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BenefitsLink Retirement Plans Newsletter

May 22, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Part Time On Call Retirement Planning Consultant
for Transamerica Retirement Solutions in AR, CA, MO, NC, NY, UT

Retirement Plan Consultant
for TRA, Inc. in ANY STATE, WI

Communications and Marketing Coordinator
for TRA, Inc. in WI

Senior Associate or Lateral Partner
for Kaufman and Canoles, P.C. in VA

Conversion Specialist
for Professional Capital Services in PA

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Webcasts and Conferences

Understanding the Health Insurance Marketplace Webinar
June 27, 2013 WEBCAST
(Centers for Medicare & Medicaid Services (CMS))

Health Insurance Marketplace 101 Webinar
June 26, 2013 WEBCAST
(Centers for Medicare & Medicaid Services (CMS))

Health Insurance Marketplace 101 Webinar
July 3, 2013 WEBCAST
(Centers for Medicare & Medicaid Services (CMS))

Plan Considerations in Sales, Mergers and Acquisitions
June 18, 2013 in FL
(ASPPA Benefits Council (ABC) of North Florida)

The Roadmap to Employee Disclosures: Best Practices and Practical Solutions to Benefits Communication Overload TeleConference
June 4, 2013 WEBCAST
(American Bar Association (ABA))

Health Care Reform: Tips in Combating Communications Burdens Webinar
May 30, 2013 WEBCAST

NY HR & Employee Benefits Summit
January 27, 2014 in NY
(Forum Events Inc)

View All Webcasts and Conferences


[Guidance Overview]

Checklist of Federal Tax Law Rules Applicable to Public Retirement Systems
"This outline is a basic summary of the principal Internal Revenue Code qualification requirements that apply to governmental plans, other than plans described in Code section 403(b) or 457(b). It also includes selected Code requirements that do not relate to qualification. It is very general in nature, and does not replace research on specific questions." (Calhoun Law Group, P.C.)


Great Lakes Benefits Conference in Chicago, June 13-14!

Sponsored by ASPPA

The Great Lakes Benefits Conference provides an opportunity to discuss employee benefit issues with colleagues and local, regional and national government representatives from the IRS and DOL.

[Guidance Overview]

Proposed PBGC Regs Address Reportable Events and Certain Other Notification Requirements (PDF)
"[Recently, the PBGC] issued proposed regulations to effect changes in the PBGC's reportable event program which are expected to relieve more than 90% of plans and sponsors from many of the existing reporting requirements under [ERISA].... The PBGC will receive public comments on the Proposed Rules through June 3, 2013, and will hold a public hearing on June 18, 2013. [This memo] is a summary of the key changes ... [It] also includes summary charts excerpted from the Proposed Rules which provide additional detail regarding the proposed changes." [10 pages.] (Fried Frank)

[Guidance Overview]

DOL Releases Fiduciary Tips for Selecting Target Date Funds
"Establish a process for the periodic review of selected TDFs.... Understand the fund's investments -- the allocation in different asset classes (stocks, bonds, cash), individual investments and how these will change over time.... Review the fund's fees and investment expenses.... Inquire about whether a custom or non-proprietary target date fund would be a better fit for your plan.... Develop effective employee communications." (Snell & Wilmer L.L.P.)

Retirement Savings and Participation on the Upswing in 403(b) Plans
"While 403(b) plans continue to evolve, the data points to several areas for improvement, which can be opportunities for financial professionals and TPAs: Only 14.9 percent of small plans permit Roth after-tax contributions compared to 42.9 percent of larger organizations. Higher education institutions on average make 65 funds available for participant contributions, two to three times higher than other industries in the survey." (The Principal Financial Group)

Tax Court Finds Indirect Prohibited Transaction in IRA (PDF)
"[This case] adds to the limited guidance on the circumstances in which 'indirect' transactions fall within the Sec. 4975 prohibition. Shortly after the enactment of ERISA, the [DOL] provided guidance suggesting that an 'arrangement' between the plan and the disqualified person to do through an intermediary that which they were prohibited from doing directly ... was generally the hallmark of an indirect prohibited transaction. No more than a handful of court cases have previously considered the 'indirect' issue." [Peek v. Commissioner (T.C. May 9, 2013)] (Sutherland)


2013 Advanced Pension Conference in Chicago - August 28-30

Sponsored by SunGard's Relius Education

75% more breakout sessions and topics! Agenda: Tax reform, EPCRS 2013, pre-approved 403(b) plans, E&O coverage, component plan testing, 457 plans, disqualification, ERISA recapture accounts, early eligibility, TPA contracts and more. 19 CE hours. See details.

