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June 3, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Manager, Service Team Leader - Client Services
for Mullin TBG - A Prudential Company in CA, FL

Retirement - Account Managers
for Mullin TBG - A Prudential Company in CA, FL

Defined Benefit Pension Plan Benefit Calculation Specialist
for The Angell Pension Group, Inc. in ANY STATE

Vice President, Not-for-Profit Market
for Transamerica Retirement Solutions in ANY STATE

Retirement Plan Administrators
for MVP Plan Administrators, Inc. in NC

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Webcasts and Conferences

Employer Exchange Notice and Related Disclosures: Communicating Minimum Value, Affordability, and More to Employees
June 13, 2013 WEBCAST
(Thomson Reuters / EBIA)

Continuation Coverage for Health FSAs and HRAs: When and How Does COBRA Apply?
May 30, 2013 WEBCAST
(Thomson Reuters / EBIA)

The Roadmap to Employee Disclosures: Best Practices and Practical Solutions to Benefits Communication Overload TeleConference
August 6, 2013 WEBCAST
(ABA Joint Committee on Employee Benefits)

Defined Contribution Health Plan Update
July 15, 2013 WEBCAST
(Lorman Education Services)

Ready for Health Care Reform 2014: What’s Here and What’s Coming?
July 10, 2013 WEBCAST
(Thomson Reuters / EBIA)

Pension Risk Management: Important Lessons for the Corporate CFO
June 18, 2013 in NY
(Moody’s Analytics)

Health Care Reform: Preparing for 2014 Webinar
June 12, 2013 WEBCAST

Free Webcast: ERISA and Your Health Care Reform Strategy
June 18, 2013 WEBCAST
(Davidson Marketing Group -- FutureOffice Network)

13 Traps That Limit the Effectiveness of Your Plan
June 11, 2013 WEBCAST
(Multnomah Group)

View All Webcasts and Conferences


[Official Guidance]

Text of IRS Private Letter Ruling 201322051: Plan for Employees of College Preparatory School Is Entitled to Church Plan Exemption (PDF)
"The governing body of School S is a Board of Trustees ... of which no less than one-third plus one shall be members of Society J, which is a religious order of men.... [T]he Board of Trustees has the authority to elect the President of School S by a two-thirds majority of the Board of Trustees and by a majority of the members of Society J then on the Board of Trustees ... School S is listed in Directory C and, consequently, is exempt from federal income taxes under Section 501 ... In view of the common religious bonds between School S and Society J, the inclusion of School S in Directory C, and the indirect control of School S by Society J through the Board of Trustees, we conclude that School S is associated with a church ... within the meaning of Section 414(e)(3)D of the Code[.]" (Internal Revenue Service)


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Upping the Ante: PBGC Initiates Pension Plan Termination in Leveraged Acquisition
"In April, the PBGC initiated proceedings to terminate a pension plan in connection with Compagnie de Saint-Gobain's sale of its US metal and glass containers business to Ardagh Group. Initiation of a plan termination is typically viewed as an attempt to scuttle a transaction ... [T]he PBGC has announced that it intends to become more aggressive in future LBO transactions and to allocate more of its resources in this area." (Debevoise & Plimpton LLP)

The New Era of Fee Transparency: Making Sense of the Details (PDF)
"[E]ven with new fee disclosure statements, it can be challenging for plan fiduciaries to know how much they actually pay for a particular service and how that fee compares with those of other providers. One tip is to convert all fees listed in basis points or percentages into dollars.... Converting all fees into dollars will be important for benchmarking to determine whether the amount you are paying is reasonable and valuable to the plan... It is critical that your comparative data be from unrelated outside sources." (Bank of America Merrill Lynch)

Five Reasons to Let a Sleeping 401(k) Lie
"1. You can't buy comparable investment options on your own.... 2. You may need early access to your money.... 3. You could need the extra legal protections.... 4. You own company stock in your 401(k).... 5. You need the guardrails." (Morningstar)

Brokerage Firms Debate Value of Certified Financial Planner Title
"With consumer faith in brokers' investment skills shaken -- and commissions for simple buy and sell orders slipping -- brokers are positioning themselves as trusted advisers that help clients meet goals ranging from saving for college to estate planning. Yet while some firms are pushing their brokers to earn the CFP credential as a way of attracting clients and profits, others say the bottom line benefits have not been proven." (Reuters)

Employees Retiring Before Full Social Security Benefits Because of Medicare Eligibility
"[W]orkers who didn't have retiree health care coverage were 6.5 percentage points more likely to retiree during the month they turned 65 than those with retiree health care coverage through their employer. Ultimately, the study predicted that 13% of the participating workers who had employee health care coverage but no retiree coverage would retire at 65, compared with 9.8% of those who had neither employee nor retiree health insurance. Meanwhile, 7.7% of those who had both retiree and employee coverage were likely to retire at 65." (Investment News; free registration required)

The 4 Percent Annual Withdrawal Method Is Not Safe in a Low-Yield World
"Using historical averages to guide simulations for failure rates for retirees spending an inflation-adjusted 4 percent of retirement date assets over 30 years results in an estimated failure rate of about 6 percent. This modest projected failure rate rises sharply if real returns decline. As of January 2013, intermediate-term real interest rates were about 4 percent less than the historical average used in previous simulations." (Journal of Financial Planning)

How Much Can I Afford to Spend in Retirement?
"It is critical ... to make sure that you are indeed on track to 'save enough' before you decide that you have saved too much and you should be spending more. The table [in this article] might help you determine whether you are on track or not. It shows the approximate multiple of final year's pay in accumulated savings needed to provide real dollar annual income during retirement that is expected to replace a specific percentage of your income prior to retirement (when added to income from Social Security)." (Kenneth A. Steiner, FSA Retired)

