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July 5, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Senior Benefit Advisor
for ThinkHR Corporation in CA

Retirement Services Manager
for District of Columbia Retirement Board in DC

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Webcasts and Conferences

Voluntary Fiduciary Correction Program Workshop -- Free
August 21, 2013 in MO
(Employee Benefits Security Administration (EBSA), U.S. Department of Labor)

Recent DOL Enforcement Initiatives & ERISA Supreme Court Update
August 11, 2013 in CA
(ABA Joint Committee on Employee Benefits)

How Does the DOMA Decision Affect My Employee Benefit Plans? -- Webcast
July 10, 2013 WEBCAST
(International Foundation of Employee Benefit Plans)

Employee Benefit Plans - 2013 Plan Sponsor Update -- Webcast
July 11, 2013 WEBCAST
(PricewaterhouseCoopers LLP)

Turbo Charge Your EAP Program: Addressing Hardship Through Effective Collaboration
July 31, 2013 WEBCAST

View All Webcasts and Conferences


[Guidance Overview]

DB Plan Notices and Disclosures: Sending the Right Message (PDF)
"Certain notices ... are not subject to the civil and criminal ERISA penalties but may be subject to IRS monetary sanctions. If the failure is caught during regular review by the administrator, plan sponsors may be able to self-correct the issue without any financial penalties. In certain circumstances, however, failures require a Voluntary Correct Program (VCP) filing that can cost an initial fee of up to $25,000, with additional financial costs to correct any mistakes made.... [If] the issues are caught during an IRS or DOL audit, failure to provide required documents to participants may result in ... plan disqualification with all of its costly consequences[.]" (Milliman)


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Few Get Paid Advice, and Even Fewer Take It (PDF)
"Just 23 percent of workers (and 28 percent of retirees) report they have obtained investment advice regarding their household financial situation from a professional financial advisor who was paid through fees or commissions ... Of these workers, only a quarter (27 percent) followed all of the advice, but more disregarded some of it and followed most (41 percent) or some (27 percent) of it. Retirees were more likely to report following all of the advice (46 percent)." (EBRI)

Investment Outsourcing Nears $1 Trillion
"Nearly $1 trillion is managed for institutional investors worldwide in investment outsourcing, an industry that barely existed five years ago. In aggregate, $955 billion was managed on a partial or fully discretionary basis as of March 31.... That's up 59% from two years ago, the first time P&I conducted the survey." (Pensions & Investments)

Plan Sponsor's Notice of Change in Retirement Plan Structure Was Not Defective and Did Not Justify Equitable Relief (PDF)
"Even if they can't show Solvay's omission was intentional, the employees argue they can show the company engaged in 'egregious' misconduct because it knew of the defect in its 204(h) notice long ago and failed to correct it promptly.... The district court found that Solvay didn't discover its failure until after this litigation began. And nothing suggests that finding was clearly erroneous.... [T]he employees might be entitled to other equitable remedies the district court's findings do not otherwise foreclose. But we just don't know whether that's the case.... The employees may secretly harbor a wish for some form of equitable relief not foreclosed by the district court's findings, but they have yet to identify it to anyone else after six-and-a-half years of litigation and to know that much is to know it is time to call this matter to a close." [Jensen, Goff, et al v. Solvay, No. 11-8092 (10th Cir. July 2, 2013)] (U.S. Court of Appeals for the Tenth Circuit)

Teamsters Pension Plan Funding Status Continues Slide to 53.9%
"Teamsters, Central States, Southeast and Southwest Areas Pension Plan's funding has deteriorated to 53.9%, keeping it in 'critical status,' according to its annual funding notice that covers the period through Dec. 31.... The pension fund's assets totaled $18.8 billion and liabilities, $34.9 billion, based on actuarial values as of Jan. 1, 2012, the latest plan measurement date. Plan assets fell from $21 billion in 2011 and $22.7 billion in 2010." (Pensions & Investments)

Public Pension Plan Executives Slam Fee Study
"'The study used incorrect numbers that essentially double-counted the North Carolina pension fund's management fees, skewing them by $218 million,' said spokesman Schorr Johnson ... Michael Golden, spokesman for the $40.6 billion Maryland State Retirement and Pension System, Baltimore, said that in addition to 'egregious errors' in a similar report a year ago that have not been corrected, this year's median of fees paid was skewed by underreporting in other state systems." (Pensions & Investments)

