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BenefitsLink Retirement Plans Newsletter

May 23, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Retirement Services Program Director
for Nationwide Insurance in MN, WI

IRT Relationship Manager 3
for Wells Fargo in PA

Defined Benefit Actuarial Associate
for Charles Schwab in OH

for Saunders Financial in FL

Internal Sales Director
for Goldleaf Partners in ANY STATE, MN

Senior Technical Manager
for Benetrends, Inc. in PA

Client Relationship Manager / Retirement Plan Clients
for 401k Advisors Intermountain in UT

Account Service Representative
for DailyAccess Health & Welfare Services in KS

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Webcasts and Conferences

Health Insurance Marketplace 101 Webinar
July 17, 2013 WEBCAST
(Centers for Medicare & Medicaid Services (CMS))

Understanding the Health Insurance Marketplace Webinar
July 11, 2013 WEBCAST
(Centers for Medicare & Medicaid Services (CMS))

Health Insurance Marketplace 101 Webinar
July 10, 2013 WEBCAST
(Centers for Medicare & Medicaid Services (CMS))

401(k) Rekon is Coming to Baltimore, MD
June 11, 2013 in MD
(401(k) Rekon)

Executive Compensation Webinar
June 4, 2013 in CA

Health Care Reform Workforce Realignment: Beware the Unintended Consequences
June 18, 2013 in KS
(Spencer Fane Britt & Browne LLP)

Retirement Plan Compliance Assistance Seminar For Small Business
July 11, 2013 in KS
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

"Fundamentals of 401(k) and Other Qualified Plans" - a 3-day Seminar, Kansas City
June 26, 2013 in KS
(SunGard Relius)

View All Webcasts and Conferences


[Official Guidance]

Text of Notice of Proposed Amendment to PTE 80-26 For Certain Interest-Free Loans to Employee Benefit Plans
"PTE 80-26 is a class exemption that permits parties in interest with respect to employee benefit plans to make certain interest free loans and extensions of credit to such plans, provided the conditions of the exemption are met. The proposed amendment, if adopted, would give retroactive and temporary exemptive relief for certain guarantees of the payment of debits to plan investment accounts (including IRAs) by parties in interest to such plans as well as certain loans and loan repayments made pursuant to such guarantees.... The proposed amendment was requested by the Securities Industry and Financial Markets Association (SIFMA)[.]" (Employee Benefits Security Administration, U.S.Department of Labor)


Form 5500 Webinar with Expert Janice Wegesin

Sponsored by ftwilliam.com

On 5/30, learn about the Form 5500 updates to 2012 forms and EFAST2 processing as well as how to respond to governmental correspondence regarding such filings. Filing options for one-participant plans and Form 8955-SSA will also be addressed.

[Official Guidance]

June 25 IRS Phone Forum: What You Need to Know about the 403(b) Pre-Approved Plan Program
"Join IRS tax law specialists ... as they discuss the new Program, outlined in Revenue Procedure 2013-22, set to open June 28, 2013. If you have a specific question that you would like us to address, please email us at ep.phoneforum@irs.gov by June 18, 2013." (Internal Revenue Service)

SEC Eyes Advisory Contract Approval Disclosures (PDF)
"The [settlement with Northern Lights and Gemini] reminds boards that the SEC Enforcement Division's Asset Management Unit 'has been taking a widespread look into the investment advisory contract renewal process and fee arrangements in the fund industry' and that fund governance and the role of fund directors in the contract renewal process is an examination priority for the SEC staff. The matter also comes on the heels of the SEC's settlement with former fund directors in connection with alleged deficiencies in fair valuation practices." (Morgan Lewis)

Fidelity Reports Record Gains for 401(k) Savers Since 2009 Market Low
"[Fidelity's] quarterly analysis of its 401(k) accounts ... found that the overall average balance hit another record high reaching $80,900 at the end of the first quarter. This represents an 8.4 percent increase over one year prior when the average balance stood at $74,600 and 75 percent growth since the market low during the first quarter 2009 when it dropped to $46,200. Continued contributions from the employee and employer as well as the strong equity markets contributed to the overall gains." (Fidelity Investments)

