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April 23, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Relationship Manager
for Verisight, Inc. in CA

Compliance Account Manager
for Verisight, Inc. in CA

Defined Benefit Pension Administration Professional
for Milliman in NJ

401(k) Plan Client Services Manager
for a 401(k) Plan Advisory Firm in AZ

Director, Business Process & Workflow Management
for Prudential in NJ

Plan Administrator
for Verisight, Inc. in MN

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Webcasts and Conferences

Ethics Case Studies One
Nationwide on May 14, 2013 presented by McKay Hochman Co., Inc.

"Fundamentals of 401(k) and Other Qualified Plans" - a 3-day Seminar, June-July. Register Now!
Nationwide on June 12, 2013 presented by SunGard Relius

"Form 5500 Workshop 2013: Issues and Answers" - Norfolk
in Virginia on May 23, 2013 presented by SunGard Relius

"401(k) Plan Workshop 2013: Tax Reform and the 401(k) Plan" - Norfolk
in Virginia on May 24, 2013 presented by SunGard Relius

Next Generation Advisory Council Meeting for Young Benefits Professionals
in Massachusetts on April 30, 2013 presented by New England Employee Benefits Council

Employee Benefits in the Cloud and on Social Media
in New York on May 16, 2013 presented by WEB (Worldwide Employee Benefits Network ), New York Chapter

How the Integration of Healthcare Accounts is Enabling Health Plans and Powering Exchanges Webinar
Nationwide on April 24, 2013 presented by Evolution1

View All Webcasts and Conferences

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'The Retirement Gamble' Facing Us All -- PBS Frontline Show on Retirement Crisis Airs Tonight
"America is facing a retirement crisis. One in three Americans has no retirement savings at all. One in two reports that they can't save enough. On top of that, we are living longer, and health care costs, as we all know, are increasing. But ... those advertisements are imploring us to start saving for one simple reason. Retirement is big business -- and very profitable.... And as long as they don't run away with our money or invest it in a Ponzi scheme, they have little in the way of accountability to us when something goes wrong. And even then it can be hard to fight back." [Note: The author, Martin Smith, is the PBS correspondence who prepared the FRONTLINE story 'The Retirement Gamble'.] (PBS)


5500 & 401(k) Workshops: Tax Reform - Issues and Answers

Sponsored by SunGard's Relius Education

IRS/DOL 5500 audit targets, line-by-line review, Form 8955-SSA, welfare 5500s, DFVC. 401(k) tax reform, plan corrections, 11(g) retroactive amendments, Roth transfers, disqualification, compliance survey and benefit rights and features. 25 Locations, April–June.

'Retirement Gamble' Program to Spotlight Crisis in Retirement Readiness
"Many of us, including some retirement-jittery people featured in the show, aren't doing a terrific job of putting aside money for our futures.... [O]ne of the key points in The Retirement Gamble: Many of the 51 million people who have 401(k) plans simply don't understand how to size them up and make smart investing choices." (Forbes)

Retirement and Health Care Expenses: Retirees' Concerns Are Off the Charts
"There needs to be a better acknowledgement that paying for health care in retirement is a pretty major issue and something they need to incorporate as part of their (financial) plan. The next step is to do an estimate as to what these costs will be and incorporate it into the plan." (USA TODAY)

Participants of Higher Education Retirement Plans Save More Than Corporate Workers
"Higher Education institutions outperform the corporate sector when it comes to faculty and staff deferral rates and plan design practices that can generate successful retirement outcomes. Among those surveyed, the average deferral rate for faculty and staff is currently 13.4 percent.... [On] average 41 percent of Higher Education institutions offer automatic enrollment, and over half (54 percent) apply a default contribution rate of 5 percent or more. The report also shows that Higher Education institutions' retirement plans are evolving quickly." (Transamerica Retirement Solutions)

Employee Benefits Committees: Shop for Best Deal on New Cars, 401(k)s and 403(b)s
"[M]any fiduciaries of [ERISA] plans spend far more than the price of a car annually on plan fees and have not fully exercised their abilities to negotiate a better deal with 401(k), 403(b) and other retirement plan service providers... [H]iring even the best of outside consultants is not an adequate defense to a charge of excessive fees if the committee cannot demonstrate its own initiative in getting the best deal for participants." (Bond, Schoeneck & King, PLLC)


BenefitsLink would like your help

Sponsored by BenefitsLink

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!

