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BenefitsLink Retirement Plans Newsletter

May 17, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Manager of Retirement Plans
for Northern NJ Benefit Consulting firm in NJ

Senior Manager, Billing and Eligibility
for Associated Third Party Administrators in CA

for BakerHostetler in OH

Retirement Plan Relationship Manager
for AEPG Wealth Strategies in NJ

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Webcasts and Conferences

Predictive Modeling Web Summit
June 13, 2013

Retail Consumer Strategies for 2014: Healthcare Marketplace Shift from B2B to B2C
June 26, 2013

Corporate Wellness Programs - Measuring Success Seminar
June 20, 2013
(New England Employee Benefits Council) in MA

401(k) Fees: Benchmarking What You're Responsible For and How to Make Appropriate Comparisons
July 25, 2013

Orlando ERISA Update Seminar
August 22, 2013
(GrayRobinson, P.A.) in FL

Retirement Plan Insights Seminar
August 6, 2013
(McKay Hochman Co., Inc.) in MA

View All Webcasts and Conferences


Multiemployer Plan Withdrawal Liability Can Be Trap for the Unwary
"The [Seventh Circuit recently held] that a bright-line 'categorical' rule applies when a property owner in common control with a withdrawing employer leases property to that employer: the leasing activity is categorically a trade or business within the meaning of Section 4001(b)(1). The court justified its categorical rule because it is unlikely that leasing to a commonly-controlled withdrawing employer would ever be a truly passive investment. It is more likely that the goal is to split up the withdrawing employer's assets. Categorically labeling this activity a trade or business prevents businesses from shirking ERISA obligations by fractionalizing operations into separate entities." (McGuireWoods LLP)


Attend the Women Business Leaders Forum in Austin, June 10-13!

Sponsored by ASPPA

The Women Business Leaders Forum will focus on HR hot topics, business growth for succession or sales, social media, technology and TPA trends. It will be a mix of general sessions and roundtables with plenty of time to network with your peers.

[Guidance Overview]

Updating a Public Pension Plan's Funding Strategy in the Face of New GASB Standards
"Plan accounting is now separated from funding, which has resulted in a vacuum for guidance on funding policies which a number of organizations have taken steps to address. This article provides an overview of funding policies, the considerations and components of establishing a policy, and recently issued and pending guidance." (Cheiron)

A Nervy Approach to Retirement Saving: Self-Directed IRAs Using Exotic Investments
"[W]hile many Americans rely on their savings or 401(k) plans to see them through their golden years, high-end folks are falling in love with another option -- something called the self-directed individual retirement account. The idea is simple enough: Invest in anything you want, but put the investment into a special IRA, so it isn't taxed until retirement ... [But] some experts are expressing serious reservations about the skyrocketing growth of self-directed IRAs ... because many parts of this business aren't regulated." (The Wall Street Journal)

Morgan Stanley Sued Over Retirement Plan Deal With ING
"Morgan Stanley [has been] sued ... over claims the bank received improper payments from ING Life Insurance and Annuity Co. in exchange for referral of retirement-investment business. [The suit alleges that the] bank placed retirement plans with so-called alliance partners, including ING, and received additional compensation from them based on the assets invested[.]" [Skin Pathology Associates Inc. v. Morgan Stanley & Co., No. 13-cv-3299, (S.D.N.Y.)] (Bloomberg)

Pennsylvania Pension Crisis Will Hit Homeowners and Taxpayers Hard
"[Pennsylvania's] two pension systems -- for state government workers (SERS) and public school employees (PSERS) -- are, together, more than $47 billion in debt. It's a shortfall that taxpayers must cover, amounting to an average $1,000 increase in contributions per household by 2017. In the Pittsburgh region alone, property taxes are expected to rise between $190 and $440 a year as a result." (Pittsburgh Tribune-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.

SEC Chair Presses for More Funding for Advisor Exams, Enforcement
"[SEC Chairman Mary Jo] White testified that the SEC should be able to avoid employee furloughs under the sequester budget, but that key priorities at the agency will be unmet if the current level of funding holds. White acknowledged that the SEC's budget request comes in response both to the new mandates of recent legislation and an understanding that the agency has been unable to fulfill longstanding obligations, citing the oversight of investment advisors as exhibit A." (On Wall Street)

Retirement Security Across Generations
"This report explores how the Great Recession affected the wealth and retirement security of baby boomers relative to younger and older age groups.... Early boomers (born between 1946 and 1955) were approaching retirement in better financial shape than the age groups that came before them.... The picture of wealth accumulation and savings for Americans born after 1955 was more mixed.... Both cohorts of baby boomers and the Gen-Xers have significantly lower asset-to-debt ratios than do the older groups.... All groups experienced wealth losses in the Great Recession, but Gen-Xers took the hardest hit.... Replacement rate analysis shows that the youngest cohorts will not have enough assets for a secure retirement." (Pew Center on the States)

Future Retirees at Risk of Downward Mobility, Pew Finds
"The report estimates that, at the median, Americans born between 1966 and 1975 -- so-called Gen-Xers -- will be able to replace just half their pre-retirement income once they stop working, well below the minimum 70 percent replacement rates recommended by most financial planners. Late baby boomers -- which the report defines as those born between 1956 and 1965 -- will be able to replace 60 percent of their working incomes in retirement, the report estimates. Both replacement rates are below what financial experts say is necessary for a secure retirement." (The Washington Post)

