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BenefitsLink Retirement Plans Newsletter

May 1, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Regional Bundled Sales Specialist
for Nationwide Insurance in AZ, CA, CO, KS, OR, WA

Pension Administrator
for Retirement Strategies, Inc. in GA

401(k) Compliance Consultant
for The Savitz Organization in PA

Retirement Plan Consultant / Actuary
for Ingham Retirement Group in FL

New Account Manager
for Heintzberger - Payne in OR

Plan Administration Manager
for Heintzberger - Payne in OR

Actuary/Retirement Plan Manager
for Benefit Consultants Group in NJ

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Webcasts and Conferences

"Form 5500 Workshop 2013: Issues and Answers" - Nashville
May 30, 2013
(SunGard Relius) in TN

"401(k) Plan Workshop 2013: Tax Reform and the 401(k) Plan" - Nashville
May 31, 2013
(SunGard Relius) in TN

Annual Benefits Fair and Trade Show
June 5, 2013
(New England Employee Benefits Council) in MA

HIPAA HITECH 2013 Update and Compliance Actions
May 8, 2013
(Employers Council on Flexible Compensation (ECFC)) WEBCAST

Basics: 403(b) Plan and 457(b) Plan Overview Webcast
May 30, 2013
(American Bar Association (ABA)) WEBCAST

View All Webcasts and Conferences


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Frontline Producer Explains Controversial 401(k) Documentary (Part 2 of 3)
"When producer Martin Smith put together his Frontline documentary 'The Retirement Gamble,' he wanted to shock typical 401k investors out of their complacency.... In fact, if not for a sense of maintaining journalistic objectivity, Smith could have made the entire show about his own personal plight. In many ways, he's a poster child for what is wrong with the 401k business." (Fiduciary News)


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Another Investor Sues Fidelity Over Use of Float Income
"[The plaintiff] alleges that Fidelity Research breached fiduciary duties to [a retirement plan sponsored by General Motors] when it invested float income -- money generated from contributions, redemptions and transfers of plan assets when they're placed temporarily in interest-bearing accounts -- into Fidelity funds that were in the plan menu. Meanwhile, Fidelity Institutional Operations allegedly breached its fiduciary duty by using the float income, which [the plaintiff] claims is a plan asset, to cover operating expenses." (Investment News; free registration required)

Illinois House Speaker Submits Pension Reform Proposal
"[The proposal] calls for workers employed by the state, Illinois universities and school districts outside of Chicago to pay more, get reduced retirement benefits and retire later if they're younger than 45. In exchange, unlike in the current law, the state's five major pension funds would be authorized to go to court to collect what they're owed if the state fails to make its required annual contributions.... Under the new scheme, the state would be required to pay an extra $1 billion a year above and beyond the required actuarial level starting in 2019." (Crain's Chicago Business)

Delay in Providing QDRO to Plan Causes Ex-Spouse to Lose Survivor Benefits Awarded Under Divorce Decree
"The divorce decree provided that Patricia, [Gary's] former spouse [of almost 30 years at their divorce in 1993], would be ... named as the survivor beneficiary if Gary elected a pension with a survivor benefit.... Gary remarried ... [and] made a pension benefit election, choosing a joint and 50% survivor annuity in favor of Shelly, his new wife.... [In 2005, Patricia served an order on the plan.] Gary then died [later in 2005] ... The [Minnesota Supreme Court] concluded that Shelly's right to the survivor benefit vested when Gary retired and elected a survivor benefit in her favor. Because Patricia did not provide the domestic relations order to the plan until after Gary had elected his form of retirement benefit, it was too late for Patricia to claim her share of Gary's pension, at least from the portion otherwise payable to Shelly (which after Gary's death, was the only benefit being paid)." (Leonard, Street and Deinard)

