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August 19, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Webcasts and Conferences

"Advanced Cross-Tested Plans: Adding More Tools," 12 Cities
September 12, 2013 in KS
(SunGard Relius)

Health Benefits Laws Compliance Assistance Seminar
September 11, 2013 in WI
(Employee Benefits Security Administration (EBSA), U.S. Department of Labor)

Savings Fitness Workshop
August 22, 2013 in MA
(Employee Benefits Security Administration (EBSA), U.S. Department of Labor)

2013 SPARK Forum
November 3, 2013 in FL
(SPARK Institute)

Current and Future Impact of the Supreme Court’s DOMA Decision
September 10, 2013 WEBCAST
(ABA Joint Committee on Employee Benefits)

Taking the Mystery Out of Retirement Planning Workshop
September 5, 2013 in IN
(Employee Benefits Security Administration (EBSA), U.S. Department of Labor)

IRS COBRA Audit Guidelines
November 7, 2013 WEBCAST
(Lorman Education Services)

What to Expect in a DOL Investigation
September 5, 2013 in FL
(ASPPA Benefits Council (ABC) of North Florida)

View All Webcasts and Conferences

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

The 80-120 Rule: Does Your Retirement Plan Require an Audit?
"In general, plans covering 100 or more participants at the beginning of a plan year are called 'large plans' and require an audit, while plans covering fewer than 100 participants at the beginning of a plan year are called 'small plans' and do not require an audit. The 80-120 Participant Rule is an exception to the general rule and allows the plan administrator to elect to complete the annual return/report in the same category ('large plan' or 'small plan') as was filed for the prior year return/report." (Schneider Downs)  


DATAIR! Better Than Ever – Flexible Pricing – Superior Validation

Sponsored by DATAIR Employee Benefit Systems, Inc.

Choose "Pension Reporter System" modules you need:
EFAST2 5500/PBGC/SAR, 1099Rs, 5300s, FAS158
(888) 328-2474    Sales@DATAIR.com    www.DATAIR.com

Who Gets the Distribution? Plan Sponsors Resort to Interpleader Actions After U.S. v. Windsor
"An employer faced with competing claims to benefits can seek a decision from a court through an interpleader action before making any distributions. Generally, the employer initiates a court action by naming all of the competing interest-holders as defendants in the litigation so that the employer is not exposed to multiple liabilities stemming from a single obligation; in other words, to avoid paying twice." (Bloomberg BNA)  

D.C. Federal District Court Upholds PBGC's Imposition of Withdrawal Liability Based on 'Substantial Damage' to Multiemployer Pension Plan (PDF)
"The difference between considering an employer's withdrawal 'within the context of' other cessations ... and considering 'the impact of contributions by both the exiting employer and all other employers that have ceased contributing to the plan' ... is one of semantics, not substance.... PBGC's prior determinations have consistently focused on the overall financial health of the plan in question, as affected not only by the departure of the exiting employer, but also by other employer cessations and other market factors." [Quality Automotive v. PBGC, No. 12-1503 (D.D.C. Aug. 15, 2013)] (U.S. District Court for the District of Columbia)  

Buffett on Pensions in 1975: Has Anything Changed?
"'There are two aspects of the pension cost problem upon which management can have a significant impact: (1) Maintaining rational control over pension plan promises to employees and (2) increasing investment returns over pension plan assets.' So begins a memo from ... Warren Buffett on the subject of corporate pensions, dated October 14, 1975. The memo, sent to Katherine Graham the then publisher of The Washington Post, outlined the problems and pitfalls facing employers that had signed up to provide pensions for employees.... Whether Graham followed this advice to the letter is unknown, but when the Washington Post was subject to a takeover earlier this month it was revealed its pension fund was in surplus -- around 141% funded." (aiCIO)  

Second Quarter Annuity Sales Rebound from Prior Quarter, Remain Below 2012 Levels
"Total annuity sales were $56.5 billion in the second quarter of 2013 -- nine percent higher than the first quarter of 2013 but one percent below 2012 results ... Variable annuity (VA) sales were one percent lower in the second quarter 2013 compared with the second quarter of 2012, totaling $38.2 billion." (LIMRA)  


Growth and Increased Retention Through Plan Transfers & IRA Rollovers

Sponsored by Financial Research Associates, LLC

Join top-level speakers for networking opportunities and in-depth sessions on key topics to boost success in the IRA Rollover and "money in motion" marketplace. October 17-18, Boston -- Mention FMP164 during registration to receive 10% discount.

