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BenefitsLink Retirement Plans Newsletter

March 18, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Retirement Planning Consultant
for Diversified in IN

for National Pension Design and Consulting Firm in PA

Senior Retirement Plan Consultant
for United Retirement Plan Consultants in PA, WA

Client Relationship Management
for United Retirement Plan Consultants in AK, CA, CT, TX

Senior Compliance Analyst
for T. Rowe Price in CO

Retirement Plan Analyst
for United Retirement Plan Consultants in WA

Retirement Plan Analyst/Consultant - Multiple Locations
for United Retirement Plan Consultants in ANY STATE

Supervisor Health Claims (Benefits TPA)
for Zenith American Solutions in CA

Regional Director - CA (Benefits TPA)
for Zenith American Solutions in CA

Senior Actuarial Analyst
for Verisight, Inc. in IL

Benefits & Compensation Specialist
for Unisource Worldwide, Inc. in GA

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Webcasts and Conferences

Form 5500 Update
Nationwide on March 26, 2013 presented by McKay Hochman Co., Inc.

Employee Plan Compliance Resolution Systems (EPCRS) 2013
Nationwide on March 28, 2013 presented by McKay Hochman Co., Inc.

COBRA for Rookies: Understanding the Basics to Avoid Liability
Nationwide on March 14, 2013 presented by Thomson Reuters / EBIA

FREE WEBINAR: Medicare Part D Retiree Drug Subsidy vs. Employer Group Waiver Plan—Is Now the Time to Switch to EGWP?
Nationwide on April 18, 2013 presented by University Conference Services

What the HIPAA Omnibus Rule Means for You — Your Questions Answered Recorded Webinar
Nationwide on April 2, 2013 presented by Nixon Peabody LLP

Report Card on States' Price Transparency Laws Webinar
Nationwide on March 20, 2013 presented by Health Care Incentives Improvement Institute (HCI3)

View All Webcasts and Conferences

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[Official Guidance]

SEC Issues Guidance Update on Social Media Filings by Investment Companies
"The SEC staff has learned that out of an abundance of caution, many mutual funds and other investment companies may file materials on their social media sites with FINRA unnecessarily. The IM Guidance Update provides examples of the kinds of communications that the staff believes would be subject to a requirement to file with FINRA and examples of communications that would not trigger a filing requirement." (Securities and Exchange Commission)


What Happens at NIPA's NAFE Doesn't Stay at NAFE - April 28 - May 1, Las Vegas

Sponsored by 2013NAFE (2013 NIPA Annual Forum & Expo)

The 2013 NIPA Annual Forum & Expo is the most cost-effective option for earning up to 21 NIPA and 20 ERPA continuing professional education credits for TPA business owners and their staff. The 2013NAFE is now available virtually! Register by Mar. 23 to save.

PBGC's Risk-Based Enforcement Policy Keeps Almost $1 Billion in Pension Obligations from Healthy Companies
"The [PBGC] said today that shifting its enforcement policy away from companies unlikely to default on their pensions benefited about 50 businesses by almost $1 billion since the start of a pilot program announced in November. The new approach screens out financially sound companies and small plans with less than 100 people, which excludes 92 percent of businesses that sponsor plans from the agency's enforcement efforts." (Pension Benefit Guaranty Corporation)

401(k) Plan Participation Improving
"Year-over-year, BofA Merrill's proprietary 401(k) business saw over 955,000 employees start or increase contributions to their 401(k) plans -- a 6% jump from 2011 and a 9% improvement from 2010.... From January through September 2012, 'average monthly positive contribution actions' (contribution starts or increases) were 54,000. Then, in the last three months of 2012, that monthly average jumped by 270%, to 200,000 positive actions a month." (On Wall Street)

Lawmaker Proposes Bill to Give Surplus Pension Funds to Postal Service
"Rep. Stephen Lynch, D-Mass., has proposed a bill to return surplus pension funds to the U.S. Postal Service, saying the move will help the cash-strapped agency meet its financial obligations.... A report commissioned by the USPS inspector general estimated USPS' Federal Employees Retirement System surplus has reached $11.4 billion due to a growing gap between the salary of the average postal worker and the salaries of other federal employees." (GovExec.com)

Ford Seeks More Stability for Its DB Plans
"Ford Motor Co. ... will shift more of its plan's assets to fixed income to shield against changes in interest rates. The shortfall for Ford's U.S. pension plans would have dropped by $2.3 billion or risen by $2.8 billion as of the end of 2012 if interest rates went up or down by 1 percentage point ... Ford is working to diffuse pension risks after the shortfall for its worldwide plans widened by $3.3 billion last year to $18.7 billion[.]" (Bloomberg)


Registration Now in Progress: 2013 Employee Ownership Conference April 24-26

Sponsored by National Center for Employee Ownership

This conference on ESOPs and equity compensation draws over 1,000 attendees from across the U.S. and includes 88 panels and many additional interactive sessions, keynote addresses and more.

