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June 4, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Pension Administrator
for AFC Pensions, Inc. in MA

Plan Design Specialist
for American National Insurance Company in TX

Retirement Plan Project Manager
for Defined Benefit Plan Team Leader in DC

Conversions Consultant
for JPMorgan in KS

ERISA Paralegal
for Kaufman and Canoles, P.C. in VA

Relationship Manager
for Verisight, Inc. in CA

Director of Exchange Partnerships
for Prudential in NJ

Director of Group Benefit Strategic Partnerships & Voluntary Initiatives
for Prudential in NJ

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Webcasts and Conferences

Northeast Area Benefits Conference - Boston
July 8, 2013 in MA
(American Society of Pension Professionals & Actuaries (ASPPA))

Northeast Area Benefits Conference - New York City
July 9, 2013 in NY
(American Society of Pension Professionals & Actuaries (ASPPA))

ERIC FocusOn Conference Call on the Impact of the DOMA Decision on Benefit Plans
June 28, 2013 WEBCAST
(ERIC (ERISA Industry Committee))

ERIC FocusOn Call: the ACA Challenges of Collectively Bargained Plans
June 18, 2013 WEBCAST
(ERIC (ERISA Industry Committee))

What's the News in the 2013 Social Security Trustees Report? Archived Webcast
June 18, 2013 WEBCAST
(National Academy of Social Insurance)

Defending and Managing Employment Discrimination
July 31, 2013 in NY
(American Conference Institute)

2013 National Conference
September 9, 2013 in AZ
(Plan Sponsor Council of America (PSCA))

View All Webcasts and Conferences


[Guidance Overview]

Recent and Expected Developments Affecting Retirement Plans in Puerto Rico
Topics include: [1] New Due Dates to Amend and File Puerto Rico Tax Qualified Plans; [2] New Tax Amnesty Program Covers Certain Plan Taxes and Reports; and [3] Are PR-Only Plans Covered by PBGC Insurance? Stay Tuned. (Groom Law Group)


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.

General Release of 'Any and All Claims' Trumps ERISA Pension Claim
"The Court drew a distinction between entitlement claims, which it said are subject to ERISA's anti-alienation provision, and contested claims, which it said fall outside the realm of the anti-alienation provision. The Court defined a pension entitlement as a claim 'for vested benefits to which a plaintiff is entitled under the terms of the pension plan itself;' whereas a contested claim is 'a claim for additional benefits to which [a plaintiff] is not entitled under the terms of the Plan itself.'" [Hakim v. Accenture United States Pension Plan, Case No. 11-3438, 2013 U.S. App. LEXIS 10475 (7th Cir. May 23, 2013)] (Seyfarth Shaw LLP)

S&P 1500 Pension Plans Funding Levels Rise to Highest Point in Almost Two Years
"Funding levels of pension plans sponsored by S&P 1500 companies continued a strong rebound in 2013, with the aggregate deficit decreasing by $150 billion during the month, resulting in a $269 billion deficit as of the end of May 2013, according to Mercer. The funded ratio ... increased from 80% to 86% during May, to close out the month at the highest level since June 2011." (Mercer)

403(b) Program Creates Concerns About Future of Individually Designed Plans
"The news from IRS that 'limited resources' make it infeasible for the agency to establish a determination letter program for individually designed 403(b) plan documents was unexpected and potentially the most disruptive guidance in a revenue procedure that the agency released March 28 ... Not having a determination letter program for individually designed 403(b) plans might make the volume-submitter program more attractive to benefit practitioners because it is the most flexible preapproved document program that IRS offers[.]" (Bloomberg BNA)

EEOC Discriminating Against Partnerships
"The EEOC in Washington will now decide whether to sue PwC to change its retirement policy. Law firms, medical practices and other partnerships should pay close attention. If the commission goes forward, it will mean that any partnership with a fixed retirement age could be cited next. It would also open the door to lawsuits from retired partners for backpay or re-employment." (Daniel Kessler in The Wall Street Journal; subscription may be required)


ACI's Defending and Managing Employment Discrimination Litigation, 7/31 - 8/1, NY

Sponsored by ACI (American Conference Institute)

The premier employment discrimination litigation conference returns for a fourth year -- more in-house counsel client presence, more government regulators and enforcers, and top federal and state jurists actively involved in these cases. Discount Code BEN200.