TW Pension 100: Year-End 2012 Disclosures of Funding, Discount Rates, Asset Allocations and Contributions
"During 2012, aggregate funded status for defined benefit plans in the TW Pension 100 fell from 79% to 77%. Plan assets finally rebounded to 2007 levels, but plan liabilities jumped by roughly 40% over the 2008-2012 period. The pension deficit climbed from $252.7 billion to $295.2 billion -- an increase of $42.5 billion over the year." (Towers Watson)

S&P Sees Pension Funding Burden on U.S. Nonprofit Health Care
"Large pension funding demands will likely 'be a drag on the sector for several years,' [Standard & Poor's Ratings Services said].... 'We believe that health systems will continue to implement plan changes to seek the next level of cost savings within the context of organization-wide expense reduction measures,' it added." (Reuters)

Panel Pushes Back Effective Date of New 401(k)-Style Retirement Plan for Louisiana State Employees
"[A] constitutional challenge of passage of the measure is pending before the Louisiana Supreme Court and an IRS ruling is pending on whether the plan provides a benefit equivalent to Social Security. If 'cash balance' is not equivalent, the employee would have to be enrolled in Social Security too at added expense." (The Advocate)

Chained CPI: Social Security Friend or Foe?
"President Obama's budget proposes to use the chained CPI as a more accurate way of setting the annual inflation increases for Social Security benefits. It is not a cure-all for the program's long-term funding challenge but would, by itself, eliminate about a fifth of that gap. It does so, however, by cutting benefits to most recipients." (U.S.News and World Report)


Content is King: Never Lack the Tools to Connect

Sponsored by NIPA (National Institute of Pension Administrators)

NIPA's Customer Marketing Tools feature designed templates and expert-driven content to enhance plan knowledge for advisors and plan sponsors -– all part of NIPA TPA Business Owner membership! Now available on a variety of topics.

Has SEC Unfairly Rigged Its Fiduciary Questionnaire?
"'Many of the questions the SEC is asking are inappropriate or make assumptions contrary to the core principles of fiduciary,' says [fi360 CEO Blaine Aikin]. 'The SEC is asking how to accommodate the industry by compromising on two centuries of common law rules. This question is backwards. It should be "how do we accommodate the investor?"'" (Fiduciary News)

ERISA Advisory Council to Meet June 4-6, 2013 (PDF)
"The [open meeting of the] Advisory Council will study the following issues: (1) Locating Missing and Lost Participants, (2) Private Sector Pension De-risking and Participant Protections, and (3) Successful Retirement Plan Communications for Various Population Segments." (Employee Benefits Security Administration)

Pensions in 2013: Trends in Interest Rates and De-Risking
"Obviously 15 months of data is too little to identify a trend, but clearly rates were lower last summer than they are now. Some think that late 2012 was the bottom -- the end of a 30-year bull market in bonds.... Lower interest rates for 2013 make it more expensive to de-risk (e.g., by paying a lump sum to a terminated vested participant) than last year." (October Three)

Seventh Circuit Issues Sweeping Decision in Favor of Fiduciaries in a 401(k) Stock Drop Case
"The Court ... expressed 'fundamental doubts' about the common theories of liability in 401(k) stock drop cases, recognizing that 'it will be difficult' for any future plaintiff to rebut the presumption of prudence. The Court noted that, absent misrepresentations or other misconduct, 'plaintiffs in such cases under ERISA must try to hit a very small and perhaps non-existent target' to establish liability." [White v. Marshall & Ilsley Corp., No. 11-2660 (7th Cir. Apr. 19, 2013] (Sidley Austin LLP)

IRS Private Letter Rulings Permit Cashout of Pension Plan Retirees (PDF)
"[T]he IRS has opened the door to a new way to eliminate ongoing defined benefit pension liabilities by simply giving pensioners a cashout option. While the concept is simple -- amend the plan to provide a one-time election to take a lump-sum distribution -- the devil is in the details, as the approach impacts a number of complex Code requirements, and careful administration of the election process is warranted." (Groom Law Group via Journal of Pension Benefits)

