EmployeeBenefitsJobs.com logo BenefitsLink.com logo

BenefitsLink Retirement Plans Newsletter

April 26, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
         Past Issues  |  Search

Employee Benefits Jobs

Paralegal/Legal Administrator
for Transamerica Retirement Solutions in MA

401(k) Administrator
for Established TPA Firm in CA

Plan Administrator
for Verisight, Inc. in IL

Enrollment Center Manager
for Univers Workplace Solutions in CA

Consulting Actuary
for Verisight, Inc. in IL

Post Your Job on employeebenefitsjobs.com

View All Jobs

RSS feed for jobs RSS Feed: All Jobs

Webcasts and Conferences

We also publish the BenefitsLink Health & Welfare Plans Newsletter (free): Subscribe


[Official Guidance]

IRS Retirement Plan Fix-It Guides
Guides are provided for 401(k) plans, 403(b) plans, SARSEPs, SEPs and SIMPLE IRAs. Excerpt: "Each guide provides: an overview of the rules for each plan type, an overview of the Employee Plans Compliance Resolution System, the most frequent errors we find in each plan type and tips on how to find, fix and avoid these mistakes." (Internal Revenue Service)


ESOP administrators: get the training you need to be successful.

Sponsored by ASPPA

The administration of ESOPs requires knowledge of unique allocation and compliance testing requirements. The ESOP Administration certificate is designed to provide education for the beginning and intermediate ESOP administrator.

[Official Guidance]

Text of SEC No-Action Letter on Sales of Variable Annuity Products by Insurance Agencies (PDF)
"[T]he Staff will not recommend enforcement action to the Commission under Section 15(a) of the Exchange Act if insurance agencies, without registering as broker-dealers under Section 15(b) of the Exchange Act: (1) enter into insurance networking arrangements with registered broker-dealers for the offer and sale of variable products; and (2) make transaction-based payments based on the sale of variable products." (U.S. Securities Exchange Commission)

[Guidance Overview]

PBGC Withdraws Two Territorial Coverage Opinion Letters Impacting Puerto Rican Retirement Plans
"The status of PBGC coverage for Puerto Rico defined benefit plans is one that has been the subject of review and analysis by the PBGC for quite some time. Most recently, on April 19, 2013, the PBGC withdrew two older opinion letters (Opinion Letters 77-172 and 85-19), which addressed whether defined benefit plans established and maintained in Puerto Rico are covered by Title IV of ERISA. This withdrawal may be an indication that further guidance for Puerto Rico based defined benefit plans is forthcoming." (Proskauer's ERISA Practice Section Blog)

[Guidance Overview]

Retirement Plans Spring Roundup of Retirement Plan Developments (PDF)
"[This article] recaps recent developments for defined benefit and defined contribution retirement plans [including] the revised funding interest rates in MAP-21 and other guidance for these plans on reporting and disclosure obligations.... participant fee disclosure and fiduciary issues ... Hurricane Sandy relief and other items of general interest, such as COLAs and revisions to compensation rules." (Buck Consultants)

What a 28 Percent Deduction Cap Would Mean for 401(k) Tax Benefits
"Calculating the effect of the deduction cap is, it turns out, very complicated. There are two issues: How do you account for the reduced deduction/exclusion? And how do you deal with the basis the participant gets?" (October Three)


Your Website is a 24/7 billboard of your stature in the industry.

Sponsored by Gross Strategic Marketing

Your Web presence is the most visible component of your marketing strategy. It's a 24/7 billboard of your stature and success in the industry. Your presence can make the difference between being considered…or not.