More Pension Funds Dispense with Hedge Funds as an Asset Class
"The Employees Retirement System of Texas recently decided to integrate hedge fund investments across its entire $24.9 billion portfolio rather than keep them in a separate bucket... [The] retirement fund joins a growing number of U.S. pension funds that are taking a more open approach to hedge fund investing ... Increasingly, investment consultants are encouraging institutional investors to consider putting hedge funds outside the alternatives bucket, especially when it comes to equities." (Institutional Investor)

Four Proven Strategies to Reduce Choice Overload in 401(k) Plans
"[W]hen placed in a situation featuring a choice overload, 401k plan participants are more likely to: (1) Procrastinate, to put off making a decision, even when it goes against their own self-interest; (2) Make worse decisions, the kind that sacrifice quality and may even hurt them; and (3) Choose things that make them less satisfied, even when those choices do objectively better." (Fiduciary News)

Fidelity Files Motion to Dismiss Lawsuit Over In-House Plan
"Fidelity makes the following non-exhaustive list of legal and factual arguments: [1] Plaintiff lacks constitutional standing to bring her claims because she was only invested in a small sub-set of a much larger group of Fidelity funds in the plan.... [2] Fidelity offered free advice to all participants to help them pick from the plan's lineup. [3] Between 2007 and 2011, Fidelity contributed $2.1 billion in employer contributions, which purportedly amounts to 10 times the alleged amount of excessive fees paid back to Fidelity from the plan's investments. [4] Prohibited Transaction Exemption 77-3 expressly allows a company like Fidelity to use its own mutual funds." (Plan Tools, LLC)

Change in Average 401(k) Account Balances by Age and Tenure, May 2013 Update (PDF)
Change in average account balances (by age and tenure) from January 1, 2012 -- May 1, 2013 among consistent 401(k) participants have account balances on December 31, 2011. (EBRI)

Employee Ownership Update, June 3, 2013
By NCEO Executive Director Loren Rodgers. Articles include: New Research on ESPPs; Demographic Wave of Retirees Does Not End with Baby Boomers; Purchase by Yahoo! Benefits Employee-Owners at Tumblr; and Worker Cooperative Proposed for Mexicana Airlines. (National Center for Employee Ownership)

Automatic IRA Legislation Is Reintroduced
"Rep. Richard Neal (D-MA) has reintroduced payroll withholding automatic IRA legislation from the 112th Congress, with some minor changes. The legislation is intended to make available an employer-coordinated retirement saving opportunity to those workers whose employers do not offer a more typical retirement plan." (Ascensus)

Pension Plan's Interpretation of Break-In-Service Rules Upheld on Appeal
"The appellate court affirmed the district's ruling regarding the pension fund's interpretation of the plan. The plan was not arbitrary and capricious when it interpreted plan terms to exclude the five-year period from 1969 to 1973 from his accrued benefit because of the break in service. The outcome of separate litigation regarding the plan's pre-ERISA break-in-service provision ... did not require the plan to adopt the participant's interpretation in this case." [Gannon v. NYSA-ILA Pension Trust Fund and Plan (2d Cir. 2013)] (Wolters Kluwer Law & Business)

DOL Encourages Asset Custodians and Record-Keepers to Work Together to Wind Up Abandoned Plans
"JP Morgan, the plan's asset custodian, elected to serve as the 'qualified termination administrator' under the program, and chose ADP, the plan's record-keeper, to carry out the activities necessary to terminate and wind up the plan. ADP, as agent, filed the necessary papers with the department on behalf of JP Morgan. In addition to the Emergent Business Services plan, JP Morgan and ADP have elected to terminate and wind up approximately 180 other abandoned plans under the program, affecting approximately 690 plan participants and beneficiaries and involving almost $3 million in assets." (Employee Benefits Security Administration)


ERIC Urges PBGC to Withdraw Proposed Regulations on Reportable Events, Maintain Existing Requirement
"ERIC's letter argues, among other things, that the PBGC already has the appropriate tools to identify at-risk plans with the existing reportable events rules, and that the Pension Protection Act of 2006 (PPA) is working as intended in protecting the interests of the PBGC and benefits earned by participants." (The ERISA Industry Committee)


Comments by American Benefits Council on Proposed Regs on Reportable Events and Certain Other Notification Requirements (PDF)
"[W]hile the financial soundness test could decrease the reporting burden on some 'stronger' companies, the proposal has the effect of increasing the burden on 'less strong' companies ... [T]he proposal dramatically increases the amount of information required to be submitted with an initial reportable events notice and tightens reporting waivers based on plan funding status.... In addition, the Council is concerned that once the precedent of evaluating company health is established in the reportable events area, the government could use a similar test for other purposes, such as the calculation of premium payments. We see this trend as constituting a serious threat to the strength of the defined benefit plan system and to the PBGC." (American Benefits Council)


Comments by ERIC to EBSA on Fee Disclosures in Participant-Directed Individual Account Plans (PDF)
"Eighty percent of retirement plans operate on a calendar-year basis.... [B]ecause many participant fee disclosures are due in August, plans cannot combine them with the disclosures that are sent out in September or even later in the year. As a result, plans will incur considerable additional expense to mail these disclosures separately from their other disclosures -- and with little or no benefit to participants.... ERIC recommends the Department issue guidance that interprets the regulation's definition of 'at least annually thereafter' to mean at least once in any twelve-month period, but no later than 18 months from the last annual disclosure." (The ERISA Industry Committee)


