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April 30, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Senior Actuarial Analyst
for Verisight, Inc. in IL

Pension Analyst
for Hooker & Holcombe, Inc. in CT

Plan Investment and Advisory Specialist
for Christian Retirement Ministries in CO

Sr. Compliance Administrator
for VALIC in TX

Director, Operational Risk Management
for Prudential in CT

Retirement Specialist
for Nationwide Insurance in OR, WA

Retirement and Group Benefits Compliance Process & Procedure Specialist
for National Rural Electric Cooperative Association in VA

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[Guidance Overview]

IRA Contribution Deadline Not Extended for Suffolk County Residents and Others Affected by Boston Marathon Explosions
"According to the IRS drafter of Notice 2013-30, the relief does not at this time apply to making IRA or other tax-advantaged savings contributions.... Similarly, the relief does not currently apply to the completion of other commonly extended time-sensitive tax-related acts, such as rollovers or recharacterizations, filing Form 5500 for a retirement plan, making plan loan payments, etc.... The relief for filing individual income tax returns and making tax payments automatically applies to all individuals who live in Suffolk County, MA, including the city of Boston, victims of the explosions, their families, first responders, others impacted by the tragedy who live outside of Suffolk County, and taxpayers whose tax return preparers were adversely affected." (Ascensus)


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[Guidance Overview]

DOL Offers Tips on TDFs (PDF)
"The DOL suggests that the process for comparing and selecting a TDF should entail consideration of the fund's prospectus, which would include the fund's historical performance as well as fee and expense information.... Beyond the prospectus, the DOL recommends that TDF providers be questioned on the impact that plan demographics ... will have on the investment." (The Wagner Law Group via 401(k) Advisor)

[Guidance Overview]

New FASB Disclosures Kick In for Non-Public Entities Participating in Multiemployer Pension Plans (PDF)
"The new disclosures will be effective for annual periods ending after December 15, 2012 for non-public entities ... [T]he FASB focused on three main objectives for the disclosure -- disclosure of the overall health of the plan, the level of the employer's participation in the plan, and the employer's contributions to the plan -- and will require this information for individually significant plans. The standard does not define the term 'significant.'" (PricewaterhouseCoopers)

[Guidance Overview]

Standards of Conduct under ERISA, the Exchange Act, and the Advisers Act (Part 2 of 2)
"This [article] addresses the standard of conduct applicable to ERISA fiduciaries, including BDs and RIAs who are fiduciaries pursuant to the functional definition found in section 3(21) of ERISA or designated as fiduciaries pursuant to sections 405(c)(1)(B) and 3(38) of ERISA ..., and how that standard compares to the standards of conduct under the Exchange Act and Advisers Act." (Groom Law Group via The Investment Lawyer)

Presentations Made to the 'Future of Retirement' Summit (PDF)
"On April 16, 2013, the Center convened a Future of Retirement Summit to address the workforce, legal, financial, policy, and political challenges facing local and state governments as they retool their retirement benefits." [Downloadable PDFs of all presentations are available at the link.] (Center for State & Local Government Excellence)


[Advert.]

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.


Putting Longevity Risk In Its Place (PDF)
"Compared to market risks, we estimate longevity risk to be small. On a stand-alone basis, this risk is about 0.4% of funded status annually (one-standard deviation range). And in the context of a typical plan's equity market and interest rate exposures, the risk is even smaller" (NISA Investment Advisors; free registration required)

More Retirees Carrying Mortgage Debt (PDF)
"Perhaps the most dramatic finding of the 2013 study is that 67 percent of pre-retirees expect to carry mortgage debt into retirement ... Also noteworthy is that 33 percent expect to carry non-mortgage debt into retirement compared to 22 and 23 percent in 2007 and 2009, respectively. Among the boomers who expect to carry any kind of debt into retirement, more than half (56 percent) expect they'll owe $25,000 or more." (Securian Retirement)

Delayed Retirements Slow Career Progression
"Many workers who were once close to retirement are staying in jobs for reasons such as poor investment results in their retirement savings. Some are continuing to work because they are supporting unemployed adult children. The scenario is making it harder for younger workers to find senior positions or advance in their current organizations. It's also creating a leadership gap that is hampering innovation at some companies[.]" (Journal of Accountancy)

