EmployeeBenefitsJobs.com logo BenefitsLink.com logo

BenefitsLink Retirement Plans Newsletter

March 20, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
         Past Issues  |  Search

Employee Benefits Jobs

Manager, Client Relationship Management
for MullinTBG, A Prudential Company in CA, FL, NY, TX

Analyst, Regulatory Supervision
for Prudential in NJ

Post Your Job on employeebenefitsjobs.com

View All Jobs

RSS feed for jobs RSS Feed: All Jobs

Webcasts and Conferences

New EPCRS Plan Correction Procedures-the Old and the New
in New York on April 18, 2013 presented by WEB (Worldwide Employee Benefits Network ), New York Chapter

ASPPA DFW Chapter presents: Retirement Plans After the Fiscal Cliff
in Texas on April 24, 2013 presented by MassMutual

Voluntary Correction of Retirement Plan Defects Recorded Webcast
Nationwide on April 3, 2013 presented by Morgan Lewis & Bockius LLP

Voluntary Benefits Employer Boot Camp - Dallas/Plano
in Texas on April 9, 2013 presented by Rhodes-Joseph & Tobiason Advisors, LLC

View All Webcasts and Conferences

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


[Guidance Overview]

Correcting a Failure to Adopt an Interim Amendment under the New EPCRS
"Under the old EPCRS, the IRS provided a check-the-box structure to identify the interim amendment failures. Under the new EPCRS, the IRS still wants interim amendments to be identified but now requires more specificity and removes the check-the-box structure. Schedule 1 submissions for interim amendment failures must now provide the Code section and a description of each interim amendment being corrected." (SunGard Relius)


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

Missouri's Public Pensions Are Worse Than They Appear
"Even as neighboring Illinois gets lambasted regularly for having the worst-funded public pension plans in the nation, Missourians have believed their state's plans to be relatively sound.... [According to a recent study,] the state's five biggest pension funds have enough assets to cover just 46 percent of their projected liabilities. The plans themselves claim they are 80.5 percent funded." (STLtoday.com)

Mercer U.S. Pension Buyout Index as of February 28, 2013
"[T]he cost of purchasing annuities for retirees is approximately 110% of the accounting liability as of February 28, 2013, continuing to be 'cheaper' when compared to early 2012 when costs were approximately 113% of accounting liabilities. In 2013 we saw the cost rise slightly from 108% at year-end December 31, 2012 to 110% as of January 31, 2013 and remain at 110% as of February 28, 2013." (Mercer)

Controlled Group Rules for Qualified Retirement Plans -- Yours? Mine? Ours?
"The purpose of this article is to alert our readers to a couple of situations which can be real 'gotchas' for employee benefits advisors and their clients. For example, did you know that a married couple who each has their own business could be required to aggregate their qualified retirement plans for testing purposes? Or, that parents of a child under age 21 who each has their own business could be required to aggregate their plans for testing, even if the couple isn't married?" (Chang Ruthenberg & Long)

Subsidies vs. Nudges: Which Policies Increase Saving the Most?
"To encourage retirement saving, policymakers use two types of tools: tax subsidies and automatic contributions. Both tools are effective at increasing retirement saving ... A recent study, using Danish data, addresses this issue: A revision in the Danish tax subsidy led to a change in retirement saving, but it was almost fully offset by a change in non-retirement saving. In contrast, automatic contributions boosted retirement saving with only a small impact on non-retirement saving." (Center for Retirement Research at Boston College)


SouthWest Benefits Association 38th Annual Conference - May 8-10 - New Orleans

Sponsored by SouthWest Benefits Association

Staying up to date in the world of benefits has never been more critical. Changes in regulations, technology and the economy continue to influence benefits structures. Participation in the SWBA Conference is the most cost-effective way to stay informed.

Boeing to Close DB Plan to Certain Category of Workers
"Boeing Co. will close its defined benefit plan to new hires in the technical worker unit of the Society of Professional Engineering Employees in Aerospace, IFPTE Local 2001 ... New employees will enroll in only the existing Boeing 401(k) plan but have an enhanced feature of an automatic company annual contribution of 3%, 4%, or 5%, depending on age as well as the existing 75% company match for the first 8% of pay participants contribute." (Pensions & Investments)

Derivative Laws May Push Pensions to Take More Risk, British Pension Association Says
"Higher costs associated with derivative trades through increasing margin requirements could make pension funds abandon hedging strategies, making their assets more susceptible to moves in inflation and interest rates, the London-based [National Association of Pension funds (NAPF)] said in a policy paper[.]" (Bloomberg)

Are You Confident About Your Ability to Retire?
"Debt, cost of living and job uncertainties all contribute to the problem, according to the survey, but here's another factor that undermines their confidence: A whopping 54 percent of respondents haven't even tried to figure out how much money they'll need to save to live comfortably in retirement. It's hard to be confident about your destination when you don't know where you're going." (AARP)

Almost Half of British Pre-Retirees Admit They Currently Save Nothing for Retirement
"The nation will depend on part-time work and state benefits, as well as pensions, for income in retirement However, on average, people think they will retire on 37% of final pre-retirement salary. Two thirds of adults have no idea what size pension fund is required to generate an income of 25,000 GBP a year." (JPMorgan)

Can Japan's Big Stock Rally Revive Demand for Defined Contribution Pensions?
"The reticence of Japanese investors is evident in the slow growth of defined contribution pension plans.... [F]ormer prime minister Junichiro Koizumi ... hoped the growth of these plans would foster an equity culture in Japan and relieve the burden on the country's pay-as-you-go public pension system. The results have been rather less dramatic." (Institutional Investor)