Retirement Confidence Hurting as Entitlements Face Fiscal Challenges
"Saving and preparing for retirement has become an increasingly difficult task for Americans today. With Social Security and Medicare forming the base of almost every American's retirement plan, the programs' long-term fiscal challenges, as have been reported annually by their trustees for some time, compound the uncertainty and further diminish retirement confidence." (Insured Retirement Institute)

Even More Retirees Coming After Baby Boomers
"The number of Americans reaching age 65 each year will continue to grow beyond the Baby Boomers, according to a trend analysis from LIMRA.... Specifically, 3.4 million individuals are projected to reach age 65 in 2013. By 2023, 4.1 million Americans will reach 65 and then 4.2 million by 2050." (PLANADVISER.com)

Illinois Legislature Adjourns Without Addressing Pension Crisis
"The Illinois legislature ended its spring session without final action on two major proposals to reform its deeply underfunded pension system ... [Springfield's] two most powerful politicians -- House Speaker Michael Madigan and Senate President John Cullerton, both Democrats -- were unable to find a compromise to address the state's $100 billion unfunded pension liability." (Reuters)

NYC Pension Chief Wants to Cut Out Wall Street Fees
"New York City's $140 billion retirement system pays Wall Street money managers about $360 million a year, the only one of the 11 biggest U.S. public-worker pensions that refuses to manage any assets internally.... The city could hire a five-person real-estate team, pay them around $2 million, and start doing some joint ventures, [said Larry Schloss, the city's chief investment officer]. On a $1 billion investment that returns 12 percent, New York City could save $20 million in fees over five years[.]" (Treasury & Risk)

U.S. Institutional Plan Sponsors Gained 4.3 Percent in First Quarter
"Corporate Pensions gained 4.2 percent in the three months ending March 31, 2013.... Fixed income has performed better over the longer term, and the larger allocation to that asset class has helped Corporate Pension Plans lead the other segments in the one-, three- and five-year periods as of March 31, 2013[.]" (Northern Trust)

The Relationship Between Job Characteristics and Retirement Savings in DC Plans During the 2007-2009 Recession (PDF)
"[This analysis follows] private-sector workers who participated in a DC plan in 2007 and had the same employer throughout the recession.... [T]he higher the employment losses in the industries in which DC plan participants work, the greater the probability of observing a substantial reduction in real contributions between 2007 and 2009 ... The likelihood of reduced contributions was also greater for DC plan participants who worked for a small employer[.]" (Monthly Labor Review, published by the U.S. Bureau of Labor Statistics)


CBO's Estimate of Tax Expenditures Distributions Understates Impact of Nondiscrimination Rules
"When a small business owner decides to put in a workplace plan, or a larger employer puts in a plan to benefit key employees, other employees get employer contributions that they did not have before. Only a small portion of this benefit is recognized in an analysis of the distribution of the tax benefit for these employees, even though this is a very direct benefit, not an indirect impact." (American Society of Pension Professionals & Actuaries)


Text of Comments by Unified Trust Company on Proposed Rules for Pension Benefit Statements (PDF)
"We believe that unless certain steps are taken the statements can do more harm than good. Our concern is that an over simplified methodology can unintentionally mislead the plan participant. In particular, we are concerned that the proposed 'safe harbor' methodology will lead to widespread adoption by most vendors since it will be perceived as the only 'safe choice,' even though it might give materially inaccurate projections and stifle innovation. We believe six modifications will greatly improve the proposed rule by adding flexibility and help more plan participants to reach retirement success." (Unified Trust Company)


Text of Comments on Revised Exposure Draft of ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions (PDF)
"There is discussion within the actuarial community over whether it is better to smooth inputs or outputs in order to control the volatility of contributions.... The current draft of ASOP 4 appears to be silent about these methods. While it may be premature to provide any significant guidance on output smoothing methods, we believe ASOP 4 should at least include them within the discussion of 'allocation procedures' and the related required disclosures." (Pension Committee, American Academy of Actuaries)


Text of EBSA's Comments on FASB Proposed Accounting Standards Update: Deferral of the Effective Date of Certain Disclosures for Nonpublic Employee Benefit Plans in Update No. 2011-04
"The deferral of the disclosure requirements would deprive the plan's participants and beneficiaries of important information directly linked to the value of the stock of their private company sponsors. The financial disclosures currently required in ASU 2011-04 are also useful to EBSA in its role of overseeing and protecting participants and beneficiaries from fiduciary abuses, especially as they relate to ESOPs where the value of the plan's investment is often based solely on an appraiser's subjective judgment about the value of the private company employer.... The FASB's proposal to indefinitely defer these highly relevant disclosure requirements appears to be based on generalized and undocumented concerns raised by ESOP advocates about public dissemination of Form 5500 financial statements causing unintended consequences by providing insights into the private company's financial performance and financial condition. We question the merits of these concerns." (U.S. Department of Labor)

Benefits in General; Executive Compensation

Fox Rothschild Newsletter, May 2013
Articles include: [1] New Guidance Issued on the [ACA]'s Implementation; [2] Opportunity for In-Plan Roth Conversion Expanded; [3] Contributing Employers Beware: Has the Tipping Point for Multiemployer Plans Arrived? and [4] The New EPCRS -- Much Like the Old EPCRS. (Fox Rothschild LLP)

New York State Agencies Adopt Final Rules Limiting Executive Pay in State-Funded Non-Profits and For-Profit Service Providers
"Among other provisions, the rules bar covered service providers from using more than $199,000 in state funds to pay executive compensation, with certain exceptions. Providers can pay executives more than $199,000 in total compensation from a combination of New York State and other funding sources if they meet [certain] conditions[.]" (Towers Watson)

Press Releases

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