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BenefitsLink Retirement Plans Newsletter

January 24, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Part Time On Call Retirement Planning Consultant
for Diversified in CA, MO, NC, UT, WA

Qualified Plan Specialist
for CUNA Mutual Group in WI

Plan Administrator
for Nationwide in OH

Registered Nurse, Disability Review Team Lead
for Prudential in ME

Client Relations Manager
for Alliance Benefit Group of Houston, Inc. in TX

Retirement Plan Consultant
for July Business Services in ANY STATE

Pension Administrator (Defined Contribution Experience)
for Mercer Advisors in AZ

Vendor Services Analyst
for Pension Consultants, Inc. in MO

ERISA Paralegal
for Charles Schwab in OH

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Webcasts and Conferences

Plan Administrator Skills Workshop
in Oklahoma on March 22, 2013 presented by SouthWest Benefits Association

2013 NIPA Annual Forum & Expo (2013NAFE)
in Nevada on April 28, 2013 presented by National Institute of Pension Administrators

2013 NIPA Annual Forum & Expo - Virtual Conference
in Nevada on April 28, 2013 presented by National Institute of Pension Administrators

View All Webcasts and Conferences

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[Guidance Overview]

Handling In-Plan Roth Conversions Under Your 401(k), 403(b) or 457(b) Plan
"[I]t is best to wait for formal IRS guidance before amending the plan to add in-plan Roth conversions. In the interim, employers who want to add the in-plan Roth conversion feature should draft an enabling board resolution. As with conversions done under SBJCA, conversions done under the new law should be separately sourced and separately tracked, especially since we do not yet have guidance on the IRS reporting of this transaction and, of course, in order for the conversion's five-year period to be separately tracked." (McKay Hochman Co., Inc.)


DATAIR! More Choices -- Better Guidance -- Less Cost

Sponsored by DATAIR Employee Benefit Systems, Inc.

Documents, SPDs, Amendments, Administrative Forms
401(k)/Profit Sharing, 403(b), DB and Cash Balance Plans
(888) 328-2474    Sales@DATAIR.com    www.DATAIR.com

[Guidance Overview]

Recent Changes to the IRS Employee Plans Compliance Resolution System
"[T]he IRS has added new methods for calculating corrective contributions for employees who are improperly excluded from safe harbor 401(k) plans, 403(b) plans and SIMPLE IRA plans.... The IRS will process applicable fees by converting submitted checks into electronic fund transfers, which require less time to process. A plan sponsor must therefore be sure that sufficient funds are readily available in its checking account before issuing a check for the VCP fee." (Perkins Coie LLP)

[Guidance Overview]

In-Plan Roth Rollover Rules Expanded (PDF)
"Although the overall intent of the expanded In-Plan Roth Rollover provision is clear, the new law was written in general terms, and because there had been virtually no discussion with industry members about this provision of ATRA before the law's passage, there are several aspects of the expanded In-Plan Roth Rollover that will require further detailed guidance from the Internal Revenue Service, and perhaps the Department of Labor and state regulators." (ING)

Four Simple Steps to a Complete Retirement
"Getting the right mix of assets, products and withdrawal strategy ... Getting retirement expenses right ... Maximize your income ... Reaching an agreement[.]" (MarketWatch.com)

The Continuing Efficacy of Commission Disclosures Under PTE 84-24 After the 408(b)(2) Regs
"Sales compensation on financial products sold to employer plans has always been a critical piece of making the private retirement system work, particularly in the small to mid-size marketplace. As policymakers attempt to adopt different policies to increase the 'penetration' of plans in this important segment of the marketplace, no such effort will really be successful unless professionals are paid for the work it takes to get plans to those employers. It is the financial service companies which pay sales commission on their products which really makes these policy initiatives work." (Business of Benefits)


IRS Phone Forum Feb. 13 - Ethical Standards for and Accountability of Practitioners Offering Tax Advice Relating to Employee Benefit Plans

Sponsored by Internal Revenue Service

Professional standards of conduct and accountability will be discussed by Karen Hawkins, the Director of the Office of Professional Responsibility (OPR) and Gabriel Minc, a Senior Tax Law Specialist in Employee Plans. Preregistration required. Attendees are encouraged to submit questions in advance.

