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July 3, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Sr. Communications Consultant
for Lincoln Financial in ANY STATE

401k/Defined Contribution Administrator
for Long Island Employee Benefits Group in NY

Defined Benefit - Client Service Manager
for Milliman in TX

Defined Benefit - Client Service Analyst
for Milliman in TX

Retirement Services Consultant
for CUNA Mutual Group in WI

IRT Relationship Manager 3
for Wells Fargo in VA

Vice President, Strategic Relationships
for Prudential in CA

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Webcasts and Conferences

ERISA 3(38) Investment Management Agreement -- Webinar
July 11, 2013 WEBCAST

Think Like Your CFO: Bringing Healthcare Design into the C-Suite -- Free Webinar
July 18, 2013 WEBCAST
(Corporate Research Group)

APP and VFCP Compliance Online Workshops -- Free
July 25, 2013 WEBCAST
(Employee Benefits Security Administration (EBSA), U.S. Department of Labor)

Apprenticeship Plans and Fiduciary Responsibilities -- Archived Webcast
July 16, 2013 WEBCAST
(Employee Benefits Security Administration (EBSA), U.S. Department of Labor)

Fixing the Broken Plan: Tools to Get the Plan Back on Track -- Webcast
August 28, 2013 WEBCAST
(American Society of Pension Professionals & Actuaries (ASPPA))

DOMA and Prop 8 Implications for Employers -- Webinar
July 9, 2013 WEBCAST
(Faegre Baker Daniels LLP)

Supreme Court Round-Up
July 16, 2013 WEBCAST
(ABA Joint Committee on Employee Benefits)

Health Care Reform What Now?
August 10, 2013 in CA
(ABA Joint Committee on Employee Benefits)

What Impact Will Delaying the Employer Mandate Have? -- Webcast
July 11, 2013 WEBCAST
(Health Partners America )

View All Webcasts and Conferences


Place of Celebration vs. State of Residence
"Under Federal law, the treatment of such situations varies, depending on whether the Federal provisions look to the 'state of residence' to determine marital status, or the 'place of celebration' -- and currently, some Federal programs adopt one definition, while some utilize the other.... [F]inancial planners will need to be cognizant of which status applies to a client, which rules apply to a client, and stay alert as the definitions are anticipated to change in the coming months at Federal agencies and programs seek to refine their rules and regulations for determining marital status in light of the Supreme Court decision." (Wade D. Pfau, in Nerd's Eye View)


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) 328-2474Sales@DATAIR.comwww.DATAIR.com

Proposed Concepts for Measurement of Assets and Liabilities
"The GASB is proposing two approaches to measuring assets and liabilities -- initial amounts and remeasured amounts. Initial amounts are the transaction price or amount assigned when an asset is acquired or a liability is incurred, including subsequent modifications to that price or amount, such as through depreciation or impairment. Remeasured amounts are determined anew as of the date of each year's financial statements. The GASB also is proposing four measurement attributes, which are defined as the feature or characteristic of an asset or liability that is being measured[.]" (McGladrey)

Funding Levels of S&P 1500 Pension Plans Rise to Highest Point Since 2008
"Funding levels of pension plans sponsored by S&P 1500 companies continued a strong rebound in 2013, with the aggregate deficit decreasing by $47 billion during the month of June, resulting in a $222 billion deficit as June 30, 2013 ... The funded ratio ... increased from 86% to 88% during June, up 14% since the end of 2012 and reached their highest level since October 2008. The continued rise in interest rates ... drove down pension liabilities which are discounted using high quality corporate bond rates. Discount rates for a typical pension plan rose 33 to 42 basis points during June, after having already risen 46 basis points during May." (Mercer)

600 Long Island Rail Road Retirees to Lose Disability Pay in U.S. Inquiry
"[T]he United States Railroad Retirement Board, which over more than a decade granted disability benefits to hundreds of railroad retirees based on fraudulent medical evidence with little scrutiny, took the action on Thursday during a five-minute meeting at its headquarters in Chicago. The vote approved procedures under which the board will cut off the benefits, which, officials said, are costing the agency $2 million a month. Most of the retirees will continue to receive their railroad pensions, which are separate from the federal disability benefits." (The New York Times; subscription may be required)

