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BenefitsLink Retirement Plans Newsletter

March 26, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Part Time On Call Retirement Planning Consultant
for Diversified in CA, MO, NC, NY, UT

Relationship Manager
for Verisight, Inc. in IL

Benefits Underwriting Analyst
for Northwestern Benefit Corporation of Georgia in GA

Defined Contribution Employee Benefit Plan Administrator
for Pension Administrators, Inc. in IL

Pension Systems Analyst
for Saint Gobain Corporation in PA

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Webcasts and Conferences

Health Care Reform "Pay or Play" Workshop Webinar
Nationwide on April 23, 2013 presented by Pillsbury Winthrop Shaw Pittman LLP

Tracking Full-Time Employees Under Health Care Reform: Understanding and Applying the IRS Safe Harbors
Nationwide on March 21, 2013 presented by Thomson Reuters / EBIA

Form 5500 for Health and Welfare Plans: Preparation and Filing Basics
Nationwide on April 11, 2013 presented by Thomson Reuters / EBIA

2013 ECFC Annual Symposium
in Missouri on July 31, 2013 presented by Employers Council on Flexible Compensation (ECFC)

Current Issues in Executive Compensation Management and Compliance Update Webinar
Nationwide on April 10, 2013 presented by Worldwide Employee Benefits Network (WEB)

View All Webcasts and Conferences

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[Official Guidance]

Text of Proposed Amendments to IAS 19: 'Defined Benefit Plans: Employee Contributions' (PDF)
"This Exposure Draft addresses the accounting for contributions from employees or third parties when the requirement for such contributions is set out in the formal terms of a defined benefit plan. It proposes that such contributions may be [recognized] as a reduction in the service cost in the same period in which they are payable if, and only if, they are linked solely to the employee's service rendered in that period." (International Accounting Standards Board)


DATAIR! Smart By Design -- More Choices -- Less Cost

Sponsored by DATAIR Employee Benefit Systems, Inc.

Proposals, Testing, Valuation, IRS/DOL/PBGC Forms, Plan Documents
Includes Graded, 412(e)(3), Cash Balance, Combo Plans
(888) 328-2474    Sales@DATAIR.com    www.DATAIR.com

Stockton Bankruptcy Trial Has Big Stakes for Public Pensions
"Ostensibly, the trial that opened Monday in a federal courtroom was about whether Stockton is eligible to file for bankruptcy. But the real issue -- what one attorney called 'the 800-pound gorilla in the room' -- is whether public employees' pensions, long thought to be legally untouchable, could be reduced via bankruptcy." (Sacramento Bee)

California County Administrator's Pension Will Be $423,644 a Year for Life
"When local California official Susan Muranishi retires from her job in a couple of years, she's going to be walking away with a fat paycheck -- $423,664 a year -- for the rest of her life.... Like other county executives, she'll also get an $8,292-a-year car allowance.... News of Muranishi's payout comes at a time when nearby Stockton, Calif., is trying to enter bankruptcy." (Fox News)

On Tibble, the Ninth Circuit and the Scope of the 404(c) Defense
"[T]he Ninth Circuit concluded that a fiduciary's selection of investment options is not protected by 404(c).... [This] expands the scope of fiduciary liability and ... adds to the arsenal for lawyers who represent plan participants, in that it clearly demarcates the selection of plan investments as an issue that falls outside of a 404(c) defense. Not only that, but the opinion does so in an articulate, well-reasoned manner, making it likely to have significant persuasive force when the issue is considered by other courts." (Boston ERISA Law Blog)

Declining Wealth Brings a Rising Retirement Risk
"[H]ouseholds have grown less dependent on housing wealth over time. In 1984, 41 percent of wealth was held in the form of home equity. By 2000, that percentage had fallen to 30 percent; in 2011 it was 25 percent. A key reason for this change has been the switch from defined-benefit to defined-contribution pension plans.... Under a defined contribution scheme, such as a 401(k) plan, the worker and the employer jointly contribute to a tax-deductible and tax-deferred account from which the worker will finance retirement. Thus, to a certain extent, the growth of pension wealth is more apparent than real." (The New York Times)


IPMA-HR Regional Conference - June 9-12 - New Orleans, LA

Sponsored by IPMA-HR

The Big HR Issues Made Easy! Join us in New Orleans for the IPMA-HR Southern & Central Region Training Conference, June 9-12, 2013. Learn (many benefits topics!), Laugh (we're fun!), Location (enough said!).

