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BenefitsLink Retirement Plans Newsletter

June 10, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

DB/DC Retirement Plan Sales Consultant/Account Manager
for USI Consulting Group in NY

Senior Data Specialist, Client Transition
for Prudential in IA

Plan Document Project Coordinator
for Pension Consulting Firm in AL, AZ, LA, NM, OK, TX

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Webcasts and Conferences

Why and How Does the Department of Labor Target Retirement Plans for Investigation?
June 27, 2013 in CA
(No. Calif. Chapter of Certified Employee Benefits Specialists (ISCEBS))

Health Benefits Laws Compliance Assistance Seminar
June 26, 2013 in OR
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

View All Webcasts and Conferences


[Official Guidance]

Text of IRS Notice 2013-37: Update for Weighted Average Interest Rates, Yield Curves and Segment Rates for June 2013 (PDF)
"This notice provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), and the 24-month average segment rates under [Internal Revenue Code section] 430(h)(2) ... [and] provides guidance as to ... the 30-year Treasury weighted average rate under section 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under section 417(e)(3)(D)[.] These rates reflect certain changes implemented by [MAP-21]." (Internal Revenue Service)


Retirement Plan Education, Plan Documents, and more.

Sponsored by McKay Hochman

McKay Hochman provides a comprehensive retirement plan resource for financial institutions and TPAs. We offer plan documents, compliance support services, continuing education, online resource library, and more. Visit www.mhco.com for details.

On the Use of REITs and Master Limited Partnerships as IRA Investments
"Advisers say there's no prohibition against holding MLPs or traded REITs in a rollover individual retirement account or other tax-advantaged account, nor is there a penalty or tax on proceeds when these equities are sold. Ownership of nontraded REITS may result in penalties for certain IRA distributions, and there may be complications with keeping an MLP in an IRA." (The Wall Street Journal; subscription may be required)

Senate Bill Limiting Retirement Plan Beneficiary Options Stalls
"[The] federal student loan bill (S. 953), with provisions altering the payout rules for beneficiaries of IRAs and employer-sponsored retirement plan accounts, failed to receive the support necessary to bring the bill to a final vote.... This is not the first time such beneficiary limitations have been included in legislation, so the concept could potentially reappear in the future." (Ascensus)

Conflicted Revenue Capture: How Revenue Sharing As a Profit Center Can Affect Plan Sponsors (PDF)
"Plan service providers who utilize Conflicted Revenue Capture create fiduciary traps for their clients, who are often lured by the promise of 'free' or very low perceived cost plan recordkeeping.... Conflicted Revenue Capture has been the subject of much litigation against both plan sponsors and service provides over the past decade, culminating in the recent case of Tussey v. ABB, Inc.... [P]ractical plan sponsor questions are presented along with a suggested fiduciary best practice." (Securian Retirement)


Self-Auditing Your Employee Benefits - June 12, 2013

Sponsored by Lorman and BenefitsLink

This live audio conference gives you a legal and a practical perspective for each type of benefit plan. Helps you identify and prioritize so you can focus your time and resources on the important areas. Registration discount for BenefitsLink readers.

Global Bonds: A Better Solution for DC Investors
"Over the last 30 years, compelling evidence has accumulated that suggests currency-hedged global bonds have a superior risk/return profile to US bonds, with more potential opportunities to add value.... [This paper explains why] DC plans should globalize some or all of their fixed-income assets... [and] also why they should hedge non-US currency exposure, how to globalize core menus with least disruption to plan participants, and how much of an allocation to global bonds in core menus and target-date funds is appropriate." (Alliance Bernstein)

2013 EBRI Retirement Confidence Survey: A Secondary Analysis of the Findings from Respondents Age 50+
"More than half of workers age 50 and older have tried to estimate how much they will need for a comfortable retirement. Four in 10 have guessed the amount, and about a quarter have consulted a financial advisor.... Nearly three in four (73%) older adults are at least somewhat confident they will be able to pay for basic expenses during retirement, fewer (56%), however, are confident they will be able to live comfortably throughout their retirement years." (AARP)

Before It's Too Late: A Retirement Security Update
"With 10,000 baby boomers turning 65 every single day, Social Security is more important than ever. This year, 58 million people (nearly 1 in 5 Americans) will receive Social Security benefits. And for nearly two-thirds of beneficiaries 65 and older, their benefits will account for more than half of their income. Older women, because they live longer and earn less on average during their working lives, are particularly reliant on Social Security." (Phyllis C. Borzi, Assistant Secretary, Employee Benefits Security Administration)

Low Rates Push More Pension Funds to 'Real Assets'
"A number of pension funds have increased their real asset allocations or hired new real asset managers within the past 12 months.... Defined contribution plan executives who also oversee defined benefit plans ... are looking to add it to DC plans mainly through target-date funds ... J.P. Morgan Asset Management predicts institutional investors will bump up their allocations to real assets to about 25% as they search for income and inflation protection.... Cohen & Steers, Inc. would include global REITs, commodity futures, listed infrastructure, gold and currency such as Australian dollars." (Pensions & Investments)

