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September 16, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Retirement Plan Administrator
United Retirement Plan Consultants
in MD, PA

Director, Client Executive
Transamerica Retirement Solutions
in AR, MO, TN, TX

Defined Benefits Senior Pension Administrator
in OR

Defined Contribution Administrator
Pension Administration Firm
in AZ

Enrolled Actuary
Alliance Pension Consultants, LLC
in IL

Actuarial Analyst
Alliance Pension Consultants, LLC
in IL

General Counsel
I.A.M. National Pension Fund
in DC

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Webcasts and Conferences

Same Gender Marriage: Take 2 - Encore
October 1, 2013 WEBCAST
(SunGard Relius)

403(b) Plans for 401(k) Practitioners - 3 parts
October 8, 2013 WEBCAST
(SunGard Relius)

PPA Document Restatements What You Need to Know
October 23, 2013 WEBCAST

Receive a Lifelong Paycheck: Guaranteed Income in Retirement
September 17, 2013 WEBCAST
(Northwestern Mutual)

Corporate Finance Implications For Pension Risk Transfer
September 26, 2013 WEBCAST
(Institutional Investor Journals)

View All Webcasts and Conferences

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

IRS Employee Plans News, September 2013 (PDF)
Article titles include: [1] Form 8955-SSA penalty assessments -- a programming error caused approximately 4,000 penalty notices to be sent by mistake; [2] Automatically revoking spousal beneficiary designations on legal separation can lead to plan errors; [3] Frozen defined benefit plans project; and [4] Favorable determination letters don't rule on Defense of Marriage Act language. (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.

The State of State Pension Plans, 2013 Edition
"In aggregate, the state plans are 72.6% funded, with [an unfunded actuarial accrued liability (UAAL)] per capita of roughly $2,600 ... Wisconsin remains the strongest system, with a 99.9% funded ratio and a UAAL of $18 per capita. Twelve states have funded ratios of at least 80% ... On the other side of the spectrum, 26 states and Puerto Rico fall below Morningstar's fiscally sound threshold of a 70% funded ratio.... Illinois continues to have the worst funded system at a 40.4% funded ratio and a $7,421 per capita UAAL. Puerto Rico falls far below Illinois, with an aggregate 11.2% funded level and a UAAL per capita of greater than $8,900." (Morningstar)  

District Court Rules That Attorneys and Actuaries Were Not Fiduciaries with Respect to Excise Tax Penalties for Section 412 Plan
"Plaintiffs have ... done an excellent job alleging that they were poorly represented ... They do not, however, establish that defendants acted as fiduciaries, because plaintiffs have not alleged anything that suggests [the attorneys] controlled whether plaintiffs followed their advice.... [P]laintiffs have [also] adequately alleged that [the actuary] gave them what amounted to bad advice, but that does not make him a fiduciary.... Plaintiffs' allegations make it clear that the decisions remained with the plaintiffs." [Chua v. Shippee, Ashton, et al., No. 13C383 (N.D. Ill. Sept. 10, 2013)] (U.S. District Court for the Northern District of Illinois)  

Institutions Fighting Money Market Proposals
"An attempt by the [SEC] to put more safeguards on money market funds is generating caution and resistance from lobbyists for pension funds and institutional money managers concerned the move will make the funds a less viable investment option.... As many as half of all defined contribution and defined benefit plans use money market funds for stability, liquidity and a low-cost diversified way to access commercial paper and government securities. Plan executives worry that further regulation would alter the fundamental characteristics of the funds, while adding administrative and compliance headaches[.]" (Pensions & Investments)  

CalSTRS Debt Soars Under New Accounting Rules
"New government accounting rules will more than double the pension debt reported by CalSTRS, boosting an 'unfunded liability' that is now about $71 billion to a newly calculated 'Net Pension Liability' of $166.9 billion. [It's] unclear whether the new liability figure will be reported by the state or spread among school districts, where more than doubling current debt might lower credit ratings and drive up borrowing costs. If the 'Net Pension Liability' is distributed among employers, the reported total debt of a typical small-enrollment school district might jump from $21 million to $49 million and the debt of a typical large district from $280 million to $728 million." (Calpensions)  