Comments to PBGC on Proposed Regs on Reportable Events Under ERISA Section 4043 (PDF)
"Perhaps various combinations of a plan sponsor's creditworthiness and a plan's funded status could be made available to satisfy the financial soundness waiver.... Although it is true that PBGC's risk generally increases as funding levels decrease, we believe the proposed thresholds are too high... To allow the plan sponsor to determine whether the waivers apply, the waivers should be modified to allow determination of the information as of a prior date.... We suggest that the plan financial soundness waiver be expanded to also cover plans that could meet the test based on current year premium information, if available, by the event date." (Pension Committee, American Academy of Actuaries)


Who Needs Uncle Sam in Order to Save for Retirement?
"[E]normous increases in retirement savings can be achieved within the existing regulatory and tax structure by removing the imaginary and structural saving roadblocks. The imaginary roadblocks from critics of the current defined contribution (401(k)) system are that employers will not offer plans, participants will not save enough or will not invest wisely enough for retirement security without Federal intervention. They point to the uneven income distribution, arguing that those with insufficient income cannot possibly save enough for their own retirement. The imaginary roadblocks from advocates of the current system are that savings are limited by maximum limits placed on tax advantages and that it is uneconomical to serve the low income community without some form of Federal subsidy. Both of these imaginary roadblocks are patently false." (Dalbar, Inc.)


Comments by ASPPA and ACOPA on Proposed PBGC Rule Relating to Reportable Events and Certain Other Notification Requirements
"[S]mall businesses were not provided with an exemption from the requirement to report distributions to substantial owners in excess of $10,000 in the past year.... ASPPA COPA is also concerned about the credit report requirement for the financially sound sponsor safe harbor.... [W]e are concerned that the effort and cost will not be minimal." (American Society of Pension Professionals & Actuaries; ASPPA College of Pension Actuaries)


Comments by ASPPA and ACOPA on the Proposed Revision of ASOP Number 4 Measuring Pension Obligations and Determining Pension Plan Costs or Contributions
"The second exposure draft on ASOP 4 reflects many of our comments on the first exposure draft ... Concerns remain, however ... The introductory comments anticipate the standard will not require actuaries to make additional disclosures for federally mandated funded status measurements.... [T]his point is too important to be included only in the comments and should be included in the actual standard.... Section 3.14.2 assumes plan sponsors maintain a consistent funding policy that would allow the actuary to anticipate future contribution levels .... Section 4.1(f) requires 'a summary of participant information' but does not provide guidance as to how the requirement is satisfied." (American Society of Pension Professionals & Actuaries; ASPPA College of Pension Actuaries)

Benefits in General; Executive Compensation

The Future of Domestic Partner Health Benefits
"[If] DOMA is repealed, ... [same-gender] couples will have the opportunity to avoid federal taxation of their benefits by marrying. That could lead employers to conclude that the special category of domestic partner coverage is no longer needed. On the other hand, employers also need to consider the impact of state law. If the Supreme Court strikes DOMA, that does not mean that state laws necessarily would change (it will depend on the rationale of the Court's decision). So if a state law prohibiting [same-gender] marriage stands, an employer that otherwise provided domestic partner coverage may keep that category of coverage in place in order to handle the case of employees living in states where only opposite-sex marriage is legal." (Proskauer's ERISA Practice Center Blog)

Round Two of Shareholder Say-on-Pay Litigation
"Unlike the first round of say-on-pay lawsuits, which were based on negative advisory votes that had already occurred, this second wave of shareholder litigation, which began in 2012, seeks to enjoin advisory votes on executive compensation based on allegedly deficient proxy disclosures. Some cases seek also to enjoin binding shareholder votes on proposals to issue additional shares of stock for equity incentive plans. Because these lawyer-driven suits do not allege an actual violation of a disclosure statute or rule, every public company with a shareholder vote scheduled for the second half of 2013 is a potential target." (Pepper Hamilton LLP)

Executive Compensation Litigation: Nightmare or Nuisance
"[I]s it the latest fad in an ongoing series of quick-hit, nuisance-level efforts by plaintiffs' lawyers to replace the income they have lost in the recent decline of more traditional securities class action litigation? Broadly speaking, it seems reasonable to predict that consistently more robust and thorough corporate processes and proxy statement disclosures relating to executive compensation will lead to a decline in cases that don't present what courts are likely to interpret as some supposedly aggravating factor." (William Gallagher Associates)

Smaller Companies Seeing More Say-on-Pay Failures
"[A]verage shareholder support at the first 1,351 Russell 3000 companies reporting their voting results in 2013 is up to 90% from 89% overall in 2012, while the say-on-pay failure rate edged down from 3% to 2%. Meanwhile, the percentage of Russell 3000 companies receiving negative Institutional Shareholder Services (ISS) voting recommendations dipped to 11% from 13% last year." (Towers Watson)

2013 Say on Pay Voting Results as of June 3, 2013
"2,034 companies have held Say on Pay votes in 2013; 37 companies have failed with an average 59% 'Against' vote ... 72% of companies have received a greater than 90% 'For' vote." (Steven Hall & Partners)

Press Releases

Robert E. Rice Named as Chief Counsel to SEC Chair
Securities and Exchange Commission

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