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BenefitsLink Retirement Plans Newsletter

January 16, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Manager of Retirement Plan Processing
for Aspire Financial Services in FL

Omni Software Application Project Manager - IRC20789
for NRECA in DC

Manager, Benefits & Retirement Services
for Sports-Oriented Organization in NJ

Sr. 401K/DC Plan Administration Specialist
for CUNA Mutual Group in WI

Marketing and Sales
for National Retirement Services, Inc. in CA

Analyst Retirement Services - Pension / Contribution
for Catholic Health Partners in OH

Plan Administration Support Specialist / New Client Account Coordinator
for ePlan Services, Inc., a Paychex Company in CO

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Webcasts and Conferences

Rehires, including HEART and USERRA
Nationwide on January 23, 2013 presented by McKay Hochman Co., Inc.

Long Term Care Insurance: What Now? WEB Chapter Meeting
in Illinois on January 23, 2013 presented by WEB (Worldwide Employee Benefits Network) Chicago Downtown Chapter

New Pay or Play Regulations (December 28, 2012) – Are You Up-to-Date?
Nationwide on January 23, 2013 presented by International Foundation of Employee Benefit Plans

Evolving Role of Defined Contribution Plans in the Public Sector Webcast
Nationwide on February 28, 2013 presented by National Association of Government Defined Contribution Administrators

View All Webcasts and Conferences

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[Guidance Overview]

California Inches Toward Mandatory Automatic IRAs (PDF)
"Employers that offer employer-sponsored retirement plans or automatic enrollment payroll-deduction IRAs would not be required to offer the Program. The legislation does not detail requirements that might apply in the case of employees who are not eligible for the employer's programs.... Although the legislation would impose a number of requirements, the Board is precluded from opening the Program to enrollment until subsequent legislation is enacted giving the approval of the legislature to the Program's full implementation." (Buck Consultants)


Explore advantages and disadvantages of cash balance plans!

Sponsored by ASPPA

Cash balance plans are a critical facet of any plan consultant's knowledge base. Through this module, you will explore the advantages and disadvantages of a cash balance plan and how it works in combination with a defined contribution plan.

[Guidance Overview]

New Year Brings Compliance Obligations Under California Pension Reform Act
"Because ... there is no administrative body with the authority or responsibility for issuing interpretive guidance on [the California Public Employees Pension Reform Act of 2013 (PEPRA)], many California agencies are left to interpret PEPRA on their own ... In some many cases, legal positions taken by CalPERS and CalSTRS with respect to their own systems may not be applicable to standalone plans maintained by public employers. Documenting the basis for your interpretations of PEPRA may become important because you may be forced to defend the positions you have taken." (Focus on Public Benefits)

U.S. Taps Federal Employee Pension Fund to Avoid Passing Debt Limit
"Treasury Secretary Timothy Geithner says the government has begun borrowing from the federal employee pension fund to keep operating without surpassing its debt limit. Geithner says in a letter to congressional leaders that the move will free up $156 billion in borrowing authority while Congress debates increasing the $16.4 trillion debt limit." (The New York Times; free registration required)

Why You Can't Avoid Dumb 401(k) Mistakes
"Employers select mutual funds that perform better than comparable, randomly selected funds, but worse than passive index funds; and participants don't add any value through their own decisions." (MarketWatch.com)

Employers Making Retirement Readiness a Top Priority
"[W]orkers need 11 times their final pay to meet their financial needs in retirement, but the average U.S. worker has a savings shortfall of 2.2 times pay.... [T]o help bridge this gap, most employers (80 percent) are making financial wellness a top priority in 2013. Almost two-thirds (61 percent) are looking beyond current participation and savings rates and are helping workers evaluate their retirement readiness, up from 50 percent in 2012. Additionally, 86 percent of companies plan to focus communications initiatives on helping workers evaluate and understand how much they need to save for retirement." (Aon Hewitt)


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.

CalPERS Gains 13% in 2012
"[W]ith half its assets in stocks, CalPERS will experience more volatility -- both on the upside and downside -- than its large Canadian peers that are moving more and more assets into private markets.... [B]ack in February 2011, after losing 42% of the value of its extensive real estate portfolio during the recession, CalPERS's Board endorsed a plan to shift away from risky residential properties, raw land and highly leveraged real estate investment trusts to so-called core holdings, mainly commercial office buildings." (Pension Pulse)

South Carolina Retirement System Returns Estimated 11.5% for 2012
"The return translated into $2.8 billion in investment returns ... The pension fund's estimated 8.1% annualized three-year return exceeded the fund's 7.5% assumed rate of return and provided investment income of $5.8 billion to the defined benefit plan." (Pensions & Investments)

