Financial Advisor
for MFP Strategies in PA

Retirement Plan Education and Communication Specialist
for MFP Strategies in PA

Retirement Plan Relationship Manager
for MFP Strategies in PA

Actuary
for MassMutual Financial Group in MA

Plan Administrator
for Nationwide Financial in OH

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How to Avoid Hiring Pitfalls - Live FutureOffice Network Smartcast webinar
Nationwide on February 19, 2013 presented by Davidson Marketing Group -- FutureOffice Network

Quality, Affordability and Accessibility - Health Care Reform Webinar
Nationwide on February 15, 2013 presented by Davidson Marketing Group -- FutureOffice Network

ERISA Litigation Update
in California on February 19, 2013 presented by Western Pension & Benefits Council - San Diego Chapter

Health Care Reform
in Pennsylvania on May 3, 2013 presented by Thomson Reuters / EBIA

COBRA Compliance for Group Health Plans
in Pennsylvania on May 2, 2013 presented by Thomson Reuters / EBIA

HIPAA Privacy & Security
in Pennsylvania on May 2, 2013 presented by Thomson Reuters / EBIA

HSAs, HRAs, and Consumer-Driven Health Care
in Pennsylvania on May 1, 2013 presented by Thomson Reuters / EBIA

ERISA Compliance for Health & Welfare Plans
in Pennsylvania on May 1, 2013 presented by Thomson Reuters / EBIA

Cafeteria Plans
in Pennsylvania on April 30, 2013 presented by Thomson Reuters / EBIA

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[Official Guidance]

Text of IRS Notice 2013-6: February 2013 Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
"IRS-updated figures under Code sections 412, 417, 430 and 431: the corporate bond weighted average interest rate, the three corporate bond segment rates, the 30-year Treasury securities weighted average interest rate, the three minimum present value transitional segment rates, and minimum present value segment rates required under MAP-21." (Internal Revenue Service)

[Advert.]

Register Today for PSCA's Premier One-Day DC Plan Conference

Join top DC plan experts March 6 at this unique conference designed to educate plan sponsors about the latest issues and trends affecting the DC industry. Gain the tools you need to manage your plan effectively. Register by Feb. 15 and save $100.

[Official Guidance]

Text of DOL Advisory Opinion 2013-01a: Application of ERISA to 'Cleared Swap' Transactions Under Dodd-Frank Act
"[A] Clearing Member acting pursuant to the Agreement negotiated with the plan fiduciary would not be exercising any authority or control with regard to plan assets and would not be a plan fiduciary ... solely by reason of liquidating the swap contracts in a plan's account and selling any collateral posted as margin in order to pay off losses suffered by such account.... With respect to the Clearing Member representing the plan ... by virtue of a direct contractual agreement with the plan in the procurement of the clearance of swap transactions and other services, such as the collection and transmission, and/or receipt, of margin payments from the plan, the Clearing Member is providing services to the plan and as a result would be a party in interest with respect to the plan ... [W]hen facilitating a swap transaction involving a plan, a Clearing Member is a service provider, and therefore a party in interest with respect to the plan. As a result, certain transactions between the plan and the Clearing Member that occur in connection with swap transactions are prohibited under section 406(a) of ERISA unless an exemption applies.... An 'extension of credit' includes the guarantee of an obligation. As a result, the Clearing Member's guarantee of the plan's obligations to the CCP would be a prohibited transaction[.]" (Employee Benefits Security Administration)

Low Bond Yields and Safe Portfolio Withdrawal Rates (PDF)
"Yields on government bonds are well below historical averages [which] will have a significant impact for retirees, who tend to invest heavily in bonds ... [This paper examines] a model that takes into account current bond yields and allows them to 'drift' toward a higher value during retirement ... [A] retiree who wants a 90% probability of achieving a retirement income goal with a 30-year time horizon and a 40% equity portfolio would only have an initial withdrawal rate of 2.8%. Such a low withdrawal rate would require 42.9% more savings if the retiree wanted to pull the same dollar value out of the portfolio annually as he or she would get with a 4% withdrawal rate from a smaller portfolio." (Morningstar Investment Management)

2013 Fact Sheet on State and Municipal Bankruptcy, Municipal Bonds, and State and Local Pensions (PDF)
"With nearly $3 trillion set aside in pension trusts for current and future retirees, most states and cities have substantial assets to weather the economic crisis.... State and local governments are taking steps to strengthen their pension reserves and have a long-term time horizon.... Long-term investment returns of public funds continue to exceed expectations.... Retirement systems remain a small portion of state and local government budgets." (National Governors Association, National Association of State Retirement Administrators, and nine other associations)

IRS Revises Retirement Plan Correction Program
"The IRS made several important changes to EPCRS, some of which are intended to broaden its scope and others to make the correction process more efficient. The most significant changes [are]: New Forms 8950 and 8951... Applies to 403(b) Plans ... Governmental 457(b) Plans ... Section 436 Corrections ... Lost Participants ... Correcting Missed Matching Contributions ... QNEC for Nondiscrimination Failures ... New Mailing Address." (Snell & Wilmer L.L.P.)

