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September 5, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Benefits Manager
Chugach Alaska Corporation
in AK

Benetech, Inc.
in CA

Pension Case Designer
American National Insurance Company
in TX

Internal Sales Consultant
The Newport Group
in NC

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Webcasts and Conferences

Voluntary Fiduciary Correction Program And Abandoned Plan Program Workshop
September 16, 2013 in IN
(Employee Benefits Security Administration (EBSA), U.S. Department of Labor)

Same Gender Marriage: Take 2
September 10, 2013 WEBCAST
(SunGard Relius)

Handling IRA Legal Issues
September 10, 2013 WEBCAST

Conducting Your Own Compliance Audit
September 12, 2013 WEBCAST

Rollovers Between Retirement Plans and IRAs
September 12, 2013 WEBCAST

View All Webcasts and Conferences

  LinkedIn   Twitter   Facebook Hand-picked links to the web's best news articles,
official guidance, jobs, webcasts and more.

Corporate Retirement Plans: What's the Point?
"The days of corporate retirement programs being a valued benefit appear numbered, as employers focus increasingly on managing benefit costs and risks. The rapid and wholesale shift of retirement savings responsibilities to individuals has exacerbated the perception that a corporation must only do the minimum required by law and competition to have an effective retirement plan. The primary focus on expense rather than talent management is understandable in today's environment, but creates a race to the bottom that may have unintended consequences." (Mercer; free registration required)  


ftwilliam.com Launches ftwProposal Pro!

Sponsored by ftwilliam.com

Join us on Sept 18th for a quick demonstration of our newest product, ftwProposal Pro, an integrated proposal module. Click here to learn more about the features we will cover and sign up for our free webinar.

401(k) Plans Add More Personalized Advice
"[B]ig advice providers such as Morningstar Inc. and Financial Engines Inc. are trying a new tack: They are adding more personalized, low-cost advice, much of it aimed at investors nearing retirement.... While it can be tough persuading workers to pay closer attention to their workplace savings plans, research suggests a little hand-holding would do some of them a lot of good.... [R]etirement savers who embrace professional help typically end up saving more." (The Wall Street Journal; subscription may be required)  

Gen Y Financial Perspective the 'Most Changed' Following the 2008 Financial Crisis
"81 percent of Gen Y now consider themselves more knowledgeable about their finances, compared to 66 percent of older generations. In addition, when it comes to confidence levels, Gen Y is faring better: 55 percent of Gen Y versus 47 percent of older generations feel more confident as investors. Additionally, 64 percent of Gen Y versus 54 percent of their elders now save more systematically." (Fidelity)  

S&P 1500 Pension Plans' Funding Remain Stable
"Funding levels of pension plans sponsored by S&P 1500 companies were relatively flat during the month of August, resulting in a $213 billion deficit as August 31, 2013 ... The funded ratio ... remained at 89% during August, which is 15% higher than the end of 2012. Equity markets saw losses during the month with the S&P 500 index falling 3.1% ... [D]iscount rates continued to rise which reduced the liabilities: the Mercer Yield Curve discount rate for mature pension plans was up 17 basis points for the month and is up 92 basis points year-to-date." (Mercer)  

Funded Status of U.S. Corporate Pensions Falls to 88.1% in August (PDF)
"Corporate pension plans, public pension plans, and endowments and foundations in the U.S. all lost ground financially in August as rising interest rates led to lower values for most asset classes ... The decline in liabilities for corporate plans resulted from the 13 basis-point-increase in the Aa corporate discount rate, which increased to 4.78 percent in August.... However, the falling liability values from rising bond yields were not enough to offset the decline in assets from struggling US equity markets ... Overall, typical corporate benefit plan assets in August fell 1.6 percent as liabilities fell 1.5 percent." (BNY Mellon)  


Lost Participants, Relative Search, Obituaries & Verify Death Data Instantly!

Sponsored by Pension Benefit Information, Inc.

PBI's Research Center provides Instant access to locate Participants, Relatives, review Obituaries and Access to PBI's comprehensive Death Database. Some utilities are even Free! Contact PBI today to obtain access at 415-482-9611 or email inquiry@pbinfo.com.

Is CalPERS Ticking Along, or a Ticking Time Bomb?
"California taxpayers fund CalPERS's pensions and ultimately guarantee them -- now with $260 billion-plus in assets. But it also has growing unfunded liabilities -- pegged at about $80 billion or so by CalPERS ... Bringing that number down ... depends on whether CalPERS hits its presumed 7.5% investment rate of return over the next couple of decades.... If some reason it comes it under that, say 4.5%, that places CalPERS in a scary $290 billion range." (RIABiz)  

Why DB Plan Participants Can't Sue Actuaries
"A recent decision involving a suit over investment actions of a defined benefit plan illustrates one of the reasons why participants in a DB plan cannot sue plan actuaries for mistakes -- the participants have almost never been damaged. DB plan participants have a right to a fixed set of benefits, and how well the plan does on its investments or meeting its actuarial assumptions does not increase or decrease that set of benefits[.]" [Palmason v. Weyerhauser, No. C11-0695RSL (W.D. Wa. Aug. 23, 2013)] (Reinhart Boerner Van Deuren s.c.)  

