EmployeeBenefitsJobs.com logo BenefitsLink.com logo

BenefitsLink Retirement Plans Newsletter

September 17, 2013          Get Health & Welfare News  |  Advertise
         Past Issues  |  Search

Employee Benefits Jobs

Assistant Administrator
The Ryding Company
in CA

Benefits Associate II
Western University of Health Sciences
in CA

Director, Client Executive
Transamerica Retirement Solutions
in CA

Post Your Job

View All Jobs

RSS feed for jobs RSS Feed: All Jobs

Webcasts and Conferences

Washington & DOMA Update
October 10, 2013 WEBCAST
(National Tax Sheltered Accounts Association)

Best Practices in Designing Behavior Changing Financial Wellness Programs
October 10, 2013 WEBCAST
(Lorman Education Services)

The Roadmap to State and Private Exchanges
October 3, 2013 WEBCAST
(ABA Joint Committee on Employee Benefits)

The Roth 403(b) Option; The Opportunity With Both Ongoing Contributions & Conversions
November 7, 2013 WEBCAST
(National Tax Sheltered Accounts Association)

Plan Governance
October 3, 2013 in GA
(ASPPA Benefits Council of Atlanta)

HITECH and HIPAA Omnibus Final Rule - A Glimpse at Primary Changes
September 23, 2013 WEBCAST
(Bond, Schoeneck & King, PLLC)

The Two Main Components of a “Reasonable Arrangement” under 408(b)(2)
September 19, 2013 WEBCAST
(Pension Consultants, Inc.)

View All Webcasts and Conferences

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

Upcoming Employee Plans Guidance Phone Forum, October 29, 2013
"Join us for an overview of retirement benefit items on the 2013-2014 Priority Guidance Plan released on August 9 and other projects in EP Technical Guidance. Please email your questions by October 22, 2013." (Internal Revenue Service)  


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!

Marginal Tax Rates and the Benefits of Tax Deferral
"Because the benefit of tax deferral is roughly equivalent to getting a zero rate of tax on investment returns, and because investment returns compound over time, the amount of benefits a taxpayer receives from tax deferral depends more on the length of time that a contribution remains invested than on the taxpayer's marginal tax rate." (Investment Company Institute [ICI])  

Can Defined Contribution Plan Returns Match Defined Benefit?
"There's more money in corporate [DC] plans than there is in corporate [DB] plans today, and the gap is only going to get bigger from here. Trouble is: the DC money doesn't seem to be able to earn the same level of investment returns as DB money does.... And it's not because DB plans were following a riskier investment strategy: DC asset allocations were in aggregate more aggressive and returns were more volatile than DB, and some of the biggest DC underperformance came in the years in which markets fell." (Russell Investments)  

Mercer U.S. Pension Buyout Index, August 2013
"[T]he cost of purchasing annuities for retirees remained relatively level over August 2013, with only a small increase from 108.7% to 108.8% of the accounting liability. The economic cost of retaining the retirees also remained relatively level, but showed a small decrease from 108.2% to 108.1% of the accounting liability.... The retiree buyout cost relative to the economic cost of retaining the liabilities therefore increased slightly during August but continues to be low at approximately 70 basis points indicating that buyout premiums are potentially attractive for sponsors when compared with all-in retention costs[.]" (Mercer)  

U.S. Investors Are Confident About Financial Prospects, But May Be Underestimating Their Retirement Income Needs (PDF)
"Americans project they will need 62% of their final pre-retirement salary to live in retirement, compared to the 70%-80% income replacement rate commonly used for planning purposes. Generation Y investors expect to need just 56% of their salary, while Generation X investors believe they will need 64% ... On average, American investors expect to retire at age 64 and live to the age of 81 -- spending 17 years in retirement." (Natixis Global Asset Management)  


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.

Court to DB Plan Participants: 'Don't Howl Until You're Hurt!'
"Plaintiffs were required to show a concrete and particularized injury that was not merely speculative in order to have a right to the money damages they demanded. This means that they must have shown that the alleged breaches 'created an appreciable risk that the defined benefits would not be paid.' ... The court said, after considering expert testimony, that the plan was underfunded by at most 1.5%, and that the alleged fiduciary breach 'posed no threat to [plaintiffs'] present or future benefit payments.'" [Palmason v. Weyerhauser Co., No. 11-0695 (W.D. Wash. Aug. 23, 2013)] (Seyfarth Shaw LLP)  

Puerto Rico Can Only Cover 11.2% of Pension Costs
"[Puerto Rico's] pension liability is now put at $8,900 per person, and the island's three public pension plans are projected to deplete their respective assets in the coming years ... It passed reforms earlier this year to try to bring down its $37.3 billion of unfunded pension liabilities, but the territory's $35 billion of pension debt will remain for years." (Reuters)  

S&P Revises Chicago's Outlook to Negative on Pension Costs
"Under an Illinois law mandating actuarially required pension payments for police and fire retirement funds, Chicago's payment is projected to top $1 billion in fiscal 2015 from $483.4 million in fiscal 2014, which begins Jan. 1. Subsequent payments are expected to continue to climb, hitting $1.25 billion in fiscal 2020 ... S&P noted the unfunded liability for Chicago's four retirement funds had grown to $19.4 billion in 2012 from $11.9 billion in 2009, with a funded level of just 35 percent." (Reuters)  

Alberta Tackles Pension Costs with Sweeping Reforms
"The effort to contain the cost of Alberta's four separate public pension plans, with unfunded liabilities of more than $7.4-billion, is being called the boldest move yet ... The key features of the new scheme include a cap on total contribution rates for government and its employees, a moratorium on benefit improvements until 2021, and a limit on pension cost-of-living adjustments to 50 per cent of Alberta's inflation, instead of the current 60 per cent.... And long-serving government workers who can now retire early with a full pension will see reduced benefits if they retire before age 65." (The Globe and Mail)  


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.

Employee Ownership Update for September 16, 2013
Article titles include: Survey Shows Global ESPP Participation Declining; Employees to Receive Shares in UK's Royal Mail; and DOL Sues California Pacific Bank. (National Center for Employee Ownership [NCEO])  

Postal Service Offers Early Retirement to More Than 15,000 Supervisors
"USPS said it does not have an exact goal for the number of employees who accept the offers, but confirmed it has identified 15,580 field employees ... generally managers, supervisors and local postmasters.... Postal workers who accept the offer will not receive any financial incentive to leave; instead, they will collect their retirement annuity earlier than they would have otherwise been eligible." (Government Executive)  

Same-Sex Marriage Recognition Impacts Employer Plans
"As of September 16, 2013 ... (a) lump-sum death benefits under a defined contribution plan must be paid to a same-sex spouse unless such spouse consents to the designation of a different beneficiary; (b) annuity benefits under a defined benefit plan must be paid in the form of a 50% (or higher) joint and survivor annuity unless the same-sex spouse consents to a different form of payment; (c) a same-sex spouse may rollover a distribution, either directly or indirectly, to his own IRA or employer-sponsored plan; and (d) a participant with a same-sex spouse will be considered married for purposes of the minimum distribution rules which may result in smaller mandated distributions." (Clifton Budd & DeMaria, LLP)  


How Investment Theory Explains 401k Plan Sponsors' Evolving Fiduciary Duties
"Understanding the dominant investment theory of the era helps explain the fiduciary motivations of 401k plan sponsors. It is both instructive and ominous to see how plan sponsors respond. In the early era, sponsors set up their 401k plans to mimic traditional investment goals. Yet, they quickly abandoned those tried and true methods when inundated by the marketing literature of an industry that saw an opportunity to expand revenues at a phenomenal rate. During the current mature phase of 401k plans, we see plan sponsors moving much slower." (Fiduciary News)  