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U.S. Equity, Credit Boost Public Pension Plan Returns
"Double-digit returns were the norm for U.S. public pension plans for the year ended June 30, with smaller funds and those focused on domestic equities or taking opportunistic positions in credit achieving the best results.... The median return of the 42 plans analyzed ... all with assets of more than $1 billion -- was 12.45%, slightly below the 12.61% median for public plans with more than $1 billion[.]" (Pensions & Investments)  

401(k) Index Observations: Monthly Details, August 2013
"Defined contribution plan participants' daily transfer volumes were low in August, with transfers averaging 0.022% of balance totals per day ... Daily trading favored fixed income investment vehicles during August, which experienced net gains from transfer activity for over half (59%) of the trading days. Net transfer activity for August moved away from diversified equities (equity assets excluding company stock) by $34 million (0.02%). Total transfer activity across the Index was $377 million for the month." (Aon Hewitt)  

Retirement Plan Contributions Are Tax-Deferred -- Not Tax-Free
"The tax treatment of retirement savings -- tax deferral -- too often has been lumped together with tax deductions (such as the deduction from income of mortgage interest expense) and tax exclusions (such as the exclusion from income of employer-provided health insurance premiums).... Tax deferrals reduce taxes paid in the year of deferral, but increase taxes paid in the year that the income is recognized. Deductions and exclusions, on the other hand, reduce taxes paid in the year they are taken -- period.... Clearly, the benefits of tax deferral are quite different from those of deducting or exempting income from tax." (Investment Company Institute [ICI])  

Dreams Deferred: Boomers Delaying Retirement Plans
"Many Americans are finding that economic realities are making it impossible for them to contemplate retirement on the timeline they had hoped. From the impact of the recession on savings to a fear of rising health care costs, a number of factors are forcing older Americans to reconsider their plans to leave the workforce." (Deseret News)  


Form 5500 Reporting Update Webinar - September 27 Webinar

Sponsored by Lorman and BenefitsLink

This live webinar will help you understand when you need to file a Form 5500 and what you need to file, and will focus on some recent changes that may impact your filings. Registration discount for BenefitsLink readers.

Retiree Investment Portfolios: Adjusting for QE Tapering
"[R]etirement portfolios should strive for stability through diversification and noncorrelation. A portfolio constructed of noncorrelated assets such as equities, fixed income and commodities or alternatives likely will react to changes in the market more favorably over time. To augment these holdings, a cash alternative such as a money market fund could add further balance and diversification." (InvestmentNews)  

Some Alternate Perspectives on the Sun Capital Partners Private Equity Case
"The question that matters the most is whether the private equity fund and its portfolio companies are members of a single 'control group' for ERISA purposes.... If these entities are all under common control for ERISA purposes, an unfunded pension liability could move up and then back down the ownership chain -- even if the fund itself is not liable on the basis that it is not a trade or business, its portfolio companies, i.e., its investment assets, presumably are liable." (DrinkerBiddle)  

Exchanging Delayed Social Security Benefits for Lump Sums: Could This Incentivize Longer Work Careers?
"This paper explores whether allowing people to receive a lump sum as a payment for delayed retirement rather than as an addition to their lifetime Social Security benefits might induce them to work longer.... [The] base case indicates that workers given the chance to receive their delayed retirement credit as a lump sum payment would boost their average retirement age by 1.5-2 years. This will interest policymakers seeking to reform the Social Security system without raising costs or cutting benefits, while enhancing the incentives to delay retirement." (University of Michigan Retirement Research Center)  

How People Are Retiring
"In a survey of people 65 to 69: Only the top 10 percent of all households has more in actual financial assets than they have in virtual Social Security wealth.... This means that Social Security provides more income than financial assets provide for a very large majority of Americans. Pensions mean little to most households because most people don't have them. Pension wealth registers at zero for the bottom 70 percent of all single-person households [and] at zero for 60 percent for all married households." (John Goodman's Health Policy Blog)  