A Paycheck's Impact on Retirement Income Benefits (Social Security, IRA, Qualified Plans and Annuities)
"You've retired, but now you have a chance to go back to work. Perhaps an intriguing opportunity has come your way, or you need to bolster your portfolio. Whatever the case, returning to the workplace can have an impact on the retirement income benefits you're currently receiving. Here's what you need to know before you 'unretire.'" (Kiplinger)

FASB Clarifies Characteristics of Investment Companies for Financial Reporting Purposes
"Accounting Standards Update No. 2013-08 ... takes effect for fiscal years beginning after Dec. 15, 2013. Earlier application is prohibited.... An investment company will be required to disclose: [1] The fact that it is an investment company and is applying specialized guidance; [2] Information about any changes in the company's status as an investment company; and [3] Information about financial support provided or contractually required to be provided by an investment company to any of its investees." (Journal of Accountancy)


Asset Classes in DC Plan: Should They be the Same as in a DB Plan?
"There are a myriad of reason why participants in DC plans, on average, do not get the returns on investments that DB plan sponsors do. Here are some: In theory, DB plans, have an infinitely long investment time horizon.... DC plan participants, even if they choose to invest in non-traditional strategies, do not usually have the knowledge or the tools to develop an investment portfolio that sits on an efficient frontier.... DB plans don't have leakage.... DB plans spread those asset pools over a group of participants." (Benefits and Compensation with John Lowell)


A Proposed Set of Professional Standards of Conduct for the Delivery of Personalized Investment Advice
"[T]he lobbyists of Wall Street firms and insurance companies, and the hired law firms of large BD firms and insurance companies, are now extensively arguing that, should fiduciary duties be applied to brokers, only 'disclosure' of a conflict of interest is required. To that [the author] would say ... nonsense.... The fiduciary duty of loyalty is not met simply by disclosure of a conflict of interest; much more is required." (Ron Rhoades)


401(k)s Are Not a Tax Dodge for the Rich
"The major beneficiaries of 401(k) are middle-class workers, business owners must continue to be incented to offer these plans in the workplace, and Uncle Sam is a major beneficiary of the tax-deferred treatment of 401(k) deposits.... [M]iddle-class workers can be marginal retirement savers. They need the structure (payroll deduction savings) and tax incentive (pretax deposits to lessen the take-home pay impact) to tip them over the edge into joining their employer's 401(k) plan. Without the structure and incentive, far fewer workers would engage in retirement saving." (Jim Phillips on MarketWatch.com)


Text of Testimony to ERISA Advisory Council on Successful Retirement Plan Communications for Various Population Segments (PDF)
"[To] effectively communicate, it is important to strip out as much complexity as possible, to create a clear next step and, more importantly, to offer a specific reason to take that step. The best way ... to accomplish this is to share an income replacement projection. Doing so reduces the complexities of retirement to a single number.... [Recipients of] regular income replacement projections ... are 19% more likely to achieve income replacement levels of 70% or more and they are nearly twice as likely to have diversified asset allocations." (Don Hess of J.P. Morgan, on behalf of the American Benefits Council)


A Guide to the 2013 Social Security Trustees Report
"Social Security faces a large and increasingly immediate financing shortfall necessitating prompt legislative corrections.... The shortfall facing Social Security as a whole arises primarily from demographic factors interacting with the program's benefit formula and financing method.... We are running out of time to fix Social Security's finances without abandoning its historical financing structure." (Social Security/Medicare Trustee Charles Blahous, via Committee on Ways and Means, U.S. House of Representatives)

Benefits in General; Executive Compensation

Need More Time Off from Work? Just Buy It
"[Nine] percent of employers allowed workers to cash out unused vacation time. Five percent let employees purchase additional vacation days through a payroll deduction. An additional 7 percent allowed employees to donate vacation time to a general pool that can be used by other workers.... The cost is usually one week's salary, prorated over the course of the year. Employees often have to decide whether to participate during an annual fall enrollment process and it becomes part of their benefits for the upcoming year." (Fox News)

2013 Say on Pay Voting Results as of June 7, 2013
"2,183 companies have held Say on Pay votes in 2013. 42 companies have failed with an average 59% 'Against' vote ... 72% of companies have received a greater than 90% 'For' vote." (Steven Hall & Partners)

ERISA Does Not Protect Top-Hat Plan Benefits from Garnishment
"[B]ecause top-hat plans are designated for HCEs, they are exempt from certain ERISA protections, including anti-alienation, Judge Catherine C. Blake reminds in her ruling on the plaintiff's claim. This finding especially applies to creditors not party to the anti-alienation protection agreement that may exist as a contract between plan sponsor and participant." [Sposato v. First Mariner Bank, No. 1:2012-cv-01569 (D. Md. Mar. 28, 2013)] (Thompson SmartHR Manager)

Press Releases

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David Rhett Baker, J.D., Editor and Publisher
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