Air Canada Bonuses Tied to Pension Payments?
"In an unusual move of government intervention in Air Canada's program of executive performance incentives, Ottawa will allow the Montreal-based airline's top executives to receive performance bonuses that grow as the company contributes money to its pension deficit.... By allowing bonuses to be paid once a certain target amount is reached toward paying off the pension deficit, the government is striking a balance between the dual priority of ensuring sound pension management and sound management of the company." (Pension Pulse)


Margin Requirements for Non-Centrally Cleared Derivatives in Europe
"As guided by UK pension law, pension schemes use derivatives largely to hedge liabilities and, thereby, reduce risk. Extra costs or processes that provide a disincentive for pension schemes to use derivatives could in fact increase the degree of risk in the markets. Together with the other new requirements being introduced in the European Union through EMIR, the new margin requirements would significantly increase the cost of hedging to pension schemes. This would have an impact on individual pension scheme members through lower pensions, increased contributions, increased risks, higher pension ages or scheme closures." (National Association of Pension Funds)


Americans Bracing for a Retirement Crisis?
"[G]iven the looming retirement crisis, [the author thinks] it's high time the United States does the unthinkable -- expand Social Security to bolster retirement benefits for all Americans and adopt the same management and governance standards as the Canada Pension Plan Investment Board and other large Canadian public pension plans. But don't think that Canada's retirement system is vastly superior to the U.S. system." (Pension Pulse)


GASB Loopholes Created Illusions of Solvency
"What if most of the public employee compensation enhancements of the past decade or more in California were based on inaccurately optimistic government financial statements? Or to be blunt, what if government decision makers thought they could afford these compensation enhancements, because the information they relied on used accounting gimmicks that would land a person in private industry in jail for fraud?" (California Public Policy Center)


Delaying Retirement Helps the Economy and Older Americans
"The normal retirement age should gradually rise to 68 for workers born in or after 1959 and the early retirement age should rise to 65 for workers born in or after 1964. Then, both should be indexed to increases in longevity. Those whose health won't allow them to continue working up until those ages would have access to a reformed disability system until qualifying for Social Security's regular benefit." (The Heritage Foundation)


SEC Makes it Hard to Read Fiduciary Tea Leaves in Data Request
"By requesting data, many observers had hoped that the assumptions used would reveal the SEC's thinking on the rule's parameters. Anticipating such speculation, the release relies heavily on disclaimers to discourage any notion that the assumptions for a fiduciary standard and rules harmonizing broker and adviser regulation opens a window into its thinking.... [If] you begin to look at the data request as an attachment to a court brief, rather than a request for industry data, the disclaimers start to make sense." (fi360)


CalPERS Criminal Prosecutions Needed to End Public Pension Fraud
"The Wall Street public pension trough feeding frenzy has, unbeknownst to taxpayers and government workers participating in these funds, cost the nation trillions and is only getting worse with the proliferation of hedge funds and private equity alternative investments. Investigating abuses related to the investment of the assets of these funds is no easy matter." (Forbes)


ASPPA Applauds Introduction of the SEAL Act
"The Shrinking Emergency Account Losses in 401(k) Savings Act of 2013 (SEAL Act), contains provisions that reduce the loss of savings from early hardship withdrawals and 401(k) plan loans outstanding when employment is terminated.... The SEAL Act proposes simple changes that will lessen the loss of retirement savings when an employee terminates employment with an outstanding loan balance, and reduce the long-term impact of hardship withdrawals.... These provisions are sensible improvements to current law that will allow many Americans to keep more of their retirement savings working for them." (American Society of Pension Professionals & Actuaries)


Insurance Licensing Across Multiple States Considered Burdensome in Sales of Lifetime Income Products
"The IRI study, which is part of a research initiative to identify regulatory barriers that impede broker-dealers' ability and financial advisors' willingness to sell lifetime income products, found that 80 percent of broker-dealers said state regulations have a negative effect on the ease of conducting annuity sales. In fact, while 46 percent of broker-dealers say they would like to sell more annuities, 83 percent of broker-dealers and 76 percent of financial advisors believe it takes considerably more time to sell annuities compared to other investments." (Insured Retirement Institute)

Benefits in General; Executive Compensation

[Guidance Overview]

IRS Issues Favorable Guidance on Recently Modified Voluntary Classification Settlement Program
"The guidance clarifies how employers can reclassify some or all of their workers and how, once reclassified, all workers in the same class must be treated as employees for employment tax purposes. The guidance also provides instructions for filing the application using Form 8952 and explains how the VCSP payment is calculated." (McDermott Will & Emery)

Banning Work-from-Home Programs Not a One-Size-Fits-All Decision
"[F]ive questions employers should consider when evaluating their virtual work programs: [1] To what extent does the organization's strategy emphasize collaboration and innovation, and what tools does it have to encourage and enhance collaboration for those working virtually? ... [2] Are formal guidelines in place to help managers and employees evaluate whether a virtual work arrangement is appropriate for the role/employee, or are arrangements offered on an ad hoc basis? [3] How does offering a virtual work program impact employee attraction, engagement and retention, especially with high performing employees? What effect would eliminating this policy have? [4] Does the organization have managers who can successfully manage their teams, whether employees are working in or out of the office? [5] Are there tools in place to assess the effectiveness of virtual work, such as performance, engagement, retention, teamwork and cost/savings impact?" (Aon Hewitt)

Press Releases

BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Phone (407) 644-4146
Fax (407) 644-2151

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright © 2013 BenefitsLink.com, Inc. but feel free to forward this newsletter if done without modification in any way.

All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

Links to Web sites other than those owned by BenefitsLink.com, Inc. are offered as a service to readers. The editorial staff of BenefitsLink.com, Inc. was not involved in their production and is not responsible for their content.

Useful links: