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July 11, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

U.S. Health and Welfare Benefits Specialist
for Fluor Corporation in TX

Pension Administrator
for Retirement Strategies, Inc in GA

Plan Document Specialist
for Kravitz, Inc. in CA

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Webcasts and Conferences

11th Annual Value Based Care Congress
August 5, 2013 in MA
(World Congress)

32nd Annual ISCEBS Employee Benefits Symposium
September 22, 2013 in MA
(International Society of Certified Employee Benefit Specialists (ISCEBS))

ERPA-SEE Summer 2013 Exam Registration Deadline Extended to July 18
July 10, 2013 WEBCAST
(American Institute of Retirement Education, LLC (AIRE, LLC))

Free Immigration Webinar for Employers
July 16, 2013 WEBCAST
(Davidson Marketing Group -- FutureOffice Network)

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[Official Guidance]

Text of SEC Final Rule Eliminating Prohibition Against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings (PDF)
"The amendment to Rule 506 permits an issuer to engage in general solicitation or general advertising in offering and selling securities pursuant to Rule 506, provided that all purchasers of the securities are accredited investors and the issuer takes reasonable steps to verify that such purchasers are accredited investors. The amendment to Rule 506 also includes a non-exclusive list of methods that issuers may use to satisfy the verification requirement for purchasers who are natural persons. The amendment to Rule 144A provides that securities may be offered pursuant to Rule 144A to persons other than qualified institutional buyers, provided that the securities are sold only to persons that the seller and any person acting on behalf of the seller reasonably believe are qualified institutional buyers. We are also revising Form D[.]" (U.S. Securities and Exchange Commission)


2013 Advanced Pension Conference in Chicago August 28-30

Sponsored by SunGard's Relius Education

New: 75% more topics, deeper registration discounts, free night out. Agenda: Tax reform, self-correction, benefit statement guidance, PPA restatements, fee disclosures, 403(b) documents, and more. 19 CE hours. Early fee ends July 22, register now.

[Official Guidance]

Text of SEC Proposed Amendments to Regulation D, Form D and Rule 156 under the Securities Act (PDF)
"[W]e anticipate that issuers using Rule 506(c) will be able to reach a greater number of potential investors than is currently the case in Rule 506 offerings, thereby increasing their access to sources of capital.... On the other hand, we recognize the concerns raised by a number of commenters that a general solicitation for a Rule 506(c) offering would attract both accredited and non-accredited investors and could result in an increase in fraudulent activity in the Rule 506 market, as well as an increase in unlawful sales of securities to non-accredited investors." (U.S. Securities and Exchange Commission)

[Guidance Overview]

New SEC Rules Substantially Alter Landscape for U.S. Private Securities Offerings
"These developments will significantly impact the manner in which private securities offerings are conducted in the United States.... [N]ew Rule 506(c) will eliminate the prohibition against general solicitation with respect to offers and sales of securities made under that rule, provided that: [1] all terms and conditions of Rule 501 and Rules 502(a) and (d) are satisfied; [2] all purchasers of the securities are 'accredited investors'; and [3] the issuer takes 'reasonable steps' to verify that the purchasers of the securities are 'accredited investors.'" (Sidley Austin LLP)

[Guidance Overview]

SEC Fact Sheet on Final Rule Changes Eliminating the Prohibition on General Solicitation and General Advertising in Certain Offerings
"The final rule approved [on July 10] makes changes to Rule 506 to permit issuers to use general solicitation and general advertising to offer their securities provided that: [1] The issuer takes reasonable steps to verify that the investors are accredited investors. [and] [2] All purchasers of the securities fall within one of the categories of persons who are accredited investors under an existing rule (Rule 501 of Regulation D) or the issuer reasonably believes that the investors fall within one of the categories at the time of the sale of the securities." (U.S. Securities and Exchange Commission)

[Guidance Overview]

SEC Fact Sheet on Proposed Amendments to Private Offering Rules
"The Commission approved a proposal intended to enhance the SEC's ability to assess developments in the private placement market now that the rule to lift the ban on general solicitation has been adopted. In particular, the proposal would improve the SEC's ability to evaluate the development of market practices in Rule 506 offerings and would address certain concerns raised by investors related to issuers engaging in general solicitation." (U.S. Securities and Exchange Commission)

Lifting SEC Ad Ban Promises Wider Airing of Hedge-Fund Pitches
"While yesterday's vote by the [SEC] to end a ban on advertising for private offerings isn't expected to spark an immediate deluge of mass-media marketing, funds will feel pressure to promote investments as competitors take advantage of the new freedom, according to securities lawyers. Some may experiment with low-cost venues such as social media while others may sponsor sporting events that attract wealthy investors." (Bloomberg)