$3M Settlement in Class Action Lawsuit Over 401(k) Investments
"The suit on behalf of former and current employees of Flagstar Bank alleges that Flagstar breached its fiduciary duties under ERISA, by allowing investments in its own stock for the employees 401(k) for several years during and after the Great Recession, 'when they allegedly knew or should have known that such investment was imprudent[.]'" (Grand Rapids Business Journal)  

Does Risk-Parity Target-Date Strategy Work?
"Proponents of risk-parity funds say the traditional approach to asset allocation -- which might involve a blend of 60% stocks and 40% bonds for long-term investors -- is fundamentally flawed. They say 60/40 funds are far riskier then investors realize because about 90% of the risk of such a portfolio comes from stocks, which are more volatile than bonds..... The risk-parity or balanced-risk approach has definitely paid off in periods when stocks have tumbled and other target-date funds have taken a hit.... But it has held the ... funds back this year -- a period in which stocks have risen strongly while bonds and commodities have been weak." (The Wall Street Journal; subscription may be required)  

Annuity Sales Increase By Nearly 10%
"Second-quarter 2013 sales results for the U.S. annuity industry ... reveal a 9.9-percent increase to nearly $54.5 billion from $49.6 billion for the previous quarter. Year-over-year, however, that sales number is down 1.4 percent from $55.3 billion in the second quarter of 2012.... [F]ixed annuity sales rose to their highest quarterly level since the fourth quarter of 2011. Sales totaled $17.14 billion, up 14.6 percent from just under $15 billion in the first quarter and up 0.2 percent from $17.10 billion in the second quarter of 2012[.]" (On Wall Street)  

Correcting Participant Loan Failures
"Plan failures related to participant loans can be corrected using either Voluntary Correction Program (VCP) or Correction on Audit. Since plan loan failures are not operational failures, they cannot be corrected using the self-correction method." (Belfint Lyons & Shuman, CPAs)  

FPA Changes Compensation Disclosure, Removes Salary Option
"The site has removed the option for an advisor to select 'salary' when explaining compensation disclosure -- thus removing one of the choices that tripped up former CFP Board Chairman Alan Goldfarb. The change reduces the FPA's compensation description options to three: 'fee-only,' 'commission only' and 'combination fee/commission.'... The FPA change is a response to a clarification from the CFP Board last month, which noted that CFP certificants may not call themselves fee-only if their employers or any other 'related parties' receive commission income." (On Wall Street)  

Technology Aids Advisor Client Communications
"[E]xactly how and when to contact clients is a question that no advisor can afford to ignore. The basic idea is simple -- more client contact leads to happier clients and more referrals -- but executing it can be complex. That truth is magnified as the range of communication options proliferates." (On Wall Street)  

Last-Minute Bill Would Exempt Transit Workers from New California Pension Rules
"Thousands of employees of public transit agencies around the state would be exempt from stricter pension requirements under an eleventh-hour proposal expected to move through the [California] Legislature next week ... The compromise reached between the Brown administration and federal officials would allow local transit agencies to receive an estimated $4.3 billion in federal funds over the next year while ultimately letting the courts decide whether changes to state pension law can be forced on local transit workers[.]" (Los Angeles Times)  


New Report from Economic Policy Institute States the Obvious About Retirement Savings
"The EPI's report shocks and awes with charts and graphs showing the savings disparities between rich and poor, black and white, young and old, etc. None of the data appears to be incorrect, however, many charts border on misleading and the blame for all inequality is placed on 401(k) accounts which is completely and irresponsibly wrong." (National Center for Policy Analysis)  

Benefits in General; Executive Compensation

[Guidance Overview]

Post-Windsor Agency Guidance Means Some Plans Will Need to Apply Multiple Rules
"Since the SSA decided to recognize a same-sex marriage based upon the law of the couple's state of residence at the time of application for Social Security benefits, employers who sponsor defined benefit plans which have benefit forms that coordinate with Social Security benefits ... or other plans such as long term disability benefits which may offset for Social Security benefits, will also need to know the participant's state of residence at the time Social Security benefits were applied for ... to be able to understand and determine the impact of the marital status on the Social Security benefits which will then impact the calculation of the optional benefit form and/or the disability benefit plan offset." (Winstead PC)  

Compensation Paid to Outside Directors at Largest Public Companies Increased Last Year (PDF)
"[T]otal compensation paid to outside directors in the Fortune 250 increased by approximately 4% over the past year. While only a modest increase of 2% in total cash compensation was observed, total equity awarded increased by nearly 8%[.]" (Meridian Compensation Partners, LLC)  

Slight Increase in Rate at Which Large Companies Are Granting Equity Incentives (PDF)
"The median run rates are up slightly for Fortune 100, Fortune 250 and Fortune 500, as companies continue to shift from granting stock options to full value shares.... The median total overhang [is] up for Fortune 100 and Fortune 250, but slightly down for Fortune 500.... Among Fortune 500 companies ... the annual run rate at the 75th percentile was 2.4% and total overhang was 16.0%." (Meridian Compensation Partners, LLC)  


CEO Pay Disclosure Rule: About as Dumb as It Gets
"Forcing companies to disclose the gap between CEO pay and rank-and-file compensation is about as dumb as it gets.... [W]hat makes executives take wild risks in order to earn their incentive pay -- risks like the ones financial firms took that helped trigger the economic crisis that began in 2008, and later Dodd-Frank -- doesn't have a lot to do with how much money they make. Let alone how much their rank and file makes. It has far more to do with the short periods of company performance, usually no longer than three years, on which such compensation is based. You've got to show results in a hurry to get your money." (CFO)  

Press Releases

EBRI at 35 -- Fall 2013 President's Report
Employee Benefit Research Institute (EBRI)

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