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BenefitsLink Retirement Plans Newsletter

May 7, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Retirement Plan Advisory Services Operations Manager
for Alerus Retirement Solutions (Alerus Financial) in MI

Relationship Manager
for John Hancock Financial Services in CA

Processing Specialist
for The Newport Group in FL

Retirement Plan Investment Consultant
for Alerus Investment Advisors (Alerus Financial) in MN

Experienced Defined Contribution Analyst
for Milliman in OR

Pension Administrator
for Polycomp Administrative Services, Inc in CA

Plan Relationship Manager
for PenServ Plan Services, Inc. in SC

Retirement Plan Consultant
for General Pension Planning, a TWG Benefits company in OH

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Webcasts and Conferences

"Form 5500 Workshop 2013: Issues and Answers" - Irvine
June 6, 2013
(SunGard Relius) in CA

"401(k) Plan Workshop 2013: Tax Reform and the 401(k) Plan" - Irvine
June 7, 2013
(SunGard Relius) in CA

"401(k) Plan Workshop 2013: Tax Reform and the 401(k) Plan" - Knoxville
June 6, 2013
(SunGard Relius) in TN

Pharmacy Benefits Academy West Conference
May 13, 2013
(Midwest Business Group on Health and Pharmacy Outcomes Specialists) in OR

ERISA Advisory Council to Hold Open Meeting
June 4, 2013
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA)) in DC

Cleveland Clinic Case Study: How We Created a Culture of Health and Responsibility for Our Own Employees through Effective Chronic Disease Management Incentives Webinar
June 4, 2013
(Corporate Research Group) WEBCAST

View All Webcasts and Conferences

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[Official Guidance]

Text of DOL Proposed Regs on Illustration of Lifetime Benefits by ERISA-Governed Defined Contribution Plans
"The rules being considered are limited to the pension benefit statements required of defined contribution plans. First, the [DOL] is considering a rule that would require a participant's accrued benefits to be expressed on his pension benefit statement as an estimated lifetime stream of payments, in addition to being presented as an account balance. Second, the [DOL] also is considering a rule that would require a participant's accrued benefits to be projected to his retirement date and then converted to and expressed as an estimated lifetime stream of payments." (Employee Benefits Security Administration)


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Sponsored by ftwilliam.com

Wolters Kluwer ftwilliam.com is about to launch ftwClient Manager, our integrated workflow/CRM solution. In this webinar, we'll reveal all the benefits of using our solution including no maintenance, full integration, CRM, built-in QC and more.

[Official Guidance]

DOL Fact Sheet On Proposed Rule for Illustrating Lifetime Income to Retirement Plan Participants
"The language and concepts would be part of the regulatory framework under section 105 of ERISA under which: A participant's pension benefit statement would show his or her current account balance and an estimated lifetime income stream of payments based on such balance.... For a participant who has not yet reached normal retirement age, his or her pension benefit statement also would show a projected account balance and the estimated lifetime income stream based on such balance. ... Both lifetime income streams (i.e., the one based on the current account balance and the one based on the projected account balance) would be presented as estimated monthly payments based on the expected mortality of the participant.... Pension benefit statements would contain an understandable explanation of the assumptions behind the lifetime income stream illustrations." (Employee Benefits Security Administration, U.S. Department of Labor)

[Official Guidance]

Link to DOL's Online Lifetime Income Calculator
"Using assumptions described in the [proposed regulations], this calculator illustrates an annuitization approach to estimate the monthly lifetime income streams based on both the participant's current account balance and on the projected value of the account balance at retirement. For both balances, the calculator develops two level lifetime payments: one for the life of the participant (with no benefits to any survivors) and the second for the joint lives of the participant and the spouse with a fifty percent survivor's benefit for the spouse's lifetime. This calculator uses a simplified computation (e.g., annual contributions, mid-year retirement). Depending on the comments received in response to the ANPRM, the next version of the calculator may provide a more precise computation (e.g., monthly contributions, retirement in a specified month)." (Employee Benefits Security Administration, U.S. Department of Labor)

[Guidance Overview]

PBGC Releases Enforcement Guidelines for ERISA Section 4062(e) Financial Assurance Program
"A company is not financially sound in a new case if in the judgment of the Office of Negotiations & Restructuring (ONR) and the Chief of Negotiations and Restructuring, it has signs of financial weakness, including, but not limited to: A lack of ongoing operations. Existing or imminent: changes in business fundamentals, such as a large drop in demand; or transactions that would result in a credit ratings downgrade. An insignificant amount of assets or operations in the US." (Practical Law Company)

