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April 22, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Development Analyst
for Diversified / Transamerica Retirement Solutions in MA

Retirement Plan Consultant
for Pension Consultants, Inc. in MO

Director, Structured Settlement Market & Product Development & Management
for Prudential in NJ

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Webcasts and Conferences

Controlling Health Care Costs With Self-Funded Plan Options
Nationwide on May 31, 2013 presented by Lorman Education Services

Provider Payment Reform Seminar
in Illinois on April 29, 2013 presented by Society of Actuaries

Health Insurance Marketplaces: Race to the Deadline (Webinar)
Nationwide on May 7, 2013 presented by National Institute for Health Care Management Foundation

ACA 101: What You Need to Know Briefing
in District of Columbia on April 26, 2013 presented by Alliance for Health Reform

"Form 5500 Workshop 2013: Issues and Answers" - Charlotte
in North Carolina on May 21, 2013 presented by SunGard Relius

"Form 5500 Workshop 2013: Issues and Answers" - Houston
in Texas on May 22, 2013 presented by SunGard Relius

"401(k) Plan Workshop 2013: Tax Reform and the 401(k) Plan" - Charlotte
in North Carolina on May 22, 2013 presented by SunGard Relius

View All Webcasts and Conferences

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[Official Guidance]

Handout for IRS April 23 'Defined Benefit Update' Phone Forum (PDF)
Topics include: Regulatory Update; Section 415 issues; Hybrid plan issues; Multiemployer Report. (Internal Revenue Service)


Order the 2013 ERISA Outline Book today!

Sponsored by ASPPA

The ERISA Outline Book is both a reference book and a study guide on qualified plans, and it is the recommended study resource for IRS Enrolled Retirement Plan Agent (ERPA) Program.

ERISA Fiduciary Checklist for Monitoring Plan Investments
"Corporate officers and directors should consequently establish practical systems for tracking both the investment performance of plan assets, and new developments in governmental regulation and ERISA litigation." (ERISACloud.com)

Seventh Circuit Affirms Dismissal of ESOP Stock Drop Case
"With inevitable fluctuations in the stock market, ERISA's simultaneous demands to comply with plan documents and to exercise prudence in choosing investment options for plan participants can place fiduciaries on a razor's edge.... If ESOPs are to fulfill their purposes, fiduciaries ... need substantial protection from liability ... Without this shield, the duty of prudence would leave fiduciaries exposed to liability based on 20-20 hindsight for ... circumstances in which reasonable fiduciaries and other investors could easily disagree about the better course of action." [White v. Marshall & Ilsley Corp., No. 11-2660 (7th Cir. Apr. 19, 2013)] (Justia.com)

IRS Makes Employers' Internal Controls a Priority in Employee Plan Audits (PDF)
"IRS agents now begin their focused audits by asking questions about the plan sponsor's internal controls so they can quickly size up the situation and set the scope of the audit. If a plan sponsor can show checks and balances in key areas of plan operations that the IRS has identified as prone to error, then the IRS does not need to spend its time and limited resources to expand the examination[.]" (Bloomberg BNA Pension & Benefits Daily)

Milliman Pension Funding Index, April 2013
"The funded status of the 100 largest corporate defined benefit pension plans rose by $29 billion in March, reflecting a $15 billion asset increase and a $14 billion liability decrease ... As of March 31, the funded ratio climbed to 82.7%, up from 81.2% at the end of February." (Milliman)


BenefitsLink would like your help

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On April 19, the BenefitsLink newsletter celebrated 18 years of publication. Unlike most 18-year-olds, we're asking for your advice. We're excited to be working on ways to enhance your experience with BenefitsLink.com and we'd really appreciate your feedback and opinions. Please take our quick survey. Thanks!

Advisors Boost Boomers Confidence
"Most Boomers lack confidence in their retirement readiness, and the unease is growing.... 37% of Boomers are confident about their financial preparations for retirement, down from 44% in a similar survey in 2011.... 48% of Boomers who work with a financial professional are very or extremely confident with their financial preparations for retirement, compared to only 28% of those Boomers putting together their own plans." (Financial Planning)

The Retirement Knowledge Gap
"The three concepts that seem to matter most are: understanding inflation, compound interest and the reduction in risk associated with portfolios.... Not surprisingly, extensive research finds that people with a poor understanding of concepts like these have much worse financial outcomes. They are also more likely to be caught up in scams." (Human Resource Executive Online)

Shrouded Costs of Government: The Political Economy of State and Local Public Pensions
"Central control over dispersed municipal pensions has two offsetting effects on pension generosity: more state-level media attention helps taxpayers better understand pension costs, which reduces pension generosity; but a larger share of public sector workers will live within the jurisdiction, which increases pension generosity. [The authors] discuss pension arrangements in two decentralized states ... and two centralized states ... and find that in these cases, centralization appears to have modestly reduced pension arrangements[.]" (National Bureau of Economic Research; purchase required for full document)

