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July 8, 2013          Get Health & Welfare News  |  Advertise
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Webcasts and Conferences

Building Trust in Employee Owned Companies
September 3, 2013 WEBCAST
(National Center for Employee Ownership)

ASPPA Cincinnati Pension Conference
November 18, 2013 in KY
(American Society of Pension Professionals & Actuaries (ASPPA))

Health and Welfare Benefit Plans 24th Annual National Institute
September 26, 2013 in VA
(ABA Joint Committee on Employee Benefits)

Understanding Roth Accounts and In-Plan Conversions in 401(k), 403(b), and Governmental 457(b) Plans -- Webinar
August 1, 2013 WEBCAST
(Lorman Education Services)

4th Annual Leadership Summit on Health Insurance Exchanges
July 15, 2013 in VA
(World Congress)

Innovative Drivers of Value Based Purchasing Seminar
July 25, 2013 in IL
(World Congress)

6th Annual Forum on On-Site Employee Health & Wellness Clinics
July 24, 2013 in IL
(World Congress)

View All Webcasts and Conferences


[Official Guidance]

Text of Exemption from Certain Prohibited Transaction Restrictions: Modifications to the 'Underwriters Exemptions'
"This document contains an exemption issued by the Department of Labor ... from certain of the prohibited transaction restrictions of [ERISA] and/or the Internal Revenue Code of 1986 ... This notice includes the following: 2013-08, Amendment to Prohibited Transaction Exemption 2007-05, 72 FR 13130 (March 20, 2007)[.]" (Employee Benefits Security Administration, U.S. Department of Labor)


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[Official Guidance]

FASB Issues Standard Deferring Some Disclosures for Nonpublic Employee Benefit Plans
"The Financial Accounting Standards Board (FASB) today published a new Accounting Standards Update that defers indefinitely certain disclosures about investments held by nonpublic employee benefit plans in their plan sponsors? own nonpublic equity securities.... The deferral applies specifically to employee benefit plans -- other than those plans that are subject to Securities and Exchange Commission filing requirements -- that hold investments in their plan sponsors' own nonpublic entity equity securities, including equity securities of their nonpublic affiliated entities. 'The Update addresses private company stakeholder concerns that certain disclosure requirements would potentially provide proprietary information when their employee benefit plans' financial statements are posted on the plan regulator's website,' said FASB Chairman Russell G. Golden." (Financial Accounting Standards Board (FASB))

[Official Guidance]

Text of Proposed Prohibited Transaction Exemptions for Sales to Wells Fargo by Four Plans Investing in Wells Fargo Collateral Pools
"This document contains notices of pendency before the [DOL] of proposed exemptions from certain of the prohibited transaction restrictions of [ERISA] and/or the Internal Revenue Code ... This notice includes the following proposed exemptions: D-11640, Wells Fargo Bank, N.A. (the Applicant or the Bank); D-11772, UBS AG (UBS or the Applicant); and D-11739, D-11740, & D-11741, Sears Holdings Savings Plan (the Savings Plan), Sears Holdings Puerto Rico Savings Plan (the PR Plan) and The Lands' End, Inc. Retirement Plan (the Lands' End Plan)." (Employee Benefits Security Administration, U.S. Department of Labor)

Third Circuit Finds Increased Retirement Benefit Offered Under Reduction-in-Force Plan Is Early Retirement Subsidy Subject to QDRO (PDF)
"[The plan] but excluded from that calculation the increase in [plaintiff's] ex-husband's pension that was payable under [the employer's] policy that entitled an early-retirement eligible employee to the full amount that would have been payable at age 65 if he or she was terminated as part of a reduction-in-force ... The District Court [found] that the ... separation policy did not provide a subsidy for early retirement because it was payable 'on account of' contingencies other than early retirement ... [The Third Circuit Court of Appeals finds] that, because a purpose of the separation benefit is to enhance early retirement benefits and is payable only to employees who are eligible for early retirement, the ... policy does indeed provide a subsidy for early retirement." [Gruber v. PPL Retirement Plan, No. 12-2123 (3rd Cir. April 9, 2013)] (PLANSPONSOR.com)