Retirement Plan Administration Questions Remain After Supreme Court DOMA Ruling (PDF)
"How will conflicts between plan documents and state law be resolved? Consider, for example, an IRA document that requires that the law of the sponsoring financial organization's state be used when a dispute arises, and yet the IRA owner's state law definition of marriage is more expansive. Will plan administrators be required to (or be allowed to) seek proof of a legal marriage relationship for purposes of beneficiary designations, spousal consents, or availability of distribution options?" (Ascensus)

Generation W: (W)on't Be Able to Retire
"Advisors who recognize the looming crisis have begun working to get millennials to understand that if they don't start saving now, they're wasting the most crucial retirement-saving years they'll ever get. The hard part, of course, is getting them into the office in the first place, and so far, advisors admit they haven't done a great job of outreach. Some advisors say it's because the retirement of the baby boomers presents a more immediate concern." (On Wall Street)

Impact of Tussey v. ABB on Fiduciary Advisors
"If you operate as an investment advisor under the 1940 Act, you have virtually the same responsibilities as an ERISA fiduciary to many of your clients. If you ignore these legal developments, you might face costly consequences; ABB is now appealing a $36.9 million judgment against it. In considering the ramifications of the ruling, [this articles describes what] Savant Capital Management, is doing to act as a fiduciary in all cases." (Financial Planning)

Tax-Exempt Organizations May Be in Line for a 457(b) Compliance Check
"[The authors are] a bit surprised that the IRS intends to focus on [the limited participation rule] as it relates to a requirement found in ERISA (rather than in the tax law), is under Labor Department jurisdiction and pertains to an area of law where there are no clear guidelines to determine whether a given person would qualify as a 'top-hat' participant. This may be an indication that the IRS believes a significant number of tax-exempt employers are improperly utilizing 457(b) plans for rank and file employees, which is generally not allowed unless the sponsor is a church or governmental entity." (Towers Watson)

New Accounting Rules Would Show Public Pensions in Bad Shape
"U.S. state and local public pensions would have been a paltry 60 percent funded in 2012 if measured by new accounting rules ... That compares with the 73 percent aggregate funded level as actually reported for 2012 ... If many plans end up using that lower rate of return under the new rules and the stock market remains healthy, the overall funding rate of U.S. public pensions would be about 72 percent in 2016 ... If many plans don't end up using the lower rate, the aggregate funded ratio would be 83 percent under the new rules, compared with 81 percent under the current rules[.]" (Reuters)

Does the PBGC Insure DB Plans in Puerto Rico?
"The PBGC recently withdrew a long-standing advisory opinion that held that a Puerto Rico pension plan that did not meet U.S. qualification requirements (because its trust was located in Puerto Rico) was nevertheless covered by the PBGC's insurance program. The withdrawal has many wondering whether a change in policy is afoot." (Towers Watson)

Net Unrealized Appreciation: A New Strategy
"For clients who have large holdings of their employers' stock in 401(k) plans, an attractive option for advisors has been to use the special tax break for net unrealized appreciation.... But the big tax package signed into law at the beginning of the year made changes to both ordinary income tax and long-term capital gains rates. In addition, a new 3.8% health care surtax on net investment income took effect at the start of 2013." (Financial Planning)

What Does Tax Reform Mean for Tax-Qualified Retirement Plans?
"[T]he Joint Committee on Taxation recently issued a 558 report to the House Committee on Ways & Means on Present Law and Suggestions for Reform Submitted to the Tax Reform Working Groups. Notably, this report includes a dedicated section on pensions and retirement, with several pages of comments regarding various ways to expand or improve the effectiveness of the current tax expenditures for pension plans, and to largely support the existing tax expenditures for retirement savings." (Groom Law Group)

State Pension Funds Paying Higher Investment Fees Don't Get Better Performance
"The 10 states with the highest fees had a median rate of 0.61% of total assets, compared with 0.22% for the bottom 10 states. However, the states paying the highest fees had an annualized five-year return of just 1.34%, compared with 2.38% for the lowest fee-paying states." (Pensions & Investments)