Designing Better Pension Benefits Statements: Current Status, Best Practices and Insights from the Field of Judgment and Decisionmaking (PDF)
"Currently, the information provided in pension benefits statements vary widely by plan provider as well as by the nature of benefits offered. The inconsistency could occur partly because recommended best practices for, and empirical studies that test, the design and content of statements vary widely in the literature. Furthermore, little is known on how people think about saving for retirement.... [This paper begins] by reviewing best practices and recommendations provided from the trade literature. Next, we describe the content and design of a cross section of statements that are currently being used by plan providers. Finally, we review the academic literature on individuals' understanding of, and information needs related to, pension benefits statements." (RAND Corporation, prepared for the U.S. Department of Labor)


Proven Distribution Strategies to Amplify Sales in Defined Contribution

Sponsored by Financial Research Associates, LLC

Consultants, Advisors, Plan Sponsors and Platforms discuss what's going on in defined contribution investment-only and how you can be part of it at the DCIO Market Share Summit. June 25-26, Miami Beach. Mention FMP164 during registration for 10% discount.

[Guidance Overview]

Recent 403(b) Developments
"[I]t is likely to be at least two years before IRS pre-approved 403(b) plans are available. The IRS will announce the end of the remedial amendment period for adopting pre-approved 403(b) plans in future guidance. [The authors] would expect the last day of the remedial amendment period to be a reasonable period of time after the IRS begins issuing opinion and advisory letters to pre-approved plans." (King & Spalding)

PBGC Provides Data on Single-Employer DB Plan Freezes (PDF)
At the 2013 Enrolled Actuaries Meeting held recently in Washington, DC, PBGC staff shared some data relating the frequency and incidence of plan freezes based on information reported in premium filings. A copy of the slides shown at that meeting is available at the link. (Pension Benefit Guaranty Corporation)

Court Upholds Validity of ERISA Fiduciary Indemnification
"The DOL sued the ESOP trustee and the plan sponsor company in connection with a transaction under which the ESOP became the 100% owner of the company's stock. The ESOP trustee's engagement agreement with the company contained a defense and indemnification provision.... The court recognized that, as a general rule, the 'plan-asset rule' provides that assets of an operating company that sponsors an ESOP or other employee benefit plan are not assets of the plan and that, absent facts like those in Couturier, there is no legal basis to treat defense and indemnity payments by a 100% ESOP-owned company as if they were payments by the plan itself." (Morgan Lewis)

PBGC Director Josh Gotbaum, Panelists Talk Pension Reform
"Josh spoke with Bob Litan, director of research at Bloomberg Government, about PBGC's efforts to safeguard the pensions of millions of Americans. Another trending topic Director Gotbaum spoke about: multiemployer pension plans and PBGC's multiemployer program. Then, the conversation gained added insights from panelists Earl Pomeroy, Cary Franklin, Norman Stein, and Randy DeFrehn." (Pension Benefit Guaranty Corporation)

Institute for the Fiduciary Standard Establishes Frankel Fiduciary Prize
"The prize is named in honor of Professor Tamar Frankel, the Michaels Faculty Research Scholar, at the Boston University School of Law.... Professor Frankel [said], 'The Prize is not in my personal honor but in the honor of fiduciary law about which I wrote. Yet, my words were backed by many writers. I did not invent them. Therefore, the prize is in the honor of Fiduciary Law, which this country has established and follows.' She said her passion for fiduciary issues comes from 'an enormous, almost overwhelming satisfaction from giving.'" (Fiduciary News)

Top Five Ways Financial Professionals Can Boost Retirement Plans' Effectiveness for Employees (PDF)
"[1] Define 'retirement plan success' as better retirement outcomes for participants.... [2] Use auto-enrollment and auto-escalation features to improve participation and savings rates.... [3] Help plan sponsors optimize the number of investment choices to improve savings rates.... [4] Advise on target-date solutions to help participants stay on track over the long term.... [5] Advise on structuring the company's matching contribution to drive savings rates to 10 percent or more." (Transamerica Retirement Solutions)

How Online 'Marketplace Fairness Act' Could Tax Your 401(k)
"The bill authorizes states to 'require all sellers not qualifying for the small seller exception [$1 million in sales or less] to collect and remit sales and use taxes with respect to remote sales sourced to that Member State.' Yet 'sellers' and 'sales' are never specifically defined, and there are no specific exemptions for certain types of products or services. Financial experts say this means states [could] tax 'sales' such as stock trades in a mutual fund or brokerage account, or even contributions to pension plans such as 401(k)s that were designed to be tax-free until retirement." (OpenMarket.org)

Boomers Usher in New Retirement Reality
"When it comes to retirement, baby boomers are favoring lifestyle choices over wealth preservation, bucking the traditions of the generations that came before them.... The majority of the baby boomers surveyed said they see retirement as a 'longevity bonus' or a period of time when they can pursue other interests outside of their career.... 57% said they look at retirement as a new life phase, while 51% of respondents who have not retired yet said they plan to keep working into retirement, but in a different field of work." (On Wall Street)