Small-Plan Market Can Be Big Opportunity
"Nearly 65% of survey participants believe there is a large opportunity in the micro-small plan 401(k) market. Fifty-one percent ... view time management as a key challenge to doing business in the retirement plan market. Resource management (39%) was the next most often-cited challenge, followed by fiduciary responsibilities (27%) and government regulations (23%)." (PLANADVISER.com)


Understanding Roth Accounts in 401(k), 403(b), and Governmental 457(b) Plans

Sponsored by Lorman and BenefitsLink

This live webinar will provide you with an understanding of how Roth accounts operate in 401(k), 403(b), and governmental 457(b) plans, including rules regarding in-plan conversions to Roth accounts. >Registration discount for BenefitsLink readers.

Long Term Impact of Loans and Hardships
Infographic. Excerpt: "Plan borrowing is all too common ... Hardship withdrawals occur less frequently ... 'Serial Borrowing' is a savings threat ... Borrowers also save less." (Fidelity)

Hunt for Yield Might Lead Pension Funds to Taxable Muni Debt
"The amount of taxable municipal debt sold is small relative to the overall demand for fixed-income investments from U.S. pension funds. In 2012, municipal issuers sold almost $378.2 billion in debt, including $32.6 billion of taxable debt ... By comparison, the top 200 U.S. defined benefit pension funds held $1.026 trillion in domestic fixed income as of Sept. 30, 2012[.]" (Pensions & Investments)

Tenth Circuit is First Circuit to Determine Remedies for Violation of ERISA Section 204(h) Notice Requirements
"[T]he Tenth Circuit held that plaintiffs had no path to relief under [ERISA section] 204(h) because they could not demonstrate that the disclosure failure was 'egregious.' The Tenth Circuit was also persuaded that [the employer] did not discover its failure until after litigation began, and immediately thereafter sought to correct the error." [Jensen v. Solvay Chemicals, Inc., No. 11-8092 (10th Cir. July 2, 2013)] (Littler Mendelson P.C.)

Bonds Battered Some Target-Date Funds in the Second Quarter
"Despite some anxious days in June, 2013 so far has been a strong period for the stock market. That has contributed to robust one-year and three-year returns for target-date mutual funds ... Looking at just the past three months, however, many funds posted losses." (The Wall Street Journal; subscription may be required)

How to Design Target-Date Funds
"The main purpose of this article is to analyze and understand dynamic allocation in a target-date fund framework. We show that the optimal exposure in the risky portfolio varies over time and is very sensitive to the parameters of both the market and the investor's. We then deduce some practical guidelines to better design target-date funds for the asset management industry." (Lyxor Asset Management via SSRN)

SIFMA to SEC: Fiduciary Rule Would Cost a Ton
"[The Securities Industry and Financial Markets Association (SIFMA)] said that nine of its member firms estimated that it would cost each of them $5 million annually to upgrade their compliance, supervision and training systems. Another seven firms estimated that if brokers were to adopt disclosure forms similar to those that investment advisers use at the beginning of a client relationship, it would cost about $3 million per firm annually." (Investment News; free registration required)


Comments of U.S. Chamber of Commerce to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
41 pages. Excerpt: "Arbitration is an effective method of dispute resolution that benefits consumers ... by reducing the transaction costs of pursuing claims against broker-dealers and investment advisers, all while providing them with outcomes superior to litigation. Because retail investors are not made worse off by entering into pre-dispute arbitration agreements -- and virtually always are benefited by such agreements -- an investment adviser or broker-dealer who requires clients to enter into such agreements acts consistently with the best interests of the client, and therefore does not violate any duties or standards of conduct owed to the client." (U.S. Chamber of Commerce)