The Participant Disclosure Regulation: Turning 'Experts' Into Informed Participants (PDF)
"[F]ive years after the bankruptcy of Lehman Brothers and the global financial crisis that followed, some participants are waking up to the fact that in order to properly invest their retirement account, they need accurate, reliable and understandable information about their retirement plans and investment alternatives. Unfortunately, other participants -- many with the encouragement of class action plaintiffs' attorneys -- are convinced that their losses must be someone else's fault: the result of excessive fees, substandard investment options or improper disclosures." (Groom Law Group via Plan Consultant)

Seventh Circuit Clarifies Standard for Establishing Fiduciary Status for Plan Service Providers (PDF)
"The primary take-away from this decision is that merely being authorized to choose plan investment options is not enough to make a plan service provider a fiduciary.... For plan fiduciaries, the Leimkuehler decision [by the 7th Circuit, issued April 16, 2013,] highlights that they, not vendors providing their plans with a platform of investment options, will in most cases be responsible for selecting available investment option." (Jenner & Block)

State and Local Government Pensions Get a Grip on Future Costs
"Not long after the biggest financial crisis in four generations, cries began in earnest to close these systems to new hires and replace them with defined contribution, or retirement savings, plans.... In all the clamor, it appears that one important detail has been drowned out. The fact is, the majority of states have been quite flexible in initiating changes to shore up their damaged funds and are on track to bring pension costs back to precrisis levels -- or lower." (Institutional Investor)

Fiduciary Discretion: A Plan for Improving Outcomes (PDF)
"[Most plan] sponsors hire an institutional trustee for their plans -- after which many breathe a sigh of relief believing that they have also delegated their fiduciary responsibility, as it relates to plan assets, to the designated trustee. Most often, this isn't true." (Unified Trust Company, N.A.)


How Your Pension Got Turned Into Scotch Or Cheese
"Stocking pension funds with whisky, cheese and golf courses? What could possibly go wrong here? ... According to a report from the International Monetary Fund (IMF) ..., these moves are part of an alarming trend: pension funds are increasingly 'gambling on resurrection'.... Gambling on resurrection often ends badly for those whose money is being played with. Bad losses often turn into catastrophic collapses." (Forbes)


It's Not Perfect -- But the U.S. Retirement Evolution from DB to DC Plans Remains a Model for the World
"Some critics argue the answer is to do away with defined contribution plans and go back to defined benefit pension plans -- but that oversimplified and unrealistic answer ignores the fact that global competition puts great pressures on most employers today regardless of size. In this environment, defined benefit pension plans create financial obligations on employers that, for many, are just not sustainable." (The Principal Blog)


Analysis of Proposed Budget Limit on Tax-Advantaged Retirement Savings (PDF)
"[B]ecause it is based on actuarial assumptions tied to [DB] plan benefit limits, the [maximum permitted allocation (MPA)] will, in reality, likely be far lower than $3 million -- both if interest rates return to historic averages and (even if interest rates remain at historic lows) for younger workers.... [T]he fact that the MPA is as high as $3 million in today's interest rate environment is an historical aberration." (Davis & Harman LLP)


Text of Comments to DOL on Final Rule for Disclosure in Participant-Directed Individual Account Plans and Related Guidance under FAB 2012-02R
"In particular, we are requesting a transitional realignment period for making the 'second round' of the annual participant level fee disclosures required by the Final Regulations. In addition, we recommend clarification of the 'at least annually' standard in a way that will permit plan administrators more flexibility and reduce plan administrative expenses." (American Society of Pension Professionals & Actuaries)

Benefits in General; Executive Compensation

Your Shareholders Get It, But Do Your Executives? (A Surprising Number Don't)
"We can all agree on the criticality of ensuring that you have strong shareholder support and demonstrating that your executive compensation program is aligned with shareholders. But it's equally important to ensure that your program and reward opportunities are well understood by participants. After all, didn't you just tell your shareholders that your program is designed to pay for performance?" (Towers Watson)

Are Executive Bonuses an Obstacle to Shareholder Value?
"[Do] executive bonus plans actually encourage long-term value growth? Unfortunately, many do not.... To design the proper bonus scheme requires consideration of unique business factors such as the industry, business model, strategy, investment time horizon and corporate culture. [This article provides] some guidelines that should be used for better executive bonus design[.]" (CFO.com)

Press Releases

ASPPA Urges Lawmakers to Oppose 401(k) Tax
American Society of Pension Professionals & Actuaries (ASPPA)

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