Passive Investing: If It's Good Enough for CalPERS ...
"Passive investing has reached a watershed moment. The second-largest pension fund in the United States is considering a move to an all-passive portfolio while at the same time, the largest brokerage firms are falling over themselves to push passively managed exchange-traded funds." (Investment News; free registration required)

Employee Enrollment: Another Fiduciary Responsibility
"A successful employee enrollment meeting isn't hard to stage. It requires a little preparation, and a little time. The effort to hold a meeting is insignificant in comparison to the benefit gained -- the employees understand the Plan so much better if they hear about it first-hand than if they're just handed a stack of papers." (Benefit Resources, Inc.)

Trend Toward Multi-Asset Changes How Investment Management Success Is Evaluated
"The point of multi-asset is to categorize a portfolio according to what it does -- its goals -- rather than according to what it is made of -- the asset class. So, in a sense, this trend is really about a change of perspective.... [which] can lead to a re-evaluation of things that have long been taken for granted. For example: how should investment success be evaluated?" (Russell Investments)

Refining Cost Variables for Better Retirement Plans
"Retirement income planning is a complex process with many moving parts and a lot of variables.... Perhaps a more effective approach would be to consider these expense variables individually. This can help us more accurately consider accumulation strategies and distribution strategies because our analysis may be better aligned with a realistic outcome." (Financial Advisor)

Can Illinois Seal the Deal on Pension Reform?
"It took until last week for the first major action: Madigan's House passed a bill with bipartisan backing that would cut back cost-of-living pension increases to save the state $100 billion over 30 years. Cullerton's Senate, meanwhile, defeated a bill that would have saved an estimated $150 billion. He then corralled enough Democrats to pass a bill to save much less." (Governing)

Milliman 2013 Corporate Pension Funding Study
"Year-end discount rates fell to a record low of 4.02%, increasing pension funding deficits for the Milliman 100 companies to a record high of $388.8 billion (a $61.1 billion increase over 2011).... [At] least 15 companies engaged in significant risk-reduction efforts, each resulting in a settlement of more than $100 million of plan liability. However, the de-risking measures were accompanied by increased pension cost." (Milliman)

401(k) Plan Fees: Paying Too Much? Think Again (PDF)
"Certainly, everyone should understand how much they are paying for their 401(k) or 403(b) plan. However, the focus should not be entirely on the cost, individuals should also consider the benefits. Are you getting what you are paying for?" (Cedar Brook Financial Partners LLC)

DOL Smacks 401(k) Adviser for 12b-1 Fiduciary Breach. Plan Sponsors Next?
"A more interesting question, though, ... is 'Why didn't the DOL fine the plan sponsors of the 13 defined benefit plans?' After all, they had an ongoing fiduciary duty to conduct due diligence with regard to their service providers." (Fiduciary News)

Spring-Cleaning Your Organization's Retirement Plan
"Here are a few tasks, which may 'spruce up' your plan: Confirm the appropriate compliance testing has been performed and the Form 5500 is being prepared.... Cash out small balances.... Review the list of those needing to take a Required Minimum Distribution (RMD).... Update beneficiary forms.... Review your plan's Investment Policy Statement (IPS).... Confirm receipt, distribution and review of all fee disclosure documents.... Set dates to review education strategy, investments and plan costs." (Crain's Cleveland Business)


CalPERS Moving to All-Passive Investments?
"[T]he biggest problem at CalPERS for the longest time was they wanted to invest with everyone. When you invest with everyone, you end up paying huge fees and getting back mediocre benchmark returns. This is what happened in their large private equity portfolio ... And this is what is going on in their large real estate and hedge fund portfolios. They're is a lot of cleaning up that needs to be done as these portfolios are dolling out huge fees and not getting the value added to justify such big allocations." (Pension Pulse)


Americans Want More Social Security, Not Less
"It is appropriate to judge an industry, including the retirement planning industry, by the results it produces. Any fair assessment must conclude that, as measured by the anemic financial stability it has produced, the retirement planning industry is an utter failure." (Forbes)


Official Education Spending Figures Not Showing Full Cost of Teacher Pensions
"States report to the federal government only the yearly contributions to teacher pension funds rather than the present value of accrued benefits. Since states and local school districts routinely contribute less to their pension funds than is needed to cover future benefits, correcting this accounting problem could add tens of billions of dollars -- somewhere around $1,000 per pupil -- to official education spending estimates." (The Heritage Foundation)


