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BenefitsLink Retirement Plans Newsletter

June 17, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Webcasts and Conferences

SunGard's Advanced Pension Conference
August 28, 2013 in IL
(SunGard Relius)

SunGard's Just for ERPAs Workshop
August 27, 2013 in IL
(SunGard Relius)

"Fundamentals of 401(k) and Other Qualified Plans" - a 3-day Seminar, Dallas
July 17, 2013 in TX
(SunGard Relius)

9th Annual Value-Based Benefits & Wellness Forum and Vendor Fair
December 5, 2013 in TX
(Dallas-Fort Worth Business Group on Health)

Getting It Right – Know Your Fiduciary Responsibilities
August 6, 2013 in VA
(Employee Benefits Security Administration (EBSA), U.S. Department of Labor)

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

View All Webcasts and Conferences


IRS Announces Compliance Check Program for Tax-Exempt Employers
"The IRS will use the data gathered from the questionnaire initiative to gain a better understanding of the 457(b) plans of tax-exempt employers and the plans' overall compliance with section 457(b) of the Internal Revenue Code[.] Specifically, through the compliance check program, the IRS seeks to learn more about the operation of 457(b) plans of nongovernmental employers, verify whether the plans comply with the requirements of the Code, identify noncompliance issues, and develop recommendations to remove barriers to compliance." (Morgan Lewis)


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Proposed Lifetime Income Illustrations May Radically Change Participant Behavior
"This transformation of values is really quite significant because it will change the perspective about what 401(k) and other DC plans are intended for and what they are able to do.... [T]hese may be unsettling numbers for many workers in DC plans because ... even seemingly large account values will actually produce modest lifetime income streams. This realization could very well lead participants and sponsors to increase their contributions to the retirement plan[.]" (Institutional Investor)

Detroit's 10-Cents-on-the-Dollar Meme
"There will be a legal battle over repayment of pension bonds that bond insurers, who insured that debt, will undoubtedly wage. [Detroit's emergency manager, Kevyn Orr,] must rush into bankruptcy court fast to escape litigation that would force repayment for those bonds.... The biggest piece of puffery in Orr's plan is the sudden ballooning of unfunded pension fund liabilities.... Orr is going to have to show math that demonstrates the pension funds are so massively underfunded that retiree pensions must be so dramatically haircut." (Reuters)

REIT Game 'In the Late Innings'
"Real estate investment trusts, once the darlings of income-starved investors, have lost enough momentum over the past few weeks to justify a fresh look at any commitment to the asset class. Even staunch REIT bulls usually acknowledge that equity REITs, as a broad category, are at least fully valued. The less bullish, meanwhile, are saying that the strategic REIT play relative to stocks is over and the only play at this point is tactical." (Investment News; free registration required)

Social Security: Call It 'Married With Benefits'
"For married couples planning their retirement, the quintessential question is this: 'Who will die first?' That mortality forecast can turn out to be a do-or-die financial issue for the surviving spouse, who could end up living a much longer life with less income, or worse yet, run out of money." (The Wall Street Journal; subscription may be required)

What's Stopping ETF Growth in 401(k)s?
"Though ETFs continue to grow at astounding rates and penetrate the market, their failure to gain traction in 401(k) plans is the prime example of a future opportunity to accelerate growth even further ... If ETFs are ever going to reach the asset levels of mutual funds, cracking this market will be essential. One roadblock is technological, the report said, though progress is being made." (PLANSPONSOR.com)

SEC Charges Revlon with Misleading Shareholders in Going Private Transaction
In its press release, the SEC alleges: "The trustee administering Revlon's 401(k) plan decided that 401(k) members could tender their shares only if a third-party financial adviser made an 'adequate consideration determination,' which involved assessing whether the value of the preferred stock 401(k) members would receive was at least equal to the fair market value of the exchanged common stock shares.... The SEC's order finds that Revlon did not want to disclose the third-party financial adviser's view on the adequacy of the transaction's consideration.... The SEC's order finds that Revlon's ring-fencing conduct resulted in various materially misleading disclosures to its shareholders." (U.S. Securities and Exchange Commission)

Retirement Reality Check: Which Rules Still Matter?
"Myth 1: Stick to a firm 4% withdrawal rule.... Myth 2: End-of-life costs are too uncertain to plan around.... Myth 3: Roths don't make sense for wealthy clients.... Myth 4: Wait as long as possible to claim Social Security.... Myth 5: During a decumulation period, withdraw first from taxable accounts, then tax-deferred, then Roths.... Myth 6: When retirement rolls around, clients who've saved regularly will be all set." (Financial Planning)

Chrysler Revamps Pension Plan for Salaried Workers
"Chrysler Group LLC will freeze its U.S. pension plan for about 8,000 salaried workers, transferring those employees to a defined contribution plan starting in 2014 ... The move affects only current salaried workers, not those who have already retired or who are hourly employees. Chrysler hasn't offered pensions to new white-collar hires for about a decade.... The company also lowered the age in which retirement-eligible workers can start collecting pension benefits to 58 years from 62, as long as they retire on or after Jan. 1, 2014." (The Wall Street Journal; subscription may be required)