SEC Charges Advisor on Alleged CalPERS Fraud at Simran Capital Management
"The SEC says its investigators found that while pitching Simran Capital Management's services, Umesh ('Mesh') Tandon, the firm's CEO, falsely certified to CalPERS that his firm satisfied its minimum requirements over AUM. Tandon struck a settlement deal, neither admitting nor denying charges, the SEC says; adding that he agreed to be barred from the securities industry and pay $100,000 as penalty, disgorgement of $20,018, and prejudgment interest of $1,680. CalPERS has since severed ties with Simran Capital Management." (On Wall Street)

Shhh!!! Brokers Are (Already) Fiduciaries
"[O]ften lost in the 'debate' regarding whether brokerage firms and their registered representatives should be required to be fiduciaries to their individual customers is the fact that -- for nearly a century -- courts across the country have found brokers to be fiduciaries through the application of state common law." (Ron Rhoades, via Scholarly Financial Planner)

How Much Can Public Pensions Squeeze Other Programs?
"[A]ctuarial methods adopted by CalPERS will raise many employer rates to what ... could be 'unsustainable costs of between 25 percent of pay for a miscellaneous plan and 40 to 50 percent of pay for a safety plan (police and firefighters).' The official CalPERS view ignores the possibility that the big rate increase could squeeze funding for other programs enough to trigger a backlash[.]" (CalPensions)

State of Pennsylvania Aims to Stabilize Pension Outlook for Municipalities
"Of the 102 local pension plans included in a recent report issued by the Pennsylvania Public Employee Retirement Commission, only 33 have less than 90 percent of the assets needed to pay pension obligations. Fifty-six local pension plans are fully funded or overfunded, with more in assets than they have in liabilities. Another 13 are at least 90 percent funded." (Lancaster Online)

Pension Liability Clouds Marin County's Bright Fiscal Portrait
"With the unfunded liability of benefits promised county retirees running anywhere from about $632 million to $2.3 billion, the county board was quick to affirm earlier pledges to pump in $46 million from reserves to pay down the debt. The $46 million move, on top of $12.5 million already set aside to pay down retiree health liability, was unparalleled in the region.... But the one-time allocation of reserve funds did not commit the board to follow suit with continuing annual pay-down allocations." (Marin Independent Journal)

Ensuring the Payment of Americans' Pension Benefits in the Wake of the Great Recession (PDF)
"In designing a pension plan, there are three basic problems: setting aside enough money during employment, investing that money efficiently and wisely, and ensuring (by overcoming the first two problems) that the pensioner can achieve the planned level of post-retirement consumption for the rest of his or her life. Attendant to these problems, there are at least eight distinct issues or risks that must be navigated." (Kenneth Glenn Dau-Schmidt, JD, Ph.D, via SSRN)

CalPERS: Charge Would Be $5.7 Million to End San Jose Council Pensions
"The pension plan covers nine of the city's current elected officials -- all except Vice Mayor Madison Nguyen and Councilwoman Rose Herrera, who had chosen a 401(k)-type alternative. Also covered are 20 former mayors and council members, 10 of whom are now drawing retirement benefits." (San Jose Mercury News)

California Attorney General Clears Way for San Jose Police Union's Pension Suit Over Benefit Reductions
"The San Jose Police Officers' Association is among several city unions seeking to overturn the pension reform Measure B, which nearly 70 percent of city voters approved in June, in court as well as through a state agency that oversees public employee bargaining rights. The measure ... calls for reduced pensions for new hires and for current employees to either pay more toward their pensions or choose a reduced benefit formula for remaining years on the job." (San Jose Mercury News)

A Pension Plan Funded With Cheese
"[The PBGC] ... encounters all kinds of peculiar assets. It has taken possession of water rights in the Mojave Desert, diamonds, oil wells, a hog-slaughtering facility, a restaurant, a hyperbaric chamber, a brewery in Philadelphia, a lien on a terminal at Kennedy International Airport and a stake in a nuclear fuel-reconditioning partnership." (The New York Times)

Merrill Lynch to Pay N.J. $45 Million Over Pension Fund Losses
"In 2009, then-Attorney General Anne Milgram sued Merrill on the grounds that it misled New Jersey's Division of Investment Management when it sold the state $300 million of its own preferred stock in January 2008. According to the state's initial complaint, Merrill gave the state inaccurate financial reports and understated its risks at the time of the sale.... Merrill Lynch settled without admitting or denying liability." (Associated Press via NJ.com)

Teamsters Pension Crisis Sapping Hoffa's Support, Power
"The Central States Pension Fund, which serves Teamsters members across the country and which also happens to be 'deeply troubled,' has joined the Teamsters in lobbying for the new legislation. Insiders believe that the Fund plans to make across-the-board pension cuts. The Teamsters' unwillingness to allow companies to move Teamsters members out of the fund and into more secure retirement plans has enraged Teamsters members and sparked backlash against Hoffa." (The Daily Caller)

Federal Bill Seeks to Tie Municipal Borrowing to Public Pension Disclosure
"[Proposed federal legislation] would strip states and cities of their right to issue tax-exempt bonds unless they first disclosed the true cost of their pension plans and whether they could pay it." (The New York Times)

