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December 4, 2012          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Manager, Benefits Administration and Outsourcing
for Tegrit Group in OH

ERISA Attorney
for Bousquet Holstein PLLC in NY

Installation Coordinator
for Ascensus in PA

Senior Compliance Analyst
for T. Rowe Price in MD

ERISA Consultant I
for Ascensus in MN

Employee Benefits/ERISA Associate
for Sherman & Howard L.L.C. in CO

Conversion Specialist
for J.P. Morgan in CO, IL, KS

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Webcasts and Conferences

On the Right Track? Public Pension Reforms in the Wake of the Financial Crisis Webinar
Nationwide on December 5, 2012 presented by National Institute on Retirement Security

View All Webcasts and Conferences

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[Official Guidance]

DOL Releases Advance Copies of 2012 Form 5500 and Form 5500-SF Annual Report (PDF)
"Modifications to the Form 5500 and Form 5500-SF for plan year 2012 [include] [1] Optional Paid Preparer Information.... Filers may optionally enter preparer's name and address. Although the preparer information is optional at this time, the IRS encourages filers to provide preparer information on the new lines. [2] Optional Trust Information.... Filers may optionally enter the trust's name and trust EIN. Although this trust information is optional, the IRS encourages filers to provide such information on the new lines. [3] Multiemployer actuarial information reporting has been clarified for changes in adjustable benefits, and for amortization charges under the funding standard account statement for this plan year. [4] The Schedule SB instructions have been updated to advise that additional detail is requested for the prior year's excess contributions to be added to the prefunding balance." (Employee Benefits Security Administration)


New! Plan Document Software Module

Sponsored by ftwilliam.com

Wolters Kluwer Law & Business - ftwilliam.com has implemented lots of feedback and our own innovative ideas into a newly designed plan document software module. Join our webinar on December 6th for a sneak peek at our enhancements and what's coming.

[Guidance Overview]

IRS Handout for Upcoming Phone Forum on Hurricane Sandy Relief (PDF)
12 presentation slides covering relief provided by IRS for hardship distributions and loans to plan participants affected by Hurricane Sandy. The Phone Forum takes place on December 11. (Internal Revenue Service)

IRS Says 401(k) Plan's Matching Formula May Require Additional Employer Contributions At Year's End
"In Employee Plans News (Issue 2012-3, Nov. 14, 2012), the Internal Revenue Service ... provides guidance, which indicates that a 401(k) plan's matching contribution formula may require additional employer contributions at year's end.... Many plans require the employer to match salary deferrals up to a percentage of a participant's total compensation for the plan year (up to $250,000 for 2012). So, if a participant stops or decreases their salary deferrals during the year, you may owe the participant an additional match." (ERISA Lawyer Blog)

SEC Will Pursue Uniform Fiduciary Rule in 2013
"The Securities and Exchange Commission plans to 'move forward' next year with a uniform fiduciary standard rule for advisors and brokers when providing personalized investment advice as well as 'continue to assess' ways to better harmonize advisor and BD rules when they are providing similar services, according to the agency's just-released 2012 Financial Report." (Advisor One)

Supreme Court Allows GM Workers' Pension Claim Against State Street Bank
"Without comment, the court refused ... to review the case and let stand a February ruling from a lower court that allowed the workers to sue State Street Bank and Trust Co. The 2009 lawsuit said the bank should have acted faster to sell a 401(k) investment fund's shares in GM stock after the automaker's business troubles came to light.... State Street said ERISA had shielded it from liability since it did not cause the losses and the employees themselves had decided to invest in the GM fund." (Insurance Journal)


The Future of Target-Date Funds - February 25-26, 2013 - Boston, MA

Sponsored by Financial Research Associates, LLC

The 2013 Target-Date Funds Forum highlights the latest trends, challenges & new developments in target-date funds from Plan Sponsors, Investment Consultants, Asset Managers, & Industry Experts. Mention FMP164 during registration to receive 10% discount.

Lump-Sum Windows: Why, and What to Consider
"Even though the interest-rate environment isn't as friendly as it once was, some sponsors believe the benefits of offering a lump sum compensate for that.... PBGC premiums don't need to be paid on behalf of participants once they take the lump sum.... While a plan must be 100% funded before it can terminate, it only needs to be 80% funded for it to make a lump-sum program available." (The Vanguard Group, Inc.)