No Pension Reform, No Paycheck: Illinois Governor Suspends Legislators' Pay
"'I've tried everything in the book to get their attention,' Illinois Gov. Pat Quinn said after announcing he will suspend pay for lawmakers due to their inaction on pension reform. Describing it as a wakeup call for the Illinois General Assembly, Quinn lifted the line item he vetoed. Now, lawmakers won't get their paychecks at the end of this month." (Associated Press, via KGO-TV)

CalPERS Explains Delay in Online Release of Pension Database
"CalPERS has delayed the launch of a pension database on its website, pending the outcome of legislation being introduced by various retiree organizations that would limit what retiree data is publicly releasable under law.... [It] is important to keep in mind that CalPERS is still currently required to release the pension data contained in the database to anyone requesting it. Though it will not be displayed on the CalPERS website, members may still find their public pension information displayed on other websites." (CalPERS)

Text of All Comments Received to Date by SEC on Proposed Uniform Fiduciary Standard for Broker-Dealers
On the linked web page, the name of each of the 53 persons and organizations listed under the heading "Comments on Duties of Brokers, Dealers, and Investment Advisers" is a hypertext link to the full text of that particular comment. (U.S. Securities and Exchange Commission)

Student Loan Bill with Retirement Beneficiary Feature Fails, Again
"For the second time in just over a month, the Senate has failed to advance legislation that would provide a subsidy to maintain lower student loan interest rates.... The tax cost of providing the subsidy in S. 1238 would have been offset by limiting most nonspouse beneficiaries of IRA or employer-sponsored retirement plan accounts to five years to distribute and pay taxes on inherited accounts." (Ascensus)

Bankruptcy Court Applies Supreme Court's Defalcation Guidelines to Hold ERISA Fiduciary Personally Liable for Multiemployer Plan Contributions
"Fiduciaries who breach their duties may pay the consequences far longer than they may think, for they may not even be able to escape liability through personal bankruptcy.... [T]he U.S Bankruptcy Court for the District of Massachusetts became the first court to apply the new defalcation guidelines laid down by the Supreme Court ... to an ERISA fiduciary, finding that a debtor who breached his fiduciary duties with regard to contributions to his company's multiemployer funds could not discharge his fiduciary liability in bankruptcy because he had engaged in 'defalcation.'" [Raso v. Fahey (In re Fahey), No. 11-1118 (June 11, 2013)] (Seyfarth Shaw LLP)

Senator Hatch Offers Pension Reform Bill But Some Say It Wouldn't Work
"Hank Kim, executive director of the National Conference on Public Employees Retirement Systems, was left scratching his head. 'Public pension plans are already self-annuitized,' he said. 'To say the private sector would do it more efficiently, I just don't understand that rationale.' ... 'No pension plan has ever gone bankrupt, but there are a slew of private insurance companies that have gone bankrupt,' he said." (Bond Buyer Online)

Booming Number of Seniors Brings Market Changes and Opportunities
"Whether focused on an investment strategy for a defined benefit plan or selecting choices for a defined contribution scheme such as a 401(k) plan or both, fiduciaries are understandably focused on how longer life spans are likely to alter the money landscape.... Whether you see this wave of senior citizens as welcome news or cause for worry about how programs will be financed, demographic patterns are a reality. As a result, performance-hungry investors are searching for winners." (Pension Risk Matters)


Something to Get Worked Up About: The 2013 PSCA 403(b) Plan Survey
"[T]hese concerns really represent opportunities for financial professionals and TPAs to help 403(b) sponsors continue to modernize their plans -- and a reason to meet with them for benchmarking ... It also identifies gaps which give financial professionals different reasons to approach prospects as well. Probably the strongest message ... is that non-profit plan sponsors and participants alike are displaying a resurgent faith in our nation's defined contribution retirement system." (The Principal Blog)


The Need for Good Research on Public Pension Reform
"[A chart in this article] shows the accumulation of pension wealth over an employee's career in Missouri under the existing [DB] plan and under a hypothetical reform called cash balance, which rewards employees with roughly the same retirement benefit for each year of service rather than in fits and starts. It would be misleading to trumpet the benefit cut to the long-serving group as a travesty while ignoring the fact that it would enable the state government to increase the benefits to those who serve the public for 'only' 20 years. It is not enough to simply calculate the cuts to the benefits of those who benefited most from the old plan -- they must be placed in the context of those who gain as a result." (Brookings)


