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

Webcasts and Conferences

ESOP Distribution Policies
November 19, 2013 WEBCAST
(National Center for Employee Ownership)

Experience Synergies360
September 25, 2013 in PA
(Corporate Synergies)

ERISA Workshop 2013 - 24 Cities, October-November
October 23, 2013 WEBCAST
(SunGard Relius)

Health Reform - Beyond the Basics: What Counts as Income for Premium Tax Credits and Medicaid
September 25, 2013 WEBCAST
(Center on Budget and Policy Priorities)

View All Webcasts and Conferences

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

Text of IRS Notice 2013-58: Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates, September 2013 (PDF)
"For plan years beginning in 2014, based on the segment rates applicable for October 1988 to September 2013, the 25-year averages for the period ending September 30, 2013, of the first, second, and third segment rates are 5.54, 7.02, and 7.77 percent, respectively. For plan years beginning in 2014, the applicable minimum and maximum percentages are 80 percent and 120 percent." (Internal Revenue Service)  


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.

[Guidance Overview]

DOL Proposes Important Exemption for In-Kind Contribution (PDF)
"In-kind contributions of 'employer securities' are fairly common ... However, this one is significant for a number of reasons: [1] [T]he contribution is one of the largest ever made. [2] AT&T is not reporting any financial hardship or need to satisfy a minimum funding obligation.... The contribution is voluntary and will bring the Plan close to fully funded status. [3] The preferred LLC interests were created specifically for this transaction and are not marketable; under normal circumstances they may only be sold back to AT&T or the issuer subsidiary. [4] AT&T may elect to redeem the interests for AT&T common stock in lieu of cash." (Groom Law Group)  

Proposed SEC Rule Changes for Money Market Funds
"For DC plans that allow participant choice and include a money market fund in their fund menu, the key questions are: Will a government fund (exempt from both alternatives) or a retail fund (exempt from the floating NAV alternative) be an appropriate 'solution' or will the possibility of the (marginally) higher returns available in institutional prime funds compensate for added risk? What sorts of ERISA disclosures will be necessary with respect to whatever sort of fund is used? ... Will there be significant compliance costs, e.g., with respect to implementing (and communicating) the floating NAV proposal and maintaining 'retail fund' status?" (October Three)  

DOL Still Working on Fiduciary Proposal
"'You're not going to see anything in October because we're not finished,' [Assistant Secretary of Labor Phyllis] Borzi said. 'We're trying very hard to make sure we've crossed all the T's and dotted all the I's.' Borzi did not offer a new forecast for when the fiduciary proposal could emerge, though she indicated that the department remains adamant that new rules are necessary to protect investors from advisors and brokers with conflicts of interest." (Financial Planning)  

QPAM and INHAM Compliance Audit Information for Hedge Funds
"[At] a time when numerous institutional investors are undertaking additional due diligence of asset managers, a [Qualified Professional Asset Manager (QPAM) or In-House Asset Manager (INHAM)] may be able to use a compliance audit passing grade (if one applies) to demonstrate its commitment to good governance. However, a passing grade on a QPAM or INHAM compliance audit is not a substitute for a long list of action steps that, if taken, could demonstrate that robust ERISA fiduciary practices are in place. Moreover, a transaction(s) may be acceptable for purposes of a compliance audit related exemption but still be deemed imprudent for a particular ERISA plan." (Good Risk Governance Pays)  


Network, Learn and Sell at the SPARK Forum Retirement Industry Conference

Sponsored by SPARK

Join top record keepers, asset managers, TPAs, advisors, marketing and sales executives for unequaled educational and networking opportunities. Gain insights into the latest market trends, business strategies, regulatory and legislative issues, and product developments.