The Impact of Fee Disclosure Regs on 403(b) Plan Sponsors and Participants (PDF)
"Very few plan participants asked questions about the fee information they received -- an average of only 2.3 percent of participants did so ... The majority of plan sponsors (95.9 percent) reported no noticeable changes in participant behavior.... One-third of plan sponsors used the fee disclosure information they received from their provider(s) to benchmark their plans ... Of the plans that benchmarked, 64.3 percent made no changes, 14.3 percent made changes to their investment lineups, and 16.3 percent changed their participant education efforts[.]" (Plan Sponsor Council of America)

The Impact of Fee Disclosure Regs on 403(b) Plan Sponsors and Participants: Detailed Survey Results (PDF)
"PSCA conducted a survey of 403(b) plan sponsors to determine what effect, if any, the recently conducted fee disclosures have had on not-for-profit organizations and their plan participants. The results show little impact on the behavior of participants and plan sponsors." [Editor's note: Detailed report of survey results in charts and graphs.] (Plan Sponsor Council of America)

The Value of Benchmarking Your Retirement Plan
"Many industry experts recommend benchmarking defined contribution (DC) plans every three years to ensure they are receiving the same pricing and product offerings that any new client would receive.... Remember, ERISA imposes high standards -- 'the highest known to law' -- upon fiduciaries." (Retirement Town Hall)

Income, Fixed Annuity Sales Rise Amid Retirement Crunch
"Fixed annuity sales in the third quarter were buoyed by the strongest sales quarter ever for income annuities and steady indexed annuity sales ... [I]ncome annuity sales increased to nearly $2.4 billion in the third quarter, up 3.8 percent from about $2.3 billion in the second quarter and up 6.7 percent year-over-year from $2.2 billion." (On Wall Street)

What Makes Annuitization More Appealing?
"A majority of respondents prefer to receive an extra 'bonus' payment during one month of the year that is funded by slightly lower payments in the remaining months. Concerns about later-life income, spending flexibility, and counterparty risk are the most important self-reported motives that influence the annuitization decision, whereas the desire to leave a bequest has little influence on this decision." (National Bureau of Economic Research)

Measuring Stable Value Risk Structures
"Since 2008 there has been a major disruption in the stable value market with a Synthetic GIC shortage, with older forms of stable value coming back from the 90's and 80's. What is needed is a way to measure the structural risk differences of the wrap or insurance segments of stable value investment options in 401(k) s and related U.S. defined contribution plans." (Case Western Reserve University Research Paper Series in Legal Studies)

Upper Middle Class Delays Retirement -- A Look at the Road Ahead
"[A recent survey of] households with between $50,000 and $250,000 in total investable assets ... [revealed] that 56 percent of respondents reported that they plan to retire later than they thought they would one year ago. In a year where the S&P 500 has grown more than 12 percent and the unemployment rate has fallen, why are people growing more pessimistic about their retirements?" (Forbes)

Women's 'Retirement Gap' Is a Pay Gap
"Excepting age then, EBRI's report suggests that a large part of what keeps a worker from joining a company retirement plan is a lack of spare cash after present-day bills are paid, or uncertainty about their cash flow. Of those fulltime workers most likely to be offered a pension plan, those making at least $75,000 participated at twice the rate as those making between $30,000 and $40,000." (Business Insider)

Massachusetts District Court Finds Investment Funds Not Liable for Portfolio Company's Underfunded Pension Liability
"This ruling comes as welcome news to private equity funds that (either together or through related funds) own 80% or more of a portfolio company with underfunded pension liabilities or withdrawal liability, and is a matter of concern for the Pension Benefit Guaranty Corporation ... and multiemployer pension plans seeking to assert liability on these funds." [Sun Capital Partners III, LP v. New England Teamsters and Trucking Industry Pension Fund, Civ. Action No. 10-10921-DPW (D. Mass. Oct. 18, 2012)] (Proskauer Rose LLP)

Stockton Closely Watching San Bernardino's CalPERS Dispute
"Stockton's bankruptcy may grow into a mammoth fight over public employee pensions with reverberations felt throughout California and the nation. But Stockton may be taking a back seat as the California Public Employees' Retirement System, which manages Stockton's pensions, battles to the bitter end with Wall Street creditors and bond insurers." (Fox Rothschild LLP)