Pension Funding Gap Widens for Big Cities
"Cities employing nearly half of U.S. municipal workers saw their pension and retiree health-care funding levels fall from 79% in fiscal year 2007 to 74% in fiscal year 2009 ... While the recession may have exacerbated pension woes, it didn't cause them in most instances, according to the Pew Center ... The cities that are the worst off, according to the most recent data, didn't make their full required contributions to their pension systems before the financial crisis." (The Wall Street Journal)

Cities' Pension Gaps Worse Than States in 2009
"Pew researchers found 61 key cities had a total shortfall of $99 billion in fiscal year 2009, the most recent year with complete data, with an average funding level of 74%, compared with 78% for all states. The 61 cities represent 45% of all municipal employees in the U.S. Pew also looked at 40 cities for 2010 and found an even wider gap, when unfunded pension liabilities rose by 15% from 2009." (Pensions & Investments)

Research Shows Declining Optimism About Finances Among Employers and Employees
"Nearly four years after the financial crisis began, fewer employers and employees are reporting severe negative economic effects. However, both groups exhibit declining optimism about how they will be doing financially a year from now.... 14% of both employers and employees cite severe negative economic effects, down significantly from 2010 results of 27% for employers and 22% for employees. Conversely, employers who say their financial position will be better or improving in one year dropped from 70% in 2010 to 54% this year; employees report a drop from 44% to 38%." (Prudential)

Corporate Pensions Finished 2012 with Highest-Ever Deficits
"The aggregate deficit in pension plans sponsored by large U.S. companies (the S&P 1500) increased by $73 billion to a record year-end high of $557 billion as of Dec. 31, 2012 ... This compares to an aggregate pension deficit of $484 billion at year-end of 2011. While the year-end 2012 funded ratio of 74 percent (assets to liabilities) rebounded from a record low of 70 percent as of July 31, 2012, overall the ratio declined from the slightly better 75 percent funded ratio seen at Dec. 31, 2011." (Society for Human Resource Management)

Measures of Retirement Benefit Adequacy: Which, Why, for Whom, and How Much? (PDF)
"Key findings include: [1] Many of the next generation of retirees are facing a big drop in their standard of living when they retire.... [2] [T]here is a 29% chance median households will have positive wealth at death.... [3] Individuals need to be aware that attempts to over-simplify the retirement planning process can be very dangerous if used for personal decision making. [4] The most appropriate measure of retirement benefit adequacy depends on the stakeholder: plan sponsor/employer; financial planner/individual; public policymaker; or financial institution. [5] While it is much easier to plan for expected events, so-called 'shock events' must be taken into consideration since they are more likely to derail an individual's retirement plan, especially at lower income levels. For the median income individual, shocks are the biggest driver of asset depletion." (Society of Actuaries)

NCEO Employee Ownership Update for January 15, 2013
"NCEO Executive Director Loren Rodgers discusses the effect of the American Taxpayer Relief Act of 2012 on employee ownership, the revision of the IRS Employee Plans Compliance Resolution System, the Innovations in Employee Ownership Award, and the Employee Ownership Australia and New Zealand conference." (National Center for Employee Ownership)


Text of NCPERS Response to Pew Charitable Trusts Study 'A Widening Gap in Cities' (PDF)
"Unfortunately, the analysis presented in the Pew Charitable Trusts' new report 'A Widening Gap in Cities' presents a distorted and outdated picture of the health of municipal pension plans -- primarily because the data Pew worked with is four years old. Examining data from 2009 -- immediately following the unexpected market collapse of the Fall 2008 that precipitated the Great Recession - may provide a valuable history lesson, but it cannot yield a realistic representation of the status of municipal pension plans today." (National Conference on Public Employee Retirement Systems [NCPERS])


Why DB Pension Plans May Not Be Better than 401(k)s
"Here are a few reasons the 401(k) self-contribution system might turn out to be the better option for some people: A pension may force you to stay at a job.... Benefits can change midway through your career.... Your pension could be eliminated if the employer files for bankruptcy.... Benefits usually don't extend beyond your lifetime.... You may be able to get better investment returns.... Yearly benefits are inflexible, which could mean more taxes paid.... Many private plans do not have inflation adjustments." (U.S. News and World Report)

Benefits in General; Executive Compensation

Top Executive Compensation Issues for 2013, Part II
"[The authors of a recent article] claim to have examined SEC filings since 2004 and found that 'of the 20,237 executives who traded their own company's stock during the week before their companies made news, 1,418 executives recorded average stock gains of 10% (or avoided 10% losses) within a week after their trades'.... The issue is already on the SEC's radar screen.... [This author predicts] that this is the year that the SEC tightens the rules for 10b5-1 plans and requires some form of public disclosure of them." (Winston & Strawn LLP)

Press Releases

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