Defined Benefit Plans Outperformed 401(k) Plans During 2011 by Largest Margin Since Mid-1990s
"[The] analysis of more than 2,000 plan sponsors found that DB plans had median investment returns of 2.74% in 2011, while DC plans had median returns of -0.22%. The nearly three-percentage-point difference is the widest margin by which DB plans outperformed DC plans since 1995 ... The analysis also found that despite the large performance difference in 2011, the gap between DB and DC plans narrowed during the previous five-year period." (Towers Watson)

Do You Know How Much Income You Will Have In Retirement?
"LIMRA's retirement research shows that the majority of pre-retirees (age 55-70, non-retired) have not done some of the basic retirement planning to determine how much income they would have in retirement. Presenting plan balances as an income stream highlights the fact that retirement balances are designed to provide income over time in retirement. If participants start thinking in terms of income, they may start thinking about things they need to do to generate income and plan for retirement." (LIMRA)

403(b) Plans: 2013 Survey Highlights
"76.3 percent of respondent plans are ERISA, 16.4 percent are non-ERISA, and 7.3 percent of respondents were unsure of their plan's ERISA status. 34.3 percent of organizations offer more than one type of retirement plan to essentially the same group of employees. 85.3 percent of employees at respondent organizations are eligible to participate in their organization's 403(b) plan." (Plan Sponsor Council of America)


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.

Seventh Circuit Rejects Inherited IRA Protection in Bankruptcy
"The bankruptcy code protects 'retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under Sections 401, 403, 408, 408A, 414, 457 or 501(a) of the Internal Revenue Code.... What the court questioned, and answered in the negative, was whether her account was still a 'retirement fund' once Heidi inherited it." (WealthManagement.com)

Global Bonds: A Better Solution for DC Investors (PDF)
"The most obvious potential benefit to globalizing comes from a significantly increased opportunity set. The Barclays US Aggregate Bond Index as of year-end 2012 represents about $15.5 trillion in outstanding debt and about 8,000 issues. Its global counterpart, the Barclays Global Aggregate Bond Index, clocks in at nearly two and a half times that size: $39 trillion in outstanding debt and more than 14,000 issues. That's a much bigger pond to fish in." (Alliance Bernstein)

A 401(k) Menu for Today's Investing Reality
"Traditionally, investors in the United States have tilted portfolios towards domestic holdings of equities and fixed income. This made sense in the 1970's when the U.S. economy represented 36% of the world's economic output and U.S. companies comprised 70% of the market capitalization of the world's publicly traded stocks. However, today is different. Currently, the U.S. accounts for 23% of the world's economic output and U.S. companies represent 42.3% of the world's publicly traded stocks ... Despite this change in world market capitalization, the average 401k investor's exposure to international funds is just 8% of assets[.]" (401kHelpCenter.com)

Groups Praise DOL ANPRM on Lifetime Income as a 'Good First Step' (PDF)
"'We highly support the idea of people being able to translate their [tax code Section] 401(k) balances into some sort of lifetime stream of payments,' said Karen Friedman, executive vice president and policy director at the Pension Rights Center ... Edward Ferrigno, vice president of Washington affairs at the Plan Sponsor Council of America ... said that he is supportive of DOL's lifetime income initiative, but he does not think it should be required." (Bloomberg BNA Pension & Benefits Reporter)

DC Plan Participants Not Using All Retirement Tools
"Defined contribution plan executives continue to believe overwhelmingly that participants don't take full advantage of the savings and retirement tools available to them ... 82.1% of respondents answered 'no' when asked whether participants take 'full advantage' of the savings and retirement tools, compared to 80.9% in a year-earlier survey and 78.5% in a 2011 survey." (Pensions & Investments)

Keys to Successful Rollover and In-Plan Asset Retention Strategies (Video)
"[LIMRA analyzes] the most recent research that identifies the factors -- including participant and provider characteristics -- that determine whether individuals will choose to keep their defined contribution plan money with the plan provider." (LIMRA)