Correction of Late Deposit of Elective Deferrals and Loan Repayments
"If it is discovered that a late deposit violation was corrected, but an application was not filed under the VFCP, DOL Regulation 2510.3-102(d)(3) requires that the rate of interest calculated for the correction be based on the plan investment that had the highest rate of return in the plan for the applicable quarter." (McKay Hochman Co., Inc.)

Mary Jo White to Get Obama Nod for SEC Chair
"Ms. White served as the U.S. Attorney for the Southern District of New York from 1993 to 2002. The first woman to serve in that role, she became known for prosecuting corporate crimes as well as terrorism cases.... Some of her clients have been the subjects of SEC cases. Her appointment represents a shift for the top position at the SEC, which traditionally has been filled by chairmen who built careers as regulators or politicians." (Investment News; free registration required)

Pennsylvania Governor Says Funding for Education Will Depend on Fate of Public Pension Costs
"Gov. Corbett said Wednesday that he would not slash funding in his forthcoming budget for basic education or the four state-related universities, although he cautioned that could change if there was no legislative giveback on one of his priorities: reining in public-employee pension costs.... The two public pension plans, for state workers and public school employees, have an unfunded liability of $41 billion." (Philadelphia Inquirer)

Exercise Due Diligence When Choosing a Retirement Plan Advisor
"[Points to explore] when considering a plan advisory firm: All advisors are not fiduciaries.... Advisors are either specialists or generalists.... Learn where potential conflicts of interest lie.... Make sure all fees are reasonable -- including the plan advisor's fees... Question advisory firms about capacity and resources. ... Find out if your advisor has influence." (Retirement Playbook, Inc.)

Pensions Dump Gun Stocks, But Will It Make a Difference?
"Between March of 1996 and October of 2000, more than 16 major public pension funds sold or put restrictions on their tobacco investments.... Yet, the tobacco industry has since rebounded, bringing in $45 billion last year.... Public pension divestment is likely to have even less of an impact on the $11.7 billion gun industry, where public pension funds hold far less stock because only three gun companies trade publicly." (The Fiscal Times)

Chicago Teachers' Pension Fund Will Divest Shares in Assault Weapons Makers
"Chicago Public School Teachers' Pension & Retirement Fund will divest all of its $130,267 in public-market holdings in retail assault weapons manufacturers ... The pension fund's trustees voted to 'instruct the separate account managers to liquidate any and all public-market holdings in retail assault weapon manufacturers as soon as reasonably practicable, and in accordance with the managers' fiduciary duties'[.]" (Pensions & Investments)

Changes in Capital Gain and Dividend Taxes: Would They Affect the Decision to Fund a Qualified Plan?
"[This article considers], first, the relevance of different tax rates for capital gains and dividends under current law, and, second, the impact on participants of changes in those rates (e.g., in connection with changes that may emerge from ongoing budget negotiations.)... Under the Tax Code ... capital gains and dividends have historically been taxed at a lower rate -- for the past several years, 15% -- than ordinary income. How does that affect the relative 'tax value' of saving in a 401(k) plan vs., e.g., buying a growth stock or stock that pays out earnings in dividends?" (October Three)

The Value of Retirement Plans as Savings Vehicles: What If Tax Rates Change?
"[This study starts with] calculating the value of a participant's plan contribution vs. saving outside the plan, for a period of 10 years [then considers] the value of in-plan vs. out-of-plan savings under 2012 rules, taking all the key taxes -- ordinary income, Medicare net investment income and capital gains and dividend taxes -- into account [and illustrates] how the results would have changed had we gone over the 'fiscal cliff,' triggering a broad range of tax increases. Finally, [the study considers] the effect of a 28% cap on the 401(k) 'tax preference' which continues to be a possibility under comprehensive tax reform proposals." (October Three)

