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BenefitsLink Retirement Plans Newsletter

February 7, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Director of Sales Support and Implementation
for July Business Services in TX

Sr. Retirement Plan Administrator
for First Savings Retirement Services in PA

Employee Benefits Attorney
for Ice Miller LLP in IN

Litigation Associate
for Boutique Benefits Firm in DC

401(k) Internal Sales / Administrator
for Farmer & Betts in OR

Assistant General Counsel / Director of Government Affairs
for The American Society of Pension Professionals & Actuaries in VA

Retirement Plan Consultant
for Sentinel Benefits & Financial Group in NY

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Webcasts and Conferences

New HIPAA/HITECH Act Regulations - What Plan Sponsors Need to Do to Comply
Nationwide on March 14, 2013 presented by ABA Joint Committee on Employee Benefits

ERISA Litigation National Institute
in Illinois on May 20, 2013 presented by ABA Joint Committee on Employee Benefits

NAPA/ASPPA 401(k) Summit
in Nevada on March 3, 2013 presented by American Society of Pension Professionals & Actuaries (ASPPA)

Long-Term Disability Benefits Advanced Seminar
in Illinois on May 22, 2013 presented by ABA Joint Committee on Employee Benefits

WiPN Seattle and Las Vegas Events - February and March
Nationwide on February 26, 2013 presented by Women in Pensions Network

Health Care Reform
in Minnesota on April 26, 2013 presented by Thomson Reuters / EBIA

COBRA Compliance for Group Health Plans
in Minnesota on April 25, 2013 presented by Thomson Reuters / EBIA

HIPAA Privacy & Security
in Minnesota on April 25, 2013 presented by Thomson Reuters / EBIA

HSAs, HRAs, and Consumer-Driven Health Care
in Minnesota on April 24, 2013 presented by Thomson Reuters / EBIA

ERISA Compliance for Health & Welfare Plans
in Minnesota on April 24, 2013 presented by Thomson Reuters / EBIA

Cafeteria Plans
in Minnesota on April 23, 2013 presented by Thomson Reuters / EBIA

Application for Health Insurance Webinar
Nationwide on February 8, 2013 presented by Centers for Medicare & Medicaid Services (CMS)

Application for Health Insurance Webinar
Nationwide on February 11, 2013 presented by Centers for Medicare & Medicaid Services (CMS)

Impact of Recent Agency FAQ Guidance on HRAs and Private Exchange Arrangements Teleconference
Nationwide on February 13, 2013 presented by Employers Council on Flexible Compensation (ECFC)

Health Care Reform Update: The Employer Mandate and Other Considerations for 2013 Webinar
Nationwide on February 13, 2013 presented by Ballard Spahr LLP

Helping Small Business Owners Save for Retirement Webcast
Nationwide on February 27, 2013 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

View All Webcasts and Conferences

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


[Guidance Overview]

DB Plan Sponsors in Bankruptcy Get Increased Flexibility to Modify Plan Distributions
"Defined benefit plans present particular problems for employers experiencing financial distress. Before the new anti-cutback exception was created, employers in bankruptcy had limited options for addressing underfunded defined benefit plans.... AMR Corporation, the parent of American Airlines, may be first debtor in bankruptcy seeking to use the new exception." (McGuire Woods LLP)


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Choose "Pension Reporter System" modules you need:
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Has the Shift to 401(k)s Been a Disaster?
"The first crop of workers who spent their careers under the 401(k) regime is nearing retirement age now ... So, how is this 'grand experiment' in retirement economics working out for employees? 'The 401(k) experiment has been a disaster, a disaster which threatens to doom millions to economic misery during the later years of their lives,' [says Duncan Black, better known as the blogger Atrios, at USA Today.]" (The Week)

Fewer Have Retirement Funds, More Raid Them
"'Everyone knows [DB pensions are] a thing of the past. But we also found that participation in defined contribution plans declined, going from 33 percent of employed men in 1999-2001 to 30 percent in 2007-2009. And that is the opposite of what we expected,' [said U-M economist Frank Stafford]." (CBS Detroit)

Mutual Fund Industry Playing Defense on 401(k)s
"A sizeable majority said they find that 401(k) plans help them get ready for retirement and -- spoiler alert -- they like the tax breaks.... [A]n overwhelming majority of the people surveyed by ICI think it's important that workers get to make their own in-plan investment decisions, and that Washington not try to force decisions, Treasury bonds, or insurance annuities on participants." (Reuters)

Worm Wiggles Itself Into Apple Stock
"Following the release of the company's disappointing fourth-quarter earnings report on Jan. 23, the stock fell 12.4% in a single day.... [T]hat translates to a paper loss of $2 billion for 33 pension funds that manage equities internally.... The value of the Apple stock held by the 33 pension funds fell $9.2 billion [between Sept. 19 and Jan. 25]." (Pensions & Investments)

Dell 401(k) Participants Would Get Minor Boost from Privatization Deal
"Based on the latest available data -- the year ended Dec. 31, 2011 -- participants in the Dell 401(k) owned $122.7 million worth of Dell stock out of total plan assets of $3.06 billion in 2011, according to an 11-K statement filed with the Securities and Exchange Commission in June. (The Dell plan now has about $3.4 billion in assets.)" (Pensions & Investments)

Legislative and Regulatory Landscape for 401(k) Plans in 2013 (PDF)
"2013 is likely to be a year in which federal regulators, particularly at the [DOL], will continue to be busy addressing plan investment, disclosure, and fiduciary responsibility issues. Lawmakers will maintain their focus on deficit, spending, and tax issues, which will potentially threaten retirement savings incentives. [In this article] is a chart identifying the issues [which the authors] expect to attract attention in 2013[.]" (T. Rowe Price Retirement Plan Services)