ICI Concerned About Lack of Investor Protections in SEC Rule Allowing Private Fund Advertising
"The final rule does not include investor protection measures recommended by ICI, consumer groups and many others; instead, the SEC put forward a proposal to consider whether investor protections should be added at a later date." (Investment Company Institute (ICI))


State Pension Funding Projections Are Way Off Base
"The baseline GDP forecasts is 3.5% real growth. Seriously? We would all be delighted if it happened but it can't be the standard assumption. (The pessimistic case is 2% a year, which is not that downbeat.) In the last 5 years, U.S. productivity growth has been 1.6% a year and the population has been growing at 0.7% a year, or 2.3% combined. Surely that should be the baseline case?" (The Economist)


Proposing Politically 'SAFE' Public Pension Reform
"Senator Orrin Hatch outlined the public pension crisis in this country in a report last year putting the debt at $4.4 trillion and yesterday on the Senate floor ... [It] seems to have completely escaped him that his SAFE solution of allowing insurance companies to annuitize promised benefits is a non-starter once you get outside of an insurance company boardroom." (Burypensions)


Letter by American Benefits Council to Senator Orrin Hatch Supporting 'SAFE Retirement Act of 2013' (PDF)
"Your bill contains provisions that would broaden coverage, increase retirement adequacy, and make plan delivery of information more effective. In particular, the bill provision facilitating electronic communication would allow employers to use forms of disclosure that are far more effective in communicating with participants.... We believe these proposals are important to further strengthening the private employer-sponsored retirement system and helping workers obtain personal financial security." (American Benefits Council)


Deadline Arrives for Comments on Proposed Uniform Fiduciary Standard for Broker-Dealers
"Almost 30 comments were filed on Friday (with an additional couple of stragglers on Monday), bringing the total comments to 153 (at the time of this post). The comments range from a paragraph or two by individuals to substantial filings by parties like SIFMA, Schwab, IAA, and FSI, all of whom had large interests at stake. The comments were notable for the relatively few responses that actually included some attempt at providing the SEC with data for its cost-benefit analysis, purportedly the primary reason for the RFI." (fi360)

Benefits in General; Executive Compensation

[Guidance Overview]

Supreme Court Rules Part of DOMA Unconstitutional; Action Steps for Employers
"[T]here are at least five steps that any affected employer should now be considering: [1] Stop imputing income for federal income and FICA tax purposes on health plan coverage provided for a same-sex spouse, but continue imputing income for state income tax purposes if the employee resides in a non-recognizing state; [2] Communicate the Supreme Court's decision to employees, and request that any employees in same-sex marriages that may not be known to the employer identify themselves; [3] Offer a mid-2013 enrollment right under welfare plans for same-sex spouses not previously eligible; [4] Identify all employee plan provisions that may be affected by a changed definition of the term 'spouse'; [and] [5] Identify all past and present employees who are in a same-sex marriage." (The Wagner Law Group)

Use of Flexible Benefits Increases, Improving Employee Engagement
"The use of flex plans is becoming ever more widespread, with 70% of organizations surveyed offering them -- up from 62% in 2012.... [Other] key findings ... include: [1] Over half of respondents spend more than 15% of payroll on benefits and more than a third spend more than 20% of payroll on benefits.... [2] 45% of respondents cite attracting and retaining talent as the most popular reason for offering benefits. [3] More than half of respondents evaluate their benefits strategy. The evaluation measures they use are partly aligned with the reasons they give for offering benefits." (Aon Hewitt)

DOMA is (Almost) Dead -- Now What?
27 presentation slides. Titles include: Review of the Supreme Court's Decision; Health and Welfare Plans; Retirement Plans; Other Plans; Retroactivity and Other Sticky Issues; Expected Future Guidance. (Morgan Lewis)

CBO Cost Estimate for H.R. 1135, 'Burdensome Data Collection Relief Act'
"Under current law, issuers must disclose the relationship between executive compensation paid and the financial performance of the issuer as well as a comparison of the median total compensation of the issuer's employees, exclusive of the chief executive officer's (CEO) compensation, with the total annual compensation of that CEO. Under [H.R. 1135] that information would no longer be reported to the SEC. Based on information from the SEC, CBO expects that incorporating the provisions of H.R. 1135 at this point in the regulatory process would not require a significant change in the workload of any agency. Hence, CBO estimates that any change in discretionary spending by the SEC to implement the legislation would not be significant." (Congressional Budget Office)

Press Releases

NCPA Offers Members Turnkey Resource to Keep Prescription Drug Benefits Local
National Community Pharmacists Association (NCPA)

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