Trick Yourself Into Boosting Your Individual 401(k) Contributions
"Looking for a way to spur your savings? Calculate how much income you'll be able to draw from your 401(k) when you retire. That's the takeaway from a recent study in which workers received brochures showing how raising their 401(k) contributions would increase their retirement income. The employees who got income forecasts and changed their contributions set aside $1,150 a year more than did those who didn't get a pamphlet." (CNNMoney.com)  

Colorado State Employee Pension Fund Has $22B Shortfall
"The Public Employees' Retirement Association is $22.7 billion shy of what is needed to pay out retirement benefits over the next 30 years. That unfunded liability grew by $143.4 million in 2012 despite a 12.9 percent return on investments. But Greg Smith, executive director of PERA, said that's part of a deliberate long-term plan to get the fund's liability back in the black.... Instead, SB1 -- passed during the 2010 legislative session -- takes a 40-year trajectory at fully funding the retirement system." (CPA Practice Advisor)  

Target-Date Fund Returns Sliced by Bond Buzzsaw
"Because [target-date] funds are invested heavily in bonds, they were damaged in May and June by the worst bond market sell-off in a decade. Quarterly fund statements for many workplace plan participants will show no gains. Does that mean it was a mistake for the government to push the investment funds as if they were USDA-inspected pieces of beef? Not really[.]" (U.S.News & World Report)  

The Income Annuity Puzzle: Why Don't More People Use Them?
"Economists have long argued that there's a perfect financial product for retirement: the humble immediate income annuity.... [A recent study] found that health shocks can produce a unique double-whammy for annuity buyers: a sharp decline in life expectancy, which cuts the remaining value of the annuity, and the unmet need for cash to pay for care. [The authors] conclude that for risk-averse retirees, or for those with limited retirement assets, the best move is to avoid annuities altogether." (Reuters)  

Skimming 'Excess' Pension Investment Earnings
"An issue in the San Jose pension reform trial, a '13th check' bonus for retirees when investment earnings exceed the annual forecast, reflects a widespread attitude that added to public pension debt. In its starkest outline: When pension fund earnings are above the target, it's a surplus or windfall that can be distributed to employees and employers. When earnings are below the target, it's a shortfall that must be paid by taxpayers.... [T]reating investment earnings as an excess or surplus, in ways large and small, has skimmed off money that could have been invested, adding to pension debt rather than lowering it." (Calpensions)  

Institutionalizing DC Plans: A Starting Point for Addressing Fiduciary Issues (PDF)
"'Institutionalization' is a broad mindset that applies beyond investment options. It's how you get people into the plan; how you design it properly; how money moves out of the plan over time; what options are offered; how fees are structured; and what type of unbiased advice might be available for participants along the way.... [T]his paper [highlights] some key fiduciary topics related to each level of the institutionalization hierarchy." (Defined Contribution Institutional Investment Association (DCIIA))  

Health Care Will Take Center Stage in Retirement Planning
"Advisers should talk to their clients about how they will pay their medical bills during retirement ... The amount of money that a 65-year-old couple will need to set aside to meet their projected out-of-pocket health care expenses through a 25-year retirement is $283,000, according to a study by the Employee Benefit Research Institute. That translates to $5,660 per person a year." (InvestmentNews; free registration required)  

Broadening the Appeal of Private Equity for Retirement Plans
"As [DB] plans decrease in size and take on shorter-dated liabilities, the private equity industry has to think more carefully about how it is going to make itself more attractive to defined contribution [plans].... Unless a way can be found to price the underlying companies in private equity portfolios on a daily basis and give pension participants a better source of data through which to make reallocation choices, private equity will arguably struggle to get beyond the 3 percent allocation ceiling it appears to have hit in defined contribution [plans]." (Institutional Investor)  