The Gender Factor: How to Engage and Motivate Women in Retirement Plans (PDF)
"When saving for retirement, hope and fear influence women more than men.... Some women take charge of retirement planning, but many avoid it.... Very few women are fully engaged, possibly because they rely on their partners... [S]pecific actions you can take: Engage with a multifaceted approach for a dynamic segment.... Offer in-person guidance, particularly one-on-one if possible.... Deliver outcomes-focused communication and de-emphasize process-focused communication.... Provide straightforward choices." (Lincoln Financial Group)

News About 401(k) Fees Decreases Benefit All Investors But More Is Needed
"Based on new data ... small plan costs fell from 1.47% to 1.46% in 2012, while large plan costs fell from 1.08% to 1.03%. Expenses for small plans were between 0.38% and 1.97%, while large plan expenses ranged from 0.28% to 1.41%.... In most cases, the difference in changing from a more expensive to a lower-cost fund fee will more than compensate for a decrease in any fund investment returns over time ... because the difference between market return and a fund's individual return is directly attributable to a fund's costs." (MutualFundReform.com)


Critical Legislation to Help Protect Financial Advice Signed Into Law by Florida Governor
"[This law] affects every financial services firm with affiliated financial advisors in Florida, regardless of where the firm is headquartered. The law makes Florida a 'notice-filing state' for branch office applications. Florida becoming a notice-filing state is critical for our industry and investors because financial advisors have been forced to close down for extended periods of time, losing revenue and denying clients access to their advice, due to their applications not being approved in a timely manner." (Financial Services Institute)


California's Misleading Pension 'Losses'
"The reason for rising pension costs has nothing to do with the recession or short-term declines on Wall Street. Public pension costs are increasing simply because liabilities are growing faster than assets.... To meet the rate at which pension liabilities were growing in 1999, CalPERS needed the Dow to reach 30,000 by now. Because it is half that level, California has spent $20 billion more on public pensions than would have been the case had pension assets grown at the hurdle rate." (Bloomberg)


Economics Prof. Robert Fogel Saw What's Wrong with Our Retirement System
"Fogel had no use for the retrenchment mentality. His work emphasized that increased longevity isn't a burden; it's an opportunity. America is an immensely wealthy country with more than ample resources and economic dynamism to provide for a secure retirement for everyone." (StarTribune)


Testimony before the ERISA Advisory Council: The Problem of Lost Pensions
"The size of the problem of lost pension benefits is unknown but probably very significant. In a 2004 paper, [the author] estimated that the problem could be as large as $100 billion in unclaimed retirement money. Thus, developing an efficient system that connects retirees to their money would be very beneficial to current and future retirees.... The problem of lost pensions could be relieved substantially if there were a central agency where participants or their advocates could go for information and, ideally, payment of benefits from terminated defined contribution plans." (Pension Action Center, University of Massachusetts Boston)

Benefits in General; Executive Compensation

[Official Guidance]

EBSA Requesting Nominations to ERISA Advisory Council (PDF)
"Council members shall be persons qualified to appraise the programs instituted under ERISA. Appointments are for terms of three years.... The Council will meet at least four times each year. The terms of five members of the Council expire this year. The groups or fields they represent are as follows: (1) employee organizations; (2) employers; (3) insurance; (4) accounting; and (5) the general public.... [A]ny person or organization desiring to nominate one or more individuals for appointment to the Advisory Council on Employee Welfare and Pension Benefit Plans to represent any of the groups or fields specified ... may submit nominations ... [which must be] received on or before August 8, 2013." (Employee Benefits Security Administration)

SHRM 2013 Employee Benefits Survey: An Overview of Employee Benefits Offerings in the U.S. (PDF)
88 pages. Excerpt: "Over the last five years, there has been an increase in the number of organizations providing wellness-related initiatives that offer incentives to employees.... Employer-sponsored retirement plans continue to shift toward defined contribution retirement savings plans and Roth 401(k) savings plans. There was also an increase in the number of organizations offering one-on-one investment advice and specific retirement-preparation advice.... Paid time off plans, which combine traditional vacation time, sick leave and personal days into one comprehensive plan, continue to gain in popularity. At the same time, the following benefits have become less prevalent: floating holidays, paid personal days, paid vacation leave donation programs and paid sick leave donation program." (Society for Human Resource Management)

Executive Does the Right Thing -- and Loses Everything
"[T]he acquirer threatened to withdraw its offer to purchase Capital Bank unless Yarber and other bank executives signed amendments to their employment agreements relinquishing their right to the change in control severance payments.... The acquirer closed the deal to purchase Capital Bank. It then removed Yarber from his position as president and chief executive officer, and terminated his employment ten days after the term of his contract expired. Yarber received no change in control severance payments.... Yarber sued ... Unfortunately for Mr. Yarber, the court saw this as an open and shut case." (Winston & Strawn LLP)

CFO Pay Rises But Subjective Bonuses Rankle Finance Chiefs
"Since 2006, median CFO pay has risen 18.75%, compared with an 11.1% rise in median pay for CEOs, presidents, and COOs ... CFO pay has not experienced the ups and downs of CEO pay. Instead, finance chiefs' pay has increased slightly each year ... The proportion of subjective CFO bonuses in private companies has decreased over the years, but that proportion remains relatively high compared with other countries[.]" (Journal of Accountancy)

Press Releases

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