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December 19, 2012          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Conversion Consultant
for Aspire Financial Services in FL

Consulting Actuary
for Charles Schwab in OH

Senior Client Service Manager
for Charles Schwab & Co., Inc. in TX

Entry Actuarial Position
for Venuti & Associates in CA

Plan Administrator
for Verisight, Inc. in IL

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[Official Guidance]

PBGC Issues 2013 Premium Payment Instructions and Addresses
The premium payment instructions (including illustrative forms) for both the estimated flat-rate filings and comprehensive filings for plan year 2013 have been posted by the PBGC on the linked web page. The "My Plan Administration Account (My PAA)" page on the PBGC's web site is expected to be revised and ready to handle 2013 premium e-filings by early January 2013. (Pension Benefit Guaranty Corporation)


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[Guidance Overview]

IRS Reminds Employers About Savers Tax Credit
"Those individuals who have remaining salary and bonuses for 2012 who have not made elective deferrals to their 401(k) or 403(b) plans may have an opportunity to do so with help from the federal government. The eligibility is dependent upon the taxpayer's adjusted gross income. For married couples filing jointly, the cap for 2012 is $57,000; married filing separately and singles can earn up to $28,750 in 2012 and be eligible for the credit." (Leonard, Street and Deinard LLP)

Backlash Against Gun Firms Grows from Investors, Including Massachusetts State Pension Fund
"Massachusetts Treasurer Steve Grossman directed the state pension fund Tuesday to review its investments in any companies in the firearms industry.... Grossman stopped short of calling for divestment in gun companies, saying it was the pension fund's duty to maximize investment returns for retirees.... The pension fund said it has $1.4 million in shares of two publicly traded gun manufacturers, as well as a stake in the gun retailer Academy Sports and Outdoors, through the private equity firm Kohlberg Kravis Roberts & Co." (Boston.com)

Creditors Say Stockton City Manager Acted in Bad Faith on City's Pension Contribution Obligations to CalPERS
"[Two creditors] seeking to block Stockton's bankruptcy ... contend that Stockton failed to negotiate in good faith and isn't therefore eligible to restructure its finances under Chapter 9 because the city didn't engage CalPERS in negotiations. CalPERS is the city's single largest creditor with an estimated liability at $245 million over the next decade." (Recordnet.com)

CalPERS Pits State Court Versus Federal in San Bernardino Bankruptcy
"The biggest U.S. pension fund argued in a court filing that its status as a state agency gave it sweeping powers in the San Bernardino, California bankruptcy case and that the federal jurisdiction that applies in bankruptcy should be overridden by the state's rights.... [CalPERS'] latest legal argument ... [also] contends that bond insurers who are opposing CalPERS in San Bernardino are actually supporting its legal position in another big municipal bankruptcy in Alabama." (Reuters)


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When Bankruptcy Meets ERISA
"[T]he real Hostess [Brands] story ... is not about a future without Twinkies, but about the men and women who made the Twinkies facing a future where Hostess made their vested retirement benefits disappear. Unfortunately, Hostess is not alone. Over the last several years, there are a number of companies, and one U.S. Territory (the Northern Mariana Islands Retirement Fund) which have looked to a bankruptcy court to resolve their underfunded pension issues." (The Pension Protection Act Blog)

The U.S. Retirement Market, Third Quarter 2012
[Editor's note: this item is an Excel spreadsheet (an ".xls" file).] Provides detailed current and historical data for: U.S. Total Retirement Market Assets; Equity and Bond Returns; Retirement Assets' Share of Household Financial Assets; Defined Contribution Plan Assets by Type of Plan; 403(b) Plan Assets and Share of Total 403(b) Plan Assets by Type of Institution; IRA Assets by Type of Institution and by Type of IRA; and Retirement Account Assets Invested in Mutual Funds. (Investment Company Institute)

Actuarial Increases: What They Cost (or, Why No Good Deed Goes Unpunished)
"Does your [DB] plan provide actuarial increases to participants who work beyond normal retirement age? It's a nice gesture, but you may be in for a shock. Many people in recent years have chosen to delay their retirements because of the poor economy, and it doesn't take long for an actuarial increase to make a modest pension benefit look like a lottery jackpot." (Retirement Town Hall)

To Get Higher 401(k) Deferrals by Employees, a Nudge Isn't Always Enough (PDF)
"While ... default design strategies can improve some saving decisions, researchers have begun exploring their potential limitations. For example, one recent study found that setting a very high default contribution rate for a workplace saving plan caused many workers to choose a different rate. This brief is based on a new study that also tests the limits to default design through an experiment to encourage low-income individuals to save about 10 percent of their tax refund." (Center for Retirement Research at Boston College)

The Fiduciary Duty Under ERISA to Recover Securities Class Action Settlement Awards (PDF)
"Given the prevalence of class action settlements, it is important for plan fiduciaries and their service providers to develop a prudent process for investigating and recovering the amounts owed to plans in connection with their legal claims. Any plan sponsor or fiduciary service provider that breaches its investment-related duties under ERISA for imprudently failing to recover amounts owed to the plan may become subject to significant liability and penalties for its fiduciary breach." (The Wagner Law Group via Tax Management Compensation Planning Journal)

