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

Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm in NJ

Pension Plan Administrator
for Pension Plan Services, Inc. in MI

Associate Plan Administrator
for Shore Tompkins Actuarial Resources, LLC in IL

Director, Retirement Key Account Management
for Prudential in CA

Retirement Education Specialist
for MassMutual Financial Group in ANY STATE, NC

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Webcasts and Conferences

Puerto Rico Retirement Income Regulations Webinar
Nationwide on May 23, 2013 presented by Bloomberg BNA

36th Annual ESOP Conference
in District of Columbia on May 9, 2013 presented by ESOP Association

"Form 5500 Workshop 2013: Issues and Answers" - Kansas City
in Kansas on May 1, 2013 presented by SunGard Relius

"Form 5500 Workshop 2013: Issues and Answers" - San Francisco
in California on May 1, 2013 presented by SunGard Relius

"Form 5500 Workshop 2013: Issues and Answers" - Boston
in Massachusetts on May 2, 2013 presented by SunGard Relius

"401(k) Plan Workshop 2013: Tax Reform and the 401(k) Plan" - Kansas City
in Kansas on May 2, 2013 presented by SunGard Relius

"401(k) Plan Workshop 2013: Tax Reform and the 401(k) Plan" - San Francisco
in California on May 2, 2013 presented by SunGard Relius

"401(k) Plan Workshop 2013: Tax Reform and the 401(k) Plan" - Boston
in Massachusetts on May 3, 2013 presented by SunGard Relius

Taking The Mystery Out Of Retirement Planning Workshop
in Illinois on April 24, 2013 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

IRA Live Streaming Webinar - Level I, Part 2
Nationwide on May 9, 2013 presented by Wolters Kluwer Financial Services

IRA Live Streaming Webinar - Level I, Part 2
Nationwide on May 23, 2013 presented by Wolters Kluwer Financial Services

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[Official Guidance]

Updated IRS Publication 4286 (SARSEP Checklist) and New SARSEP Fix-It Guide (PDF)
"Every year it is important that you review the requirements for operating your Salary Reduction Simplified Employee Pension (SARSEP) plan. Use this checklist to help you keep your plan in compliance with many of the important rule" (Internal Revenue Service)


Earn Nearly a Year's Worth of CPE at the NIPA Annual Forum & Expo

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

Join NIPA April 28-May 1 at The Cosmopolitan of Las Vegas for 35+ sessions on topics shaping the industry, up to 21 NIPA/20 ERPA CPE credits and 40 displays in the Expo Hall. Can't join us in Las Vegas? Register for the 2013NAFE Virtual Conference!

[Guidance Overview]

IRS Launches 403(b) Opinion and Advisory Letter Program (PDF)
"403(b) sponsors that invested time and money to draft an individually designed plan document may be disappointed to learn that they cannot obtain a determination letter that they can rely on to ensure their plan meets the 403(b) requirements. Employers that have adopted 403(b) plans that are individually designed may want to consider adopting a pre-approved 403(b) plan document that they can rely on under this program. Church-related organizations may also consider sponsoring their own pre-approved plans since the usual requirement to have at least 30 employers that intend to adopt a pre-approved plan is waived for 403(b)(9) retirement income account plans sponsored by church-related organizations." (Buck Consultants)

Retirement Plan Providers Misleading Savers About IRA Rollovers, Government Report Concludes
"Undercover investigators hired by the GAO called 30 of the largest 401(k) providers to study how the firms market products to 401(k) account holders. Eleven firms encouraged a rollover to an IRA, while 12 raised doubts about the caller's ability to roll over to a new employer's plan and 16 touted IRAs for having more investment options. In addition, 7 incorrectly said that there were no fees to open or maintain an IRA, according to the report. And 5 out of 10 large firms advertised free IRAs on their websites, while scattering fee information among hard-to-find documents." (CNNMoney.com)

