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BenefitsLink Retirement Plans Newsletter

June 7, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Pension Risk Consultant
for OneAmerica Financial Partners in IN

Defined Benefit Retirement Administrator
for Belcan in AZ

401(k) Administrator
for Swerdlin & Company in GA

Business Analyst
for McCamish Systems, An Infosys Company in GA

Executive Director
for Taft-Hartley Benefit Funds in IL

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Webcasts and Conferences

Getting Unstuck® Without Coming Unglued: Restoring Work-Life Balance (WiPN Boston Regional Event)
June 20, 2013 in MA
(Women in Pensions Network)

Executive Compensation, 28th Annual National Institute
November 4, 2013 in NY
(ABA Joint Committee on Employee Benefits)

EBIA's Advanced Cafeteria Plans and Benefits Conference 2013
July 10, 2013 in WA
(Thomson Reuters / EBIA)

Strengthening the Multiemployer Pension System: What Reforms Should Policymakers Consider? (Hearing - Live Webcast)
June 12, 2013 WEBCAST
(U.S. House Committee on Education and the Workforce)

View All Webcasts and Conferences


[Official Guidance]

Text of FASB ASU 2013-08: Amendments to the Scope, Measurement, and Disclosure Requirements under Topic 946
"The amendments do all of the following: [1] Change the approach to the investment company assessment in Topic 946, clarify the characteristics of an investment company, and provide comprehensive guidance for assessing whether an entity is an investment company; [2] Require an investment company to measure noncontrolling ownership interests in other investment companies at fair value rather than using the equity method of accounting; [3] Require the following additional disclosures: (a) the fact that the entity is an investment company and is applying the guidance in Topic 946, (b) information about changes, if any, in an entity's status as an investment company, and (c) information about financial support provided or contractually required to be provided by an investment company to any of its investees." (Financial Accounting Standards Board)


DATAIR! New Features – Flexible Pricing – Module Integration

Sponsored by DATAIR Employee Benefit Systems, Inc.

Proposals, Testing, Administration, 5500s, 1099Rs, Plan Documents
401(k), New Comparability, 403(b), Non-qualified Plans
(888) 328-2474    Sales@DATAIR.com    www.DATAIR.com

[Guidance Overview]

FASB Issues Standard Clarifying Investment Company Status and Accounting
"The Update sets forth a new approach for determining whether a public or private company is an investment company. The Update also clarifies the characteristics and sets certain measurement and disclosure requirements for an investment company. This Update is a result of the efforts of the FASB and [IASB] to develop a consistent approach for determining whether a company is an investment company. The significance of that determination ... is that investments must be carried at fair value, even if the investment company holds a controlling interest in the investee." (Financial Accounting Standards Board)

Ninth Circuit Limits Reach of Moench Presumption of Prudence for ERISA Plan Fiduciaries
"The [Ninth Circuit court] pointed to the district court's decision upholding a federal securities class action against Amgen based on the same series of events, noting that if the alleged misrepresentations and omissions in that action were sufficient to state a claim for violations of Section 10(b) of the Securities Exchange Act of 1934, the allegations raised by the plaintiffs were sufficient to state a claim under ERISA's more stringent duty of care." [Harris v. Amgen, No. 10-56014 (9th Cir. June 4, 2013)] (Practical Law Company)

Retirement Benefit Changes Require Smart Change Management Strategies
"Transparency is crucial. Employers should provide consistent, clearly written communications explaining what's changing and why. It's especially important to use simple language in internal messages about legal and regulatory changes. They should communicate often and through various channels to make sure the messages are heard and understood. It's also important to continually monitor employees' understanding of these change-related messages." (Towers Watson)

Lawmakers to Consider Retirement Savings Fund for All Workers in Oregon
"[H]alf of all working Oregonians don't have access to any pension program at all through their employer.... [Recent] discussion centered around a plan that would create an automatic IRA account for all Oregon workers. They would be enrolled through their work; a state investment board made up of private-sector experts would invest the money on the workers' behalf. It would cost the employer nothing, and workers would be able to opt out or modify their plans." (StatesmanJournal.com)

Re-Enrollment Litigation After the 2008 Financial Crisis
"[T]he current state of affairs seems to be as follows: [1] The QDIA regulation by its terms seems to provide a broad authorization for 401(k) investment re-enrollment programs. [2] This is an emerging area of the law. We may see more litigation and the emergence of judge-made 'glosses' on the QDIA authorization. [3] 'Not getting the notice' seems to be a basic element in claims. The other element that will be significant is language in the plan and in communications that seem to give participants the unqualified right to 'invest assets as he or she chooses.'" (BNY Mellon)

CalPERS Pension Costs Will Dip Next Year
"Overall state contributions will fall $71.3 million to approximately $3.81 billion in fiscal 2013-14, according to actuarial estimates prepared for CalPERS' June 18 board meeting. School districts will pay $4.98 billion for pensions, down $31.5 million from this year." (The Sacramento Bee)

Federal Reserve: U.S. Corporate Retirement Assets Rose 2.78% in First Quarter
"U.S. corporate defined benefit and defined contribution plans had combined assets as of March 31 of $6.821 trillion, a 2.78% increase from the previous quarter and a 3.71% increase over the first quarter of 2012 ... Defined benefit plan assets were $2.566 trillion as of March 31, up 0.73% from the previous quarter, while defined contribution plan assets were $4.255 trillion, up 4.06% from the previous quarter." (Pensions & Investments)

