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April 5, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Retirement Education Specialist
for The Newport Group, Inc. in NC

401(k) Plan Third Party Administrator
for Applied Pension Services, LLC in NY

Senior Actuarial Analyst
for Verisight, Inc. in IL

Client Service Manager, Defined Benefit
for The Newport Group in WI

Managing Director, Retirement Plan Services
for Charles Schwab in TX

Business Consultant
for New York Life Retirement Plan Services in MA

Business Analyst
for New York Life Retirement Plan Services in MA

Enrolled Actuary
for Retirement, LLC in ANY STATE, OK

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Webcasts and Conferences

Overview of Types of Plans, IRA/DOL Guidance
Nationwide on April 16, 2013 presented by McKay Hochman Co., Inc.

Qualified Plan Essentials Plus Series
Nationwide on April 16, 2013 presented by McKay Hochman Co., Inc.

Defined Benefit Plan Update Phone Forum
Nationwide on April 23, 2013 presented by Internal Revenue Service (IRS)

Financial Education Resource Workshop
in Missouri on April 9, 2013 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Ethics in the Insurance Industry
in California on April 11, 2013 presented by No. Calif. Chapter of Certified Employee Benefits Specialists (ISCEBS)

RITA IRA Institute
in Colorado on May 21, 2013 presented by Retirement Industry Trust Association (RITA)

IRA Live Streaming Webinar - Level II, Part 1
Nationwide on June 6, 2013 presented by Wolters Kluwer Financial Services

IRA Live Streaming Webinar - Level II, Part 1
Nationwide on June 20, 2013 presented by Wolters Kluwer Financial Services

IRA Live Streaming Webinar - Level II, Part 2
Nationwide on June 13, 2013 presented by Wolters Kluwer Financial Services

IRA Live Streaming Webinar - Level II, Part 2
Nationwide on June 27, 2013 presented by Wolters Kluwer Financial Services

View All Webcasts and Conferences

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[Official Guidance]

Text of IRS Notice 2013-28, Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
Updates for the corporate bond weighted average interest rate for plan years beginning in April 2013; the 24-month average segment rates; the funding transitional segment rates applicable for March 2013; and the minimum present value transitional rates for March 2013. (Internal Revenue Service)


Attend the Benefits Conference of the South, May 9-10!

Sponsored by ASPPA

The Benefits Conference of the South provides an opportunity to discuss employee benefits issues with colleagues and representatives from the IRS & DOL!

[Guidance Overview]

Target Date Funds: A Checklist for 401(k) Plan Fiduciaries (PDF)
"This checklist has been prepared based on guidance and recommendations published in the [DOL]'s 'Target Date Retirement Funds -- Tips for ERISA Plan Fiduciaries' ... It also incorporates guidance from the DOL's 2010 proposed participant fee disclosure requirements for TDFs[.]" (Kelly, Hannaford & Battles P.A.)

Companies Withdrawing from Teamsters' Plan Amid Fears Over Pension Funding
"Investment losses during the financial crisis and hard times for trucking companies that pay into the Teamsters' Central States Funds have sapped the fund of money it uses to pay promised benefits. With just 60 cents of assets for every $1 in obligations, the Teamsters pension fund is considered in 'critical' status by the [PBGC]." (The Wall Street Journal)

Obama to Propose $35 Billion in Federal Retirement Program Savings
"[A] senior administration official indicated the budget savings would come through increased charges to federal employees for their retirement benefits.... [T]he White House indicated the budget will incorporate savings outlined in an administration's previously released plan to reduce the deficit. That plan calls for saving $35 billion through 'reform federal retirement programs.'" (The Washington Post)

Aspirin Seen Costing Pensions $100 Billion As Lifespans Increase
"The pension costs for men in the U.K. could rise by 0.7% within 20 years if more people begin taking aspirin daily, according to a statement by Risk Management Solutions Inc. this week. An increase of that magnitude across the more than $13 trillion in pension liabilities in North America and Europe would be about the same as everyone giving up smoking within a generation, the modeling firm says.... Daily doses of aspirin reduce the chances of developing or dying from cancer earlier than previously thought and also prevent tumors from spreading, studies published in the Lancet medical journal last year showed." (Employee Benefit News)


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.