GAO Report Says Workers Hurt When Rolling Over 401(k) Plans to IRAs
"Rollovers into IRAs can be lucrative for financial companies that run 401(k)s. As part of a study, Government Accountability Office personnel called 30 of the largest 401(k) service providers, posing as plan participants. They often received sales pitches for IRAs." (Investment News; free registration required)

Designing 401(k) Communication for an 11-Year-Old
"Put together a motivational and actionable communication piece on 401(k) Plans, Profit Sharing Plans or Defined Benefit Plans using 50 words or less that a 5th grader level. If 50 words is too little, then limit the communication to 1 page, with lots of pictures or visual examples to take up the space over 50 words. Keep the message simple.... If the communication needs a page of legal disclosures, then the messaging in the material is way too complicated and needs to be scaled back." (Benefits of HR)


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!).

Six Insights into Higher Education Retirement Plan Opportunities
"With a couple years of final 403(b) regulations behind us, plan sponsors are realizing many of their administrative headaches and compliance concerns come from dealing with multiple providers.... Many studies have shown that too many options actually hinder effective retirement savings and investment. Financial professionals can help pare down the choices to a responsible number and mix." (The Principal Blog)

Five Years Later: Investor Views and Sentiment on the Financial Crisis (PDF)
"Investors have taken positive and permanent steps with their finances and are feeling more confident.... More than one half (56 percent) shifted from scared or confused to confident or prepared ('scared to prepared'). Among the steps many of these investors took: [1] Increasing the amount of retirement savings; [2] Reducing their debt loads compared to five years ago; [3] Starting or building up emergency savings funds; [4] Searching for guaranteed income options." (Fidelity)

Five Questions to Ask a Financial Planner Before Investing
"[W]orking with a competent professional is still the best chance many people have to achieve a comfortable retirement.... Here are a few qualifying questions you should ask if you are thinking about hiring a financial planner: [1] What are your qualifications, and how do these qualifications benefit me? ... [2] What exactly do you do for your clients? ... [3] What is the income and asset level of your typical client? ... [4] How are you compensated? ... [5] Do you know anybody who can help me with other services?" (U.S.News and World Report)

Reporter's Transcript: Stockton Bankruptcy Proceedings (Findings of Fact and Conclusions of Law) (PDF)
54 pages. Excerpt: "Negotiation is, by definition, a two-way street. You cannot 6egotiate with a stone wall. You cannot do it. It cannot be done. It is a contradiction in terms. In evaluating the overall scenario, I am persuaded that the City did negotiate in good faith. That is evidenced by the substantial agreements reached on the collective bargaining agreements.... [T]he question is whether the omission of CalPERS justifies another group of creditors [who] would be impaired from voting with their feet and choosing to act as the stone wall. And my answer to that question is, no, it does not justify a creditor in taking the position that it need not negotiate in good faith on the basis that somebody else is not being taken care of or being treated similarly in the plan." (U.S. Bankruptcy Court, Eastern District of California)

Retirement Plan Audits for Form 5500 Filings
"What is the rule for audits? ... How is the participant count determined? ... What will the auditors do to prepare their reports? ... When will the audit take place? ... How much will the audit cost?" [Editor's note: Includes a checklist designed to help prepare for a plan audit.] (Benefit Resources, Inc.)

Drinker Biddle Plan Sponsor Newsletter, April 2013 (PDF)
This newsletter's articles include [1] Five Practical Tips for Plan Committees to Avoid Fiduciary Liability; [2] Check Your Plan Loan Administration; [3] DOL "Tips" for Selecting Target Date Funds; [4] What Plan Sponsors Need to Know About a "Limited Scope Review"; and [5] Accountant's Audits of Retirement Plans. (Drinker Biddle)

The Wizard of Oz, Retirement Plans and You
"Just as Professor Marvel claims that his magic elixir cures what ails you, some claims used to sell 401(k) products are just as worthless in providing you fiduciary protection. And, just as Dorothy and friends believed that they could rely on the Wizard to get back home, many retirement plan sponsors believe they can rely on their 401(k) service providers to help them fulfill their fiduciary duties. Like the Wizard who used elaborate props to make himself appear great and powerful, some retirement plan providers would also like you to 'Pay no attention to that man behind the curtain.'" (Fiduciary Plan Governance, LLC)