2013 Investment Company Fact Book (PDF)
"Employer-sponsored retirement plans ..., IRAs ... and annuities ... totaled $19.5 trillion at year-end 2012, up 8.6 percent from year-end 2011 ... The largest components of retirement assets were IRAs and employer-sponsored DC plans, holding $5.4 trillion and $5.1 trillion, respectively, at year-end 2012. Other employer-sponsored pensions include private-sector DB pension funds ($2.6 trillion), state and local government employee retirement plans ($3.2 trillion), and federal government plans ... ($1.6 trillion) In addition, there were $1.7 trillion in annuity reserves outside of retirement plans at year-end 2012." (Investment Company Institute)

[Opinion]

Frontline Producer Explains Controversial 401(k) Documentary -- What Was Good About It
"When Frontline producer Martin Smith and his crew set out to make a documentary on the problems with the 401k industry, they sought to 'alert,' even 'shock,' if not downright 'scare' the general public.... Many thought the show exposed some of the myths 401k investors believe. One of the primary objectives of the show, according to Smith, was to convince employees not only that their 401k was not free, but that it had a substantial cost." (Fiduciary News)

[Opinion]

Text of SPARK Comments on Budget Proposals Affecting Retirement Plans (PDF)
"The budget provisions ... are complex, they create the potential for significant unintended consequences, and will be costly to employers and individual savers. At a minimum, the proposals will increase the costs ultimately borne by all American workers trying to save for retirement, not just the higher-income workers whom the provisions target. At worst the proposals will adversely impact the availability of plans and the amounts contributed by employers, particularly among small businesses. We urge you to consider proposals that will encourage voluntary plan formation and contributions by employers instead of complex and costly provisions that will have the opposite effect." (The SPARK Institute)

[Opinion]

The 401(k) Debate
"The [PBS 'Retirement Gamble' program] started with two misconceptions. The first is that most Americans aren't prepared for retirement. That's an over-exaggeration ... [W]hen you focus exclusively on that group, you do give the misleading impression that everyone is getting it wrong, which is untrue.... The second misconception was about the old defined benefit (DB) pension system ... About 4 in 10 private sector workers had pensions in their heyday, and the typical pension was modest. The system was full of risks.... And few workers were aware of these risks." (Vanguard)

[Opinion]

Rhode Island Officials Admit History of 'Pay-to-Play' and SEC Inquiry
"[The Rhode Island] Treasurer's office confirmed ... that, unbeknownst to Rhode Islanders, secret payments to placement agents, commonly referred to as 'kick-backs' had occurred in the past.... [Further,] the SEC had confidentially contacted the pension requesting information about these questionable payments." (Edward "Ted" Siedle, via Forbes)

[Opinion]

403(b)izarre: Make It Automatic -- Fiduciary Responsibility (Part 4 of 4)
"Implementing a 'Make It Automatic' fiduciary-based plan can be extremely simple and not cost the employer much, or anything at all. One issue is that these plans are not available in every state and some states have laws against such a system. Whenever these laws are proposed to be changed the insurance industry spends a lot of money to stop their repeal, the status quo drives profit margins... Where these programs are being tried, the participation rates skyrocket -- it works." (The Teacher's Advocate)

[Opinion]

Text of ASPPA Comments to IRS on Pre-Approved Defined Benefit and 403(b) Plans
"ASPPA and NTSAA recommend that, with respect to the pre-approved defined benefit plan program, the IRS ... [1] Permit cash balance plans as part of the existing pre-approved defined benefit program for the cycle that began February 1, 2013; [2] Extend the deadline for the submission of mass submitter plans from October 31, 2013 to January 31, 2014; and [3] Expand the master and prototype (M&P) minor modifier program to include volume submitter plans. ASPPA and NTSAA recommend that, with respect to the pre-approved 403(b) plan program, the IRS [1] Extend the submission deadline from April 30, 2014 to January 31, 2015; [2] Modify the definition of mass submitter by reducing the number of word-for-word adopters from 30 to 10 [3] Confirm that once a mass submitter satisfies the word-for-word threshold for one plan, then there is no threshold for all other plans of the mass submitter; and [4] Expand the prototype minor modifier program to include volume submitter plans." (American Society of Pension Professionals & Actuaries)

[Opinion]

Text of ASPPA Letter to IRS with Suggestions for Combining the M&P and Volume Submitter Pre-Approved Plan Programs
"ASPPA's experience indicates that most employers adopting and maintaining qualified retirement plans only care that the plan is pre-approved by the IRS. The distinctions between M&P and VS are irrelevant to them and, in fact, create confusion as practitioners try to explain the differences.... Greater efficiencies for the IRS, practitioners and adopting employers could be accomplished by eliminating the procedural and substantive distinctions between the M&P and VS programs." (American Society of Pension Professionals & Actuaries)

