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July 18, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Webcasts and Conferences

Health Care Reform for Employers: Now What? - Spokane, WA
September 24, 2013 in WA
(Lorman Education Services)

Health Care Reform for Employers: Now What? - South Burlington, VT
September 24, 2013 in VT
(Lorman Education Services)

Health Care Reform for Employers: Now What? - Plainview, NY
September 24, 2013 in NY
(Lorman Education Services)

Five Pieces You May Be Missing in the 457(b) Plan Puzzle -- Webcast
July 30, 2013 WEBCAST
(MassMutual Retirement Services)

Vision: IRI Annual Meeting 2013
September 22, 2013 in IL
(Insured Retirement Institute (IRI))

View All Webcasts and Conferences

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[Official Guidance]

Check the Status of Your Voluntary Correction Program Submission
"[The Internal Revenue Service will] acknowledge receipt of your submission if you or your representative include the Acknowledgement Letter found in Revenue Procedure 2013-12 (Appendix D) in your submission. [The IRS will] mail it back to you with your submission's nine-digit control number.... You can check the status of your VCP submission, even if you didn't include an Acknowledgment Letter with your submission, by calling the VCP Status Inquiry Line at (626) 927-2011." (Internal Revenue Service)


ftwilliam.com, TAG Data, CCH and Aspen Publisher's Customer Conference

Sponsored by ftwilliam.com

Join us August 4-6 and learn from industry specialists! We'll cover hot topics including Coverage & Testing, TPA Workflow, Advanced Plan Design and much more! Make sure to drop in on our hands-on product training sessions with fellow TPAs.

[Official Guidance]

Text of FINRA Regulatory Notice 13-23: Disclosure of Fees in Communications Concerning Retail Brokerage Accounts and Individual Retirement Accounts (PDF)
"FINRA has observed overly broad language in sales material of broker-dealer firms that implies there are no fees charged to investors who have accounts with the firms. In other instances, specific fees that are not charged are highlighted and separated from disclosure regarding other fees that may be charged.... [C]laims regarding fees must be accompanied by clear disclosure of the types of fees that may be charged.... A headline statement to the effect that a firm does not charge annual maintenance fees should include an explanation in close proximity to the headline of the conditions associated with the offer and the other fees that would apply. For example, communications could discuss the lack of an annual account maintenance fee as follows: ..." (Financial Industry Regulatory Authority (FINRA))

[Guidance Overview]

New Revenue Sharing Advisory Opinion: More Mud in Already Muddy Waters
"How is revenue sharing properly contributed to a plan trust? ... Is a 408(b)(2) disclosure a communication that causes revenue sharing to become a plan asset before it is received? ... If revenue sharing is always a plan asset, is returning those assets to the plan a prohibited transaction under ERISA 406(a)(1)(B), (D) and/or 406(b)? ... If revenue sharing is deemed a plan asset, is structuring an arrangement to collect excessive fees for services from participant accounts on a disproportionate basis only to return the excess fees to participants in a disproportionate basis prudent? ... If a fiduciary can't monitor revenue sharing or calculate the amount, should they structure a plan with investments that pay revenue sharing?" (Plan Tools, LLC)

For Investors Nearing Retirement, Time Is Not Always on Their Side
"[W]ith the huge losses in both home prices and in their equity portfolios, anyone approaching retirement should be trying to recoup their losses as fast as possible. But the basic mathematics of finance is against that.... If you owned an S&P 500 index fund in 2008, that fund fell by 37.5%. To recoup this loss, it would take an investor over five years to recover this loss assuming the traditionally-accepted 9.4% historical rate of return in the S&P 500 Index with dividends re-invested." (MutualFundReform.com)

Cumulative List of Non-U.S. Pension Funds Exempted by FATCA Intergovernmental Agreements
This page links to a cumulative list of those specific pension-related exemptions for each country that has entered into an IGA with the United States. Updated July 17, 2013. (Groom Law Group)


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.

Cigna in $35 Million Settlement of Excess Fee Allegations
"Cigna has agreed to settle for $35 million a class-action lawsuit brought by current and former employee participants in the health insurance company's 401(k) plan, alleging they were charged excessive fees. As part of the settlement Cigna pledged to hire an independent consultant to monitor and suggest changes for the 401(k)'s stable value fund and its overall investment management." (Thompson SmartHR Manager)

Decisions, Decisions: Choices That Affect Retirement Income Adequacy (PDF)
18-page summary of EBRI's recent Policy Forum. "[Topics addressed at the forum included:] Insights on the impacts of a sustained low-interest-rate environment on retirement savings and retirement income; Perspectives on the impacts of the employer match in 401(k) plans -- contribution timing, sources, and meeting plan objectives; Suggestions on how to help plans and participants optimize their distribution choices, in particular rollover, drawdown, and annuity options." (EBRI)

Most Employers Sprucing Up Employee Stock Purchase Plans
"More than half of the companies surveyed (51 percent) indicated they intend to modify their employee stock purchase plan during the next two to three years in an effort to improve their benefits package, with nearly a third (31 percent) of employers either introducing or increasing the employee discount on company stock -- usually between 10 and 15 percent -- or adding a 'look back' provision to help workers buy shares in their company at a lower purchase price." (Society for Human Resource Management)