Business Best Practices: Bootcamps Beyond the Gym (PDF)
"[D]elivering education in a bootcamp structure is ideal for candidates who either take an online exam immediately following the session or for those who are taking a proctored exam after studying the material and attending the bootcamp.... [W]hat makes a successful bootcamp experience: 1. Keep it short.... 2, Keep it small.... 3. Set expectations.... 4. Get a good teacher.... 5. Aim high!" (Sarah L. Simoneaux and Chris L. Stroud, in the Journal of Pension Benefits)

Differences Between the Traditional CPI and the Chained CPI
"The traditional versions of the CPI are based on spending patterns from a point in the past, and so do not fully incorporate the effects of consumers' substitution between various goods and services when their relative prices change.... The chained CPI-U provides a more accurate estimate of changes in the cost of living from one month to the next by using market baskets from both months, thus 'chaining' the two months together." (Congressional Budget Office Blog)

Provincial Government-Run 'Longevity Pension' Would Cost Working Quebecers $843 a Year
"Benefits under the new plan would be paid starting at age 75 -- on top of federal Old Age Security and existing Quebec Pension Plan benefits, adding as much as $14,564 a year to a pensioner's income. Quebecers are retiring earlier and living longer, putting unsustainable pressure on private pension plans." (Montreal Gazette)

Are Women Standing Up to Retirement Challenges? (PDF)
"[O]ld stereotypes about women and money are dissolving into a clearer picture of capability and strength ... [E]valuate how the women in your plan are faring ... Be proactive in engaging women on retirement saving and start useful conversations." (Fidelity Investments)


Unexpected Praise for Australia's Private Social Security System
"Probably the most sobering comparison is to look at a chart of how much private wealth has been created in Superannuation accounts and then look at a chart of the debt that we face for Social Security. To be blunt, the Aussies are kicking our butts." (Cato Institute)


New Brunswick's Pensioners Declare War?
"[R]etirees are right to feel angry, betrayed and hoodwinked. There were no public consultations whatsoever and the cuts to their benefits were not explained to them properly.... Why is it important to keep an eye on New Brunswick's pension war? Because some think New Brunswick has the answer to Canada's pension funding crisis and that shared-risk plans are the future and will likely spread across Canada as their benefits become better known." (Pension Pulse)


403(b)izarre: Make It Automatic -- What About Personal Responsibility? (Part 3 of a Series of 4)
"American's have proven they won't save on their own, they need a nudge. I challenge anyone to find a retiring teacher upset with their decision to contribute to a defined contribution plan early in their career." (The Teacher's Advocate)


The CalPERS Bill Has Come Due
"Information provided to the governor and the Legislature to justify huge pension increases in 1999 was ludicrous on its face.... CalPERS estimates for investment return growth relied on the Dow Jones reaching 25,000 by 2009 -- it turned out to be about 8,000 -- and 28,000,000 by 2099. It was as if the return would be so great it would be hard to spend all the money rushing in[.]" (Howard Jarvis Taxpayers Association)


Investment Advisors: Why Saying You're a Fiduciary Destroys Trust Instead of Building It
"Focus on conveying credibility more holistically, which includes a focus not only on motives and intent, but also the advisor's integrity, capabilities to deliver value to the client, and track record for positive financial planning results. And establish your trust and credibility not just by your words, but by your actions and behaviors." (Nerd's Eye View)


Tax Benefits of Retirement Savings in Jeopardy
"Will the regular Joe would save that money for retirement if the tax incentive is taken away? ... EBRI's 2011 Retirement Confidence Survey [reported that] 76% of respondents with incomes between $15,000 and $25,000 classified tax deductibility of contributions as 'very important,' the largest percentage of respondents for any income class." (MarketWatch.com)

Benefits in General; Executive Compensation

[Guidance Overview]

July 1 Deadlines Approach: Stock Exchange Independence Rules for Compensation Committees and Their Advisers
"While extensive in their scope, Section 952, Rule 10C-1, and the new exchange rules will require relatively few companies or Compensation Committees to make substantive changes in how they conduct their affairs. However, like most executive compensation rules adopted these days, they do impose paperwork and process requirements that affect every publicly traded company." (The Conference Board)

[Guidance Overview]

IRS Regs Address ACA $500,000 Deduction Limit for Health Insurance Companies; Who's Next?
"[T]hese new compensation deduction limits on health insurers are much broader than the longstanding $1 million deduction limit that applies to the 'Top 5' employees of public companies.... In the current economic and political environment, Congress may well consider similar proposals that would apply to a much broader group of companies (e.g., all public companies) as potential revenue raisers in future budget and tax reform legislation." (Groom Law Group)

IRS Decides to Shut Down Completely on Furlough Dates
"Acting IRS Commissioner Steve Miller announced that the IRS will close 'all public-facing operations,' including toll-free operations and Taxpayer Assistance Centers, on May 24, June 14, July 5, July 22, and August 30, with another two days of closings possible in August or September, in response to the budget cuts from sequestration." (Journal of Accountancy)

Press Releases

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