Implementing a Custom LDI Strategy (PDF)
"An effective [liability-driven investment (LDI)] strategy begins with a custom implementation.... An effective LDI framework begins with a thorough understanding of the pension plan's assets and liabilities, followed by a diversified, risk-managed, multi-manager fixed income implementation. Diversification is very important in the fixed income space -- multiple fixed income strategies, as well as multiple managers, are needed within each strategy." (SEI)  

Treasury Urged Bailout Funds to Delphi Pensions, Watchdog Says
"The U.S. government urged General Motors Co. to improve pensions of some Delphi Automotive union retirees while cutting those of salaried workers to help ensure a speedy emergence from a GM bankruptcy, the watchdog of the Troubled Asset Relief Program said.... Demands from the United Auto Workers representing the retirees threatened to stall GM's bankruptcy ... As a result, government officials led by Steven Rattner pressed the Detroit-based automaker to reach an agreement on the pension liabilities before the bankruptcy, the report said." (Pensions & Investments)  

Funding Improvements Shouldn't Nix Pension Contributions
"The bad news in the [recent] Fitch report is that even though plan assets grew 5 percent in 2012 and contributions to the plans increased, the median funded status of U.S.-based pension plans fell to 73.8 percent, from 74.4 percent in 2011. The analysis revealed that two-thirds of the plans (148) are less than 80 percent funded[.]" (Treasury & Risk)  

Complications for 403(b) Plan Fiduciaries Under the TIAA Class Action
"The definition of the class includes 'all persons, including all "persons" as defined by 29 U.S.C. 1002(9), who at any time during the Class Period requested a transfer or distribution of TIAA-CREF mutual fund or money market accounts covered by ERISA whose accounts were not transferred or distributed within seven days of the date the account was valued and were denied the investment gains.' Because of the operation of ERISA, 'persons' in this context also means 'plans,' as a participant's rights under a plan are derivative of the plan's rights. So every 403(b) ERISA Plan which holds a TIAA contract during the class period (which is August 17, 2003 to May 9, 2013) is a member of the class." (Business of Benefits)  

Tactical Asset Allocation and ERISA Plans: Best Practices for Finding the Right Strategy for Plan Participants (PDF)
"Plan fiduciaries face unique challenges when evaluating the actual benefits of [Tactical Asset Allocation (TAA)] as a whole, as well as different TAA strategies.... Given the fact that Asset Allocation Investments are also routinely used as default investments, Plan fiduciaries should take the time to investigate the prudence of selecting an Asset Allocation Investment with a TAA strategy, and develop a considered approach for evaluating the varying advantages and disadvantages of different types of TAA strategies." (The Wagner Law Group, for The Center for Due Diligence)  


Comments by Vanguard to DOL on Lifetime Income Illustration in Pension Benefit Statements
"The DOL should consider improving participant awareness regarding lifetime income by encouraging voluntary education of participants by plan sponsors and service providers about lifetime income and distribution concepts, rather than mandating retirement income illustrations on participant statements. If the DOL requires lifetime income illustrations to be provided on participant statements, sponsors and service providers should have the flexibility to project retirement income using a systematic withdrawal approach." (Vanguard)  

Benefits in General; Executive Compensation

Beginning at the End: Designing Benefits that Work
"The tendency of many companies is to first and foremost look at budget.... It's much more important to start with the desired outcomes or behaviors.... The company may want employees to save more for retirement. Or, they may want employees to improve their health as a way to help manage overall healthcare costs. Having a good understanding of the actions the company wants employees to take, helps the company design benefit structures that motivate and reinforce the desired behaviors." (The Principal Blog)  

IRS Finalizes Regulations on Reimbursed Entertainment and Other Expenses
"These regulations complement the accountable plan rules by filling in the rest of the tax picture. When reimbursements to employees are excludable from their income under an accountable plan, the deduction restrictions apply to the payor. But when the reimbursements are taxable, it is the employee who uses the deduction and is subject to the restrictions. The approach to multi-party arrangements is of particular interest, and suggests that leasing organizations and the companies that use them should ensure that their reimbursement agreements efficiently and effectively allocate the restricted deduction." (Thomson Reuters / EBIA)  

Press Releases

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