Employee Ownership Update for December 3, 2012
NCEO Executive Director Loren Rodgers discusses a U.K. study on employee ownership and well-being, the average U.S. ESOP distribution, the possible effect of the House Republican budget proposal on ESOPs, a certificate course for inside ESOP fiduciaries, and NCEO board nominations. (National Center for Employee Ownership)


Participants Hurt by Action and Inaction by US Airway Pension Service-Providers and PBGC
"Benchmark Financial Services, Inc., was retained by the [US Airline Pilots Association] to investigate potential conflicts of interest, undisclosed fees, and wrongdoing involving firms providing investment-related services to the Retirement Income Plan for Pilots of US Airways.... [In the firm's] opinion (as well as in the opinion of the Office of the Inspector General for the U.S. Department of Labor), the participants in the Plan were provided with no substantive assurance of the integrity of the assets in the Plan, and were denied useful information needed to monitor the Plan’s ability to pay benefits." (Edward Siedel in Forbes)


Why 401(k) Plan Sponsors (And Investors) Are Going Back to the Future
"By 2006, behavioral finance research and Congress had become acutely aware of the problem of too much choice. Employees were not saving enough and, to make matters worse, made investment choices far too conservative for a retirement portfolio." (Fiduciary News)


Retirement Plans in Crosshairs of Federal Deficit Reduction Efforts
"As federal lawmakers look for ways to reduce the federal government's massive deficit, group retirement plans are certain to be targeted ... Retirement plans are an appealing target: They cost the government hundreds of billions of dollars in lost tax revenue. When employees make contributions to a 401(k) plan, that means a reduction in their taxable incomes and less in taxes they pay to the Internal Revenue Service." (Business Insurance; free registration required)


Avoiding the 'Fiscal Ditch': Pension Transparency and Accountability for Public Employee Plans
"[S]tate and local governments today de facto collectively owe in their pension and other post-employment benefits (OPEB) obligations more than the amount borrowed for all the infrastructure projects, cash-flow needs, private-public initiatives, housing and the like.... Instead of arguing about which form pension systems should take -- defined benefits, 401(k) types, hybrids, and anything in between -- let us concentrate on the desired content of retirement systems." (Houston Chronicle)


Which Employees Gain Most from 401(k) Tax Breaks?
"In the discussion over retirement security, retirement plans like 401(k)s are often talked about as if they benefit all Americans equally. But with these tax-deferred accounts coming under scrutiny amid the fiscal-cliff budget debate, it's worth remembering: They're a perk that's far more valuable to the upper-middle-income, corporate golf-outing set than to store clerks or assembly-line workers." (MarketWatch)


The People's Pension: Social Security Was Designed in Secret with Bad Assumptions
"A fundamental paradox of Social Security is that while it was perhaps the most populist program the federal government ever created, welcoming all American workers as participants regardless of need, crucial decisions about it were always made by a remarkably small group of policymakers. Congressional committee chairs, actuaries, and a few influential outside policy strategists managed the evolution of the program, always in near-total isolation from the public." [Editor's note: The linked article is a review of the book, "The People's Pension: The Struggle to Defend Social Security Since Reagan," by Eric Laursen; the foregoing quote is from the book.] (Burypensions)

Benefits in General; Executive Compensation

Guidance Issued on Additional Medicare Tax
"In determining whether wages exceed $200,000, the employer does not take into account the employee's filing status or other wages or compensation that may affect the employee's liability for the tax. An employee may not request that the employer deduct and withhold additional Medicare tax on wages of $200,000 or less." (Journal of Accountancy)

CBO's Long-Term Projections for Medicare and Medicaid Spending in the United States
"If current laws remained in place, spending on the major federal health care programs would grow from more than 5 percent of GDP today to almost 10 percent in 2037 and would continue to increase thereafter. The aging of the population and the rising cost of health care would cause spending on the major health care programs and Social Security to grow from more than 10 percent of GDP today to almost 16 percent of GDP 25 years from now. By comparison, spending on all of the federal government's programs and activities ... has averaged 18.5 percent of GDP over the past 40 years." [Editor's note: The linked item is a set of 15 slides at a presentation to the "OECD Expert Workshop on Improving Health Expenditure Forecasting Methods."] (Congressional Budget Office)

Press Releases

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