FATCA's Requirements Might Indirectly Affect Employers
"The 2010 Foreign Account Tax Compliance Act (FATCA) created new reporting requirements designed to make it more difficult for U.S. taxpayers to avoid U.S. taxes by having foreign financial assets that generate unreported income.... The reporting requirements under FATCA are imposed on individuals and on foreign financial institutions, not directly on plan sponsors or employers. However, employers might be indirectly involved if: One or more of their key employees needs help in complying with their own reporting requirements, especially if those requirements are in connection with a plan sponsored by the employer." (Towers Watson)

OPM Cuts Overtime and Call-Center Hours for Federal Employee Pension Claims
"The OPM said ... that 'retirees should expect an increase in the time required to process their claims or respond to inquiries' as a result of the overtime suspension and reduced hours." (The Washington Post)

Text of FASB Proposed ASU -- Deferral of the Effective Date of Certain Disclosures for Nonpublic Employee Benefit Plans in Update No. 2011-04
"The amendments in this proposed Update would defer indefinitely the effective date of certain required disclosures in Update 2011-04 (Topic 820) ... [pertaining to] investments held by a nonpublic employee benefit plan in its plan sponsor's own nonpublic entity equity securities. The indefinite deferral is intended to allow time for discussions between the employee benefit plan regulator(s) and stakeholders about the specific quantitative disclosures and their potential effect on the plan sponsor as a result of the public dissemination of proprietary nonpublic employee benefit plan information through posting on the regulator's website." (Financial Accounting Standards Board)

Gun Debate Revives Dispute Over Social Investing by Pension Funds
"Social investing taps into highly emotional issues, and tries to turn that emotion into action.... But is social investing fiscally responsible? Research suggests that funds that screen out companies based on social values tend to perform just as well as unscreened portfolios. At the same time, some individual funds' returns have been harmed by value-screening." (Governing)

Rebound in Retirement Plan Balances and Contributions Despite the Economic Downturn
"The average contribution to [SEP-IRA, Self-Employed 401(k) or SIMPLE-IRA savings plan] accounts increased across the board since 2007, with those using Self-Employed 401(k)s showing the largest increase of 21 percent to $20,950. Employer contributions to SEP-IRAs increased 14 percent from 2007, reaching $13,250 in at the end of 2012, while average employer/employee contributions to SIMPLE-IRAs increased the least, rising 4 percent to $6,000." (Fidelity Investments, via BusinessWire)


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Laws Other than ERISA Provide Recourse for Kickbacks from Public Retirement Systems
"An article in Forbes magazine alleges that the Employees' Retirement System of Rhode Island paid kickbacks to placement agents. As most are aware, the Employee Retirement Income Security Act of 1974 (ERISA) does not apply to governmental plans. So, what kinds of protections are available in the case of kickbacks from public retirement systems?" (Calhoun Law Group)

A Retirement Savings 'Tipping Point' (PDF)
"[T]hose with investment savings of $500,000 or more view their retirement much more positively than those with less than half a million in savings. Those with savings above this perceived tipping point are more optimistic regarding their financial security, less concerned about having enough money to last through retirement, feel more prepared for rising health care costs and feel they are less likely to have to work at some point during their retirement." (Maritz Research)

McCready and Keene Employee Benefits Newsletter, April 30, 2013 (PDF)
Topics include: [1] Spring Cleaning? Don't Get Rid of Important Documents! [2] Finding Lost Participants; [3] IRS Final Report on 401(k) Plans; and [4] Failure to Notify Early Retiree of Benefit Enhancement Resulted in Payment of Lost Benefits. (McCready and Keene, Inc.)

[Opinion]

Obama Has a Sweet Retirement Package. Will You?
"$205,000 a year -- the current IRS maximum for what a pension fund can pay a recipient -- is serious money in many places. But it doesn't buy you a rich retirement lifestyle in, say, Manhattan, N.Y., where 205K is equivalent to only 88K in Manhattan, Kans.... Second, ... Obama [wants] to limit savers to only about half the value of what he stands to get from his post-presidential package ... [valued] more than $6.6 million.... And that doesn't include the IRAs ... or the $18,000 (plus cost of living) a year he will get at age 62 for his service in the Illinois senate, or any other benefits he or his wife may realize from past or future jobs." (Fortune)