S&P 1500 Pension Plan Sponsors See Funding Levels Rebound in First Quarter
"The aggregate deficit in pension plans sponsored by S&P 1500 companies improved significantly in the first quarter of 2013, decreasing by $185 billion from the record year end 2012 deficit ... The funded ratio (assets divided by liabilities) improved to 82% at the end of March compared to ... 74% at December 31, 2012." (Mercer)

Finally, a Little Bit of Sanity in ESOP Litigation: Harris V. GreatBanc Trust Company
"GreatBanc is a Central District of California case in which the DOL asked the court to void an indemnification agreement between an ESOP fiduciary and a 100% ESOP-owned company. The DOL based its request on the purported rationale of the [Johnson v. Couturier case in the 9th Circuit] that ERISA section 410(a) barred such an agreement. The court declined the DOL's request.... The GreatBanc decision returned to the traditional understanding of the DOL's plan asset regulations that distinguish corporate assets from plan assets -- a view that allows plan sponsors to indemnify ESOP fiduciaries." (Chang Ruthenberg & Long)

The National Economic Security Standard Index: Social Security Benefits Are Not Enough (PDF)
"[N]either income at the federal poverty level nor the average social security benefit provides enough income to cover basic living expenses.... The average Social Security benefit for a retired worker was $14,105 in 2011. The estimated average benefit for a couple was $22,895.... The national Elder Index shows that single individuals need $19,104 to $28,860 annually, depending on whether they live in an owned, rented, or mortgaged home. Couples need between $29,448 and $39,204 to meet expenses." (Gerontology Institute, University of Massachusetts Boston)

Protecting 401(k) Plan Sponsors from Conflicts of Interest
[Magazine in online interactive format.] Excerpt: "[S]ome service providers, investment advisors, and brokers are deliberately structuring their advisory relationships with 401(k) plan sponsors in a way that enables them to avoid accepting responsibility for their investment fund recommendations. Mistakenly believing that they are receiving impartial advice, plan sponsors might rely upon such nonfiduciary service providers, without realizing the potential conflicts of interest that can arise when it comes to investment selection ... Most plan sponsors mistakenly trust that their advisors are fiduciaries whose compensation does not vary based upon investment fund selection." (The CPA Journal)

The Benefits of Employee Stock Ownership Plans: A Primer
[Magazine in online interactive format.] Excerpt: "ESOPs are a unique financial tool for the continuation of a successful business that can provide the employees of that business with an ownership stake.... Surveys and research studies show that ESOP companies are more productive and more profitable; they also have a higher survival rate." (The CPA Journal)

Relationships Are Key to Success in Retaining Assets of Rollover-Eligible Participants
"Each year, more than $350 billion becomes available for rollovers as retirees and pre-retiree workers leave their employers. The challenge for plan service providers is to find ways for their company to keep plan participants' money under their management.... Several factors influence participants who stay with their plan: [1] Proactive contact ... [2] Personalized investment guidance, and discussions of post-retirement needs in the years leading up to retirement. [3] Financial advisors influence decisions to switch companies; but individuals whose decisions were influenced by provider-affiliated professionals were three times as likely as those influenced by non-affiliated professionals to stay with the plan provider." (LIMRA)

Corporate DB Plan Funding Rises 6.5 Points
"The typical U.S. corporate defined benefit plan's funding ratio rose to about 83% in the first quarter, from about 76% at the start of the year, according to Legal & General Investment Management America ... The increase was spurred by positive equity returns and higher discount rates in the quarter, boosting the funded status of a corporate plan with a traditional 60% global equity/40% aggregate fixed-income strategy by about 6.5 percentage points." (Pensions & Investments)

