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BenefitsLink Retirement Plans Newsletter

January 17, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Document Specialist
for The Newport Group in FL, NC

Reviewing Actuary
for Kravitz, Inc. in ANY STATE, CA

Sr. Manager, Retirement Plans
for AutoNation, Inc. in FL

401k Administrator
for Third Party Administrator in East Tennessee in TN

Retirement Plan Processor
for Katz, Sapper & Miller in IN

Retirement Specialist
for Ascension Health in MO

Part-time Retirement Planning Consultant
for Diversified in IL

Defined Contribution Pension Analyst
for United Retirement Plan Consultants in TX

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Webcasts and Conferences

"To Roth or Not to Roth" Web Seminar
Nationwide on February 15, 2013 presented by SunGard Relius

"In-Plan Roth Transfers: The New Wrinkle" Web Seminar
Nationwide on February 14, 2013 presented by SunGard Relius

Practical Advice on the Affordable Care Act: What You Must Do NOW and How To Prepare For 2014 - 2018
in New York on February 7, 2013 presented by Bressler, Amery & Ross, P.C.

Healthcare Reform - The Employer Pay or Play Rules! Webcast
Nationwide on January 30, 2013 presented by Trucker Huss

DOL Audits of Health and Welfare Plans: Be Prepared to Show Compliance With Health Care Reform and Other Laws
Nationwide on February 14, 2013 presented by Thomson Reuters / EBIA

View All Webcasts and Conferences

We also publish the BenefitsLink Health & Welfare Plans Newsletter (free): Subscribe


[Guidance Overview]

IRS Reminds IRA Owners of January 31 Deadline for Tax-Free Transfers to Charity for 2012
"Certain owners of individual retirement arrangements (IRAs) have a limited time to make tax-free transfers to eligible charities and have them count for tax-year 2012, the Internal Revenue Service said today. IRA owners age 70-1/2 or older have until Thursday, Jan. 31, to make a direct transfer, or alternatively, if they received IRA distributions during December 2012, to contribute, in cash, part or all of the amounts received to an eligible charity." (Internal Revenue Service)


401k Professionals: Get your Qualified 401(k) Administrator Credential!

Sponsored by ASPPA

Work in some aspect of retirement plan administration? Want to specialize in the administration of 401(k) plans? The QKA credential is for you! Get your Qualified 401(k) Administrator (QKA) Credential and show that you're serious about your career!

EBSA Semiannual Regulatory Agenda Addresses Rules on Lifetime Income, Fiduciaries, Fee Disclosure, Target Date Plans
"One item in EBSA's prerule stage is an initiative under which the Labor Department will explore whether, and how, an individual benefit statement should and could present a participant's accrued benefits in a defined contribution plan (i.e., the individual's account balance) as a lifetime income stream of payments in addition to presenting the benefits as an account balance." (Wolters Kluwer Law & Business)

2013 Compliance Calendar for Calendar Year, Single Employer DB Plans
"The calendar captures important filing and plan notification dates and can be referenced by plan sponsors throughout the calendar plan year reporting cycle to help keep track of important deadlines and qualified plan reporting requirements." (October Three)

The Impact of Moody's Proposed Changes in Analyzing Government Pension Data
"[Six] Bay Area-North Coast California counties that do not participate in CalPERS ... reported total unfunded pension obligations were a little over $4 billion. Moody's adjustments would increase these unfunded pension obligations by about another $6 billion which would reduce average reported pension funding ratios from 78% to 58%.... In addition these six counties reported Pension Obligation Bond (POB) debt as of June, 2011 of $1.7 billion.... All other reported debt (not including unfunded retiree healthcare and other post-employment benefits) was $2.8 billion. Thus Moody's adjustments would increase the total debt for these counties used in their credit rating analysis from the reported $4.5 billion to $14.6 billion -- slightly more than triple what is currently reported." (California Public Policy Center)

New Study Warns of Massive Government Pension Debt Yet to be Reported
"Moody's has proposed discounting pension fund liabilities at a rate of 5.5% instead of the official 7.5% rate commonly used by pension fund actuaries. Moody's has also proposed shortening the amount of time that most pension funds would allocate to 'catch up' their asset balances to become 100% fully funded. What this would do is greatly increase the value of local and state government pension debt that's currently being reported to the public. In fact researchers believe it will triple the debt now reported." (Central Coast News)


Registration Begins: 2013 Employee Ownership Conference

Sponsored by National Center for Employee Ownership

Whether you are a veteran or newcomer to the field of employee ownership, this highly interactive conference offers valuable insights and information in five learning tracks, covering both technical and nontechnical topics over three intensive days.

Moody's New Pension Rules Would Bankrupt Six California Counties
"Catch-up pension payments will have to increase in the six counties by 192 percent. And existing aggregate pension bond payments will have to be increased by a total of $177 million total in the six affected counties to avoid insolvency. As Dickerson states, this will result in consuming 98 percent of all the property taxes in the six counties for pensions only" (Fox & Hounds)

How Would Stockton Bankruptcy Cut Pensions?
"Bond insurers who want CalPERS to share the financial pain of the Stockton bankruptcy do not answer a key question in lengthy court filings: How would 'bloated' and 'overly rich' pensions be cut? ... Stockton does not want to cut pensions, arguing that its proposal to eliminate retiree health care is how debt reduction in bankruptcy is shared by employees, who are the actual creditors while CalPERS is just the middleman." (CalPensions)

Managing Pensions in 2013: Goals, Challenges, and Strategies for Plan Sponsors (PDF)
"With a challenging year behind them, participants were asked to select their top pension 'wish' for 2013. Having felt the impact of low interest rates on their pension liabilities in 2012, 35% of respondents said that 'increased interest rates' would be their number one pension wish for the upcoming year. While only two percent of polled pensions are currently in the termination stage, 25% of participants said a 'fully terminated plan' would top their pension wish lists, outpacing a 'fully funded plan' by nine percent." (SEI)

Social Security Reform and Medicare Modernization Proposals (PDF)
"Social Security ... reforms should include the following elements: Protect Retirees and Those Approaching Retirement ... Increase Retirement Age ... Change Benefit Formulas to Increase Progressivity ... Update Method for Calculating Cost of Living Adjustments (COLAs) ... Include Newly Hired State and Local Workers in Social Security ... Encourage More Private Savings ... Essential elements of a Medicare modernization proposal [include] ... Protect Medicare for Those Approaching Retirement ... Expand Competitive Models of Care ... Reduce Taxpayer Costs for Upper-Income Beneficiaries ... Protect the Safety Net for Low-Income Americans[.]" (Business Roundtable)

Why Age 70 Isn't the New 65
"For one-third of households in which the people were between ages 30 and 59 as of 2007, working until age 70 won't provide adequate income in retirement.... [But] working longer does help. While only about half of households age 50-59 in 2007 could retire at 65, the number increases to nearly two-thirds if retirement age is increased to 70. Those extra five years have a dual effect. Not only do workers save more, they also delay dipping into their retirement funds, allowing those funds to continue growing." (CBS MoneyWatch)

Pension Rights Center Says Benefit Calculation Errors Are Fairly Common
"A calculation error made years ago and only recently discovered caused 283 McLaren Bay Region retirees to be either overpaid or underpaid when it came to their pensions, and Rebecca Davis, legal director at the Washington, D.C.-based Pension Rights Center, says the situation is common.... 'This is the second most common situation that we deal with, so it's very prevalent.' The most common situation they encounter is lost pensions." (mLive.com)

Retirement Income Products: Which One Is Right for Your Plan? (PDF)
"For plan sponsors, understanding the different types of products available is the first step toward selecting the right retirement income product for their participants. Although it will likely be the first time most plan sponsors have considered an option that involves guarantees and annuity features, many of the points in the process are the same as in the selection of a mutual fund option for the plan. The sponsor must follow the prudent steps necessary in the selection of any option and, of course, the process must be well documented." (Institutional Retirement Income Council)