Federal Reserve Policy Shifts from Calendar to Economic Targets: Considerations for Investors (PDF)
"Recent changes at the U.S. Federal Reserve ... had serious consequences for investors and plan fiduciaries. No longer can we assume that rates will stay low until 2015 or some date certain in the future. Interest rates can change based on economic conditions." (Milliman)

408(b)(2) Fee Disclosure Is Tremendous Opportunity for Advisers
"Michael Sanders, principal of the retirement practice at Cammack LaRhette Consulting in New York [said] 'Based on the need to make sense of, understand and benchmark the fee disclosures, we have seen a strong uptick in our clients utilizing advisers. A lot of people on the retirement committees do not understand 12b-1 fees, revenue sharing and ERISA budget accounts.' In fact, Cammack LaRhette's annual survey of 200 403(b) sponsors found that, in 2010, 33% worked with a retirement plan adviser. In 2012, that percentage nearly doubled, to 63%." (PLANADVISER.com)

Rethinking a Tax Break on Lump Sums
"Taking advantage of the special tax break for net unrealized appreciation [NUA] on lump-sum distributions from a retirement plan most often was a fairly simple decision ... [The American Taxpayer Relief Act of 2012] changed both ordinary income tax and long-term capital gains rates. Plus, the additional 3.8% health care surtax on net investment income, which includes capital gains, took effect at the start of the year.... [F]inancial advisers should take a fresh look at the NUA strategy to see which of their clients may be affected by these changes and whether NUA may continue to make sense as part of a client's overall plan." (Investment News; free registration required)

401(k) 'Leakage' Slows as Economy Recovers
"From 2008 to 2012: The share of employers who reported an increase among plan participants taking hardship withdrawals during the prior 12-month period fell from 43 percent to 25 percent. The share of employers who reported an increase among plan participants taking loans against their 401(k) accounts fell from 49 percent to 37 percent." (Society for Human Resource Management)


Free Registration Offer for PSCA's Western Regional Conference April 3

Join us in Dallas for an in-depth look at the issues and challenges facing DC plan sponsors today. BenefitsLink is sponsoring 10 free registrations for plan sponsors -– click here and use discount code BLWRCDISC.

SEC Charges Illinois with Securities Fraud Over Pension Funding Disclosures
"There are several aspects of the Cease and Desist Order that are worth noting: [1] The SEC provides some insights as to what it views as an acceptable public pension funding policy -- or at least what it does not.... [2] The SEC does not like the projected unit credit ('PUC') actuarial cost method.... [3] Beware of consultants.... [4] Policies and procedures related to pension disclosures are important." (National Council on Teacher Retirement)

Most Investment Clients Don't Want 'Vacation Retirements'
"Financial advisors should help clients plan to continue working after age 65 rather than for a 'vacation retirement,' says industry coach Mitch Anthony.... 'Retirement is an artificial finish line,' Anthony stressed. 'Somebody decided that at this age, you're done. Is there anyone ... who would like to tell yourself when you're done rather than have someone else tell you?'" (Financial Advisor)

Fiduciaries Not Liable for Procedural Failures Because Decision to Eliminate Stock Funds Was Objectively Prudent
"While these plan fiduciaries may (subject to any appeals) have escaped liability for their failure, this litigation might have ended much sooner if they could have shown that they used a prudent decisionmaking process. Plan fiduciaries looking for guidance about what a prudent process might look like will find some suggestions in the opinion's discussion of procedural prudence." [Tatum v. R.J. Reynolds Tobacco Co., 2013 WL 692832 (M.D.N.C., 2013)] (Thomson Reuters / EBIA)

Employee Ownership Update for March 15, 2013
NCEO Executive Director Loren Rodgers discusses a reduction of company stock in public company 401(k) plans, new U.K. rules for share plans, the adoption of the Moench presumption by the Second Circuit Court of Appeals, the U.S.'s rank in retirement security, and the Certified Equity Professional Institute Symposium. (National Center for Employee Ownership)

