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BenefitsLink Retirement Plans Newsletter

April 24, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Senior Plan Administrator
for Advanced Benefits Consulting in MO

Defined Contribution Administrator/Participant Services
for Pension Services, Inc. in FL

Sr. Client Executive
for Transamerica Retirement Solutions in GA, NC

ERISA/Employee Benefits Lawyer Or Paralegal
for Buck Consultants in DC

Vice President of International Benefits Consulting
for Aon Hewitt in CA

Account Executive - Retirement Services
for Plexus Financial Services in IL

Compliance Manager
for TPA Firm in Long Island, NY (Nassau) in NY

Health and Welfare Compliance Consultant
for Gallagher Benefit Services, Inc. in TX

Sr. Process & Procedure Specialist - Retirement and Group Benefits Compliance IRC21293
for NRECA in VA

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Webcasts and Conferences

401(k) Plan Workshop 2013: Tax Reform and the 401(k) Plan - Houston
May 23, 2013
(SunGard Relius) in TX

Special Health Care Reform Briefing with Kevin Knopf, Attorney-Advisor, U.S. Dept. of the Treasury
April 25, 2013
(WEB - Washington DC Metropolitan Area Chapter) in DC

Jumping Off The Tweet Deck: Using Social Media To Market Your Firm Webcast
May 14, 2013
(InvestmentNews) WEBCAST

Forces of Change: New Strategies for the Evolving Health Care Marketplace
September 9, 2013
(Harvard School of Public Health Executive and Continuing Professional Education) in MA

401(k) Rekon is coming to Pittsburgh, PA on Wednesday, May 15th.
May 15, 2013
(401(k) Rekon) in PA

Ergonomics and Human Factors: Strategic Solutions for Workplace Safety and Health
October 7, 2013
(Harvard School of Public Health Executive and Continuing Professional Education) in MA

View All Webcasts and Conferences

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[Official Guidance]

May 23 IRS Phone Forum to Discuss '403(b) Corrections and Examination Trends'
"A discussion on Revenue Procedure 2013-12 will include guidance on correcting 403(b) plan failures and updates to the Employee Plans Compliance Resolution System.... Monika Templeman, director Employee Plans Examinations ... will review issues found in recent 403(b) audits and correcting 403(b) plan failures. If you have a specific matter that you'd like addressed, please email ep.phoneforum@irs.gov by before May 21." (Internal Revenue Service)


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

[Guidance Overview]

Target Date Funds: Don't Just 'Set It and Forget It'
"DOL has expressed concern that the investment styles and strategies of TDFs can be quite diverse, particularly because different TDFs use different 'glide-paths' to adjust participants' investments as they age.... plan fiduciaries should ... [1] Establish a process for comparing and selecting TDFs; [2] Establish a process for the periodic review of selected TDFs; [3] Understand the fund's investments[.]" (SpencerFane)

[Guidance Overview]

VCP, Scriveners' Errors and 11(g) Amendments
"In general, the IRS is reticent to permit an employer to reform a document because of the anticutback rule. An employer could attempt to use the VCP program for such an amendment but would be well advised to use the anonymous VCP program." (SunGard Relius)

[Guidance Overview]

Evaluating PBGC Premium Options in Advance of Big Increases
"Before switching interest rate methods just to get lower 2012 and/or 2013 VRPs, plan sponsors should be aware that it's less expensive to be underfunded now than in 2014 or later years. That's because the VRP premium rate is doubling in the next two years ... which could wipe out any short-term VRP savings this year." (Van Iwaarden Associates)

Cash Balance Plans for Public Employees: Somewhere in the Middle (PDF)
"[N]umerous state and local governments have recently made significant changes to their retirement plans in order to manage their costs including, in two very recent cases, establishing cash balance plans. However, if these new designs are used, care should be taken that the implications are fully understood and that they are effective in attracting and retaining qualified employees and providing sufficient and sustainable retirement benefits." (Gabriel, Roeder, Smith & Company via Government Finance Review)


Learn, Network and Sell at the SPARK National Retirement Industry Conference - June 16-18, Washington DC

Sponsored by SPARK (Society of Professional Asset Record Keepers)

Join top industry recordkeepers, asset managers, TPAs, advisors, marketing and sales executives for unequaled educational and networking opportunities. Learn the latest market trends, business strategies, regulatory and legislative issues, and product developments.

Seventh Circuit Clarifies that Discretion Is Not Always Required for Fiduciary Status, But Limits Liability to Fiduciary Acts
"[T]he Seventh Circuit made clear that discretion isn't always required for an entity to be a functional fiduciary. But at the same time, the Court reaffirmed that a functional fiduciary is only answerable under ERISA when it is acting as a fiduciary.... [T]he Court also rejected as 'unworkable' a theory advanced by the Department of Labor in an amicus brief, that by not exercising a power it had to remove or substitute fund offerings, [American United Life Insurance Company] had effectively exercised discretion over the selection of investment options." (Seyfarth Shaw LLP)

Hard-to-Value Assets and Pension Funding
"An obvious advantage to a plan sponsor is the preservation of cash when an intangible or tangible asset is instead contributed.... The downside is that an expectation of higher returns almost always means a greater uncertainty of realization.... [T]here are multiple items that must be assessed as a precursor to determining fair market value of the asset in question." (Pension Risk Matters)

Renewed Investor Optimism in First Quarter, But Non-Retired Americans Significantly More Optimistic Than Retired Americans
"U.S. investor optimism rose to +31 in March, up from -8 recorded in November 2012 ... The overall rise in optimism is due to a surge among non-retired Americans whose sentiment rose from -8 in November 2012 to +38 this spring. Retired Americans are not nearly as optimistic at +7, which is up from -5 recorded last November. The 30-plus point difference in optimism between retired and non-retired comes after six quarters of closely aligned sentiment[.]" (Wells Fargo)

Expenses and Fees Paid on Mutual Funds in 401(k) Plans (PDF)
"Plan participants have a broad range of mutual funds from which to choose, but they heavily favor lower-cost funds.... 84 percent of 401(k) plan assets in equity mutual funds were invested in funds with expense ratios of less than 1 percent at year-end 2012. Thirty-five percent of 401(k) equity mutual fund assets were in funds with expense ratios less than 0.50 percent." (Investment Company Institute)


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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!

Bankrupt San Bernardino Votes to Pay CalPERS, But Not Bondholders
"Bankrupt California city San Bernardino passed a new budget ... that will allow it to resume paying into the state pension fund on July 1 as it continues to renege on other debts including payments to bondholders. The city council vote comes nearly a year after it halted contributions to [CalPERS] ... There was no discussion either about the city's arrears to the pension fund, which tops $12 million." (Thomson Reuters)

Seventh Circuit Finds 401(k) Service Provider Not a Fiduciary in Revenue-Sharing Case
"The [Leimkuehler] opinion... rejects a novel theory of fiduciary liability that the [DOL] had espoused in an amicus brief.... The Seventh Circuit's holding should apply to almost any ERISA lawsuit where the plaintiff tries to establish fiduciary status based on the defendant's performance of administrative services. Separately, the court emphatically rejected the theory that not exercising a contractual right can somehow lead to fiduciary status." [Leimkuehler v. American United Life Insurance Co., No. 12-1081 (7th Cir. Apr. 16, 2013)] (Sidley Austin LLP)

An Overview of Cash Balance Plans: Design, Operation and Controversies
"Despite their advantages, cash balance plans have generated controversy in recent years relating to: Plan conversions and wear-away.... Back-loading. ... Whipsaw effect.... Age discrimination." (Practical Law Company)

DB De-Risking Glidepaths 'Too Mechanistic', Investment Advisor Says; Plans Should Target Risk Levels
"Instead of simply re-allocating assets to fixed income from the growth portfolio at each funded status threshold, plans should try to maximize returns at the same level of risk by allocating to active alternative strategies such as low-beta hedge funds, distressed credit, very active long-only strategies and private investment opportunities[.]" (Pensions & Investments)

PBGC Updates 'Finding a Lost Pension' Booklet
"The booklet, produced in partnership with the Gerontology Institute of the University of Massachusetts Boston, includes search tips from professional pension counselors as well as resources that a searcher can turn to for more extensive help. [Here's an excerpt:] 'This booklet helps you if you think you have a pension, but the employer and/or pension plan is hard to find. The plan may have been merged into another plan, the employer may have gone out of business -- any number of things may have happened. This booklet helps you do your own detective work to find a lost pension, and points you to professionals who can help.'" (Pension Benefit Guaranty Corporation)

Implications of FASB's Accounting Standards Update 2011-4 for Sponsors of ESOPs
"[FASB] believes the disclosures are valuable to the intended users of the financial statements, but the fact that this information is public on the DoL's database is problematic. The Board voted to propose an indefinite deferral of the quantitative portion of these disclosures until such time as the employee benefit plan community could work with the DoL to resolve this issue. The FASB's exposure draft is expected to be released at the end of April and will be subject to a 30-day comment period before being finalized." (McGladrey)

Entitlement Reform and Retirement Benefits
"A change in the [Social Security Retirement Age] presents an explicit challenge for DB plans, because those plans generally premise their benefit on a normal retirement age. It also presents an implicit challenge for account-based designs like cash balance or DC plans, at least to the extent the plan design focuses on enabling a participant to accumulate an adequate benefit at some assumed 'retirement age.'" (October Three)

Desire by Women for Financial and Retirement Planning Knowledge Nearly Doubles Since 2006
"More than six in ten women (62%) said they have an interest in learning about financial planning, retirement planning and investing ... [which is] nearly double the amount (35%) who indicated interest in these topics during the original study conducted in 2006. However, despite innovations within the financial services industry, 70% of all women said they believe financial information is hard to understand, up significantly from the 44% who felt that way during the initial [study]." (Allianz Life)


Retirement Plan Services Are Not Orange Juice: An ASPPA Response to 'The Retirement Gamble'
"The core thesis of this documentary -- or perhaps more accurately, docu-drama -- is that for retirement savers, fees are by far the most important factor to be considered when choosing an investment.... Perhaps this is the retirement plan industry's own fault. With the advent of fee disclosure, we have been so busy competing aggressively on fees (see, for example, a certain TV ad featuring a toddler with a smartphone app) we haven't been focusing enough on the critical value proposition the industry provides. If we don't do that ourselves, how can we expect our critics to focus on anything but fees?" (Brian Graff, Esq. on NAPA Net)


How Secure Is Your Pension?
"It looks like it could be another banner year for employer pension buyouts and freezes. Why? No matter how much companies try to bolster their pension funding status -- they're sinking." (Forbes)

Benefits in General; Executive Compensation

Goldberg Segalla Life, Health, Disability, and ERISA Newsletter, April 2013 (PDF)
A summary of decisions from across the country concerning life, health, and disability policies, including those governed by ERISA. This issue includes a discussion of US Airways v. McCutchen, as well as cases from most of the federal circuit courts of appeal. (Goldberg and Segalla)

Press Releases

CEFEX Delivers First Independent Fee Disclosure Assessment
Centre for Fiduciary Excellence (CEFEX)

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