Ontario Releases Draft Asset Transfer Regulations
"The stated aim of the draft regulations is to 'facilitate the restructuring of pension plans affected by corporate reorganizations, while protecting benefit security for plan members and pensioners,' to allow for more efficient and timely transactions and to simplify the regulatory approval process." (Osler, Hoskin & Harcourt LLP)

Retirement Choices in Italy: What an Option Value Model Tells Us
"Using Italian data, we estimate an option value model to quantify the effect of financial incentives on retirement choices.... Dynamic self-selection results in a downward bias in the estimate of the marginal utility of leisure. We perform a simulation study to gauge the effects of a dramatic pension reform. Underestimation of the value of leisure translates into sizeable over-prediction of the impact of reform." (Michele Belloni and Rob J.M. Alessie via SSRN)

Premium Spreading Boosts U.K. Pensions Buy-Out Market
"Willingness by insurers to accept a spreading of the premium when purchasing bulk pensions insurance is bringing the process into reach of more plans and companies years earlier than they might expect, says Mercer. The comment comes on the back of an announcement on 4 July 2013 by Legal & General that it had completed a bulk pension insurance transaction on this basis with the trustee of Kenwood Pension Scheme. The deal covered 100% of insured benefits from the outset but with a sizeable part of the premium being paid in installments during the following few years." (Mercer)

Speculation That Quantitative Easing May End Proves to Be Good News for U.K. Pension Scheme Deficits
"[T]he estimated aggregate IAS19 deficit for the defined benefit schemes of the FTSE350 companies stood at 82bn GBP (equivalent to a funding ratio of 87%) at 30 June 2013. This compares to a deficit figure of 98bn GBP at the end of May 2013 (funding ratio of 85%)." (Mercer)


Testimony to ERISA Advisory Council on Locating Missing Plan Participants
The target page (you'll need to scroll down to locate the particular content) includes the testimony of Allison Klausner, Honeywell, for the American Benefits Council; Richard McHugh, Porter Wright, for the Plan Sponsor Council of America (PSCA); J. Spencer Williams, Retirement Clearinghouse; Ellen Bruce, University of Massachusetts Boston; and Jane Smith, Pension Rights Center. (Employee Benefits Security Administration, U.S. Department of Labor)


Testimony to ERISA Advisory Council on Private Sector Pension De-risking and Participant Protections
The target page (you'll need to scroll down to locate the particular content) includes the testimony of Robert Newman, Covington & Burling LLP; Steve Keating, Penbridge Advisors; Evan Inglis, Vanguard; Craig Rosenthal, Mercer, for the American Benefits Council; John Ferreira, Morgan Lewis; Jack Cohen, Association of BellTel Retirees; and Ilana Boivie, Communications Workers of America. (Employee Benefits Security Administration, U.S. Department of Labor)


Testimony to ERISA Advisory Council on Successful Retirement Plan Communications for Various Population Segments
The target page (you'll need to scroll down to locate the particular content) includes the testimony of Donn Hess, JP Morgan, for the American Benefits Council; Linda Jacobsen and Donna MacFarland, Lincoln Financial; Jennifer Benz, Benz Communications; Lori Lucas, Callan Associates; Beth Boden, Aon Hewitt; and Morgan Gold, Catherine McCabe, and David Richardson, TIAA-CREF. (Employee Benefits Security Administration, U.S. Department of Labor)


Comments of American Bankers Association to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
"We continue to support efforts to mitigate investor confusion regarding the standard of care a financial intermediary exercises when providing personalized investment advice to its retail clients. However, such efforts should not reduce investor choice or access to the investor education that helps them better understand concepts and options available to them when they make important financial decisions.... [We] strongly believe that the term 'fiduciary' may be a misleading or confusing term for investors as well as the courts if incorporated into the Commission's regulatory provisions." (American Bankers Association (ABA) and ABA Securities Association (ABASA))


Comments of The Institute for the Fiduciary Standard to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
"The implications of what investors 'do not know,' their acute unawareness of or incapacity regarding their professional agreements, speak clearly and loudly to the need for stringent fiduciary duties; duties consistent with the risks these shortcomings present." (The Institute for the Fiduciary Standard)