Politics of Adviser Oversight Starting to Change
"[U.S. Rep. Maxine Waters (D-Calif.)] will be the first out of the gate by re-introducing her user fee legislation -- possibly within the next week or so.... That could put the Financial Industry Regulatory Authority Inc., which was the leading proponent of the SRO bill last year and covets the role of adviser regulator, in a different position -- following instead of leading the action." (Investment News; free registration required)

District Court Rules in Favor of Plan Fiduciaries in Stock Drop Case
"Although the court found that the defendants had breached their fiduciary duties, it ruled in favor of defendant RJR Tobacco. The court held that because even a prudent fiduciary might have made the same decision as the defendants, defendants' breach of duty did not cause the plan's losses. We believe that the district court applied the wrong legal standard in making that holding and we have filed an appeal to the United States Court of Appeal for the 4th Circuit." (Lewis Feinberg Lee Renaker & Jackson, P.C.)


401(k): Mega Banks' New Gold
"[T]he demand for retirement savings is increasing for all age groups as more Americans will have to rely on their savings to fund their retirement. The retirement saving participation rate will be improved by increasing financial literacy for consumers and employer contribution." (Seeking Alpha)


Bills Abound in Oregon Legislature to Lower Public Pension Costs
"Some 40 bills have been introduced this year to rein in the runaway cost of Oregon's Public Employees Retirement System.... None have had a hearing.... Statewide, the PERS tab increases $900 million come July to dig out of its $14 billion deficit. That's on top of $1.1 billion increase in 2011 and another $700 million looming in 2015." (The Oregonian)


Only One Bill Gets Illinois Closer to Public Pension Reform
"The bill would require rank-and-file state workers, teachers, university personnel and lawmakers to pay 2 percentage points more from their paychecks toward their retirement packages. It would require workers ages 45 and younger to stay on the job longer before they could retire. It would limit compounded cost-of-living increases in retiree income. It would shift, gradually, teacher retirement costs for all new hires onto local school districts instead of the state. Over 30 years, the legislation would pay down substantially the $96.8 billion in unfunded pension liabilities." (Chicago Tribune; free registration required)


Yes, Raising the Retirement Age Would Be Bad for the Poor -- No, That Doesn't Mean It's Unfair
"The moral argument against a higher retirement age rests on the assumption that poor people die young because they are poor. While it is true that life expectancy correlates with income, it is important to remember that correlation is not the same as causation." (The Washington Post)

Benefits in General; Executive Compensation

Following Proxy Advisor Pay Policies Can Erode Shareholder Value
"[In] 2011, companies receiving negative recommendations from Institutional Shareholder Services (ISS) or Glass Lewis received average shareholder support for their say-on-pay proposals of only 69% (for ISS) to 76% (for Glass Lewis).... [c]ompanies that made changes aligned with proxy advisor policies on average had a risk-adjusted shareholder return that decreased at a statistically significant rate of -0.42%." (Towers Watson)

Reinhart Employee Benefits Update, March 15, 2013 (PDF)
Articles include: Changes to Instructions for Completing the 2012 Form 8955-SSA; DOL Issues Advisory Opinion on Clearing Swaps; Departments Issue Regulations on Multiple PPACA Provisions; CMS Issues Clarification on ERRP Maintenance of Contribution Requirement and Posts New "Common Questions" on the ERRP Website; DOL Issues Final Regulations on MEWA Reporting and Enforcement. (Reinhart Boerner Van Deuren s.c.)

2013 Top Five Global Employer Rewards Priorities Survey (PDF)
"Here's how the respondents from 27 different countries ranked the Top Five priorities for 2013: 1. The ability of reward programs to attract, motivate, and retain employees; 2. Clear alignment of Total Rewards strategy with business strategy and brand; 3. Motivating staff when pay increases are flat or non-existent; 4. The cost of providing benefits to employees; 5. Demonstrating appropriate return on investment for reward expenditures." (Deloitte)

How Alzheimer's Will Change Your Workplace
"According to the Alzheimer's Association, more than 5 million seniors in the U.S. have Alzheimer's, a figure that is expected to balloon to 6.7 million by 2025. That sets the stage for a shift in America's workplaces, forcing employers to find new ways to accommodate employees who need to care for loved ones." (U.S.News & World Report)

Bridging the Generation Gap in Professional Services (PDF)
"Work/life balance is very important to Gen Xers and millennials, especially after seeing their parents work long hours away from home.... Acknowledging that generation gaps exist is the first step in bridging that gap.... Structured brainstorming sessions centered around education will point out to management that different employees have different training needs, and some of those needs are generational." (Lane Gorman Trubitt PLLC)

Press Releases

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