SEC Requests Comments About the Floating NAV Proposal
"To help focus its proposal, the SEC has a number of questions it would like answered -- particularly about the proposed floating net asset value (NAV), which would allow MMF shares to fluctuate on prime institutional funds." [Article provides a list of the 32 questions on which SEC has requested comments, with a link for submission of comments.]
(Association for Financial Professionals)
|
Up Close: SEC's Proposed Rule Changes to the Floating NAV
"[The SEC recently] released its long-awaited proposed rule changes for money-market funds (MMFs). In the 700+ pages, the SEC attempts to anticipate every conceivable question about how a change of this magnitude would impact MMFs.... In addition to an extensive economic study and analysis, the SEC proposed two major changes to the rules governing funds that would: [1] Allow the value of MMF shares to fluctuate, and [2] Limit redemptions or charge fees for full redemptions of MMF holdings."
(Association for Financial Professionals)
|
Next Stop: IRS Compliance Checks of Non-Governmental 457(b) Deferred Compensation Plans
"Specific issues of focus include: (a) verifying the deferrals reported as 457(b) relate to an actual 457(b) plan; (b) verify that the employer is eligible to sponsor a 457(b) plan; (c) confirming that participation is limited to a select group of highly compensated employees, managers, directors or officers ...; (d) determining whether the plan includes features not permitted in Top Hat Plans sponsored by tax-exempts, but that are permitted for governmental 457(b) plans, including loans, age 50 catch-ups and Code Section 457(g) trusts; and (e) reviewing unforeseeable emergency distributions.... [I]dentified plans which are out-of-compliance will be subject to audit or in some cases, referral to the Voluntary Correction Programs."
(Leonard, Street and Deinard)
|
Public Pension Costs Swamp Revenues of 10 U.S. States
"Ten U.S. states have public pension liabilities that are at least as big as their annual revenues, according to a Moody's Investors Service report ... that found the Illinois pension bill was equal to 241 percent of its revenues. The rating agency took a new approach to determining the health of public retirement systems by weighing each plan's net pension liability ... against state revenue."
(Reuters)
|
Understanding the New Public Pension Funding Guidelines and Calculations (PDF)
"State and local governments soon will need to distinguish several separate pension calculations that will be derived in different manners for distinct purposes: [1] Books -- computing an annual position regarding pensions for financial statements; [2] Bonds -- calculating how pension obligations affect a government's creditworthiness; [3] Budgets -- determining the appropriate annual contribution to the retirement system for sound funding."
(National Association of State Retirement Administrators)
|
Pension Funding: A Guide for Elected Officials (PDF)
"This guide provides key facts about public pension plans, why it is essential to have a pension funding policy, a brief overview of the new GASB standards, and which issues state and local officials need to address. The guide also offers guidance for policy makers to use when developing their pension plan's funding policy." (National Governors Association; NASRA
(National Association of State Retirement Administrators); nine other associations)
|
The Funding of State and Local Pensions: 2012-2016
"During 2012, using current GASB standards, the funded status of public plans declined slightly from 75 percent to 73 percent. Going forward, the funded ratio is projected to gradually move above 80 percent, assuming a healthy stock market. The Annual Required Contribution (ARC) increased significantly over the last three years due to higher unfunded liabilities related to the financial crisis. In 2012, employers contributed 80 percent of the ARC owed."
(Center for State & Local Government Excellence)
|
Unlocking the Secrets to Retirement Readiness (PDF)
"Retirement confidence is on the rise in 2013 amidst signs of economic recovery. Fifty-five percent of workers are 'somewhat' or 'very confident' about retirement, representing an increase from 51 percent reported in 2012. This is still, however, four points below the 2007 level of 59 percent.... [M]ost workers (57 percent) now plan on working past age 65 and most also plan to continue working (54 percent), at least part-time, in retirement. Most plan to continue working for financial reasons or healthcare benefits (66 percent), yet three in 10 plan to do so for enjoyment."
(Transamerica Center for Retirement Studies)
|
Protecting Retirees in Shaky Pension Plans
"When pension programs are changed, it's almost unheard of to cut benefits for retirees in their seventies, eighties or beyond, who would have trouble adjusting to abrupt reductions in income. The principle is a cornerstone of [ERISA] ... But all that could change soon. Congress is expected to consider changes to ERISA later this summer that could open the door to benefit cuts for current retirees for the first time in recent memory."