[Advert.]

March 17-20, 2013: What's in Store for Your Healthcare and Retirement Plans?

An educational conference focused on key retirement plan and
healthcare benefits issues for mid-sized employers.
800-864-2063 www.ucs-edu.net

PBGC Predicts Solvency Trouble for Multiemployer Plans
"PBGC projects a 36-percent probability its multiemployer pension insurance program will be insolvent by 2022 and a 91-percent chance of insolvency by 2032, with existing premium levels and economic conditions. These high levels of potential insolvency are attributed to the deterioration of a few large multiemployer plans. PBGC is expected to collect $1.3 billion in premiums from multiemployer plans over the next decade. However, the agency estimates its potential new obligations could increase by $37.6 billion." (Thompson SmartHR Manager)

DOL Settlement with ING Regarding Trading Error Correction Gains (PDF)
"[It] has been [ING]'s practice to keep the gains resulting from the correction of an error in two instances ... The DOL alleged that [ING]'s failure to disclose its transaction error correction policy resulted in it receiving compensation in violation of ERISA. As part of the settlement, [ING] must make full disclosure of its investment transaction policy to both current and prospective clients who are subject to ERISA... [ING] is further obligated to inform clients that it will track, on an annual basis, the effect the corrections have on each plan[.]" (Groom Law Group)

Milliman Pension Funding Index, February 2013
"The funded status of the 100 largest corporate defined benefit pension plans improved by $106 billion during January ... This was the second largest monthly funded status improvement in the 12-year history of the Milliman 100 PFI. The $74 billion funded status decline in 2012 was wiped out and bettered by $32 billion. The deficit was reduced to $305 billion from $411 billion at the end of December 2012, primarily due to the rise in the benchmark corporate bond interest rates used to value pension liabilities. In addition, strong January investment gains also helped to power the funded ratio to 81.7%, up from 76.5% at the end of December 2012" (Milliman)

America's Commitment to Retirement Security Investor Attitudes and Actions, 2013 (PDF)
"Survey responses indicated that households value the discipline and investment opportunity that 401(k) plans represent and that households were largely opposed to changing the tax preferences or investment control in those accounts. A majority of households also affirmed a preference for control over the disposition of their retirement accounts and opposed proposals to require retirement accounts to be converted into a fair contract promising them income for life from either the government or an insurance company. In addition, a vast majority of households agreed that continuing retirement savings incentives should be a national priority." (Investment Company Institute)

Another Court Indicates Skepticism in 'Stock Drop' Case
"[The Ohio District Court ruled that] plaintiffs must present facts showing that they bought the stock at the inflated price and that the market later learned the truth about the alleged misrepresentation, causing the share price to fall significantly. Plaintiffs here did not identify any instance where the truth regarding an alleged misrepresentation was revealed to the market or in which [the company's] stock price dropped as a result." [Metyk v. KeyCorp, No. 10-CV-2112 (N.D. Ohio Jan. 29, 2013)] (Seyfarth Shaw LLP)

FINRA Drops Bid to Regulate RIAs; Advisors Cheer
"FINRA spent much of the last couple of years lobbying to become the primary regulatory body for RIAs -- spending nearly $5 million on lobbying since 2008, according to Reuters. But [Richard Ketchum, FINRA chairman and chief executive] said that, in the wake of leadership changes as a result of the 2012 elections, it was unlikely that the House of Representative Financial Services Committee would move to overhaul the current regulation of registered investment advisors through the Securities and Exchange Commission." (On Wall Street)

Participants Sue Fidelity, Alleging 'Fiduciary Self-Dealing'
"The practice alleged by plaintiffs as an ERISA violation involves Fidelity depositing certain 401(k) plan assets 'on an interim basis in interest-bearing accounts before it disbursed monies as directed by the plans' participants' ... '[Float] Income earned or derived from the plans' assets while invested in such accounts' was an asset of the plans according to ERISA, the lawsuit said." (Pensions & Investments)

CalSTRS Returns 13.45% in 2012, 190 Basis Points Short of Benchmark
"U.S. equity rose 15.93%, underperforming its custom benchmark of 16.51%, while non-U.S. equity increased 17.24%, topping its benchmark at 16.89%. Fixed income returned 6.11% compared to the benchmark return of 4.76%." (Pensions & Investments)

Retirement Plan Outlook 2013: Potential for Tax Reform, Fiduciary Rule Re-Proposal (PDF)
"DOL is continuing its work on one of its most talked-about projects, the re-proposal of the definition of the word 'fiduciary' under [ERISA section] 3(21)(A). [Assistant Secretary of Labor Phyllis Borzi] said the rule could appear as early as July, as indicated by DOL on its fall 2012 regulatory agenda ... The question of raising PBGC premiums will again be a big topic of discussion in 2013 ... Congress may enact another pension funding relief measure in 2013 to help defined benefit plan sponsors that will see the impact of recently enacted interest rate changes begin to phase out a couple of years from now." (Bloomberg BNA, via Pension Rights Center)

Proposal to Change Florida State Pensions to 401(k) Plan Moves Forward
"A bill placing all new state employees in a 401(k)-style retirement plan passed a House subcommittee on a party-line vote .... Supporters of the proposal say it will stabilize future retirement costs at a time that the current pension plan is relatively sound and can support current employees and retirees." (St. Petersburg Times)

San Bernardino, CalPERS Fail to Reach Deal Ahead of Court Date
"San Bernardino still has not provided crucial financial information, or proposed a plan for resuming its twice-monthly, $1.2 million payments to the fund, [a] CalPERS spokesman said.... CalPERS says its efforts to help the city produce the information have produced nothing, setting the stage for a contentious court hearing on February 12.... Should the bankruptcy judge rule that the pension fund not be paid in full in a restructuring of the city's debt, other struggling California cities could be tempted to alter their payments to CalPERS." (Reuters)

Don't Miss Uncle Sam's Credit on Retirement Saving
"Uncle Sam offers a tax credit that can be worth up to half of what you contribute to a traditional individual retirement account (IRA), Roth or workplace retirement plan. The Retirement Savings Contribution Credit -- a.k.a the Saver's Credit -- is only available to taxpayers with moderate or low income. Many people who qualify for the credit aren't benefiting: only 20 percent of taxpayers with income under $50,000 are aware that the credit exists[.]" (Reuters)

[Opinion]

Qualified Plans at Risk When Jumbled With True Tax Expenditures
"[T]here seems to be ample evidence that, based on our employer-sponsored system, tax expenditures are a critical component. They encourage plan adoption and retention by employers, plan contributions by both employers and employees and assist greatly in America's overall savings for retirement. The critical unknown based on the GAO question is a determination of 'how much' expenditure is needed to make sure that there are net benefits in the form of efficiency gains for society as a whole." (Benefits Bryan Cave)

[Opinion]

The Pension Fund That Ate California
"How could a financially troubled former union leader occupy such a powerful position at the giant retirement system, which manages roughly $230 billion in assets? The answer lies in CalPERS's three-decade-long transformation from a prudently managed steward of workers' pensions into a highly politicized advocate for special interests. Unlike most government pension funds, CalPERS has become an outright lobbyist for higher member benefits, including a huge pension increase that is now consuming California state and local budgets." (City Journal)

Executive Performance Metrics and Their Link to Value
"Executive compensation design has moved towards [long-term incentive (LTI)] components in an attempt to align management interests with those of long-term shareholders; further, those LTIs are now largely performance-based. Among companies using performance-based LTIs, most (53%) use a mix of TSR and financial measures in their equity LTI plans; others (28%) use financial measures only; and a smaller minority (15%) use TSR only. This use rate puts a premium on getting the financial measures right[.]" (Farient Advisors)

Second Circuit Narrows ERISA Exhaustion Requirement When Plan Document Is Ambiguous on Need to Follow Claims Procedures
"[The Court] focused on the Plan's claims procedure language, paying special attention to the repeated usage of the phrase '[a] benefit claim' [and] drew a distinction between claims seeking retirement benefits versus inquiries seeking clarification of future benefits.... The Second Circuit then adopted precedent from the Seventh and Eleventh Circuits, whereby a plaintiff who reasonably interprets plan terms not to require exhaustion and, as a result, does not exhaust his or her administrative remedies, may proceed to directly to federal court." [Kirkendall v. Halliburton, Inc. (2nd Cir., Jan. 29, 2013) (McDermott Will & Emery)

Groom Law Group Expands its Fiduciary Responsibility Practice: David Kaleda Joins Firm
Groom Law Group

PayerFusion Expands Reach of Health Plan Administration Services Across the USA
PayerFusion Holdings LLC

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