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June 28, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

401k Administrator
for Hunter Benefits Consulting Group, Inc. in CO, IL, WA

Manager SBSS
for Ascensus in IN

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Webcasts and Conferences

"Impact of Same Gender Marriage Rulings on Retirement Plans" Web Seminar
July 18, 2013 WEBCAST
(SunGard Relius)

Washington Update
November 13, 2013 in PA
(ASPPA Benefits Council of Greater Philadelphia)

"Impact of Same Gender Marriage Rulings on Retirement Plans" Web Seminar
July 23, 2013 WEBCAST
(SunGard Relius)

2013 Executive Compensation and Benefit Year End To Do List
November 21, 2013 WEBCAST
(Winston & Strawn)

View All Webcasts and Conferences


[Official Guidance]

DOL Extends Comment Period on Lifetime Income Illustration Proposal
"The [advance notice of proposed rulemaking] has generated substantial interest by stakeholders who wish to provide input into the development of proposed regulations.... To ensure that all interested persons have the opportunity to prepare and submit comments, EBSA is extending the comment period from the original July 8 deadline to August 7, 2013." (Employee Benefits Security Administration, U.S. Department of Labor)


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Work in some aspect of retirement plan administration? Want to specialize in the administration of 401(k) plans? The QKA credential is for you! Get your Qualified 401(k) Administrator (QKA) Credential and show that you're serious about your career!

[Official Guidance]

Text of GASB Guide to Implementation of Statement 67 on Financial Reporting for State and Local Government Pension Plans
[Click on the words "Full Text" link at bottom of the linked web page.] Issued June 27, 2013; 108 pages. Excerpt: "[T]he Implementation Guide answers key questions about putting the new standards into practice. Topics addressed in the Guide include: [1] The scope and applicability of GASB Statement No. 67, Financial Reporting for Pension Plans; [2] The classification of pensions as defined benefit or defined contribution; [3] The determination of the number of pension plans that should be reported; [4] The recognition of certain transactions and other events in defined benefit pension plan financial statements; [5] Note disclosures and required supplementary information; [6] The calculation of the net pension liability." (Governmental Accounting Standards Board)

401(k) or DB Plan: Which is Better for Retirement Readiness? (PDF)
"If historical rates of return are assumed, as well as annuity purchase prices reflecting average bond rates over the last 27 years, and real-life job tenure experience ... results show a strong advantage for voluntary-enrollment 401(k) plans over both the final-average defined benefit plans and cash balance plans ... However, when subjected to various 'stress tests' ... in many cases the voluntary-enrollment 401(k) plans lose their comparative advantage to the final- average defined benefit plans (at least at the median) for lower-paid employees, though voluntary-enrollment 401(k) plans' median advantages over the stylized cash balance plans remain in force." (EBRI)

Best Practices When Implementing Auto-Enrollment in DC Plans (PDF)
"78 percent of plan sponsors reported that the optimal savings rate for participants is 10 percent or more -- despite the fact that the typical default contribution rate used for automatic enrollment ... is just 3 percent of pay.... Given all of this research pointing to the importance of robust defaults under auto feature programs, why do plan sponsors implement automatic enrollment with such low default deferrals? [1] Desire to minimize opt-outs.... [2] Cost.... [3] Safe harbor effect." (Defined Contribution Institutional Investment Association (DCIIA))

FINRA Bails on Plan to Supervise Reps' Outside Businesses
"FINRA said it had 'decided that the best course is to eliminate the proposed supplementary material from the proposed rule.' FINRA warned, though, that its broad-based Rule 2010, requiring high commercial standards, and just and equitable principles of trade, still applies to the 'non-securities activities of members and their associated persons.' Other proposed supplementary material in the new proposal, which would have the full force of a rule, would require independent broker-dealers to tighten up on the supervision of far-flung offices." (Investment News; free registration required)

New York State's High Court to Hear Demand for More Information About Public Pension Recipients
"The [New York] state Court of Appeals [agreed to] hear an appeal of the Empire Center for New York State Policy's case against keeping public pension information private. The fiscally conservative think tank in Albany sought an opinion from the state's highest court after an appeals court in Albany ruled in February to keep private the details of teachers' pensions.... In recent years, most public pension systems in New York have refused to release details about pension recipients and how much they are receiving in retirement." (Rochester Democrat and Chronicle)

Morningstar Survey of Target-Date Series Assets, 2013 (PDF)
"Target-date series assets crossed the $500 billion mark in 2013's first quarter, marking strong growth in a maturing industry.... [A]nalysis of target-date glide paths showed most should deliver similar results that should sufficiently support retiree spending to age 85. Results begin to notably diverge beyond that age, however, with glide paths with less exposure to stocks carrying increased risk that retirees will outlive their savings. Glide paths that shift their asset allocation to retirement and those that continue to shift after retirement are likely to produce similar outcomes for investors up to age 85 ... Beyond that age, however, results diverge." (Morningstar Investment Management)

