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July 29, 2013          Get Health & Welfare News  |  Advertise
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401(k) Administrator
for G & C Pensions in NY

401(k) Administrator
for The Pension Service, Inc. in CT

Retirement Plan Administrator
for United Retirement Plan Consultants in MD, PA

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for United Retirement Plan Consultants in MD, PA

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for TPA for 401(k) and Employer-Sponsored Retirement Plans in CA

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Webcasts and Conferences

The SAFE Retirement Act of 2013 A Boost for the Private Retirement System -- Webcast
September 24, 2013 WEBCAST
(American Society of Pension Professionals & Actuaries (ASPPA))

ERISA Assets: QPAM and INHAM Audit Legal Requirements and Best Practices -- Webinar
September 10, 2013 WEBCAST
(Strafford)

11th Annual ERISA Update
October 17, 2013 in WA
(ASPPA Benefits Council of Great Northwest)

View All Webcasts and Conferences


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official guidance, jobs, webcasts and more.
[Guidance Overview]

New Wrinkle on Timing Requirements for Plan Investment Disclosures
"Employers should discuss with their record-keepers the potential advantages of utilizing the comparative-chart delivery delay for 2013 or 2014, as appropriate. This decision likely will be affected by the plan's specific design and its administrative procedures for general compliance with the participant disclosure rules." (McGuire Woods LLP)  


[Advert.]

Don't miss the ASPPA 2013 Annual Conference at Natl. Harbor, MD!

Sponsored by ASPPA

Attend ASPPA's Annual Conference to inform Congress that they can't overlook pension issues! Registration includes: visits to Capitol Hill, 70+ sessions on topics shaping the industry, networking with 1,500+ retirement plan professionals, and more!



[Guidance Overview]

DOL Issues Relief for Annual Participant-Level Fee Disclosures
"The FAB will thus permit plan administrators greater flexibility in choosing the timing of the fee disclosures, and the DOL has advised that it is considering increasing that flexibility by revising the current fixed deadline to a 30-day or 45-day window during which disclosures could be provided." (Quarles & Brady LLP)  

[Guidance Overview]

Deadline Extension for 2013 Participant Fee Disclosure Notice Is Conditioned on Exercise of Fiduciary Duty
"[In] order to take advantage of this relief, plan sponsors must determine that any delay in providing the notice is in the best interest of participants. This is a fiduciary decision and plan sponsors should ensure that they carefully analyze and document the reasons for the delay in providing the notice." (Hawley Troxell)  

Fight Looms Over Pensions for Detroit Retirees
"[Michigan] Attorney General Bill Schuette announced over the weekend that he plans to represent city retirees in the bankruptcy case because he said their pensions are protected by the state constitution -- setting up a battle between state law and the federal bankruptcy code.... Mr. Schuette said retired workers shouldn't be caught in the middle of the city's bid for financial restructuring." (The Wall Street Journal; subscription may be required)  

CalPERS Approval Rating Suffers in 'Perfect Storm'
"Employer satisfaction with CalPERS dropped during the last two years, a new internal survey found, apparently the result of a 'perfect storm' of investment losses, scandal, rising rates and other problems.... [T]he average approval rating from CalPERS employers dropped from 74 percent to 61 percent.... [O]nly 49 percent [answered] 'yes' to the question 'Is CalPERS customer service being managed well?'" (CalPensions)  


[Advert.]

Free online seminar from PenChecks Trust -- August 7 -- Register Now

Sponsored by PenChecks Trust

Improve your organization's approach and create better processes to avoid future liability and costs. Attend "What Every Service Provider Needs to Know About the Risk of Uncashed Checks," a free online seminar for industry professionals. Register now.



Private Equity Funds and Withdrawal Liability
"The First Circuit concluded that the Sun Funds invested in the company 'with the principal purpose of making profit' and became 'actively involved in [its] management and operation.' It also noted that the Sun Funds' general partners had authority to make decisions about hiring, terminating, and compensating the company's employees. As a result, the Court concluded that at least one of the Sun Funds was a 'trade or business.' The Court also focused on the fact that one of the Sun Funds received a direct economic benefit that an ordinary, passive investor would not derive." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Indus. Pension Fund, No. 12-2312 (1st Cir. July 24, 2013)] (Seyfarth Shaw LLP)  

First Circuit Concludes Private Equity Fund Can Be Liable for Pension Obligations of Portfolio Companies (PDF)
"[This] decision ... leaves several unresolved issues, but clearly states that where a private equity fund and its affiliated general partner or manager is significantly involved in the operation and management of a portfolio company, or realizes benefits beyond those of a passive investor through its relationship with a portfolio company, the private equity fund itself may become subject to the portfolio company's Title IV liabilities." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, No. 12-2312 (1st Cir. July 24, 2013)] (Fried Frank)  