(Reuters)
|
Retirement Planning Experience Is Key Differentiator for Advisors
"More than half of the 2,002 adults polled (51%) indicated that they would switch financial advisors or begin working with one for the first time if an advisor developed a written retirement income plan for them. This was particularly true among people in their prime asset accumulation years, specifically those between the ages of 35-44 (65%) and 25-34 (62%). When selecting an advisor, experience mattered most to investors, according to the findings. More than half of the respondents (58%) cited experience with retirement planning as the leading factor in choosing an advisor."
(Financial Planning)
|
Text of CBO Working Paper: Optimal Annuitization with Stochastic Mortality Probabilities
"[T]he value of an annuity declines when an individual experiences an adverse health shock that lowers her life expectancy. Because of that valuation risk, risk-averse individuals will not want to fully annuitize their investments when they face higher costs or lower income in bad health. We find that most households should not annuitize any wealth. The optimal level of aggregate net annuity holdings is likely even negative." [Working Paper No. 2013-05]
(Congressional Budget Office)
|
[Opinion]
A Deed Well Done: Pensions Protected at Hospital in New Jersey
"Karen Ferguson, the [Pension Rights Center's] president and a Harvard-trained lawyer, contended that once a plan is an ERISA plan it cannot thereafter become a church plan. A few weeks ago, 10 years after the original opinion, the IRS rescinded its decision and the PBGC accepted the plan back under its protection. The reversal came just in time, because the plan was about to have run out of money and would have been unable to pay benefits to more than 800 participants."
(Alicia H. Munnell on MarketWatch.com)
|
[Opinion]
Should Illinois Switch State Workers Into 401(k) Retirement Plans?
"If we've learned anything in the past 40 years, it's this: Pensions bankrupt companies. Pensions bankrupt cities. And if we're not careful, they'll bankrupt the state of Illinois. Since a majority of the problem wasn't caused by skipped state payments, simply dumping more taxpayer money into the system won't fix it. Here's a new deal that's fair for everyone: Pension benefits earned to date are paid on schedule. Starting tomorrow, government workers control their own destiny in a self-managed plan."
(Chicago Tribune)
|
[Opinion]
Why Defined Benefit Retirement Plans Have No Place in the Local or State Public Sector
"In America, through a mix of incentives and regulations, we rely on employers to provide benefits that European governments provide through taxing and spending. But we shouldn't expect government employers to bear more of a burden than private sector firms for workers' healthcare and retirement.... Guaranteeing a secure retirement should be the responsibility of the Federal government (Social Security and Medicare), retirees and their families, not state and local governments."
(Public Sector Inc.)
|
|
Benefits in General; Executive Compensation
|
[Guidance Overview]
Supreme Court Rules on Same-Sex Marriage: The Practical Effects on Employee Benefit Plans
"The Court's DOMA ruling may require extensive revision to, among other things, retirement plan documents, health plan documents, COBRA and FMLA policies, and an employer's income tax withholding and employment tax payroll practices. [A chart at the linked article] provides a high level overview of issues involving qualified retirement and health and welfare plans that plan sponsors will need to consider. [A summary at the link] provides a more in-depth review of the issues."
(Groom Law Group)
|
[Guidance Overview]
Supreme Court Same-Sex Marriage Decisions Create New Rules for Employee Benefit Plans (Part 1: ERISA Plans)
"The most difficult situations for employers are those in which there is a conflict of laws. For example, suppose that the employer is located and has all of its operations in Virginia, which has a Constitutional prohibition on recognizing same-sex marriage. We can imagine several situations that might prove complex. In one, an employee who has always been domiciled in Virginia has traveled to Maryland to get married. In a second, an employee who has always been domiciled in Maryland travels to work in Virginia each day. And in a third, an employee who once lived in Maryland and was married there moves to Virginia.... Given the uncertainty in these areas, what can an employer do? ... [In] most instances, it is probably safest for the employer to treat couples as married if the situation is unclear."
(Calhoun Law Group)
|
|
|
[Guidance Overview]
Supreme Court Strikes Down DOMA: Eleven Benefit-Related Issues to Review
"[This article includes] a list of certain significant issues that plan sponsors and benefits professionals should review in connection with the Supreme Court decision.... Many questions remain unanswered, and ... new issues will become apparent ... Must a same-sex marriage in a state or district permitting such marriage be recognized in a state that does not otherwise permit same-sex marriage?... What is the effect on a company's plans if it has employees in several jurisdictions, only some of which recognize same-sex marriages?... Should plans be administered prospectively from the date of the decision, or must there be retroactive application?"