[Opinion]

The 401(k) Blame Game
"Critics of excessive and opaque 401(k) fees, conflicts of interest, and poor plan design may be right as far as their argument goes; but the reason that 50 million Americans may ultimately be betrayed by their 401(k) is not that mutual fund managers are overpaid, and that some advisors receive commissions. Rather it is that the 401(k) idea 'works' when incomes and stock prices are rising, and does not work when income growth and stock returns stall for a prolonged period." (Mark Fandetti via SSRN)

[Opinion]

The California Secure Choice Retirement Savings Program: An Innovative Response to the Coming Retirement Security Crisis (PDF)
"A number of steps need to be taken and key questions addressed concerning the default plan features, funding, and product design before the California Secure Choice Retirement Savings Program launches. Moreover, the dialogue surrounding the program presents an opportunity for discussion and enactment of broader structural reforms to address some of the barriers beyond account access that impede low-income workers' ability to save adequately for retirement." (New America Foundation)

[Opinion]

Text of ICI Letter to Wall Street Journal on 'Worrisome Savings Killer' in Budget Proposal
"Your editorial ... correctly criticizes the impact of President Obama's proposed limit on the amount that individuals can save in tax-sheltered defined-contribution plans, defined-benefit plans and IRAs.... But the president's budget contains another, even more worrisome savings killer: a proposal to cap the value of tax-deferred retirement contributions at 28%, which may be lower than your income-tax rate. The notion is that the benefits of tax deferral, like the benefits of deductions and exclusions, should be limited for taxpayers in the top brackets." (Investment Company Institute)

Benefits in General; Executive Compensation

Text of IRS Notice 2013-31: Determination of Housing Cost Amount Eligible for Exclusion or Deduction for 2013 (PDF)
"The [table in this Notice] provides adjusted limitations on housing expenses (in lieu of the otherwise applicable limitation of $ 29,280) for 2013." (Investment News; free registration required)

BLS Report of Compensation Costs in March 2013 for State and Local Government Employees
"Compensation costs for state and local government workers increased 1.9 percent for the 12-month period ending March 2013. In March 2012 the increase was 1.5 percent. Wages and salaries were up 1.0 percent for the 12-month period ending March 2013, the same as the March 2012 change.... Benefit costs increased 3.5 percent in March 2013, up from the March 2012 increase of 2.3 percent." (U.S. Bureau of Labor Statistics)

The 2013 ABCs of Employee Benefits
"Accountability is working.... Barrage of regulations. ... Consider outsourcing your benefits administration. ... Don't forget the Family and Medical Leave Act.... Ensure you have good help.... X-amine 'play or pay.'... Your well-being.... Zero in on exchanges." (Employee Benefit News)

Hodgson Russ Employee Benefits Developments, April 2013
Articles include: Now is the Time to "Play or Pay" [with employer checklist]; DOL Offers Target Date Fund Tips for Fiduciaries; Agencies Issue New FAQs Regarding Affordable Care Act Preventive Care Issues; Discounted Stock Options Subject to Section 409A Penalties; Second Circuit Revisits Application of Moench Presumption; Rental Property Sufficient to Find Personal Liability for Multiemployer Plan Withdrawal. (Hodgson Russ LLP)

Medicare's Income-Based Premiums Can Affect Retirement Savings
"What's the difference between $107,000 and $107,001? Answer: $974.40, at least that's how much more that $1 in income will raise ... annual Medicare premiums for Part B and Part D in 2013.... The standard Part B premium is set to equal 25 percent of projected program costs, with general revenues funding the other 75 percent. Higher-income enrollees pay a higher percentage of Part B costs. The percentage rises as income rises, with premium amounts that range from 35 percent to 80 percent of the value of Part B coverage." (Financial Advisor)

Press Releases

New ESOP Website for Plan Sponsors
Principal Financial Group

PBGC.gov Goes Mobile
Pension Benefit Guaranty Corporation (PBGC)

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