[Opinion]

Moving Ahead with 'Pension Progress'
"Prior to MAP-21 pension plans had to determine liabilities based on a 2-year average of interest rates. After MAP-21 companies could use a 25-year average of interest rates. As a result, companies get to contribute less when interest rates are low. [The author of this linked article] would like to point out this is precisely when companies ought to be contributing more!" (Mish's Global Economic Trend Analysis)

Benefits in General; Executive Compensation

[Official Guidance]

Text of IRS Notice 2013-30: Filing and Payment Extension for Those Affected by the Boston Marathon Explosions (PDF)
"The [IRS] is granting an extension of time to file 2012 tax returns and pay any tax due on those returns until July 15, 2013, to those affected by the Boston Marathon explosions.... This relief applies to all individuals who live in Suffolk County, Massachusetts, including the city of Boston, victims of the explosions, their families, first responders, others impacted by the tragedy who live outside of Suffolk County, and taxpayers whose tax return preparers were adversely affected." (Internal Revenue Service)

BLS Employment Cost Index, March 2013
"Benefit costs decelerated to 0.1 percent in March 2013, down from 0.6 percent in December 2012.... Benefit costs increased 1.9 percent for the 12-month period ending March 2013, down from the March 2012 increase of 2.7 percent. BLS has discovered an error in the benefits data for March 2013 primarily affecting private industry benefits data for sales and office occupations.... Other benefit and compensation data may also be affected by this error." (U.S. Bureau of Labor Statistics)

Providing Same-Gender Domestic Partner Benefits Is Violation of Texas Constitution, Says Texas Attorney General
"The Texas Constitution bars local governments -- including the City of Austin, Travis County and area school districts -- from offering domestic partner benefits to employees in same-gender relationships, according to a legal opinion ... by Attorney General Greg Abbott. Domestic partnerships, as recognized by Austin and the other governments, are close enough to the definition of marriage to violate a constitutional amendment banning same-gender unions that 76 percent of Texas voters approved in 2005, the opinion stated." (The Austin American-Statesman)

Employers Should Review How Plan Documents Define 'Spouse' in Light of Recent Benefits Litigation
"[P]roviding a clear definition of spouse can help to minimize the risk of competing claims for death benefits under the employer's retirement plans brought by a deceased employee's same-gender spouse and the blood relatives who otherwise may be entitled to death benefits under the plan's default beneficiary rules." (McDermott Will & Emery)

Looking Closely at Operational Competence: ERISA Litigation Moves Away from Doctrine and Towards a Careful Review of Plan Performance (PDF)
"Over the years ... [ERISA's] tightly limited scope of remedies has been giving way, reducing the protection from liability that this aspect of ERISA litigation had subtly and quietly granted to plan sponsors, administrators, and fiduciaries. This quiet shift ... has picked up steam over the past year in particular, raising the stakes for plans both in terms of the need to perform at a high level in administration and operation, and in the potential liability outcomes from litigation.... [T]he transition means that the factual elements of plan management and performance are now moving towards the forefront in disputes over benefit plans[.]" (Journal of Pension Benefits, via Boston ERISA Law Blog)

Must Financial Institutions Choose Between Pay for Performance and Avoiding Compensation Plan Designs that May Incentive Risk Taking?
"[I]n 2010, the Fed embarked on a project known as the Horizontal Review of Practices at Large Banking Organizations (the 'Horizontal Review') under which it thoroughly reviewed the incentive compensation practices at 25 large, complex banking organizations ... Because the Horizontal Review process took place behind closed doors between the Fed and each institution, what the rest of corporate America (and investors and their advisors) did not necessarily see was that the Fed was strongly urging financial institutions to make their compensation programs less likely to create risk . . . by making the performance targets easier for officers and employees to achieve!" (Winston & Strawn LLP)

Disclosure of CEO-to-Worker Pay Ratios Stalls
"Almost three years after Congress ordered public companies to reveal actual CEO-to-worker pay ratios under the Dodd-Frank law, the numbers remain unknown.... [M]andatory disclosure of the ratios remained bottled up at the [SEC], which hasn't yet drawn up the rules to implement it." (Treasury & Risk)

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