Pension Finance Watch, May 2013
"A 40-basis-point increase in long bond yield drove liability values down more than 5% in May. This pushed the Towers Watson Pension Index up 5.5% for the month, to 69.6. The index value has now increased almost 12% year to date." (Towers Watson)

Rising Interest Rates in May Drive $95 Billion Improvement in Corporate Pension Funded Status
"The funded status of the 100 largest corporate defined benefit pension plans improved by $95 billion during May ... The deficit dropped to $226 billion from $321 billion at the end of April ... [The Pension Funding Index] funded ratio ... has surged to 86.0%, up from 81.2% at the end of April. This monthly improvement of 4.8% is the highest since the 4.9% improvement in October 2010.... [P]ension liabilities, decreased by $101 billion during May[.]" (Milliman)

FTSE350 Pension Deficits Reduce Over May
"[T]he estimated aggregate IAS19 deficit for the defined benefit schemes of the FTSE350 companies stood at 98bn GBP (equivalent to a funding ratio of 85%) at 31 May 2013. This compares to a deficit figure of 108bn GBP at the end of April 2013 (funding ratio of 84%). Asset values remained unchanged over the month ... Liability values reduced by 10bn GBP over the month[.]" (Mercer)

IRA Contribution Flows Dwarfed by Rollovers (PDF)
"Almost 13 times the amount of dollars were added through rollovers compared with contributions in 2011 ... The average and median (mid-point) rollover amounts in 2011 were $72,398 and $19,632, respectively, compared with the average contribution of $3,723. Average and median rollover amounts increased with age, reaching $121,106 and $46,216, respectively, for those age 60-64, at which point the median rollover amount began decreasing, while the average rollover amount continued to rise until the owners reached age 70." (EBRI)

Six Things You Need To Do to Prepare For California's Public Employees' Retirement Act
"[1] Act Now, Don't Wait ... [2] Document Existing Commitments ... [3] Re-Examine Cost-Sharing ... [4] Consider A New DCP ... [5] Set Up Necessary Administrative Policies ... [6] Set Up Necessary Administrative Policies" (Chang Ruthenberg & Long)


Text of Comments to SEC on Fiduciary Duties of Brokers, Dealers and Investment Advisers (PDF)
"We support the SEC staff recommendation ... to adopt parallel rules ... establishing an over-arching fiduciary duty that is identical for brokers and advisers, but only if, as the Dodd-Frank Act mandates, it is no less stringent than the existing standard under the Advisers Act. We maintain that the fiduciary duty standard should be supported by guidance to clarify how the standard would apply to the broker-dealer business model and rules where needed. We believe that such an approach, if properly implemented, could both enhance investor protections and preserve key beneficial elements of the transaction-based broker-dealer business model." (AICPA, NAPFA, AARP and six other organizations)


Text of Testimony to ERISA Advisory Council on Private Sector Pension De-Risking and Participant Protections (PDF)
"When a company purchases annuities without plan termination, there is a difference in protections afforded to plan participants whose benefit payment obligation has been transferred to an insurance company versus participants that remain in the plan sponsored by the company.... Plan sponsors have a very clear idea of whether they are seeking advice in their settlor or fiduciary capacity, and act appropriately as such." (Stephen A. Keating of Penbridge Advisors, LLC)


Observations on 'The Retirement Gamble'
"By far the most important factor in how comfortable retirement will be for participants is how much money they salt away in their plan accounts. Even a 70% annual return would be of little consequence if a participant is squirreling away only $3 a year. Many experts maintain that annual plan contributions should total -- between participant and employer -- around 15%-20% during the participant's working years to help ensure a comfortable retirement." (W. Scott Simon, for Morningstar Advisor)

Benefits in General; Executive Compensation

[Official Guidance]

Text of NASDAQ Reminder About Approaching Deadline for Compensation Committee Listing Standards (PDF)
"Compensation committees for NASDAQ-listed companies must have certain responsibilities and authority by July 1, 2013.... NASDAQ Listing Rule 5605(d)(3) ... requires a compensation committee to have: The sole discretion to retain or obtain the advice of a compensation consultant, legal counsel or other adviser, and the direct responsibility for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel and other adviser it retains." (NASDAQ)

2013 Top Five Global Employer Rewards Priorities Survey (PDF)
"The global race to attract and retain top talent is foremost on employers' minds as reward challenges continue in a difficult economy.... [T]he Top Five priorities for 2013: [1] The ability of reward programs to attract, motivate, and retain employees; [2] Clear alignment of Total Rewards strategy with business strategy and brand; [3] Motivating staff when pay increases are flat or non-existent; [4] The cost of providing benefits to employees; [5] Demonstrating appropriate return on investment for reward expenditures." (Deloitte, IFEBP and ISCEBS)

Health Plan Coverage for Terminated Executives After the ACA
"[A] change under the [ACA] would subject an employer to daily penalty taxes if it offers post-termination health benefits to executives only ... Ironically, the penalty tax applies to insured plans and not to self-insured plans." (Winston & Strawn LLP)

Equity Compensation -- Are Stock Appreciation Rights the Right Tool for You?
"For companies who do not want to or can't give up any ownership, SARs provide an opportunity to share the growth in the company's value without providing new shareholders. For types of corporate entities like S-Corps this can allow for broader plan participation that might otherwise be possible." (PayScale)

Press Releases

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