Exclusive Money Managers Target $3.6 Trillion in 401(k)s Accounts
"Carlyle Group LP, Blackstone Group LP and KKR & Co., which usually open their doors only to clients willing to commit at least $5 million, are lowering that threshold or offering investments directly to individuals, an effort to attract fresh cash amid lackluster fundraising. Their ultimate goal: a slice of the $3.57 trillion Americans have accumulated in their 401(k) retirement plans. The firms are looking for ways to move down-market as a growing number of workers are pushed out of public and corporate pension funds, which guarantee an income after retirement, and into 401(k)-style plans, where they are responsible for investing their savings." (Bloomberg)

Australia to Reduce Tax Breaks on Pension Earnings
"Under the plan, designed to save about 900 million Australian dollars (US$940 million) over four years, the tax-free threshold on earnings from pension assets will be capped at A$100,000. Earnings above that level will be taxed at 15%. Currently all earnings from assets that support retired Australians, such as dividends and interest, are exempt from tax." (MarketWatch.com)

IASB Proposed Amendment to IAS 19: Accounting for Employee Contributions to a Defined Benefit Plan
"The proposed amendment would permit an employer to recognize the contributions as a reduction in its short-term employee benefits costs in the same period in which the benefits are payable if, and only if, the contributions are linked solely to the employee's services rendered during that period, for example, employee contributions based on a fixed percentage of the employee's salary regardless of the employee's years of service to the employer." (Haynes and Boone, LLP)

Falling Corporate Bond Yields Drive Increase in U.K. Pension Fund Deficits, Despite Rising Equity Markets
"[T]he estimated aggregate IAS19 deficit for the DB schemes of FTSE350 companies stood at 79bn GBP (equivalent to a funding ratio of 87%) at 31 March 2013. This compares to a deficit figure of 68bn GBP at the end of February 2013 (funding ratio of 89%), an increase from 75bn GBP at the close of January 2013 (funding ratio of 88%). The reduction in the funding level relative to the position at 28 February 2013 more than reverses the increase in funding levels that occurred during February." (Mercer)

How Much Does My 401(k) Plan Save Me in Taxes?
"There's a superficial answer to this question -- just multiply your marginal tax rate times the amount of this year's benefit. So, if you are getting a benefit that is worth, say, $10,000, and your tax rate is 39.6%, then your tax saving $3,960. That is the wrong answer[.]" (October Three)

IRS Cycle D Retirement Plan Filings: Gearing Up for Round Two
"In accordance with the Internal Revenue Service (IRS) determination letter program, [tax-qualified retirement] plan documents are submitted to the IRS for a renewed determination of their qualified status under the Internal Revenue Code (IRC) every five years, on the schedule labeled Cycle D. The second Cycle D will start less than a year from now, on February 1, 2014,... To prepare for the second Cycle D, trustees should take the following steps: Address 'loose ends' from the first Cycle D (or E).... Identify all plan amendments needed and made since the last filing.... Consider the need for a VCP filing.... Review and update amendment procedures.... Locate other filing-related documents.... Determine who will prepare the plan restatement.... Determine the preparation timing.... Determine if nondiscrimination testing should be performed." (Segal)

New Report Recommends Strategies for Strengthening Multiemployer Pension Plans (PDF)
"It is important to note that the recommendations [of the National Coordinating Committee for Multiemployer Plans] are not a plea for financial assistance. Rather, they are a road map of additional tools that can be used to address the current system's deficiencies and that would result in fewer failed plans. In fact, they could retain billions of dollars in liabilities within the private sector that might otherwise become the responsibility of the PBGC." (Segal)

Pension Finance Watch, March 2013
"Positive equity returns and a slight uptick in long bond yields led to a 2.3% increase in the Towers Watson Pension Index for March. Favorable movements in both assets and liabilities have resulted in a strong upward trend since November." (Towers Watson)

Ninth Circuit Affirms Tibble v. Edison International: What Does This Decision Mean for Plan Fiduciaries?
"[Lessons for plan fiduciaries] from this decision [include]: [1] Before including any mutual fund investments in a plan, plan fiduciaries should ask about any alternative class shares and make reasoned determinations on what class share would be in the plan participants' best interests.... [2] Plan fiduciaries should not automatically exclude retail-class mutual funds from their plans' investment options.... [3] Plan fiduciaries should review the mutual funds in their plans and determine whether to include or remove certain funds.... [4] Plan fiduciaries in the Sixth or Ninth Circuits should be aware that section 404(c) may not protect them from liability if a participant brings a claim alleging imprudent selection of investment funds." (Trucker Huss)

Goodwin Procter ERISA Litigation Update, March 28, 2013
Articles include: [1] Ninth Circuit Addresses Numerous ERISA Issues in Affirming District Court's Rulings in Tibble Case; [2] Fourth Circuit Affirms Dismissal of Claims and Summary Judgment in Case Challenging Financial Services Company's Use of Proprietary Products in Its Retirement Plans; and [3] Second Circuit Vacates Dismissal of Stock Drop Claim As to Plan That Neither Required Nor Encouraged Holding of Employer Stock. (Goodwin Procter LLP)