Text of Comments to Pension/Retirement Tax Reform Task Force of the House Ways and Means Committee
"[E]mployees of employee stock owned companies were four times less likely to lose their jobs during the Great Recession than those in conventionally-owned companies. Clearly, these men and women working for employees stock owned companies, primarily ESOP companies, still had their retirement savings intact, still received additions to that retirement savings pot of assets on a 4 to 1 ratio compared to other men and women working in non-ESOP companies." (The ESOP Association)


Conflicts In Fixed Annuities: Understanding Sales Incentives
"The key takeaway is the insurance agent has a choice to earn a 4.5%, 6.5% or a whopping 10% commission. The choice is pretty simple, especially if you have a mortgage payment to make. Selling the 'platinum' product pays the agent 122% more commissions than selling the 'silver'.... [T]he fact that insurance companies offers incentives to attempt to get agents to sell what are likely more profitable products is a major conflict of interest. Trusted advisors should NOT be paid more to recommend one product over another." (The Teacher's Advocate)


Text of Comments to DOL on Pension Benefit Statements Survey (PDF)
"It is important that the survey ask questions in a manner that reflects common methods of disclosure used by plans (e.g., notice and access) as well as the range of methods that may be used.... [It] is important that the survey questions be unbiased between paper and electronic disclosure.... It is important that any sample benefit statements used for the purposes of this research are carefully reviewed to ensure that they reflect reasonable assumptions, have sufficient information, and the numbers add up." (American Benefits Council)

Benefits in General; Executive Compensation

Discounted Stock Options Hit With Section 409A Surtaxes
"[A recent] ruling upheld the IRS assessment of a 20% surtax plus interest on distributions the plaintiff received under deferred compensation arrangements found to be noncompliant. The amounts in dispute total $3,172,832, plus another $304,456 in interest. While in this challenge to the IRS assessment the court still must decide whether discounted stock options were actually granted, it brushed off all the plaintiff's legal arguments claiming that Section 409A does not apply to discounted options." [Sutardja v. United States, No. 11-724T (Fed. Cl. Feb. 27, 2013)] (myStockOptions.com)

2012 Report Reaffirms Significance of Nonqualified Deferred Compensation Plans in Helping Executives Meet Retirement Savings Goals
"[S]urvey highlights include: Criteria used for determining NQDCP eligibility varied amongst categories, with job grade cited most often (28%), and salary and title coming in second (16.5%). General plan participation rates declined overall to 43.9%, but were highest (54.2%) for firms that offered both a company match and informally funded their plan liabilities. Of the 47 percent of companies providing a company match, most calculate according to a fixed percent, or to replace a lost 401(k) match." (Prudential)

In 2012, for Every Person Aged 65 or Older, There Were Four People of Working Age in the EU27
"The old age dependency ratio in the EU27 increased from 21.1% in 1992 to 26.8% to 2012. During this period, the ratio rose in all Member States, except Ireland ... As a result, the total age dependency ratio in the EU27 grew slightly over the last two decades, from 49.5% in 1992 to 50.2% in 2012, meaning there are around two persons of working age for each dependent person. In the Member States, the total age dependency ratio in 2012 ranged from 39% in Slovakia to 56% in France and 55% in Sweden." (Eurostat via Perspective PensionSurveys)

Employers Show Increasing Appetite for Technology to Improve Employee Health Engagement (PDF)
"[This study] examined the current use and future potential for three key technologies: gamification, mobile apps and social media.... [G]amification is the most prevalent (62 percent) and ranks highest in employers' perception of effectiveness.... Social networking is used in some fashion by 50 percent of organizations, but ranks highest in concerns over privacy of personal information. Mobile technology is the least implemented (36 percent) but leads the pack as the highest priority for future adoption or expansion (40 percent)." (Buck Consultants)

Claims Administrator Not Liable for Statutory Penalties for Failing to Provide Requested Documents
"You know already that a plan administrator can be liable for statutory penalties under ERISA for failing to provide requested plan documents. But what if the claims administrator failed to provide documents Will the claims administrator have to pay statutory penalties? NO. But what if an agent of the plan administrator failed to provide documents? Does the plan administrator have to pay? NO." [Delprado v. Sedgwick Claims Management, United Health Group Inc., et al. (N.D.N.Y. Mar. 20, 2013)] (Lane Powell PC)

Press Releases

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