IRS Issues 2012 Tax Year Instructions for Form 8606, Nondeductible IRAs
"The IRS has posted at its website the 2012 tax year Instructions for Form 8606, Nondeductible IRAs.... Noted under 'What's New' in the Instructions is a reference to AGI limits for Roth IRA contribution eligibility, an extension for making IRA qualified charitable distributions (QCDs)--including transition rules for 2012 QCDs -- and a reference to the rollover of airline bankruptcy settlement payments under provisions of the FAA Modernization and Reform Act of 2012." (Ascensus)

Should You Rework Your Retirement Savings Strategy in 2013?
"Stocks had a terrific year in 2012, the fiscal cliff has been avoided -- and so now's the perfect time to reconsider your retirement plan, right? Well, yes and no. Yes, tax time is a good time to reevaluate financial plans and in particular focus on your retirement program. But, no, it's rarely the case that a retirement plan needs to be completely reworked just because of a good year in the stock market or changes in tax rates. A successful retirement plan is built over decades, not in reaction to short-term news, and depends on a consistent pattern of saving and investing." (Vanguard)


Qualified Plans at Risk When Jumbled with True Tax Expenditures
"The GAO describes tax expenditures as 'reductions in a taxpayer's tax liability that are the result of special exemptions and exclusions from taxation, deduction, credits, deferrals of tax liability, or preferential tax rates'.... The 'tax expenditures,' if we wish to call them that, inherent in the retirement system do come back to the federal fisc since they are taxed later. In other words, the tax implications for the retirement system do not have the same effect as a government spending program. That is the case if one understands the meaning of deferral. Congress apparently does not." (Benefits Bryan Cave)


401(k) Income Statements: The Next Subprime?
"[J]ust as with the real estate bubble, financial institutions have some responsibility, too. Mortgage lenders and banks shouldn't have been offering sub-prime mortgages to just about anybody who walked through the door. Similarly, if financial institutions and employers that sponsor 401(k) plans want to be trusted, they need to do a better job of educating their customers and employees about the various methods of generating retirement income." (CBS MoneyWatch)


Nobody Benefits: How Teacher Pension Systems Are Failing Both Teachers and Taxpayers
"Key Findings: Pension systems are severely underfunded.... Pension underfunding is even worse than meets the eye ... Retirement eligibility rules add to costs.... Most pension systems are inflexible and unfair to teachers.... In numerous ways, teachers and school districts are being squeezed to make up ground for poorly funded state pension systems.... States are putting their own financial health, as well as the security of their teachers, at great risk by failing to take on a comprehensive approach to pension reform that addresses fundamental problems." (National Council on Teacher Quality)

Benefits in General; Executive Compensation

[Guidance Overview]

SEC Approves NYSE and NASDAQ Listing Standards Relating to Independence of Compensation Committees and Their Advisers (PDF)
"The final listing standards, as amended, require compensation committees to consider six independence factors before selecting or receiving advice from a compensation adviser. However, the final listing standards emphasize that nothing in the rules requires a compensation adviser to be independent, only that the compensation committee consider the six factors before selecting or receiving advice from such adviser. These requirements must be complied with by July 1, 2013." (Alston + Bird LLP)

Which is More Important to Recent Grads: Salary or Benefits?
"For today's graduates on the job hunt, the amount of numbers on a paycheck is becoming more important than benefits such as medical insurance and retirement plans when deciding to take a job offer. Earning an adequate salary to make ends meet should always take priority, but experts caution against overlooking the offerings in a benefits package." (FoxBusiness.com)

2013 Expanded Reporting and Disclosure Requirements Calendar (PDF)
"[W]ho, what, when and where reporting and disclosure information for single-employer pension and welfare plans under [ERISA]. Plan administrators can access concise instructions for filing reports with the [DOL], IRS and [PBGC], and for disclosing tax and benefit information to U.S. plan participants, beneficiaries and alternate payees." (Towers Watson)

Press Releases

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David Rhett Baker, J.D., Editor and Publisher
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