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BenefitsLink Retirement Plans Newsletter

January 9, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

ERISA Attorney
for Rodey, Dickason, Sloan, Akin & Robb, P.A. in NM

Conversion Specialist
for National Provider of Qualified Plans in ANY STATE

Account Manager, Retirement Plans
for Consulting Firm in NY

Compliance Advisor IRC20367
for NRECA in DC

Plan Administrator
for Verisight, Inc. in IL

Actuarial Analyst
for Verisight, Inc. in IL

Regional Manager
for Diversified in

Daily Valuation Specialist
for Qualified Plan Administrators, Inc. in GA

Project Manager
for Verisight, Inc. in CA

Conversions Specialist
for The Newport Group in NC

Actuarial Analyst
for Milliman in TX

ERISA Compliance / Plan Document Specialist
for Milliman in TX

Consulting Actuary
for Milliman in TX

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Webcasts and Conferences

Updated Guidance on Play or Pay: Health Care Reform’s Shared Responsibility Provision
Nationwide on January 24, 2013 presented by Thomson Reuters / EBIA

401(k) Investment Lineup Summit
in California on April 16, 2013 presented by Pensions & Investments

401(k) Investment Lineup Summit
in Texas on April 18, 2013 presented by Pensions & Investments

401(k) Investment Lineup Summit
in Illinois on April 23, 2013 presented by Pensions & Investments

401(k) Investment Lineup Summit
in New York on April 25, 2013 presented by Pensions & Investments

Pensions & Investments East Coast Defined Contribution Conference
in Florida on March 10, 2013 presented by Pensions & Investments

2013 San Francisco Mid-Sized Retirement & Healthcare Plan Management Conference
in California on March 17, 2013 presented by University Conference Services

2013 Atlanta Mid-Sized Retirement & Healthcare Plan Management Conference
in Georgia on April 28, 2013 presented by University Conference Services

View All Webcasts and Conferences

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[Guidance Overview]

The Fix Is In: IRS Updates Retirement Plan Correction Programs (PDF)
"This Legal Alert focuses on the changes to EPCRS that apply to all types of retirement plans. Rev. Proc. 2013-12 is effective April 1, 2013, but plan sponsors may rely on this new guidance after December 31, 2012. The chart [in this article] describes some of the more significant changes made in Rev. Proc. 2013-12. Most of the changes are technical or procedural in nature. Many areas of EPCRS that seemed ripe for possible modifications have generally not changed, including loan corrections, methods for determining earnings, de minimis rules, and fee amounts." (Sutherland)


Learn About Plan Coverage and Testing with ftwilliam.com Industry Experts

Sponsored by ftwilliam.com

This webinar on January 29 will cover when to test for coverage, 414(s) and general testing; including disaggregation and aggregation and what to look for in your plan document. The ftwilliam.com admin software may be used to illustrate tests and test results.

[Guidance Overview]

IRS Correction Program Expanded for 403(b) Plans
"Up until now, EPCRS allowed for-profit employers to correct certain errors in their retirement plan documentation and operations, but these correction opportunities were limited for 403(b) plan operational errors and unavailable for 403(b) plan documentation errors. Now, 403(b) plan sponsors can generally correct the same operational errors as sponsors of qualified retirement plans and, most importantly, can correct plan documentation problems through EPCRS." (McKenna Long & Aldridge LLP)

[Guidance Overview]

IRS Implements Changes to Employee Plans Determination Letter Program
"Specifically, the determination letter program is modified to: Clarify the documents to include with a determination letter application. Eliminate the option to submit a 'working copy' of the plan. Provide that sample calculations are to be submitted with Form 6088, Distributable Benefits from Employee Pension Benefit Plans. This revenue procedure is effective February 1, 2013." (Practical Law Company)

Eight Ways to Make Your Participation Education Plan Rock
"[Here are eight] best practices to help you create a participant education plan that can rock; Draft an Education Policy Statement.... Create a written plan.... Clearly define objectives -- in the policy statement as well as the written plan. ... Hold both group and individual meetings.... Determine what you want to tell participants.... Provide tools participants can easily use to help them achieve their goals.... Review the quality and credentials of individuals providing the education.... Monitor progress against the plan and make adjustments when necessary." (The Principal Blog)

Illinois Lawmakers Adjourn Without Fix for Pension Plan Deficit
"Bond rating agencies are expected to issue new ratings Wednesday, and [Gov. Pat] Quinn warned lawmakers that without any action on pension reform, Illinois' rating is in 'dire jeopardy'.... Years of inattention by lawmakers and governors to properly fund five state-run pension accounts has led to $96 billion in red ink.... [T]he state's obligation -- $6 billion this year -- will soon eclipse one-third of the total amount of revenue the state takes into its general checking account each year[.]" (The New York Times; free registration required)

Illinois Tries, and Fails, to Fix Its Pensions
"[A]s the lame-duck legislative session drew to a close ... there was no deal. Lawmakers began talking optimistically about how they would keep searching for a fix to the nation's most underfinanced state public pension system during a new session in the months ahead. And the shortfall in the state's pension systems, now about $96 billion, will keep right on mounting at a rate, according to an estimate by Gov. Pat Quinn, of $17 million a day." (The New York Times; free registration required)