Retirement Plan Participants: Comparing Concerns of Men to Those of Women
"There are few retirement readiness issues on which men and women feel equally secure.... When asked about future prospects, men are more likely than women to say they expect to be better off financially one year from now. They also express greater concern with their level of household debt. Women are more concerned about not saving enough for retirement, health issues and the financial situation of their children." (Spectrem Group)

How to Choose an Investment Advisor: A Checklist for Consumers
The author presents a list of questions and accompanying discussion, including: "Are you a fiduciary under the law, and will you continue to be my fiduciary at all times during the advisor-client relationship we will enter into? ... Can 'financial planning' advice be separated out from your 'investment advisory' services? ... What conflicts of interest do you, your firms, or any affiliated firms possess with respect to the advice you may provide to me? Do you or your firm receive any material third-party compensation when I choose your investment advisory services or invest in investment or insurance products recommended by you?" (Ron Rhoades, via Scholarly Financial Planner)

Canada Pension Posts 10% Return on Global Stock Market Rally
"Canada Pension Plan Investment Board, the country's second-largest public pension manager, posted a return of 10 percent in the fiscal year after it boosted exposure to international markets.... The fund, which manages retirement savings for 18 million people in every province except Quebec, continues to look outside the country for growth, it said in a statement" (Bloomberg)


Clean Up Detroit's Pension Mess
"Detroit's pension assets are a big, inviting honey pot. And a lot of folks lately have put their hands in the honey jar. It may be time to put someone else in charge of these assets. Detroit Emergency Manager Kevyn Orr noted in his first report on the state of the city that the city's pension funds ... may have overestimated the value of their assets. The report cites a difference of hundreds of millions of dollars[.]" (Detroit News)

Benefits in General; Executive Compensation

[Official Guidance]

IRS Statement on Court Ruling Prohibiting Testing of Tax Return Preparers
"In accordance with this order, tax return preparers covered by this program are not required to complete competency testing or secure continuing education. The ruling does not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents, enrolled retirement plan agents or enrolled actuaries.... Fee amounts collected for scheduled registered tax return preparer test appointments canceled due to the court ordered injunction are being refunded. Additionally, fees collected from return preparers who tested on or after January 18, 2013, the date the test was enjoined, are also being refunded." (Internal Revenue Service)

[Guidance Overview]

IRS Spotlights Problematic Compensation Practices at Colleges and Universities (PDF)
"The IRS has released its final report on the tax-exempt colleges and universities study, which began in 2008. Examination of employment returns for roughly one-third of the schools resulted in wage adjustments of about $36 million and over $7 million in taxes and penalties. Problems with retirement plan reporting resulted in additional wage increases, taxes, and penalties. These findings underscore the need for schools -- and other tax-exempt organizations -- to establish a process to set and provide appropriate executive compensation on an ongoing basis." (Buck Consultants)

Obama Appoints Daniel Werfel as Acting Head of IRS
"President Obama on Thursday appointed senior budget adviser Daniel Werfel as the acting commissioner of the Internal Revenue Service... Werfel has served for most of the Obama administration as controller of the Office of Management and Budget, overseeing federal procurement, financial disclosure and working to fight waste. A lawyer by training who also worked as a budget official in the George W. Bush administration, Werfel has helped reduce the administration's level of improper payments to contractors and has been working to manage the mandatory budget cuts known as the sequester." (The Washington Post)

Reinhart Employee Benefits Update, May 2013 (PDF)
Articles include: Summary of Description of Material Modifications for Calendar Year Plans; PBGC Issues Proposed Regulations on Reportable Events and Other Notification Requirements; IRS Provides Relief from the Anti-Cutback Requirements for Certain ESOP Amendments; FAQs on SBC Requirements and Updated SBC Template for 2014; IRS Proposes Regulations on Determining Minimum Value; Supreme Court Issues Decision in US Airways, Inc. v. McCutchen. (Reinhart Boerner Van Deuren s.c.)

The Duty of Advisors to Investigate Their Independence as to the Compensation Committee
"Inquiring minds want to know: 'Mike, how is Winston figuring out how to test for a "business or personal" relationship between the Firm and any director or executive officer of the client?' The answer is that law firm (and most other professional service firms) tend to have a good idea of all of their connections and relationships within a client." (Winston & Strawn LLP)

Companies Work to Improve Say-on-Pay Outcomes in 2013 After Disappointing Earlier Votes
"A number of factors have contributed to enhanced shareholder support in 2013, including improved performance at some companies and reduced incentive payouts at companies where performance has lagged, driving better pay-for-performance alignment. Additionally, improved say-on-pay results have occurred due to the results of companies engaging shareholders and responding to concerns raised when voting on previous say-on-pay resolutions." (Towers Watson)

New NYSE and NASDAQ Compensation Committee Rules: Questions Clients Are Asking
Includes overview of the rules, followed by numerous Q&As. Excerpt: "Will the new rules prohibit a board designee of a significant stockholder from serving on the compensation committee of a listed company? ... Does a compensation consultant or other adviser need to be engaged by the compensation committee for the rules to be applicable? ... How does a company determine whether an adviser is providing services to the compensation committee? ... Do the new rules require that compensation consultants, outside legal counsel and other advisers providing advice to the compensation committee be independent?" (Bass, Berry & Sims)

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

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