The ERISA Excessive Fees and Revenue Sharing Playbook
"The recent decisions in the Braden-Tibble-Tussey trilogy suggest that [an] epiphany may be occurring to provide defined contribution participants with much-needed information to allow them to make the 'fully informed investment decisions' promised to them as part of ERISA 404(c) plans, and to require plan sponsors and other plan fiduciaries to comply with their fiduciary duties of loyalty and prudence." (The Prudent Investment Adviser Rules)  

Should You Buy Retirement Income?
"More insurers are marketing a relatively new breed of annuity to baby boomers hungry for retirement income. But potential buyers might be able to build as good a stream of income -- or better -- on their own.... Some advisers question the value of buying a fixed annuity before retirement for all but the most risk-averse investors." (The Wall Street Journal; subscription may be required)  

Parsing the Social Security Rules for Spouses
"[B]y waiting until full retirement age, married couples, as well as divorced spouses in some cases, can exercise some creative claiming strategies to maximize lifetime benefits.... [Some have] asked if it is possible for both spouses to file and suspend their benefits or for both spouses to file a restricted claim for spousal benefits only. It is a logical question, but the short answer is no." (Investment News)  

Optimal Life Cycle Portfolio Choice with Variable Annuities Offering Liquidity and Investment Downside Protection
"[The authors] evaluate lifecycle consumption and portfolio allocation patterns resulting from access to Guaranteed Minimum Withdrawal Benefit variable annuities, one of the most rapidly-growing financial innovations over the last two decades.... [T]hese products ... offer access to equity investments with downside protection, hedging of longevity risk, and partially-refundable premiums. Welfare rises since policyholders exercise the product's flexibility by taking withdrawals and dynamically adjusting their portfolios and consumption streams. Consistent with observed behavior, differences across individuals' cash out and annuitization patterns result from variations in realized equity market returns and labor income trajectories." (University of Michigan Retirement Research Center)  

The Worst May Be Over for Canadian DB Plans
"DB plans have been under constant attack for well over a decade now, largely because Canadian long-term interest rates on government bonds fell from a level exceeding 15% in 1981 to just 2.3% in 2012. However, there is some evidence that bond yields are cyclical, with rates rising for 30 years and then falling for the next 30. If bonds have truly bottomed out, the next 30 years may offer up a reversal of almost all the significant pension-related events that we have witnessed over the past 30 years." (Benefits Canada)  

Early Retirement Incentives and Student Achievement
"Early retirement incentives (ERIs) are increasingly prevalent in education as districts seek to close budget gaps by replacing expensive experienced teachers with lower-cost newer teachers. Combined with the aging of the teacher workforce, these ERIs are likely to change the composition of teachers dramatically in the coming years.... [This study examines] the effects of large-scale teacher retirements on student achievement. We find the program did not reduce test scores; likely, it increased them, with positive effects most pronounced in lower-[Supplemental Educational Services (SES)] schools." (CESifo Working Paper Series via SSRN)  

[Opinion]

The 8 Pillars of an RIA-Created Professional Organization
"How would a [professional regulatory organization (PRO)] be different from FINRA? Through these eight key attributes: ... [1] [T]he PRO would have as it members individuals (not firms) who are qualified to become members of the profession.... [2] The PRO would possess a clear and unambiguous adherence to a bona fide fiduciary standard for its members.... [3] The PRO would possess as its primary purpose the protection of the public interest. [4] A four-year college degree from an accredited institution would be required, plus an advanced course of study in financial planning and investments.... [5] Peer review of alleged violations would be initiated.... [6] All fines imposed would be paid to U.S. Treasury and/or to the states, as appropriate.... [7] Either mandatory pro bono hours each year, or a mandatory annual contribution to a not-for-profit providing such services, would be required of all members.... [8] Through legislative fiat (at the national and/or state levels), only professionals duly licensed as financial and investment advisors would be permitted to hold themselves out as such." (Ron Rhoades in RIABiz)  

[Opinion]

Comments by AARP to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)
"The fiduciary standard should be no less stringent than the existing fiduciary duty standard under the Investment Advisers Act of 1940 ... The standard should be based on the core principle that when providing personalized investment advice to retail customers, a financial adviser -- no matter how they market themselves, what their business model is, or what their registration status is -- must always act in the best interests of those customers." (AARP)  

Benefits in General; Executive Compensation

Tightening Incentive Plan Performance Criteria a Top Priority for Both HR and Finance Executives
"Finance executives are less likely than HR execs to view executive incentive programs as appropriately structured to discourage excessive risk-taking. Almost three-quarters (74%) of the HR executives believe their executive incentives effectively discourage excessive risk-taking, compared to only 58% of the Finance executives surveyed, possibly reflecting HR leaders' deeper appreciation for the behavioral implications of incentives or maybe Finance leaders' greater sensitivity to the risk implications." (Towers Watson)  

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