'No Change' in Retail Price Index Means Higher Pension Deficits for Large Companies in Great Britain
"Mercer estimates that, across all FTSE 350 companies, the immediate effect of the [U.K.] Office of National Statistics (announcement to retain the existing method for calculating the Retail Price Index (RPI) could wipe up to 20 billion GBP [$32 billion] off company balance sheets through increases pension deficits. This would wipe out any gains that pension schemes made in the equity markets since the beginning of the year and is equivalent to the estimated value of deficit contributions paid by companies over 2012." (Mercer)

Consumer Watchdog to Scrutinize Operation of British Defined Contribution Plans
"Britain's consumer affairs watchdog is to investigate so-called 'defined contribution' pension plans, which could see up to 8 million new members over the next six years as part of a government drive to boost workplace saving for retirement. Britain's Office of Fair Trading (OFT) said ... its study would focus on value for money and the size of pension pot savers end up with at retirement.... The OFT study will look at pensions charges, pressure on smaller firms providing pensions, continued engagement from employers in setting up and managing pensions and barriers to switching between pension plans." (The New York Times; free registration required)

Benefits in General; Executive Compensation

[Guidance Overview]

A Checklist for the New NASDAQ Compensation Committee Rules
The linked article is a detailed list of the requirements for establishing a compensation committee and for the independence of its members, as required by NASDAQ rules. (Dodd-Frank.com, a blog by Leonard, Street and Deinard)

Business Groups Propose Raising Minimum Age for Social Security and Medicare Benefits
"The Business Roundtable, which represents chief executives of major U.S. companies, proposed shoring up Social Security and Medicare by raising the eligibility age without increasing taxes on income subject to the Social Security payroll tax.... The group also offered a plan for the Medicare health program for the elderly that would raise the eligibility age to 70 and create a system of private plans to compete with the government-sponsored program ... [and] proposed expanding means testing in Medicare, or reducing benefits for upper-income recipients." (Bloomberg)

Controlled Group Rules for Employee Benefit Plans
"The controlled group rules identify whether two or more corporations and certain other groups of related trades or businesses are treated as if they were one employer under many provisions of [ERISA] and the Internal Revenue Code (IRC) applicable to employee benefit plans. These rules: Differ depending on the type of controlled group under ERISA and the IRC. Affect several IRS qualification requirements for employee benefit plans. Can result in liability for each member of the controlled group on a joint and several basis to the extent they are violated. Apply in several contexts for welfare plans and deferred compensation plans." (Practical Law Company)

Sixth Circuit Will Not Rehear Decision that Severance Pay in Connection with a Reduction in Force Is Not Subject to FICA; Supreme Court Next Step?
"It is unclear at this time how the IRS will respond to refund claims. New claims filed as a result of the Quality Stores decision may be rejected by the IRS due to the split in the circuits or may be held without action. Until this controversy is resolved, it is prudent for employers to continue withholding FICA taxes on SUB payments made in connection with the present or future involuntary termination of employees that do not meet the strict definition provided in IRS Revenue Ruling 90-72 for exemption." (Proskauer Rose LLP)

A Widening Gap for Cities: Shortfalls in Funding for Pensions and Retiree Health Care
"Besides pensions, many localities also have promised health care, life insurance, and other non-pension benefits to their retirees, but few have started saving to cover these long-term costs. These unfunded liabilities loom even larger than for pensions ... As of fiscal year 2009, the cities in this report had promised at least $118 billion more than they had in hand to cover retiree health care benefits. Wide disparities exist in how prepared cities are to fulfill their pension obligations ... Cities have more in common when it comes to gaps in funding for retiree health care and other non-pension benefits. As of fiscal year 2009 ... Only Los Angeles and Denver had even half of the money needed." (Pew Center on the States)

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