Pension Finance: Fall in Interest Rates Dominates April Results
"The impact of a significant decline in long bond yields was only partially offset by positive investment results. As a result, the Towers Watson Pension Index fell 1.6% in April to 66.0. Even with this month's decline, the index value remains up 5.9% for the year." (Towers Watson)

Financial Advising on the Rise, But Few Advisors Are Female
"Presently only three in 10 advisors are female, yet 70 percent of women would prefer to work with a female advisor. This presents a significant opportunity for female advisors, as women continue to own a greater share of financial assets and take more control of financial decision making.... [J]ob-training provisions would increase the likelihood of women pursuing careers as financial advisors.... Of women who expressed an interest in becoming a financial advisor, salary considerations and growth of the field were the primary drivers." (Insured Retirement Institute)

Social Security Bulletin, May 2013 (PDF)
126 pages. Articles include: Outcome Variation in the Social Security Disability Insurance Program: The Role of Primary Diagnoses; The Impact of Retirement Account Distributions on Measures of Family Income; and Contribution Dynamics in Defined Contribution Pension Plans During the Great Recession of 2007-2009. (U.S. Social Security Administration)


Demand More from Your Retirement Plan TPA (PDF)
"[T]he background of the TPA deeply dictates how they see their job and the services they deliver.... The people who come from an Administrative TPA background tend to be one-dimensional.... The second type of TPA ... come[s] from an insurance or sales background... The client is seen as revenue opportunity and 'churn and burn' is the motto.... The third type ... come[s] from a legal and business background and understand[s] that they work for the client and must compete for business every day." (NH Hicks)


Conflicts in Fixed Annuities: Incentives Part 2 -- The Trips! The Amazing Trips!
"Fully paid for vacations to exotic locales could certainly persuade an agent to sell one annuity product or another or to sell an annuity when another financial product would be more appropriate. Educators should be aware of the incentives behind products sold to them. In a perfect world there would be no incentives, only the best interest of the client and a fully disclosed compensation scheme separate from the recommendation." (The Teacher's Advocate)


Proposed Cap on IRAs, 401(k)s Is Hardly Onerous
"Obama isn't keeping people from saving as much money as they can or want. The question is how much the rest of us should have to chip in. Obama is suggesting that at some point retirement accounts, invented to encourage working people to set aside enough for their sunset years, no longer need a helping hand from taxpayers" (Arizona Daily Star)


For Want of a Nail: Thoughts on 'The Retirement Gamble'
"[W]ait, haven't we heard this story before? Yes, we have. On May 16, 2006, Frontline ran an amazingly similar story entitled "Can You Afford to Retire?" (archived on www.pbs.org). Some of the same industry experts even appear in both documentaries. The same problems were highlighted and there were the same subsequent calls for change. And what changed after that? Clearly, not much." (Advisors Access)

Benefits in General; Executive Compensation

Supreme Court Oral Arguments on DOMA and Prop 8: Potential Employee Benefit Plan Implications (PDF)
"If the Supreme Court finds Section 3 of DOMA to be unconstitutional ... employers with pension and 401(k) plans would be required to recognize same-gender spouses for purposes of determining surviving spouse annuities or death benefits ... [and] employees would no longer have to be taxed on the income imputed for the employer's contribution for the same-gender spouses' coverage, and COBRA continuation would be required to be offered to same-gender spouses. Employers also would be required to permit employees to take family and medical leave to care for the illness of a same-gender spouse. Such a ruling ... presumably would require the federal government to clarify if and how federal law will defer to state marriage laws." (McDermott Will & Emery)

Advantages to Pre-Tax Deferral of Income in an Uncertain Tax Environment (PDF)
"[I]n all but a few scenarios, even if taxes do rise in the years ahead while working or during retirement, the accumulated savings that may be achieved over the long term through deferral of income and related taxes under [a nonqualified deferred compensation] plan are still greater than the amount that could be accumulated through after-tax investing in a personal investment account." (Fulcrum Partners)

Survey Finds Executive Compensation Remaining Steady
"Incentives continue to play an important role in executive compensation, with nearly 70 percent of financial executives reporting having an annual target bonus level ... [T]he majority (80 percent) of public company CFOs receive a form of stock-based long-term incentive awards. For those executives who do receive this benefit, stock options were the most popular option (44 percent) for public company CFOs.... The estimated average salary increase for all respondents was 3 percent. For public companies, the average salary increase was 3.5 percent, and for private companies the average salary increase was 3.1 percent." (Financial Executives Institute)

Press Releases

First NIPA Annual Forum & Expo Virtual Conference a Resounding Success
National Institute of Pension Administrators

New Private Exchange For Health Insurance Coming To New Jersey
Horizon Blue Cross Blue Shield of New Jersey

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