Lame Duck Session Legislators Punt Illinois Pension Problem to Incoming General Assembly
"State lawmakers [have] bequeathed the government worker pension problem to the next General Assembly, rejecting Gov. Pat Quinn's roundly criticized 'Hail Mary' plan to ask a committee to fix the worst-in-the-nation retirement system. The failure of the Democratic governor and legislators to start reducing a $96.8 billion pension debt threatens to divert more and more money away from education and social services toward retirement benefits." (Chicago Tribune; free registration required)

DC Plan Sponsors Focused on Compliance in 2012
"The proportion of DC plan sponsors that reviewed their plan's investment policy statement (IPS) in the past year rose to 63% in 2012 from 55% in 2011. More plan sponsors have a written plan fee payment policy in place (41%) than in 2011 (38%), either as part of their IPS or as a separate document." (PLANSPONSOR.com)

Eight Things DC Plan Sponsors Should Consider for 2013 (PDF)
"1. Benchmark plan fees and services.... 2. Review the investment policy statement.... 3. Assess the investment menu.... 4. Determine if institutional vehicles make sense in the plan.... 5. Examine the plan's target date funds.... 6. Revisit auto features.... 7. Check the plan's policy on terminated participants.... 8. Evaluate participant communications." (Callan Associates)

Fixing a Small-Biz 401(k) Plan: Eliminate Hidden Fees
"Take a perfectly disciplined employee who invests 10% of his or her income in a 401(k) with a 4% employer match, and who starts at age 24 and continues to age 65, without ever taking a break, losing a job, getting sick, getting a divorce, or needing a loan from the plan. The investment returns average 7% per year, and inflation averages 3%. The employee starts out making $25,000 per year and yearly receives raises of 4%.... After 42 years of saving diligently, nearly 36% of this employee's retirement savings has vanished due to an additional 2% in fees. And many small-business 401(k) plans charge even more than that." (CFO)

How Have Employers' 401(k) Mutual Fund Selections Affected Investment Results? (PDF)
"Key findings: [1] 401(k) performance is affected by the decisions of plan administrators as well as participant choices. [2] Administrators choose mutual funds that perform worse than comparable indexes but better than comparable, randomly selected funds. [3] When making changes to a plan's fund offerings, administrators chase returns and do not improve performance. [4] Participants also tend to chase returns through contribution changes and asset transfers, and their investment strategies add no value" (Center for Retirement Research at Boston College)

Social Security Shortfall: It's Worse Than You Think
"For the first time in more than a quarter-century, Social Security ran a deficit in 2010: It spent $49 billion dollars more in benefits than it received in revenues, and drew from its trust funds to cover the shortfall. Those funds -- a $2.7 trillion buffer built in anticipation of retiring baby boomers -- will be exhausted by 2033, the government currently projects. Those facts are widely known. What's not is that the Social Security Administration underestimates how long Americans will live and how much the trust funds will need to pay out -- to the tune of $800 billion by 2031, more than the current annual defense budget -- and that the trust funds will run out, if nothing is done, two years earlier than the government has predicted." (The New York Times; free registration required)

Benefits in General; Executive Compensation

[Official Guidance]

Text of Third Amendment by Chicago Stock Exchange to Proposed Rules to Establish Listing Standards for Compensation Committees (PDF)
"This Amendment No. 3 to SR-CHX-2012-13 (the 'filing') partially amends the filing submitted as Amendment No. 2 on October 10, 2012. Amendment No. 3 corrects technical errors throughout the proposed rule language. Moreover, substantive amendments were also made ... Proposed Rule 19(d)(4) was amended to give compensation committees the authority to retain 'legal counsel' generally and not merely "independent" legal counsel. In addition, proposed Rule 19(d)(4) was amended to include a proposed subparagraph ... that enunciates the scope of the independence assessment that a compensation committee is required to conduct prior to retaining a compensation consultant. Proposed Rule 19(d)(5)(B)(vii) and proposed paragraph .03(7) of the Interpretations and Policies of Rule 19 were deleted. Finally, paragraph .05(6) of the Interpretations and Policies of Rule 19 was amended to outline a simplified transition schedule for issuers to comply with the provisions of the proposed rule change." (Chicago Stock Exchange)

JCEB Q&As Offer Nonbinding DOL Responses on Late Contributions, Electronic Delivery of SPDs and Participant Investment Discretion
"[In answer to a question about whether sending a flash drive or other electronic medium containing SPDs and other plan documents to participants via first class mail would satisfy ERISA disclosure requirements,] the DOL reasoned that although participants and beneficiaries might actually receive the flash drive or CD in the mail, DOL would not consider the information to have been furnished if participants and beneficiaries are unable to read or access it. The DOL stated that it is not reasonable to assume that participants will be able to access and read the CD or flash drive merely because they are formatted "in a commonly accessible fashion", especially where the plan administrator has not determined whether participants and beneficiaries have the necessary technology and ability to do so." (Practical Law Company)


Health Care and Pursuit of Profit Make Poor Mix
"How much should we rely on the private sector to satisfy broad social needs? From health to pensions to education, the United States relies on private enterprise more than pretty much every other advanced, industrial nation to provide essential social services. The government ... provides a tax break to encourage employers to cover workers under 65. Businesses devote almost 6 percent of the nation's economic output to pay for health insurance for their employees. This amounts to nine times similar private spending on health benefits across the Organization for Economic Cooperation and Development, on average." (The New York Times; free registration required)

Press Releases

Social Security Announces New Online Services Available with a my Social Security Account
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

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David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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