(Epstein Becker Green)
|
[Guidance Overview]
Employer Benefits Obligations Post-DOMA
"For a legally married couple who live in a state where same-sex marriage is recognized: ... Employers with self-insured welfare plans ... may not have to extend spousal-benefit coverage to same-sex spouses ... Businesses will have to offer COBRA continuation coverage to same-sex spouses. Employers with pension plans will be required to recognize same-sex spouses for purposes of determining surviving-spouse annuities.... Organizations with 401(k) plans will have to recognize same-sex spouses for purposes of determining death benefits, and same-sex spouses must consent to beneficiary designations. Employees must be permitted to take family and medical leave to care for an ill same-sex spouse."
(Society for Human Resource Management)
|
[Guidance Overview]
Allowable Compensation Limitations on Federal Contractors: Not Just for Top Senior Executives Anymore
"Prior to [these Federal Acquisition Regulatory Council (FAR)] changes, only the compensation of a contractor's five most highly compensated senior executives at a home office or segment was subject to the compensation reimbursement limitations established by the Office of Federal Procurement Policy (OFPP). [These] FAR changes, however, apply the OFPP's compensation limitations to all contractor employees. This means, under FAR 31.205-6(p) as amended, compensation for any employee, including scientists, engineers and other technical or non-management personnel, that exceeds the OFPP compensation limitations is unallowable."
(McKenna Long & Aldridge LLP)
|
The Verdict on DOMA and Proposition 8: Impact on Employee Benefit Plans
"The rulings ... do not require all employer-sponsored benefit plans to provide benefits for same-sex spouses. All they require is that the federal government treat same-sex couples who are legally married under applicable state law the same as opposite-sex married couples for all purposes under federal law.... [The] rulings should have little impact on the design of fully insured health plans, which remain subject to state insurance law mandates. The impact on self-funded plans remains to be seen[.]"
(Verrill Dana LLP)
|
DOMA Ruling Boosts Key Social Security, Medicare Benefits
"The DOMA ruling also will open up valuable Medicare benefits to some married same-sex couples ... [M]arried spouses can enroll without paying a premium even if they don't have the requisite quarters of work history ... What's that worth? Seniors without adequate work credits can buy into the system by paying a Part A premium out of pocket. This year, the monthly Part A premium is $243 for beneficiaries with 30 to 39 quarters of work history, and $441 for those with less than 30 quarters in the system."
(Reuters)
|
Many Companies Will See Modest New Benefits-Related Costs Resulting from DOMA Ruling
"Almost all employers will have to absorb some administrative costs. For example, until now the value of health benefits for same-sex spouses of plan participants and their dependents was taxable. That will still be the case in states where same-sex marriages are unlawful. But employers will have to [retroactively adjust the tax treatment] in the jurisdictions where such marriages are allowed... On the plus side of that issue, ... employers may be able to file for [FICA] tax refunds."
(CFO.com)
|
Effective Date of Supreme Court Decisions Is Among Many Details to be Analyzed
"The result of today's decisions is full marriage equality (state sanctioned and federal recognition) for same-sex marriage in [13 states plus D.C.] ... [E]ffective dates for marriage equality in [these states] vary ... Moreover, the effective date of today's Supreme Court ruling and the details regarding how employers will be required to implement the requisite changes to pension and welfare plans have yet to be determined."
(Baker & McKenzie)
|
CEO Pay in 2012 Became Even Higher Relative to Typical Workers and Other High Earners
"Over the last three decades, CEO compensation grew far faster than that of other highly paid workers, those earning more than 99.9 percent of other wage earners. CEO compensation in 2010 was 4.70 times greater than that of the top 0.1 percent of wage earners, a ratio 1.62 higher (a wage gain roughly equivalent to that of 1.6 high wage earners) than the 3.08 ratio that prevailed over the 1947-1979 period. Also over the last three decades, CEO compensation increased further relative to other very high wage earners than the wages of college graduates grew relative to those of high school graduates."
(Economic Policy Institute)
|
|
Press Releases
|
|
|
|
|
|
|
|
|
|
|