Board Resolutions: Back to Basics
"Board resolutions are needed: [1] To establish a plan. [2] To amend a plan. [3] To provide the allocation formula for a discretionary contribution such as in cross-tested plans using multiple groups. [4] To authorize a flexible safe harbor non-elective contribution for the plan year. [5] To remove a safe harbor provision from a plan. [6] To merge or consolidate plans or spin off to another plan. [7] To terminate a plan. Generally, the board resolution should be executed before the action occurs. Board ratification of something that has already occurred may be inadequate and may pose serious legal complications for a plan sponsor." (McKay Hochman)

Nebraska: Home of Corn, Kool-Aid, and the Best-Funded Public Pension Plan
"Nebraska has been named as the number one state in terms of its [having the lowest] pension deficit, according to the latest data released by Moody's Investor Services. The low level of pension benefits is helping to offset its history of underfunding, resulting in its pension liability only representing 6.8% of revenue, the lowest in the country.... [Moody's] found Illinois has the largest net pension liability in the country at $133 billion, equal to $10,340 per person in the state. The liability is equal to 19.8% of the state's gross domestic product. Moody's also found that 10 US states have public pension liabilities that are at least as big as their annual revenues." (aiCIO)

Benefits in General; Executive Compensation

[Official Guidance]

Text of FASB Proposed Accounting Standards Update for Insurance Contracts
"The guidance in this proposed Update would require an entity to measure its insurance contracts under one of two measurement models, referred to as the building block approach (for most life, annuity, and long-term health contracts) and the premium allocation approach (for most property, liability, and short-term health contracts). Under the guidance in this proposed Update, contracts accounted for using the building block approach generally would be measured in a way that portrays a current assessment of the insurance contract." (Financial Accounting Standards Board (FASB))

[Guidance Overview]

An In-Depth Look at the Final New York Regulations Limiting Executive Compensation Paid by State-Funded Service-Providers
"If a provider chooses to pay an executive more than $199,000 (i.e., using other funds), the provider must ensure that several conditions are met: [1] The executive's compensation can be no greater than the 75th percentile of compensation provided to comparable executives in comparable organizations. [2] The compensation must have been approved by the organization's governing body, which must include at least two independent directors. [3] These decisions are substantiated with contemporaneous documentation." (Towers Watson)

Supreme Court Strikes Down DOMA: What This Means in the Workplace (PDF)
"This briefing explains what employers in same-sex marriage states (like Massachusetts) should consider doing in the very near future, and touches cursorily on the dilemma employers face in non-recognizing jurisdictions. Federal guidance w ill provide modest lead time, but individual claims of earlier (even retroactive) rights are conceivable[.]" (Davis, Malm & D'Agostine P.C.)

Top Ten Considerations for Employee Benefit Plans After the Windsor Decision (PDF)
"Generally, spousal provisions in an employer's employee benefit plans ... should apply to same-sex spouses in the same manner as they are applied to opposite-sex spouses.... [In] the case of welfare plans and fringe benefits that define covered 'spouses' by reference to the law of a state that does not recognize same-sex spouses or such plans that do not clearly define the term 'spouse' ... plan administrators may still have the authority to interpret the term 'spouse' to exclude same-sex spouses. However, it is unclear whether such interpretation would enjoy Firestone deference, or might now be considered 'arbitrary and capricious' if challenged in litigation following the Windsor decision." (Sutherland)

What Does the DOMA Ruling Mean for Benefit Plans?
"In those states that do not recognize same-sex marriages, additional guidance on how federal law will coordinate with state marriage laws is needed.... The litigation risk, however, is greater if the employer uses the state of domicile rule and the state of marriage rule is ultimately determined to control. For example, same-sex spouses could claim they were improperly denied rights to medical coverage or survivor benefits in retirement plans. The risk in following the state of marriage rule, if the state of domicile rule is ultimately determined to control, is only that the employer would have reported income incorrectly on W-2s for health coverage or participants would have been wrongly required to get spousal consent to retirement distributions." (Warner Norcross & Judd LLP)

The Impact on ERISA Benefit Plans of the Supreme Court's DOMA Decision (PDF)
"What action should employers take now? [1] Review ERISA plan provisions to determine if updates are required.... [2] Coordinate implementation with ERISA plan service providers.... [3] Update payroll systems and plan administration processes and procedures.... [4] Continue to monitor legal developments[.]" (Wilkins Finston Law Group)

Trends and Developments in Executive Compensation, 2013 (PDF)
31 pages. Excerpt: "Three-quarters of responding companies performed a pay-for-performance analysis in the past year. Most companies looked at pay and performance over a 3-year period and used the grant-date value of [long-term incentives] in their definition of compensation.... No significant changes in year-over-year merit increases; the majority of companies increased budgets between 3.0% and 3.5%. 2013 annual incentive payouts (for 2012 performance) were slightly lower than 2012 payouts, although 61% reported payouts were at or above target." (Meridian Compensation Partners, LLC)

Press Releases

Registration Now Open for 2013 IHC FORUM West in Las Vegas
The Institute for HealthCare Consumerism

Premier H.R. Service Provider FONHR Partners with e-mobileHR
Davidson Marketing Group -- FutureOffice Network

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