Funded Status of U.S. Corporate Pensions Rises to 82.6%
"The funded status of the typical U.S. corporate pension plan increased 1.9 percentage points in March 2013 to 82.6 percent, its highest level since March 2012 ... Year to date, the funded ratio has risen 6.3 percentage points ... Assets for the typical corporate plan increased 2.1 percentage points as equity markets continued to rally despite concerns on the Cyprus banking situation ... Liabilities for the typical corporate plan decreased 0.3 percent in March, which the report attributed to the four-basis-point increase in the Aa corporate discount rate to 4.09 percent." (BNY Mellon)


The Tax Value of 401(k) Plans for Lower-Paid Participants
"The problem of understanding the value of 401(k) plan tax benefits for lower-paid employees was implicit in testimony given by William Gale of the Brookings Institution, before the Senate Finance Committee in 2011. In that testimony, which was highly critical of the current 401(k) system (and indeed proposed to replace the current system with a tax credit system), Gale consistently pointed to the fact that 'existing tax rules provide less immediate benefit to low- and middle-income households.' The key word there is 'immediate.'" (October Three)


Stockton, CalPERS and 'Fair' Bankruptcy
"Klein's decision offered more nuance than many initial reports suggested, and his comments from the bench made plain that he felt Wall Street creditors had a case. The judge said that while his Monday ruling did not deal with the fairness issue raised by bondholders, he would address the issue at the proper time, and that the city 'is going to have a difficult time confirming a [bankruptcy reorganization plan] over the objection of unfair discrimination.' He described CalPERS as a -garden-variety creditor' -- not one in a protected class." (San Diego Union-Tribune)


GAO Uncovers Troubling Practices by Financial Firms That Drain Americans' 401(k) Retirement Savings
"'This report is a wake-up call that we need stronger consumer protections in the growing 401(k) rollover market. When Americans call up their 401(k) plan provider looking for advice, they shouldn't be inundated with marketing materials masquerading as objective, investor education -- but that is exactly what's happening to many individuals,' said Senate Health, Education, Labor, and Pensions Committee Chairman Harkin[.]" (U.S. Senate Committee on Health, Education, Labor & Pensions)


Encouraging Retirement Readiness for Participants Is a Best Practice, Not a Plan Sponsor Obligation
"Can plan sponsors, as fiduciaries, be liable if participants fail to save enough for retirement? As the wave of baby-boomer retirements starts to crest, and the topic of retirement readiness becomes more urgent to 401(k) plan sponsors and their participants, the notion that inadequate retirement preparation could result in increased litigation has been raised. But in Vanguard's view, this notion has no basis in reality." (Vanguard)


Social Security Reform: Does Privatization Still Make Sense?
"Personal accounts will not improve the program's solvency directly, but would help generate new resources by strengthening the link between 'contributions' and benefits, thereby reducing dislocations of individual labor-supply choices. At a minimum, personal accounts could be an effective mechanism for sequestering from government spending additional resources intended to reduce Social Security's unfunded obligations." (Cato Institute, via SSRN)

Benefits in General; Executive Compensation

Employees Value Good Benefits Education
"Individuals whose employers offer benefits are nearly unanimous at 98 percent in saying it's at least somewhat important to understand the benefits provided to them by their employer, and a strong majority -- 73 percent -- say it's very important.... Other factors employees ranked highly in the survey included: [1] Having choices to customize the benefits package ... [2] Receiving regular information updates from their employer about the benefits program ... [3] Having convenient access to a benefits expert to talk with face-to-face[.]" (Colonial Life)

Is Your HR/Benefits Intranet Site User-Friendly or User-Less?
"[M]any companies have a difficult time keeping the HR/benefits section of their intranet organized and relevant. Often, this occurs because the site is not managed by one person. Instead, multiple departments post information as they see fit. The result is a confusing mix of information presented in silos, rather than a cohesive, cross-referenced site that is a user-friendly resource for employees." (Write on Target)

Press Releases

Ronald Triche Joins ASPPA Government Affairs Team
American Society of Pension Professionals & Actuaries (ASPPA)

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Phone (407) 644-4146
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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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