CalPERS Projects $200 Million State Rate Hike
"Annual state pension payments to CalPERS are expected to increase $200 million to a total of $4 billion in July. But the rate may go higher as the powerful pension board takes a new look at its risks and policies." (CalPensions)

Rating Agencies Downgrade Kentucky, Citing State's Pension Woes
"There was nothing ambiguous or complicated about Standard & Poor's (S&P) reasoning behind downgrading Kentucky. 'The outlook revision reflects our concern over pension funded levels, which have declined and are likely to continue declining due to lower-than-actuarially required funding of pension liabilities, and budge[.]" (aiCIO)

Los Angeles Pensions Decide to Divest from Assault Weapon Companies
"The measure instructs the city's three pension fund systems to report on their investments and begin the process of divesting from companies that produce, sell or market assault weapons, high-volume ammunition magazines, high-caliber ammunition and other firearms 'of a type used to inflict mass casualties'[.]" (The Huffington Post)

Fixing the Public Sector Pension Problem: The True Path to Long-Term Reform (PDF)
"The necessity for real reform is problematic for policymakers, who must deal with a workforce resistant to the loss of guaranteed monthly pension benefits; and for political constituencies, including government workers and their allies, whose support for defined-benefit pensions in the public sector stems as much from ideology as from financial self interest. This is a balancing act that leaves policymakers with few politically popular choices. Yet politicians' current approach to evading such opposition -- that of adopting incremental reforms while repeatedly deferring liabilities -- is no longer viable." (Center for State and Local Leadership at the Manhattan Institute)

Court OKs PBGC's Denial of Shutdown Benefits
"The PBGC's decision to not pay 'shutdown' benefits to participants whose plant closed was not arbitrary and capricious because there was sufficient evidence in the record for the agency to reasonably conclude that a permanent shutdown of plan operations did not occur until after the employer's defined benefit plan was terminated ... The participants argued the agency's decision was subject to de novo review. The appellate court disagreed, noting that when the shutdown became permanent was at issue, but the definition of 'permanent shutdown' as used in the plan was not." (Wolters Kluwer Law & Business)

Over Half of European DB Plans Will Alter Risk Appetite
"Over half of all European [DB] pension schemes (58 percent) plan to change their risk profile over the next three years to address funding challenges, according to a [recent] survey ... 60 percent of DB schemes will increase their allocation to alternative investments over the next three years. This result is in contrast to their actions over the previous three years, during which time only 28 percent increased their exposure to alternatives. With some appetite to take greater risk, 60 percent are saying they will increase their exposure to emerging markets, versus 35 per cent having done so over the last three years." (State Street Corporation)

Americans Back Tax Breaks for Retirement Savings
"A poll of 4,000 U.S. households ... found that 85% of the respondents disagree that Congress should eliminate tax deferrals associated with defined-contribution retirement products such as 401(k) plans and individual retirement accounts. By similar margins, respondents rejected curbing retirement tax breaks. In the survey, 82% of all respondents opposed reducing individual contribution limits, while 79% opposed limiting employer contributions." (Investment News; free registration required)


Must We Bribe Employers with Tax Breaks to Help Employees Save for Retirement?
"To test the effect of tax subsidies, [a recent study uses] responses to a 1999 reduction in the subsidy for retirement contributions for those in the top tax bracket. Their results show that pension contributions declined. But the decline was nearly entirely offset by an increase in other types of saving. The tax subsidy, in other words, had primarily induced individuals to shift their saving from taxable to tax-advantaged retirement accounts, not increase overall household saving." (MarketWatch)

Benefits in General; Executive Compensation

[Guidance Overview]

DOL FAQs Address Hurricane Sandy-Related Benefits Issues
"Individuals who lose coverage as a result of Hurricane Sandy may be able to request special enrollment in another group health plan (for example, under a spouse's plan), which must be requested within 30 days of losing eligibility for other coverage." (Practical Law Company)

[Guidance Overview]

DOL Updates Late 5500 Correction Program
"Paper filings are no longer accepted for either timely or delinquent filings ... The DOL added an online tool to its website ..., designed to assist filers in determining which versions of Forms 5500/5500-SF and schedules to use when filing delinquent annual reports or amending prior year annual reports under EFAST2 ... Filers who utilize the online payment system are no longer required to mail a hard copy of the Form 5500 (without schedules) to another DVFC address." (Benefits Bryan Cave)

Social Security, Health Spending to Hit $3.2 Trillion a Year by 2023
"Federal spending for Social Security, Medicare and Medicaid stood at $1.6 trillion in 2012, with healthcare spending alone at $885 billion. CBO predicts that annual outlays for those programs alone will top $3 trillion by 2023, with Obama's healthcare reform law adding another $134 billion in costs to provide coverage for 26 million people through new state-based healthcare exchanges." (Chicago Tribune)

Compensation Costs Increased in December 2012
"Compensation costs for civilian workers increased 1.9 percent for the 12-month period ending December 2012, essentially unchanged from the December 2011 increase of 2.0 percent. Wages and salaries increased 1.7 percent for the current 12-month period. In December 2011 the increase was 1.4 percent. Benefit costs increased 2.5 percent for the 12-month period ending December 2012, down from the December 2011 increase, which was 3.2 percent." (U.S. Bureau of Labor Statistics)

Press Releases

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