Social Security Benefits and the Impact of the Chained CPI
"The current debate over adopting a new measure of inflation has many beneficiaries worried that their benefits would be cut. To the contrary, their benefits would still rise under the new measure, and benefit increases would more accurately reflect changes in the cost of living. The current index used to compute cost-of-living-adjustments, like Social Security's cost-of-living adjustment, is outdated and inaccurate, and it often overstates the rise in the cost of living." (The Heritage Foundation)


Illustrations Reduce Missed Opportunities for Retirement Security
"[The DOL] is currently gathering feedback about including lifetime income illustrations on participant retirement plan statements... Now, I don't think this one thing will instantly create a large behavioral change and thus cause account balances to quickly change. I do wonder though, what if this is the start of a new chapter in the defined contribution era?" (The Principal Blog)


Text of ASPPA Comments to IRS on In-Plan Roth Rollovers Under ATRA
"ASPPA recommends that the IRS [1] extend the deadline for the adoption of the 'discretionary amendment' that will be necessary to put in effect the ATRA provisions until the later of: the last day of the plan year that the amendment is effective; or December 31, 2014.... [2] issue guidance clarifying that only fully-vested contribution sources are eligible to be transferred through an [In-Plan Roth Rollover (IRR)], or, alternatively, that a plan sponsor may limit IRRs only to contribution sources that are fully vested.... [3] issue guidance confirming that section 402A(c)(4)(E)(ii) of the Internal Revenue Code ... permits non-spouse alternate payees and non-spouse beneficiaries to effect a transfer that is treated as an IRR in plans which permit IRRs." (American Society of Pension Professionals & Actuaries)


Text of Comments to EBSA on Pension Benefit Statements (PDF)
"[R]egs like this will be enormously confusing and drown the participants in information on an already crammed participant statement.... If the EBSA wants to pass this reg, I suggest that they also provide the formula to TPA's by which we are to report such information." (Schnitman Group)


Text of Comments to EBSA on Lifetime Income Illustrations in Pension Benefit Statements (PDF)
"If DOL believes that providing lifetime income illustrations would be beneficial to all participants, I suggest that the requirement for small plans be that they provide a link to the DOL website that provides the calculator. There, the participant could enter all their own information and assumptions.... [T]here should be an ability to consolidate all of each person's savings (and perhaps savings for spouses who have their own investments) in one place in order to provide a more accurate projection ... If the DOL provided this location, and allowed each participant to input his or her own assumptions (perhaps with some default assumptions available), a more realistic projection would be realized." (Brewster & Brewster)

Benefits in General; Executive Compensation

[Official Guidance]

IRS Provides Tax Relief to Oklahoma Tornado Victims; Return Filing and Tax Payment Deadlines Extended to Sept. 30 (PDF)
"[A]ffected taxpayers in Cleveland, Lincoln, McClain, Oklahoma and Pottawatomie counties will receive special tax relief. Other locations may be added in coming days based on additional damage assessments by FEMA. The tax relief postpones various tax filing and payment deadlines that occurred starting on May 18, 2013.... Beyond the relief provided to taxpayers in the FEMA-designated co unties, the IRS will work with any taxpayer who lives outside the disaster area but whose books, records or tax professional are located in the areas affected by these storms. All workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization also qualify for relief. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227." (Internal Revenue Service)

2013 Comp Survey: Finance Pros See Healthy Salary Increase
"Overall, financial professionals garnered an average increase in their base salary of 3.4 percent in 2012, up from the 3.3 percent increase reported in last year's survey. The executive level earned the greatest percentage increase -- 3.8 percent. Management level financial professionals had an average increase of 3.5 percent, with those at the staff level garnering an average increase of 3.1 percent." (Association for Financial Professionals)

NYSE and NASDAQ Compensation Committee Adviser Independence Rules Become Effective July 1, 2013
"Publicly traded companies are reminded of the approaching deadline for compliance with certain of the SEC-approved final amendments of the NYSE and Nasdaq stock exchange listing rules governing compensation committee independence: By July 1, 2013, compensation committees must have the authority to retain and pay outside consultants, legal counsel and other advisers and the responsibility to consider certain independence factors before selecting such advisers." (Proskauer's ERISA Practice Section Blog)

Press Releases

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