Why Pension Funds Are Eating Your 401(k)'s Lunch
"Pension funds have the benefit of investing for a whole pool of people; they can look longer term and take different risks. Still, there are lessons to be learned by the two types of retirement plans' disparate returns.... The bigger the pool, the better the returns.... Fees matter... Don't play follow the leader.... Don't rule out the return of pensions." (Reuters)

U.S. Plan Audit Activity by DOL and IRS is on the Rise
"Does your 401(k) plan pay higher than average fees? Do you have more than one qualified plan? A number of recent reports indicate why you may receive special scrutiny if your plan is selected for audit or investigation.... Here is some information about new projects and what the auditors will be looking at, and some advice how to prepare." (Osler, Hoskin & Harcourt LLP)

FINRA to Consider Broker Compensation Rules in July
"Rick Ketchum, CEO of FINRA, said that the regulator will make recommendations at its July board meeting on a proposed rule to require brokers to publicly disclose the compensation they receive when switching firms. He did not disclose the content of those recommendations[.]" (On Wall Street)

Five Ideas for Plan Advisors to Create Opportunity
"1. Highlight the benefits of fully automated retirement plans.... 2. Show plan sponsors that automation costs may be lower than they think.... 3. Offer clients new, game-changing ideas.... 4. Maintain value in a competitive market.... 5. Select the best qualified default investment alternative (QDIA)." (Financial Advisor)

Variable Annuity Plans May Benefit Employers and Employees
"[W]hile the top 100 pension plans in the United States saw an optimistic $106 billion cumulative increase in funding in the first quarter of 2013, these pension plans have seen a $37 billion decrease in funded status for April 2013. Simply put, pension benefit obligations are increasing, while growth in assets, either by employer contributions or investment return, has failed to keep pace." (Retirement Town Hall)

In Debt, and (Not) Planning for Retirement
"For a generation between 22 and 32 years old, saving for retirement is one of the most important things they can do for their financial future -- at exactly the time they can't afford to do it. More than half of the so-called millennial generation, 54%, reported that debt was their 'biggest financial concern currently' ... Debt was reported as 'overwhelming' by 42% of respondents, which was twice the rate of boomers who were also surveyed." (On Wall Street)

Income, Age Key Factors in Retirement Funding Expectations
"Among all U.S. nonretirees, 401(k) plans and IRAs -- at 46% -- are the most commonly expected 'major source' of retirement funds, followed by Social Security (30%), savings accounts or CDs (25%), and pension plans (24%). Gallup has tracked these expectations since 2001, and self-directed retirement accounts such as 401(k) plans and Social Security have been the leading expected sources each year, with only minor variations in the year-to-year percentages for each." (Gallup)

Pensions Are Top Income Source for Wealthier U.S. Retirees
"U.S. retirees with $50,000 or more in annual income are twice as likely as retirees below that threshold to say a work-sponsored pension plan is a major source of retirement funds. Instead, these lower-income retirees overwhelmingly cite Social Security as a major source of their retirement income." (Gallup)

Americans' Perspectives on New Retirement Realities and the Longevity Bonus
"When it comes to financial goals, achieving peace of mind is seven times more important to Boomers than accumulating wealth.... Today's retirees are largely not retiring -- they view the 'longevity bonus' as a chance to explore new options, pursue old dreams and live life to the fullest.... Today's retirees are finding comfort, meaning and safety in connections with family, friends, communities and trusted guides." (Merrill Lynch)

Why the Future for Aspiring Retirees is Bright
"Our standard of living has never been higher.... The current retirement system isn't perfect, but it still offers a solid chance for almost anyone to retire comfortably.... Advances in technology have made us more efficient.... We have never been more informed.... It's never been easier to capture market returns.... Individuals are increasingly rewarded for talent." (U.S.News and World Report)

Projected Savings from Proposed Illinois Senate Pension Plan Cut by Half
"New numbers from state pension systems released Tuesday showed that the Cullerton bill would reduce the shortfall by about $5 billion immediately instead of the Senate president's early estimates of about $10 billion. The $5 billion in the Cullerton plan is far less than the $27 billion to $30 billion estimate for the Madigan pension bill[.]" (Chicago Tribune)