Nearly Two Dozen Public Pension Plans in Rhode Island Still Critically Underfunded
"Twenty three public pension plans managed by cities and towns remain critically underfunded, according to the state Division of Municipal Finance. The plans are not expected to emerge from that critical status until 2033. The majority are not even expected to meet their required annual contribution until 2014, according to the division." (Providence Journal)  

San Jose and Unions Make Final Argument in Court Battle Over Pension Cuts
"San Jose's pension reform has not yet been adopted because of the unions' lawsuit. The city's pension spending rose to $245 million last year from $73 million in 2001. The city has had to slash other spending and services to try and balance its budget. The court case consolidated five lawsuits brought by two unions, individual employees and retirees. The judge overseeing the case has scheduled an October 10 hearing, ahead of a final ruling." (Reuters)  

So You've Frozen Your DB Plan -- Now What?
"Some plan sponsors choose to sponsor a DB plan even after it is frozen, but most have an end goal to terminate it.... There are generally three steps to developing an effective termination strategy: 1. Evaluate the cost of termination.... 2. Evaluate several funding strategies.... 3. Evaluate the outcome of various asset allocation strategies." (The Principal Blog)  

Pension Discount Rates: September 2013 Preview
"After several years of painfully-low pension discount rates, we've seen a modest rebound in 2013.... [P]ension accounting discount rates are up by about 80 basis points so far this year.... Add in strong year-to-date equity returns, and we may finally see a reduction in unfunded pension balance sheet liability for fiscal year-end 2013.... Rates have increased at all points along the spectrum since 12/31/2012." (Van Iwaarden Associates)  


ESOP Company Symposium, Ownership Solutions for ESOP Companies

Sponsored by NCEO (National Center for Employee Ownership)

The ESOP Symposium is a three-day event in Minneapolis, MN on Oct 22-24, 2013 where you will hear from leading experts and with their guidance work through issues specific to established ESOP companies in structured interactive sessions.

Text of ERIC Amicus Brief to Second Circuit Arguing That Courts Should Not Rewrite Plan Documents (PDF)
"ERISA has never required SPDs to set forth how and why a participant's pattern of benefit accruals might rise or fall or plateau due to the interaction and influence of these external factors. And with good reason, since implementing such a requirement would pose an administrative and stochastic nightmare for plans and their administrators.... To ensure that ERISA's objectives of 'efficiency, predictability, and uniformity' in plan interpretation and administration are respected ... only in the most extraordinary circumstance would judicial reformation of a plan's terms ever be appropriate. This case is not such an occasion." [The case is Geoffrey Osberg V. Foot Locker, Inc., and Foot Locker Retirement Plan, No. 13-187-cv.] (The ERISA Industry Committee [ERIC] and U.S. Chamber of Commerce)  

ESOP Companies Report Economic Growth in 2012
"The survey asked companies to indicate their performance in 2012 relative to 2011: 71% indicated a better performance; 17% indicated a worse performance; and 12% indicated a nearly identical performance to the previous year. 78% indicated revenue increased; 22% indicated revenue decreased. 70% indicated profitability increased; 30% indicated profitability decreased. 64% of companies have created an ESOP education program or ESOP advisory committee since establishing the ESOP." (The ESOP Association)  

DB Plans Offer 'Immense' Potential for Insurance Carriers
"With interest rates still low and the insurance industry pulling back on the supply of annuities by raising prices and tightening up the generosity of features, life insurance companies need to look to generate growth through non-traditional sources ... Strong demand for income guarantees also means insurance carriers are in a position to take advantage of unfolding opportunities in the defined benefit (DB) marketplace by acquiring domestic plan assets through buyouts or hedging through buy-ins[.]" (InsuranceNewsNet.com)  

Making the Case for Working Longer
"[D]elaying retirement improves a retiree's financial security in three critical ways: The worker can continue to save money for a few more years and will have more time to earn investment income on his savings. For each year he works past age 62, he's also increasing the size of his future Social Security checks by about 7 percent to 8 percent. Working longer reduces the number of years in retirement that must be paid for." (Fidelity & Guaranty Life, and the Center for Retirement Research at Boston College)  


Pension Miseducation
"If an actuary has some (or all) purview over the return on assets assumption and (s)he is doing his or her job properly, the actuary will look at the investment lineup together with a capital market model and develop a return on assets assumption commensurate with that lineup. It is not the other way around.... Ultimately, the cost of a plan is what it is. The cost of paying $1 per month for the rest of an individual's life is the same, no matter the actuary." (Benefits and Compensation with John Lowell)  