The Fiscal Cliff, Retirement Plans and Medicare Taxes
"As part of the [ACA], for joint filers making over $250,000, Medicare taxes will increase beginning in 2013. This tax increase is part of the 'fiscal cliff', but there has been, generally, no discussion of, e.g., delaying the effective date of this new tax. The new tax will have the effect of increasing the relative value of saving in a 401(k) plan or other qualified plan. [This article reviews] just how significant the impact the relative value of in-plan vs. non-plan savings may be." (October Three)

Guidelines Issued by Government Finance Officers Association Address Public Pension Funding
"[T]he guidelines recommend that state and local governments follow five tenets to create a sound funding policy and make reporting easier: [1] Base the policy on actuarially-determined contributions. [2] Commit to meeting funding targets. [3] Ensure that benefit costs are paid by the generation of taxpayers receiving the services. [4] Manage contributions so that employer costs remain consistent as a percentage of payroll over time. [5] Promote accountability, transparency, and the ability to maintain contributions at a stable percent of payroll." (Ballard Spahr)

Statement of U.S. Rep. Phil Roe at Hearing on 'Challenges Facing Multiemployer Pension Plans: Evaluating PBGC's Insurance Program and Financial Outlook'
"Provisions in the law governing multiemployer pensions will expire in two years, which means Congress has an important opportunity to study the system, assess its strengths and weaknesses, and pursue solutions that support workers without discouraging participation in the voluntary pension system. To do this successfully, we need the facts as quickly as possible." (U.S. House Committee on Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions)

New York City Public Pensions to Add Hedge Funds to Reduce Volatility
"The New York City Employees' Retirement System, New York City Police Department and New York City Fire Department, which have about $70 billion in assets, are searching for event-driven funds, commodity trading advisers and global macro and relative value managers ... The focus is on event-driven strategies as the pensions now have more allocated to global macro funds and CTAs[.]" (Bloomberg)

Handling a Qualified Retirement Plan in a Corporate Merger or Acquisition
"Typically the structure of the transaction will determine what approach the parties take regarding their qualified retirement plans and associated liabilities. However, there are certain circumstances where the liabilities or obligations associated with these plans are so great that their existence determines the structure of the deal." (Practical Law Company)

2013 Rates Announced for Canada Pension Plan and Old Age Security Benefit
"Human Resources and Skills Development Canada today announced the benefit rates for the Canada Pension Plan (CPP) and Old Age Security (OAS) effective January 1, 2013. CPP benefits will increase by 1.8 percent for those already receiving CPP benefits.... The maximum CPP retirement benefit for new recipients will increase from $986.67 to $1,012.50 per month.... OAS benefits, which consist of the basic OAS pension, the Guaranteed Income Supplement (GIS) and the Allowances, will increase by 0.2 percent." (Canada News Centre)

Win, Win, Win ... A Better 401(k) Plan
"Whether you are a participant, plan sponsor, service provider, advisor or a government agency a common goal is to make retirement plans better. The only problem is that what is good for one may hurt another. Is there a common good that will benefit all? Lower fees cannot be that magic bullet. While participants benefit by having a bigger retirement nest egg, and plan sponsors are less likely to breach fiduciary duties, the lower revenues will ultimately mean poorer service, fewer service providers and limited product offerings. But increasing fees is not the answer either." (Dalbar, Inc.)

[Opinion]

The Technical Trick Washington Wants to Use to Cut Social Security and Medicare Benefits
"'Chained-CPI' cuts Social Security benefits and increases taxes. That's why it's part of the negotiations.... Chained-CPI, in this telling, is simply an effort to correct a measurement error in the way we calculate inflation. It's a tweak, a fix, a policy designed to achieve a higher level of technical precision. And who could be against that? ... The effort to mask cuts in technical adjustments just leads to worse cuts, as the top priority isn't protecting the poorest or improving the program, but finding a policy sufficiently confusing that you can pass it before most people realize what it is." (The Washington Post; free registration required)

Benefits in General; Executive Compensation

[Guidance Overview]

NASDAQ Files Amendment to Proposed Listing Standards for Compensation Committee and Consultant Independence
"NASDAQ [recently] filed an amendment to its proposed listing standards relating to the independence of compensation committees, compensation consultants and other compensation advisers.... The amendment: [1] Clarifies the required independence assessment for compensation advisers. [2] Changes the effective date and transition period for the new rules. [3] Changes the phase-in schedule for a company that ceases to be a smaller reporting company. [4] Provides a form of the compensation committee certification that must be submitted to NASDAQ under the new rules." (Practical Law Company)

The Future of Executive Compensation at Publicly-Traded Banks
"[A recent] study of CEO compensation practices at 58 publicly-traded banks with assets between $1 and $5 billion ... [shows that] the following will be some of the key trends in executive pay as compensation committees work to balance competing expectations. Increase in percentage of pay delivered through incentives.... Broader view of performance.... Use of multiple long term incentives, with increasing use of performance-based vesting.... More transparency." (BankDirector.com)

Legacy Advisor Benefit Plans, Winter 2012-13 (PDF)
Articles in this issue include: FASB Update Regarding Employer's Participation in Multiemployer Plan Now Effective; News Prohibited Transactions and Plan Expenses Notice of Expiration: Temporary Unlimited Coverage for Noninterest-Bearing Transaction Accounts; New Audit Standards for 2012; and DOL Taking Close Look at Apprenticeship and Training Funds. (Legacy Professionals LLP)

Press Releases

Help Employees Afford the Legal Services They Need
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