Text of Comments by American Benefits Council to SEC on Proposed Money Market Reforms (PDF)
"Because employers that sponsor defined contribution and defined benefit plans and the participants covered under these plans value money market funds for precisely the attributes the reforms will undermine -- a stable value while providing liquidity -- the Council does not support these reforms.... If the Commission imposes a floating NAV on 'institutional' prime money market funds, it should provide that all tax-advantaged defined contribution plans are treated as 'retail' investors.... The Commission's cost-benefit analysis must address the variety of special rules and considerations that apply to retirement plans and the limits, based on those rules, on the ability of retirement plans to switch to other investments to meet their investment needs." (American Benefits Council)  

Benefits in General; Executive Compensation

[Official Guidance]

Text of IRS Notice Den-2013-28, Tax Relief for Victims of Severe Storms in Colorado
"IRS gives affected taxpayers until Dec. 2, 2013, to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Sept. 11 and on or before Dec. 2, 2013.... This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56." (Internal Revenue Service)  

[Guidance Overview]

IRS Issues Guidance on Same-Sex Marriages
"Proof of marriage that may be required by employers should be the same for all marriages. In general ... requiring proof of marriage is not practical unless employees are required to update that proof periodically.... [A]necdotal evidence is that up to 20% of employees falsely claim individuals to be their spouses and dependents and a periodic audit may save the employer significant funds." (Blank Rome LLP)  

[Guidance Overview]

Same-Sex Spouses and Federal Law: Eight Key Answers on Employee Benefits
"Must benefit plans recognize same-sex marriages sanctioned in jurisdictions other than U.S. states? ... Should partners in civil unions or other state-sanctioned same-sex relationships short of marriage now be treated as spouses? ... Does this mean employers must provide the exact same benefits to same-sex couples as to opposite-sex couples? ... Do benefit plans have to be amended to reflect same-sex marriages? ... How will the employer know if an employee in a same-sex relationship has been married in another state? ... Are church plans and state governmental plans subject to these rules? ... May employees treat this new rule as a status change and allow mid-year cafeteria plan elections? ... When do we have to start implementing this change?" (Warner Norcross & Judd LLP)  

Fortune 500 Outside Director Pay Shows Modest Growth, Emphasis on Cash
"Total direct compensation for outside directors increased 3% at the median over the prior year. The typical Fortune 500 director receives almost $227,000 in total direct compensation, up from about $220,000 in last year's study. The median value of total cash compensation increased 8% over the last year, while median stock compensation remained flat.... The median retainer paid to compensation committee members increased 25% last year and now equals what audit committee members receive ($10,000)." (Towers Watson)  

Vast Majority of Healthcare CEOs Have Severance Agreements
"[A] clear majority (83%) of health care organizations have a written severance agreement with their CEO.... [S]everance benefits are most commonly triggered by involuntary termination without cause or a change-in-control. While just 5% of organizations provide service-based severance benefits, the majority of organizations continue benefits for a fixed period, typically 24 months. Moreover, most continue benefits during the severance period, including dental, vision, and life insurance." (Mercer)  

Expect the CEO Pay Ratio Disclosure Rules This Week
"Using the Summary Compensation Table method of calculating the total compensation of every employee ... will be literally impossible for most corporations. The big question ... is whether the SEC is comfortable taking advantage of recent court cases appearing to give it more interpretive authority in light of Congress' half-baked drafting of Section 953(b)." (Winston & Strawn LLP)  

SEC Schedules a Vote on the CEO Pay Ratio Rule
"As expected, the [SEC] has announced that it will consider proposing regulations this week to implement Section 953(b) of [Dodd-Frank] requiring public companies to disclose the ratio of the chief executive's compensation to the median compensation of all other company employees. The SEC will meet at 10:00 a.m. on Wednesday, September 18, to consider the CEO pay ratio rule and other matters." (Towers Watson)  

Press Releases

Connect   LinkedIn   Twitter   Facebook
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Phone (407) 644-4146
Fax (407) 644-2151

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright © 2013 BenefitsLink.com, Inc. -- but feel free to forward this newsletter without further permission from us, if you do not modify the newsletter in any way (including this lower portion).

All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

Links to Web sites other than those owned by BenefitsLink.com, Inc. are offered as a service to readers. The editorial staff of BenefitsLink.com, Inc. was not involved in their production and is not responsible for their content.

Useful links: