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March 4, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Sales Consultant 401k/DB Administration
for Farmer & Betts in ANY STATE

Small Plan Actuary
for National Retirement Services, Inc. in CA

Assistant General Counsel - Retirement Plans
for Nationwide Mutual Insurance Company in OH

Fund Manager
for Verisight, Inc. in CA

Senior Employee Meeting Liaison
for T. Rowe Price in FL, MD

Consultant (concentration in Health Informatics)
for BenRx in GA

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Webcasts and Conferences

New Final Regulations on HIPAA Privacy and Security: HITECH, Breach Notification, Individual Rights, and More
Nationwide on February 28, 2013 presented by Thomson Reuters / EBIA

Putting Your Plans on Auto-Pilot: Automation Options
Nationwide on April 25, 2013 presented by ASC Institute

Forms! Forms! Forms! Administrative and Regulatory Requirements
Nationwide on May 23, 2013 presented by ASC Institute

Challenges Facing Multiemployer Pension Plans: Reviewing the Latest Findings by PBGC and GAO Hearing Webcast
Nationwide on March 5, 2013 presented by U.S. Senate Health, Education, Labor, and Pensions Committee

Health Care Reform Webinar - Coverage Improvements during the Transition Period
Nationwide on March 15, 2013 presented by Davidson Marketing Group -- FutureOffice Network

A Current Update of EPCRS Through Rev. Proc. 2013-12
Nationwide on March 4, 2013 presented by John Marshall Law School, The

Recreating Sustainable Retirement: Resilience, Solvency, and Tail Risk Symposium
in Pennsylvania on April 25, 2013 presented by Pension Research Council

View All Webcasts and Conferences

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[Official Guidance]

SEC Seeks Information to Assess Standards of Conduct and Other Obligations of Broker-Dealers and Investment Advisers
"[T]he SEC is requesting data and other information from the public and interested parties about the benefits and costs of the current standards of conduct for broker-dealers and investment advisers when providing advice to retail customers, as well as alternative approaches to the standards of conduct. While the SEC is particularly interested in receiving empirical and quantitative data and other information, all interested parties are encouraged to submit comments, including qualitative and descriptive analysis of the benefits and costs of potential approaches and guidance." (Securities and Exchange Commission)


Register Today! 401(k) Investment Lineup: SF 4/16 - Dallas 4/18 - CHI 4/23 - NY 4/25

Sponsored by Pensions & Investments

Free registration for qualified plan sponsors. Sponsored by Pensions & Investments - learn how to design a 401(k) offering that helps your participants generate lifetime retirement income.

SEC Seeking More Data on Uniform Fiduciary Standard
"[T]he agency's 2011 report suggested that it no longer makes sense for advisors to be regulated under the fiduciary requirements stipulated in the 1940 Investment Advisers Act, while broker-dealers are overseen in accordance with the 1934 Securities Exchange Act, along with the provisions of any self-regulatory organization to which they belong." (On Wall Street)

Pension Funding Gap Among the States Is Up 20 Percent in 2012
"The recovery in the U.S. state pension system suffered a setback in 2012 as the huge funding shortfall in a large swath of state pensions swelled more than 20 percent, interrupting two years of improvement following the devastation of the financial crisis. The shortfall in 109 of the nation's state pension plans, which guarantee retirement for millions of public workers such as police, firefighters, and teachers rose to $834.2 billion in 2012, up from $690.3 billion the previous year[.]" (Reuters)

In Memoriam: Dr. Dan McGill (PDF)
"A giant in the field, Dr. McGill wrote eight books, co-authored several more, and authored numerous scholarly papers. His textbook, Fundamentals of Private Pensions, first appeared in 1964 and is now in its 9th edition; it remains the pension industry's authoritative text. His publication Guaranty Fund for Private Pension Obligations was a precursor of Title IV of ERISA. Dr. McGill ... founded the Wharton Pension Research Council in 1952 and directed its affairs until his retirement [in 1990]. He also chaired the Insurance and Risk Management Department at the Wharton School, and he was the first chair of the presidentially appointed Advisory Committee of the Pension Guaranty Corporation." (Pension Research Council, Wharton School of the University of Pennsylvania; free registration required)

Pension 'Cram Down' in Stockton Bankruptcy?
"A problem for the bond insurers is that Stockton does not want to cut pensions. If the judge rules that Stockton is eligible for bankruptcy, the city might ask for a cram down that spares CalPERS if no agreement on a plan is reached in negotiations.... Stockton argues that eliminating retiree health care and employee pay cuts of up to 30 percent are a fair share of the 'hair cut' for members of [CalPERS]." (CalPensions)


Register Today - PSCA's Western Regional Conference - April 3

Sponsored by PSCA (Plan Sponsor Council of America)

Join PSCA and top DC plan experts at this conference in Dallas designed to educate plan sponsors about the latest issues and trends affecting DC plans. Gain the tools you need to manage your plan effectively. Register by Mar. 22 and save $100.

401(k) Plans Make Aggressive Moves to Limit Access to Company Stock
"A Callan survey of 103 defined contribution plan executives found that 44.1% offered company stock in their DC plans in 2012, down from 48% in 2009. Among those, the survey found 14.8% plan to freeze company stock funds, 7.3% will eliminate stock from the lineup and 3.7% will place a limit on holding stock this year." (Pensions & Investments)

Puerto Rico Pension Fix Allays Insolvency Concern
"Governor Alejandro Garcia Padilla, 41 ... wants to boost the 6.8 percent funding level of Puerto Rico's largest pension system and keep the island's general obligations from being cut to junk. Officials last week recommended steps such as raising the retirement age and employee contributions.... 'It's one of the most comprehensive reform plans we've seen proposed for a state or local pension plan,' [said Tom Weyl, director of muni research at Barclays PLC in New York]." (Bloomberg BusinessWeek)

ESOPs Feel Heat from Campaign Against Abuses
"A Department of Labor push to curb employee stock ownership plan abuses is catching more plan sponsors and their fiduciary consultants for a variety of transgressions. Those transgressions include overvalued stock, ill-timed stock purchases, conflicts of interest and outright plan mismanagement.... 'The number of lawsuits in the past six months is unprecedented,' [said] J. Michael Keeling, president of the ESOP Association in Washington[.]" (Pensions & Investments)

Corporate Pension Funded Status Not Rising Despite Contributions
"For funded status to exceed 90%, a plan would need both a 15% increase in growth assets and a discount rate increase to 4.67% from the current rate of about 4.1% ... The positive correlation between equity returns and corporate debt credit spreads, a key metric in determining the interest rate to discount pension liabilities, makes this scenario of both rising equity returns and interest rates unlikely[.]" (Pensions & Investments)

Employee Ownership Update for March 1, 2013
NCEO Executive Director Loren Rodgers discusses the new tax law extension for recognition of built-in gains tax; new data on company stock in 401(k) plans; Sherwin-Williams to pay $80 million to ESOP participants in settlement; and a Fox Business News article on employee ownership. (National Center for Employee Ownership)

Say Goodbye to the 4% Annual Withdrawal Rule for Retirement
"In recent years, the 4% rule has been thrown into doubt, thanks to an unexpected hazard: the risk of a prolonged market rout the first two, or even three, years of your retirement. In other words, timing is everything. If your nest egg loses 25% of its value just as you start using it, the 4% may no longer hold, and the danger of running out of money increases." (The Wall Street Journal)

Never Too Late to Do Retirement Planning
"By adjusting behaviors and planning more now, people in their 20s, 30s, 40s and even 50s can be well set for retirement. Here are the steps to follow. Work a little longer.... Lower expectations.... Save more.... Have the right mix.... Make assets work." (Recordnet.com)

How Do Input and Output Smoothing Methods Affect the Funding of Defined Benefit Plans? (PDF)
"In general, the choice between input and output smoothing methodologies does not directly affect the solvency of defined benefit plans or the predictability of statutory requirements.... Input smoothing methodologies change the relationship between market-based and reported values of pension assets and liabilities. Users of the reported values need to understand their relationship to market-based values to ensure appropriate use of the information." (Society of Actuaries, Urban Institute, and Women's Institute for a Secure Retirement (WISER))

New Book Provides Valuable and Scholarly Analysis of the State and Local Pension Dilemma
"Most state and local pensions, Munnell shows, have improved their investment practices and are more professionally managed today than they were in the 1970s. Second, Munnell argues that variation in pension-plan funding is 'simply a story of fiscal discipline.' She claims that neither the 8 percent discount rate -- the assumed rate of return on investments that determines contributions and liabilities -- nor public employee unions' collective bargaining activities has caused the underfunding crisis." (City Journal)

Piling on the Pension Pain at the $20 Billion Club
"[In 2012,] asset returns [among the 19 U.S.-listed corporations with the largest worldwide pension liabilities] were strong, adding about $76 billion. And contributions continued to outpace new benefit accruals (by roughly $14 billion in 2012). But this was more than outweighed by the effect of the fall in the discount rate used to value liabilities; the median discount rate used in the projected benefit obligation (PBO) calculation for U.S. plans fell from 4.89% to 4.00%." (Russell Investments)

401(k) Plans Present a Wealth of Opportunities for Advisers
"There are two distinct areas of potential liability exposure that are within the adviser's control, according to Jason C. Roberts, chief executive of the Pension Resource Institute. 'You need a prudent investment process, and you must be able to demonstrate [it] with good document retention,' he said. 'But the sleeper issue is prohibited transactions.'" (Investment News; free registration required)

A Step-By-Step Guide to Selecting Retirement Plan Vendors
"[Retirement plan service-provider selection involves a four-step process:] (1) define the services (benefits) to be delivered, (2) identify providers capable of delivering the desired services, (3) evaluate the abilities of competing vendors to deliver the services at a fair and reasonable cost, and (4) engage and monitor the top-ranked service provider. The first step is the most important." (Investment News; free registration required)

Meeting the Retirement Challenge: New Approaches and Solutions for the Financial Services Industry
"[F]ive main barriers [inhibit] many Americans from taking a more disciplined approach to retirement. These include: Conflicting Priorities; A Failure to Communicate; A Lack of Product Awareness; Mistrust in Financial Institutions and Intermediaries; [and] The 'Do-It-Myself' Mentality[.]" (Deloitte Center for Financial Services)

Aging and Pension Reform: Extending the Retirement Age and Human Capital Formation
"Projected demographic changes in industrialized and developing countries vary in extent and timing but will reduce the share of the population in working age everywhere.... [O]penness has a relatively mild effect. In contrast, endogenous human capital formation in combination with an increase in the retirement age has strong effects. Under these adjustments maximum welfare losses of demographic change for households alive in 2010 are reduced by about 3 percentage points." (National Bureau of Economic Research; purchase required for full document)


In Favor of Stronger Gun Control Laws, But Against the Divestiture of Gun Stocks
"The case against the divestiture by public pension plans of the stocks of gun manufacturers is as strong as the case for stronger gun control laws.... However, pension fiduciaries are not investing their own money. Such fiduciaries should not use the funds under their control to pursue political agendas -- even political agendas with which [the author agrees].... For public pension fiduciaries to divest gun stocks is both futile and troubling. In a competitive market, such divestiture is an economically meaningless gesture." (Prof. Edward Zelinsky, OUPblog)


A 401(k) Alone Does Not Provide Retirement Security for Illinois State Employees
"For generations, defined benefit plans have provided American workers with retirement security. That benefit was delivered reliably and at a manageable cost to both employers and workers. With the exception of the United States, such continues to be the state of the art in the developed world. Transitioning to a defined contribution plan would shift all risk and obligation away from the employer to the worker. It would not simply change the nature of how retirement security is delivered to state employees; retirement security for public servants would end." (The State Journal-Register)


Anti-401(k) Agenda?
"Why are the folks who advise sponsors of 401(k) plans in such denial that these plans currently don't walk, talk or quack like regular pensions? ... [H]alf of the workforce, or about 58 million workers, do not have access to any type of retirement plan at work. What's more, even when their employer offers a plan, 20 million workers don't participate.... [T]he consultant who 'invented' the 401(k) plan in 1980 intended it to add security to an existing defined benefit plan -- not to replace it." (Retirement Solutions)

Benefits in General; Executive Compensation

Deferred Compensation Reminder: Beware Reimbursement Offset Provisions
"Section 409A of the Internal Revenue Code, regulating deferred compensation arrangements, can create traps for employers in situations where the employer wants to offset against amounts owed to the employer, unpaid amounts owed by the employee. [If] an employee has an obligation to reimburse an employer for certain expenses, that obligation cannot provide that the employer can offset that obligation against amounts of deferred compensation the employee is entitled to receive in the future. These types of offsets are considered prohibited accelerations of the deferred compensation payments, in violation of Section 409A." (Haynes and Boone, LLP)

Press Releases

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