OPM Nominee Says Fixing Retirement Claims Process for Federal Employees Is a Top Priority
"President Obama's nominee to lead the Office of Personnel Management vowed Tuesday to improve the retirement claims process by making information technology a top priority. Katherine Archuleta said the agency 'fell short' in previous attempts to switch from a paper-based system to a digital one.... OPM has struggled for decades to expedite retirement payments to federal retirees and eliminate the claims backlog. Many federal retirees have waited months and years to receive their full retirement benefits." (Government Executive)

Detroit Pension Boards File Suit to Block Cuts in Benefits
"Detroit's two pension funds on Wednesday sued Emergency Manager Kevyn Orr and Gov. Rick Snyder in an attempt to block Orr from slashing pension benefits for thousands of current and active city workers as part of his plan to restructure the city's massive debt. The lawsuit asks the Ingham County Circuit Court to declare that Snyder cannot authorize Orr to take any actions -- including filing for municipal bankruptcy -- that would cut pension benefits, which the lawsuit says are protected by the state Constitution." (Detroit Free Press)

Society of Actuaries Responds to Concerns of Teachers Association Over Upcoming Study of Public Pension Plan Underfunding (PDF)
The linked item is a letter to the executive director of the National Council on Teacher Retirement. Excerpt: "The panel understands there are diverse views concerning public pension plan funding and is eager to learn from members of the public plan community. Two primary ways it is accomplishing this is through a 27-question survey taken by more than 170 actuaries, plan administrators, plan trustees, public officials, investment advisors, union officials, economists and academics. The panel is also meeting in person with 20 actuaries, trustees, plan administrators, union officials, representatives of public plan organizations, economists and investment advisors so that it is assured to receive a broad range of opinions and insights." (Society of Actuaries)


CalPERS, CalSTRS Post Strong Gains
"[The Associated Press reports that] 'The California Public Employees' Retirement System reported a 12.5 percent annual return while the California State Teachers' Retirement System announced it gained 13.8 percent for the year that ended June 30.' ... [Also] worth noting on CalSTRS and CalPERS: ... CalSTRS awarded Industry Funds Management an infrastructure mandate ... to be invested in a diversified portfolio of core infrastructure assets in North America and Europe.... CalSTRS is looking into the possibility of expanding its international real estate portfolio and investing capital in Europe.... CalPERS will take a close look at the value of external active equity managers[.]" (Pension Pulse)


AICPA Opposes Expansion of Fiduciary Definition to Include ESOP Appraisers
"The Internal Revenue Code (IRC) requires that ESOP valuations be obtained from an independent appraiser at least annually. If the DOL were to redefine an ERISA fiduciary to include ESOP appraisers, an inherent conflict would arise between the DOL and IRS requirements for ESOP appraisers. An ERISA fiduciary must act solely in the interest of plan participants and their beneficiaries and therefore cannot provide an independent, third-party objective perspective." (Accounting Today)


Congress Should Protect Retail Investors, Not Undermine Them
"Many of the financial advisors who make a fortune by advising their clients to invest their retirement assets in stocks that pay the advisors a finder's fee have launched a lobbying blitz to stop the [DOL] from protecting the interests of workers and retirees whose retirement security depends on these funds. The Pension Rights Center, along with AARP, the AFL-CIO, Americans for Financial Reform, and others -- are opposing a bill misnamed 'The Retail Investors Act.' The bill in fact that effectively stops the [DOL] from doing its job of protecting investors." (Pension Rights Center)


Comments by The ESOP Association to Roundtable on Small Business Tax Reform (PDF)
Presented to a roundtable sponsored by the U.S. Senate Committee on Small Business and Entrepreneurship. Excerpt: "In terms of ... [tax code] provisions that ... should be seriously considered, here are a few ...: [1] An S corporation like a C corporation should be able to pay 'dividends' in cash to employees in the ESOP, and the employees of course would pay tax at that time to Uncle Sam on the dividends; [2] Congress basically repealed in 1989, a law adopted in 1984 that encouraged lenders to make loans to create ESOPs, by permitting the lender to exclude 50% of its interest income from its income; [3] There was for a time a variety of tax laws that encouraged estate planning of owners of private businesses to pass along in their wills ownership to the ESOP, and the ESOP would take on the responsibility for paying the estate tax." (The ESOP Association)

Benefits in General; Executive Compensation


Letter from American Benefits Council to DOL and IRS Requesting Immediate Guidance on Effect of Windsor Decision on Employee Benefit Plans (PDF)
"[We] urge you to work together expediently to provide guidance in advance of July 22, 2013. Moreover ... we urge you to take account of the unique realities associated with the maintenance of employer-sponsored plans and benefits and adopt guidance that will allow for the uniform administration of plans and benefits across state lines -- for example, by adoption of a rule that looks not at where a same-sex spouse resides, but rather at whether an individual holds a valid marriage certificate regardless of current state of domicile." (American Benefits Council)


Three Years Later, Still No SEC Regulations on Dodd-Frank's CEO Pay Ratio Requirement
"While some now question the usefulness of [CEO pay ratio] information to an investor's decision to buy or sell stock in a public company, the real debate has been the cost of implementing the rule. Congress could have approved legislation that required a ratio between the CEO's compensation and that of an average employee and left it to the SEC to issue regulations as to how to calculate that ratio.... Instead, it decided to set out in the statute how the ratio should be calculated. Among other things, the statute, if interpreted literally, would require every public company with a defined benefit pension plan to calculate the change in pension value for every single employee on a global basis in order to come up with the total compensation for each employee." (The Conference Board)

Press Releases

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David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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