Comments by NAPA to SEC on Duties of Brokers, Dealers and Investment Advisors (PDF)
"The Commission should not implement the Staff's recommended 'uniform fiduciary standard' for broker-dealers and investment advisers because such a standard would effectively result in a non-uniform 'uniform fiduciary standard' leading to significantly increased confusion for retail customers when selecting an Investment Professional.... The Commission should instead require Investment Professionals to provide retail customers with clear and concise pre-engagement disclosures designed to assist retail customers in the selection of Investment Professionals.... The Commission should take the lead to ensure that consistent disclosures are provided by Investment Professionals to protect retail customers' access to investment advice, regardless of the method by which their investment accounts are taxed." (National Association of Plan Advisors (NAPA))


Comments by TIAA-CREF to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
"TC Services continues to support a uniform standard of conduct for broker-dealers and investment advisers when providing personalized advice about securities to retail customers.... [We] believe a uniform standard will benefit investors. We agree the distinctions between the suitability standard to which broker-dealers are subject and the fiduciary standard to which investment advisers are subject are not consistently appreciated and understood by investors. At the same time, we believe it is of paramount importance that the Commission establish a common understanding of the framework for such a uniform standard. We support a uniform standard which imposes a duty to act in the best interests of the customer through a duty of loyalty and a duty of care when providing advice about securities, but which also recognizes the value of episodic advice and the nature of such relationships." (TIAA-CREF Individual & Institutional Services, LLC)


Comments by CFA Institute to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
"On a number of prior occasions, CFA Institute has expressed concerns about the different standards of care currently required of broker-dealers and investment advisers, when they provide the same services to clients. We remain committed to a position that those who provide personalized investment advice to retail investors should be held to a single fiduciary duty standard, regardless of the title of the service provider. That standard should be consistent with, and no less than, the current fiduciary standard that requires investor interests to put first." (CFA Institute)


U.S. Infrastructure and Pension Fund Investment
"[I]nfrastructure investing by pension funds seems like a good idea. There is both a demand for long-term capital and a supply in the form of interested money in search of returns over time. Like any investment and/or strategy however, one needs to weigh risks against expected returns. Currency risk and project completion risk are two considerations. Being able to obtain and properly interpret adequate performance reports is another concern." (Pension Risk Matters)

Benefits in General; Executive Compensation

[Guidance Overview]

Benefit Issues in Puerto Rico: Impact of the ACA, ERISA and the PBGC
"The most controversial parts of the ACA do not apply in Puerto Rico. These are the so-called 'pay-or-play' employer mandate and individual minimum essential coverage mandate.... The status of PBGC coverage for Puerto Rico defined benefit plans is one that has been the subject of review and analysis by the PBGC for quite some time.... PBGC may now consider the affirmative election to be a prerequisite before a Puerto Rico based plan is subject to Title IV of ERISA." (Proskauer's ERISA Practice Center)

[Guidance Overview]

What Federal Recognition of Same-Sex Marriage Means for Employee Benefits
"Many plans were drafted to specifically incorporate the DOMA definition of spouse to avoid any confusion regarding the treatment of same-sex spouses under the terms of the plan. Therefore, plan documents will need to be reviewed to determine if the DOMA definition of spouse is reflected. If it is, an amendment to the plan may be required. With respect to qualified retirement plans, any required amendment generally will need to be adopted by the last day of the current plan year, unless the IRS provides for a delayed amendment due date." (Bond, Schoeneck & King, PLLC)

Impact of the Supreme Court's DOMA Decision on Employee Benefit Plans
"The Supreme Court did not disturb the provisions of DOMA that allow states to refuse to recognize same-gender marriages performed under the laws of other states.... This will present particular challenges to employee benefit plans maintained by multistate employers.... The Supreme Court's decision has left us with many questions, some of which can be answered by the regulators, others of which will be sorted out, if at all, by the courts. Set out [in this article] are some of the most pressing questions for employer-sponsored employee benefit plans:" (Mintz Levin)

DOL Semiannual Regulatory Agenda, Spring 2013
Lists upcoming regulatory projects for DOL, including EBSA. (U.S. Department of Labor)


Retirees' Medical Bills Are Bringing Down Detroit
"Pension and retiree-health-care obligations make up the bulk of the city's unsecured debt, and their costs are rising rapidly. The emergency manager, Kevyn Orr, is right that Detroit must reduce its retirement-related debt to secure its future, but he has to be more specific about his target. Cutting retiree health care ... should take priority over pensions." (Bloomberg)

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