Annuity Sales Decline in First Quarter of 2013
"Total annuity sales fell six percent in the first quarter of 2013, totaling $51.7 billion ... Variable annuity sales were down four percent in the first quarter to $35.5 billion -- the sixth consecutive quarter of declines on a year-over-year basis. However, this was one percent higher than in the fourth quarter of 2012." (LIMRA)


Testimony of Urban Institute Before the House Ways and Means Committee Subcommittee on Social Security
"Reform of the Social Security benefit structure should proceed on the basis of principles and goals related to adequacy, protections in old age, encouragement of work to protect the tax base on which programs like this depend, and equal justice under the law for those equally situated. Many features of current law violate basic principles of public finance without promoting other worthy goals in an effective or well-targeted manner. In his testimony before the House Ways and Means Subcommittee on Social Security, Gene Steuerle lays out how to go beyond the types of options put forward by many proposals under consideration to achieve such reform." (Urban Institute)


Social Security Benefits and COLAs: Protecting Against Inflation
"Adopting the chained CPI (Consumer Price Index) in Social Security to more accurately account for changes in the cost of living is a small first step toward fixing a broken program that is currently accelerating its own demise by paying excess benefits.... One reason the system is in trouble is that the Social Security Administration is paying cost-of-living adjustments (COLAs) based on an outdated and inaccurate index that overstates changes in the cost of living." (The Heritage Foundation)


Why American Business Should Support the Bona Fide Fiduciary Standard of Conduct for Investment Advice
"The compelling answer to the problem presented by Wall Street's excessive growth and consumption of a 35% or greater share of the profits of American business lies in the application of the bona fide fiduciary standard of conduct to all providers of personalized investment advice.... Yet, Wall Street strongly opposes efforts by [DOL] and the [SEC] to apply a bona fide fiduciary standard to the delivery of investment advice to retirement plan sponsors (business owners), retirement plan participants (employees), and to all Americans." (Ron Rhoades, via Scholarly Financial Planner)


Sodexo's Twisted 401(k) Plan
"The Sodexo 401(k) plan has a poor participation rate -- only about 108,000 active participants -- and with almost $1 billion million in assets, it's a mega-plan with plenty of bargaining clout. Given average account balances of $12,000, when these food services workers retire, they won't be eating filet mignon." (Forbes)

Benefits in General; Executive Compensation

[Official Guidance]

Text of EBSA Proposed Extension of Information Collection Requests Submitted for Public Comment
"[EBSA] is soliciting comments on the proposed extension of the information collection requests (ICRs) contained in the [following] documents ... [1] Disclosures for Participant Directed Individual Account Plans Under ERISA Section 404(c).... [2] Affordable Care Act Grandfathered Health Plan Disclosure, Recordkeeping Requirement, and Change in Carrier Disclosure.... [3] Regulation Relating to Loans to Plan Participants and Beneficiaries Who Are Parties In Interest With Respect to The Plan.... [4] PTE 91-55: Transactions Between Individual Retirement Accounts and Authorized Purchasers of American Eagle Coins.... [5] PTE 85-68: Permit Employee Benefit Plans to Invest in Customer Notes of Employers.... [6] Default Investment Alternatives under Participant Directed Individual Account Plans." (U.S. Department of Labor)

SEC Provides No-Action Relief on Regulation BTR
"Pfizer argued that the exchange offer would not result in inequitable treatment for those employees subject to a suspension, and hence Regulation BTR should not apply. In other words, this is not Enron. It's why Regulation BTR includes an exception for mergers etc., which should apply here, even if Rule 101(c)(9) does not specifically refer to exchange offers. The SEC granted the no-action request, subject to some conditions." (Dodd-Frank.com, a blog by Leonard, Street and Deinard)

2013 Say on Pay Voting Results as of May 22, 2013
"1,520 companies have held Say on Pay votes in 2013 ... 73% of companies have received a greater than 90% 'For' vote; Average vote among all companies: 90.5% 'For' vote, 7.7% 'Against' vote, 1.8% Abstentions." (Steven Hall & Partners)

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