Comments of Consumer Federation of America to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
44 pages. Excerpt: "In order to develop a sound economic analysis and arrive at a reasonable approach to rulemaking, the Commission will need to reject two common misconceptions about the reasons for the current regulatory failure and the purpose of rulemaking to correct that failure. The first fallacy ... is that the sole or primary purpose of the rulemaking is to eliminate investor confusion. The second fallacy ... is that the difference in standards for investment advice by broker-dealers and investment advisers is the result of statutory differences. The first threatens to lead the Commission down a regulatory blind alley. The second causes the Commission to ignore regulatory alternatives that might offer a cleaner, more streamlined solution to the problem of inconsistent standards for investment advice." (Consumer Federation of America)


Comments of Center for Ethics in Financial Services, to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
"With all respect, we are concerned that while your request for information asks for a lot of data -- much of which may not be readily available in useful forms based on confidentiality concerns, data aggregation issues, accessibility, or other factors -- the results may not inform your decision-making in the way you had hoped. It is easy enough to say that retail investors should be served by advisors who act solely in their best interest. Few could disagree with the sentiment or intent of broadly implementing such a standard. Unfortunately, it is much harder to determine what the practical result may be across all business models to consumer choice, access to advice, and product availability." (Center for Ethics in Financial Services, The American College)


Comments of Fidelity Investments to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
"If the Commission believes that rulemaking in this area is necessary, Fidelity supports a uniform fiduciary duty that would require broker-dealers and investment advisers to act in the best interest of retail customers when offering personalized investment advice about securities to such retail customers.... We believe that the existing principles-based fiduciary duty under the Advisers Act has worked well for investment advisers and their clients and we see no reason to modify this well functioning model." (Fidelity Investments)


Comments of Financial Planning Coalition to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
57 pages. Excerpt: "The fiduciary standard should be no less stringent than the existing fiduciary duty standard ... [and] should be based upon the core principle that, when providing personalized investment advice to retail customers, a financial adviser (however registered) always must act in the best interests of those customers.... The SEC should not delay the adoption of a uniform fiduciary standard while it considers harmonization initiatives." (Financial Planning Coalition)


Who Does the Cost-Benefit Analysis for Individual Investors?
"[W]hat's missing are some number showing the negative effect on millions of naive American investors who unknowingly pay up to 17 separate fees when they buy a mutual fund.... [R]evenue sharing and 12b-1 fees, which would come into the light if a fiduciary standard, were enacted, cost investors about $9.5 billion annually. These fees paid by unsuspecting investors -- in revenue sharing, 12b-1, and in 401(k)s -- dwarf anything SIFMA and other financial services lobbying groups have offered as a way to attract sympathy.... [The] fact is that the lack of transparency, and the lack of a fiduciary standard, is very profitable." (MutualFundReform.com)

Benefits in General; Executive Compensation

Supreme Court Rules DOMA Unconstitutional (PDF)
"[The Windsor decision] does not require all states and state officials to institutionalize or recognize same sex marriages. It let stand a provision in DOMA which permits a state not to recognize a same sex marriage that is valid in another state. This decision expands the financial planning options available to legally married same sex couples in a variety of areas." (ING)

Impact of Supreme Court DOMA Decision on Employee Benefits for Same-Sex Spouses
"[The authors] believe it likely that the IRS will issue guidance on the impact of Windsor in the near future that provides (at least for benefit plans) that if an employee is married the marriage will be recognized regardless of where the employee resides. However, until such guidance is issued, in states that do not recognize same-sex marriage, it is not clear that such changes are required under the Code (based on the IRS guidance prior to DOMA)." (Dorsey & Whitney LLP)

Press Releases

Notice of Annual Meeting of FINRA Firms and Proxy
Financial Industry Regulatory Authority (FINRA)

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David Rhett Baker, J.D., Editor and Publisher
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