New Survey Results Will Help SEC Understand Fiduciary Impacts
"46 percent of registered representatives and dual-registered reps indicated that if the SEC were to implement a uniform fiduciary standard, they would most likely shift their customer mix to higher-income clients. Respondents were able to select multiple strategies they would pursue, and 39 percent said they would increase prices, while 35 percent said they would offer a more limited range of products." (National Association of Insurance and Financial Advisors (NAIFA))

Cypen & Cypen Newsletter, June 27, 2013
Article titles include: May, 2013, Shows $95 Billion Dollar Improvement in Pension Funded Status; Why Employers Should Intervene To Secure Retirement Incomes for Employees; DOL Creates Online Retirement Toolkit; SEC Charges City of Harrisburg, Pa, for Fraudulent Public Statements; and Did SEC "Do Right" in Harrisburg Matter? (Cypen & Cypen)


Comments by NAIFA to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
19 pages. Excerpt: "As both licensed insurance producers and broker-dealer registered representatives, [National Association of Insurance and Financial Advisors (NAIFA)] members are currently subject to a comprehensive regulatory regime consisting of state insurance laws, state and federal securities laws, self-regulatory organization rules and the compliance policies and procedures of their broker-dealers... As a result of these multiple regulatory layers, NAIFA members are among the most comprehensively regulated individuals in the financial services industry.... The imposition of a uniform fiduciary standard could result in registered representatives having to significantly increase the time and resources they devote to regulatory compliance, which would, in turn, lead to increased costs for the registered representatives and increased prices for their clients. The likely result would be a decrease in services and advice for less well-off clients, who are less able to afford higher prices for service and assistance." (National Association of Insurance and Financial Advisors (NAIFA))


Comments by ICI to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
14 pages; includes data and other information on the ownership of funds by retail customers in the United States. Excerpt: "[ICI believes] that the SEC should establish a fiduciary standard for broker-dealers that provide personalized advice or recommendations about securities to retail customers. When acting in this capacity, a broker-dealer is performing substantially the same function as an adviser, and the legal distinctions between the two types of financial professionals are often unclear and largely irrelevant to investors. And if the conduct is substantially the same, the same standard should apply." (Investment Company Institute)

Benefits in General; Executive Compensation

[Official Guidance]

Reminder: IRS to be Closed July 5 Due to Budget and Sequester; Filing and Payment Deadlines Unchanged
"[A]ll IRS operations will again be closed on July 5. This means that all IRS offices, including all toll-free hotlines, the Taxpayer Advocate Service and the agency's nearly 400 taxpayer assistance centers nationwide, will be closed.... Because none of the furlough days are considered federal holidays, the shutdown will have no impact on any tax-filing or tax-payment deadlines. The IRS will be unable to accept or acknowledge receipt of electronically-filed returns on any day the agency is shut down." (Internal Revenue Service)

Dealing with Overturn of DOMA: Immediate Steps
"[The authors] recommend the following steps: ... Determine if you have any employees or plan participants who are residents of the Same-Sex Marriage States.... This affects death benefits under qualified plans and certain rights under welfare plans, such as COBRA continuation coverage, HIPAA special enrollment rights and FMLA.... [If] income and employment taxes are being imputed on the value of health benefits provided to a same-sex spouse, such withholding should stop.... Determine whether you will wait to have employees come forward to inform you that they have a valid same-sex marriage or proactively send a communication to employees in the Same-Sex Marriage States to inform them of the effect of Windsor on their taxes and plan benefits.... Determine your company's position on offering equivalent spousal benefits to same-sex spouses." (Benefits Bryan Cave)


Why 'Say on Pay' Failed and Why That's a Good Thing
"From its very beginning, the 'say on pay' movement was an attempt to reduce executive pay. Instead, since becoming a requirement for all public companies in 2011, 'say on pay' has led to the routine endorsement of C-suite compensation. In fact, it may even be encouraging rising pay for top executives who can now point to direct shareholder approval of their pay packages." (CNBC)

Press Releases

PBGC to Assume Responsibility for Pension Benefits at Butzel Long
Pension Benefit Guaranty Corporation (PBGC)

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