Have Lump-Sum Windows Closed for DB Plan Sponsors?
"The number of lump-sum-window offers is expected to continue to diminish significantly over the course of 2013.... [I]nvestment-grade corporate bond rates -- or the discount rates used to calculate lump-sum values -- reached an all-time low of 3.94% at the end of the third quarter last year, barely inching up to 4.05% at year-end 2012.... So what's a plan sponsor to do?" (Vanguard)


Abolish the 401(k)!
"In these defined contribution plans, savings by individual workers received favorable tax treatment. But the risks, including risks from poor investments and the chance that you will retire during a stock market downturn, fall entirely on the individual. Even worse, many working-class and middle-class Americans with 401Ks are stealthily fleeced by money managers, who charge high and often difficult-to-find fees for allocating retirement money among stocks, bonds and other assets." (Salon)


Next Steps in Stockton Will Be Widely Watched
"If the city presents a plan of adjustment that does not include reductions to CalPERS, the city's other creditors are likely to appeal. So, the real question being asked in Stockton -- the one that Wall Street, public employee unions, and cash-strapped municipal governments across the country want answered -- is: Can public employee pensions be cut when a city goes bankrupt?" (Sacramento Bee)


Pensions' Man in the Mirror?
"[P]ension funds ... will also have to adapt to a changing epoch, one where finding good external managers is that much more difficult and fees will matter a lot more. Now is the time to prepare but keep in mind this market might continue to surprise everyone to the upside, leaving many frustrated active managers unable to beat their benchmarks or deliver uncorrelated absolute returns." (Pension Pulse)


Rhode Island Public Pension 'Reform' Looks More Like Wall Street Feeding Frenzy
"What's happened to date in Rhode Island is unprecedented in public pension history and, given the myriad risks involved, should be setting off alarms: A little-known money manager hired by the state's pension to manage a paltry $5 million succeeded in getting herself elected as state Treasurer. That means she's now responsible for overseeing the entire $7 billion." (Forbes)


Cashing Out or Rolling Retirement Balances into Other Vehicles Can Place Employees' Retirement Savings at Increased Risk
"The GAO's report brings to light very real problems with the current rollover system ... Keeping retirement dollars in the employer-provided system is paramount to helping workers ensure that they are adequately prepared for retirement, and we have long been concerned about the difficult process workers face when trying to roll one employer 401(k) plan into another." (Aon Hewitt)

Benefits in General; Executive Compensation

Majority of American Workers are Worried About Job and Benefits Security
"[A recent survey] found that: More than three in four (77%) workers believe their benefits will be reduced, especially health benefits. More than three in five (64%) believe their salaries will not increase. Half (50%) believe they will be asked to do more work for the same pay." (Harris Interactive)

Early Season Say-on-Pay Votes -- Will 2013 Be 'Deja Vu All Over Again'?
"Although the size of our say-on-pay sample thus far in 2013 is relatively small -- 151 Russell 3000 companies -- the results year to date are very close to last year's voting patterns. These companies received 90% shareholder support on average, while 11% received negative proxy advisory recommendations and 2% -- three companies -- failed to gain majority support for their resolutions." (Towers Watson)

Federal Claims Court Upholds IRS Position on Discounted Stock Options
"This is the first reported case where 409A penalties were assessed and pursued by the government.... The Company granted these stock options before 409A was even enacted, and the CEO exercised them during the 'good faith' 409A transition period ... [M]any practitioners have [assumed] that ... there may have been some IRS leniency in enforcement based on the good-faith operational compliance standard ... However, the strict enforcement of 409A in this case warrants reconsideration on this point, especially in light of the Plaintiffs' attempted self-correction through a reformation agreement." [Sutardja v. U.S., No. 11-724T (Fed. Cl. Feb. 27, 2013) (Groom Law Group)

Compensation Committee Charters: From Updates to Smoking Guns
"With Nasdaq and NYSE independence rules requiring significant charter revisions in 2013, compensation committees should take the opportunity to make thoughtful refinements. Loose language has the potential to create fiduciary duties, and breaches, where none would otherwise exist. Here is a table that identifies common charter terms, and refinements to consider." (ExecutiveLoyalty.org)

Press Releases

PBGC to Pay Pension Benefits at Bill Johnsonís Restaurants Inc.
Pension Benefit Guaranty Corporation (PBGC)

3 Good Reasons to Sell Voluntary - April SalesTalk
Davidson Marketing Group -- FutureOffice Network

CalPERS Statement on Resignation of HP Chair and Two Directors
CalPERS (California Public Employees' Retirement System)

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David Rhett Baker, J.D., Editor and Publisher
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