Gloomy Jobs Outlook: Its Impact on Retirement Planning
"Job hunters and those already employed may need super powers to ready themselves for retirement. A big part of planning is knowing what you are likely to earn from work. For so many without jobs and deep in debt, looking ahead is tough. People with jobs are affected too. Even fuzzy mathematicians have to acknowledge that taxpayers will be stretched further as the number of non-contributors goes up." (Pension Risk Matters)  

Benefits in General; Executive Compensation

[Guidance Overview]

IRS Releases Guidance on Treatment of Same-Sex Spouses and Domestic/Civil Union Partners
"The current IRS guidance does not explain how to treat a plan participant with a same-sex spouse who has already designated a non-spouse beneficiary without obtaining spousal consent (which was not required prior to the Windsor decision), nor does it obligate a plan to notify such participant that a current beneficiary designation form may no longer be valid." (Schiff Hardin LLP)  

Epstein Becker Green ERISA Litigation Update, Fall 2013 (PDF)
20 pages; articles include: 401(k) Plan Litigation Continues: Tibble V. Edison International; the Moench Presumption Revisited; IRS Provides Answers To Some of Windsor's Questions; Developments in the Continuing Litigation Over Obamacare; the Next Term: Heimeshoff & Plan-Imposed Limitations Periods for Benefit Claim Litigation; Supreme Court Supports Enforcement of Subrogation Provisions but Demands Clarity in Plan Language. (Epstein Becker Green)  

Employer Costs for Employee Compensation, June 2013 (PDF)
"In June 2013, average costs in private industry for retirement and savings benefits were $1.07 per hour worked, or 3.7 percent of total compensation. The average cost per hour worked for defined benefit plans ... was 47 cents or 1.6 percent of total compensation. The average cost for defined contribution plans ... was 60 cents or 2.1 percent of total compensation.... Private industry employer costs for paid leave averaged $2.00 per hour worked or 6.9 percent of total compensation ... [and] insurance benefits averaged $2.39 or 8.2 percent[.]" (U.S. Bureau of Labor Statistics)  

ERISA Claims, Litigation and Litigation Avoidance (PDF)
58 Presentation slides; topics include: ERISA'S Statutory Framework; ERISA Remedies; ERISA Parties: Impact on ERISA Actions; ERISA Preemption; ERISA Procedural and Evidentiary Issues; Examples of ERISA Claims (in wide variety of plan types); Avoiding and Preparing for ERISA Litigation. (Mazursky Constantine LLC)  

Bill to Create National Broker Licensing Bureau Passes House
"The bill to establish a national broker clearinghouse to cut through the red tape of state-by-state licensing [has] passed the U.S. House of Representatives ... A similar bill moved through committee in the U.S. Senate in June and is teed up for a full vote.... [T]he law would create the National Association of Registered Agents and Brokers, which would have a 13 member board appointed by the president and confirmed by the Senate. Members of organization would have a simpler time obtaining licenses to practice outside of their state of residence." (Employee Benefit Adviser)  

Protecting Deferred Comp with Credit Default Swap
"Credit risk is exactly what a credit default swap is designed to protect against. The client could buy a credit default swap against the company's bonds. Then, if the company went bankrupt or defaulted on the bonds, the payment from the swap would cover the value of the client's deferred compensation.... That swap acted as an insurance policy against a bond issued by the client's former employer, which would mature in 2015.... If the bond ... reaches maturity, the contract for the swap will expire and ... the transaction [could be repeated] by purchasing another swap on a bond with a later maturity. But since the retirement plan pays out over 10 years, there will be less deferred compensation to protect over time and the cost of doing so will drop." (The Wall Street Journal; subscription may be required)  

2013 Director Compensation Study Summary
"Total compensation paid to non-employee directors rose +4.5% over 2011 levels, to a median of $261,333.... Pay mix for non-employee directors has remained relatively unchanged since 2007. Directors continue to receive just over half of their total compensation in the form of equity (55% in 2012), in accordance with governance best practices.... Annual Cash Board Retainer increased $5,000 in 2012 to a median of $85,000 and the median Annual Equity Board Retainer increased $10,000 to $140,000." (Steven Hall & Partners)  

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