Maryland Boosts Absolute-Return Target to 10%
"Maryland State Retirement & Pension System ... is increasing its absolute-return target to 10% from 7%, focusing on strategies with lower correlation and beta exposure to equities.... The $41.1 billion pension fund returned 10.6% for the fiscal year ended June 30, net of fees, vs. 8.5% for its benchmark." (Pensions & Investments)  


Text of Comments by The SPARK Institute to SEC on Proposed Money Market Mutual Fund Reform (PDF)
"[T]he changes being considered by the SEC, if adopted, will impact our member companies, tens of thousands of retirement plans and millions of plan participants. Depending on the approach taken by the SEC, the impact on retirement plans and their participants may be significantly detrimental, and could result in the limited availability, or elimination, of money market funds from such plans.... the 'Floating NAV Alternative' is generally operationally and administratively feasible for retirement plan service providers. However, we have significant issues and concerns about the 'Standby Liquidity Fees and Gates Alternative' and the 'Combined Alternative.'" (The SPARK Institute)  

Benefits in General; Executive Compensation

[Guidance Overview]

IRS Post-DOMA Guidance: What Employers Should Do Now
"What Benefit Plan Changes Must Be Implemented Now? ... How Should We Communicate with Employees About This Change? ... What Do Employees Need to Know? ... Do Retirement Plan Election Forms Need to Be Updated Right Away? ... What Actions Should Employers Consider Taking Now for Retirement Plans? ... Should State Income Tax Withholding on Same-Sex Spousal Health Plan Coverage be Handled Differently in Non-Recognition States? ... What Is the Process for Claiming Payroll Tax Refunds for Prior Years? ... What Documentation Should Employers Require to Verify Marital Status for Same-Sex Couples? ... What Benefit Design Changes Should Employers Be Considering in Light of the Ruling?" (Ivins, Phillips & Barker)  

[Guidance Overview]

Enrolled Actuaries Program Booklet, Revised September 5, 2013 (PDF)
This recently revised booklet provides materials for the November 2013 Pension EA-2 (Segment F) Examination, May 2014 Basic (EA-1) Examination, and May 2014 Pension EA-2 (Segment L) Examination. (Joint Board for the Enrollment of Actuaries [JBEA], American Society of Pension Professionals & Actuaries [ASPPA], and Society of Actuaries)  

Cypen & Cypen Newsletter, September 12, 2013
Article titles include: The Public Safety Tipping Point (When Saving Money Loses Lives); Crime, Not Debt, Is Detroit's Biggest Problem; Lawyers Not Cutting Employees' Hours Because of ACA; Hedge Funds Cut Fees; and Local Governments Do Not Completely Control Pensions. (Cypen & Cypen)  

How Should ERISA Plans Handle Powers of Attorney and Court-Appointed Guardians and the Absence of Such Agents for Participants Lacking Capacity?
"This article discusses (1) when a third party may act on behalf of an ERISA plan participant or beneficiary who may, but need not, be unable to act on his or her behalf, and (2) the responsibilities of an ERISA plan to a participant or beneficiary unable to act on his or her behalf if no third party is authorized to act on his or behalf." (Albert Feuer)  

Peabody Says It No Longer Owes Benefits to Patriot Retirees
"[Patriot Coal] and [Peabody Energy Corp.] are fighting over the responsibility to fund benefits for a group of about 3,100 retirees that Peabody agreed to continue covering after the October 2007 spinoff.... An appeals court last month [said] the abrogation of labor deals should have exempted the group in question, and that the group's benefits remained the responsibility of Peabody. But that ruling was 'not concerned with, and expressed no opinion on, what effect a new labor agreement would have on Peabody's' obligations' ... Under the new deal, Peabody's funding obligations, which are tied to the amount of benefits Patriot provides to its workers, disappear, because the deal transfers all benefits to an outside trust, Peabody argued." (Reuters)  

Press Releases

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