Decision Against Transamerica Criticizes Fiduciary Warranties, and Pretty Much Everything Else
"[T]he Fiduciary Warranty amounts to insurance provided by TLIC to employers against law suits by employees for breach of fiduciary duty, but this insurance is paid for by the fees assessed on the employees' assets. The court has found no indication that the employers pay TLIC separately for such insurance. Thus, instead of an insurance company bargaining with a party seeking to obtain the best rate for itself in its insurance purchase, the insurer is bargaining with a party who is not in fact bearing the financial burden of the insurance, though it will reap the benefits. Because the contract does not appear to have been negotiated at arm's length, TLIC may not shield itself behind the contract from an alleged breach of duty." [Santomenno v. Transamerica Life Ins. Co., No. 12-2782 (C.D. Calif. Feb. 19, 2013)] (Plan Tools, LLC)

Federal Circuits Disagree on Beneficiary Excluding IRA From Bankruptcy Estate
"[T]he Seventh Circuit [concluded] that the inherited IRA assets would not be exempted from the bankruptcy estate. Its opinion noted that the exemption under IRC Sec. 522(b)(3)(C) is for retirement funds, that an inherited IRA of a nonspouse beneficiary is subject to distribution rules different from those that applied to the taxpayer who established the IRA to save for retirement, and therefore such assets should not be considered retirement funds." (Ascensus)

Americans Spend Less on Investment Advice and Products as Doubt Lingers
"Americans are allocating a smaller share of their spending to investment-related fees since the recession ... Spending on expenses including securities commissions, investment advice and custodial services totaled about $150.8 billion in February ... That accounted for 1.3 percent of total personal consumption, matching the average since the 18-month recession ended in June 2009, compared with 1.6 percent in the 12 months before the downturn started." (On Wall Street)

A Good Reason to Transfer Your Account from Your Former Employer's 401(k)
"Once an employer files for bankruptcy or goes out of business, it becomes very difficult for the former employees to retrieve their funds and often involves considerable expense.... [As] long as the funds have been deposited with a custodian, the employee is vested, and there are statements proving the balance of the accounts, then the money still belongs to the employee. It just may take a lot of extra leg work to retrieve it." (Central Penn Business Journal)


BenefitsLink would like your help

Sponsored by BenefitsLink

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!

408(b)(2): The Never Ending Story, or an Area of Opportunity for Advisors?
"For some financial professionals, changes to Section 408(b)(2) of ERISA may have seemed like a one and done effort ... The [DOL] has already added a question to their audit checklist asking plan sponsors for all their 408(b)(2) disclosures. This likely means we'll be dealing with the ramifications for a long time." (The Principal Blog)

ICI Focus on Funds, April 26, 2013 [Video]
"ICI chief economist Brian Reid discusses innovations that have 401(k) mutual fund fees falling -- even as plans offer more and better services to participants." (Investment Company Institute)

GAO Report: Preliminary Observations on Key Management Challenges of the Social Security Administration
"In this statement, GAO discusses initial observations from its ongoing review and describes (1) key management challenges SSA faces in meeting its mission-related objectives and (2) the extent to which SSA's planning efforts address these challenges.... This work is ongoing and GAO has no recommendations at this time. GAO plans to issue its final report in June 2013." (U.S. Government Accountability Office)

Generation X: The MTV Generation Moves into Mid-Life (PDF)
"Gen Xers have grown up ... Their current age ranges from 36 to 47.... [H]alf report being behind on retirement savings. In fact, 7% haven't started at all and 11% don't even have retirement savings goals.... Generation X may not fully understand Social Security, and only three in 10 are somewhat to very confident that it will pay out all the benefits they will be eligible to receive. Nevertheless, they are counting on it for their retirement, believing ... that one-third of their income will come from Social Security." (MetLife)

Can Multiemployer Pensions Build a 21st Century Plan?
"In the four years since the financial crisis, the National Coordinating Committee for Multiemployer Plans (NCCMP) ... has been working to create solutions to the problems besetting multiemployer pensions. ... The first set of recommendations looks at how to strengthen the multiemployer pension system already in place.... The second area of concern deals with the 5 to 10 percent of red-zone multiemployer plans that are deemed 'deeply troubled'.... [B]ut it is the commission's third recommendation -- for new structures to deliver future pension benefits -- that offers truly forward-thinking solutions." (Institutional Investor)

