaluating Say-on-Golden Parachute proposals. A third compensation policy change is the extension of ISS' quantitative pay-for-performance test to Canadian companies, similar to the new test implemented in the U.S. in 2012[.]" (Frederic W. Cook & Co., Inc.)

NASDAQ Issuers Face Heightened Requirements Under Proposed Dodd-Frank Rules for Compensation Committees
"As a result of the changes, NASDAQ listed companies, depending upon their current compensation committee policies and procedures, potentially face bigger changes than their NYSE counterparts. This is primarily because the NYSE rules prior to the Dodd-Frank Act were more developed and closer in line with the Dodd-Frank Act standards. Additionally, though the rules of both exchanges are subject to SEC approval, certain provisions of the NASDAQ rules are effective immediately while the NYSE's rules are effective in 2014. Therefore, NASDAQ listed companies should be aware that time is of the essence in reacting to the new rules." (Dechert LLP)

Eighth Circuit Avoids Deciding Whether Informal Complaints Are Protected by ERISA Sec. 510
"Although the Eighth Circuit has not decided whether informal complaints are covered by ERISA Sec. 510, it concluded that it need not reach that issue in this case because the record failed to show that the employee participated in statutorily protected activity." (Wolters Kluwer Law & Business)

October Three Selected a Winner in the 33rd Annual Telly Awards
October Three, LLC