Moody's Revised New Approach to Adjusting Reported State and Local Government Pension Data
"Moody's four adjustments to reported pension information are ... Actuarial accrued liability (AAL) will be discounted using a high-grade, long-term taxable bond index rate.... Asset valuation smoothing will be eliminated in favor of reported fair value of assets as of the actuarial reporting date.... New cost metric equal to 'amortized adjusted net pension liability' will be reported.... For multiple-employer, cost-sharing pension plans, liabilities will be allocated proportionately according to each employer's share of the total contribution." (Segal)

Addressing Retirement Readiness
"Defined contribution plans make the participant the sole decision maker for the four factors that determine an employee's ability to retire successfully: contribution rate, investment strategy/return, time horizon, and spending needs in retirement. In the transition from DB to DC, these critical elements were transitioned from sophisticated pension committees and diligent plan sponsors, to participants that in many cases lack the expertise, tools, or time to manage them effectively." (Multnomah Group)

Eliminating Friction and Leaks in America's Defined Contribution Retirement Plan System (PDF)
"A utility that facilitates the movement of participant savings from a DC plan to other retirement savings vehicles, particularly other 401(k) plans, is a proven, 'in plan' solution to the system's friction and leakage challenges.... [and is] a utility of this nature that involves programs supporting participant decision-making at job change results in better outcomes for all parties. Implemented system-wide by plan sponsors and recordkeepers, such a utility would eliminate systemic breakdowns[.]" (Boston Research Group)

Defined Contribution Plan Participant Activities, 2012
"Key Findings: [1] DC plan withdrawal activity in 2012 remained low and was similar to the prior year's activity.... [2] The already small share of participants that stopped making contributions in 2012 was slightly lower than the share that stopped contributing in 2011.... [3] Most DC plan participants stayed the course with their asset allocations as stock values generally rose throughout the year.... [4] DC plan participants' loan activity edged down slightly in 2012, although it continues to remain elevated compared with four years ago." (Investment Company Institute)

New PEPTA Legislation Introduced in House and Senate
"In effect, PEPTA would require every public pension plan to essentially keep two sets of books. One would ... reflect the reality of balanced investment portfolios ... that have, over the past 25 years, averaged 8.8 percent returns ... The other set would pretend that all public plan assets were invested in U.S. Treasury bonds (even though this is not the case for any public plan), which currently yield around 3 percent. The result would be two substantially different measurements of a plan's unfunded liabilities maintained by the Treasury Department." (National Council on Teacher Retirement)


Teachers Putting Hedge Funds on Detention?
"Unions are growing increasingly frustrated by the constant attacks on defined-benefit plans and with good reason. Their members pay a lot into these plans so they can enjoy the security and peace of mind that comes with a DB plan. The last thing they want to hear is some hedge fund or private equity manager who made it stinking rich by growing assets from their members' contributions publicly slamming DB plans." (Pension Pulse)


Obama Wants to Make Sure You Don't Retire Rich
"Why, at a time when the government is looking to reform entitlement programs because it can't keep the promises it has made to future generations, does Obama want to reduce the incentive to save? It makes no sense." (Bloomberg)

Benefits in General; Executive Compensation

Plain Language Over Equity: The Supreme Court's Ruling in U.S. Airways, Inc. V. McCutchen
"As the Supreme Court strongly suggested when it simultaneously granted certiorari, vacated and remanded the Ninth Circuit's decision in Rose after publishing its decision in McCutchen, even terms as seemingly onerous as those at issue in Rose, expressly deviating from several common law rules, should be upheld by a court. It is only when a plan is silent or ambiguous as to a particular issue that background equitable principles can be used to fill the gaps." (Trucker Huss)

Press Releases

34th Annual Telly Awards Honor ASPPA’s “Save My 401k” Campaign
American Society of Pension Professionals & Actuaries (ASPPA)

BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Phone (407) 644-4146
Fax (407) 644-2151

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright © 2013 BenefitsLink.com, Inc. but feel free to forward this newsletter if done without modification in any way.

All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

Links to Web sites other than those owned by BenefitsLink.com, Inc. are offered as a service to readers. The editorial staff of BenefitsLink.com, Inc. was not involved in their production and is not responsible for their content.

Useful links: