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September 23, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Conversion Consultant
ASPire Financial Services LLC
in FL

Retirement Planning Officer
First Merchants Bank
in IN

Sr. Accountant
Verisight, Inc.
in CA

ERISA Consultant
The Newport Group
in FL, NC

Plan Document Specialist
July Business Services

New Business Consultant
The Retirement Advantage, Inc.
in WI

Sr. Plan Administrator
American National Insurance Company
in TX

Employee Benefits / ERISA Attorney
Hill Ward Henderson
in FL

Client Executive
Transamerica Retirement Solutions
in NY

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Webcasts and Conferences

Obamacare: Will It Work? -- a WonkBlog Debate
September 24, 2013 in DC
(Washington Post)

State of the American Senior: The Changing Retirement Landscape for Baby Boomers
September 25, 2013 in DC
(U.S. Senate Special Committee on Aging)

View All Webcasts and Conferences

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

Does Your Target-Date Fund Have a Secret Flaw?
"The sad reality about the TDFs is this: You likely don't have much say in the matter of fees. You might have a say in whether you invest in such funds. And you might have a say in how much you invest in such funds. But how much you pay in fees is a function, in large part, of which series of TDFs your employer chooses to offer you in your 401(k)." (MarketWatch)  


P&I West Coast Defined Contribution Conference Oct. 27-29 | San Fran

Sponsored by Pensions & Investments

Empower your employees to save and invest for retirement. Hear from experts on the most pressing investment, legislative, plan design and education and communication issues.

CFP Board Pulls 'Fee-Only' Designation as Profile Choice
"The Certified Financial Planner Board of Standards Inc. [has] removed 'fee-only' as a compensation description for investment advisers listed on its website and is telling advisers who had used that label to review the organization's definition before restoring it to their profiles.... [The Board] changed fee-only to 'none provided' on the compensation method portion of its 'find a CFP Professional' tool -- a move that affected thousands of the approximately 68,000 CFPs." (InvestmentNews)  

Payment of Plan Expenses from ESOP Trusts
"Plan sponsors should scrutinize their basis for expense allocation to ensure that it is non-discriminatory in manner.... [In] a mature plan where most of the stock is held in long-term and more highly paid employees' accounts and that and allocates expenses based on Cash/Other Investments, potential discrimination could result because newer, lower paid employees could have more Cash/Other Investments in their accounts, relative to the longer-term employees." (Blue Ridge ESOP Associates)  

One Kentucky City Did Pension Reform and Lived to Tell the Tale
"Today Lexington is being held up by pension watchers as a model for its sweeping reform. So how were we able to cut our unfunded liability by 45%, (effective the moment Gov. Steve Beshear signed the reform into law on March 14), institute comprehensive benefit changes, and still have a whopping 76% of beneficiaries vote to send the reform package to the state legislature?" (The Wall Street Journal; subscription may be required)  

Summary of the Census Bureau Quarterly Survey of Public Pensions, Second Quarter 2013 (PDF)
"For the 100 largest public-employee retirement systems in the country, cash and security holdings totaled $2,943.5 billion in the second quarter of 2013, reaching the highest level since the survey began collecting data in 1968. Cash and security holdings had a quarter-to-quarter increase of 0.4 percent, from $2,931.8 billion last quarter, and a year-to-year increase of 8.4 percent, from $2,715.4 billion in the second quarter of 2012." [Editor's note: General information about the Quarterly Survey, including cumulative historical data, is available here.] (U.S. Census Bureau)  


Free online seminar from PenChecks Trust. Register now.

Sponsored by PenChecks Trust

Learn how to benefit from greater speed, security, and convenience. Attend "Making the Case for Debit Cards in Retirement Plan Distributions," a free online seminar for industry professionals. Register now.

Automatic IRAs: Lower-Earning Households Could Realize Increases in Retirement Income
"Implementing automatic IRAs, unless waived by participants, could expand retirement coverage and modestly increase retirement annuities for households at all earnings levels. Specifically, 7 percent of all households could receive retirement annuities from automatic IRAs even though these households had no DB or DC plans, according to GAO's projections.... [L]ow-income workers could see a sizable increase in their annuities under automatic IRAs and the existing Saver's Credit -- the projected median dollar increase for these households' annual retirement annuity would be $479." (U.S. Government Accountability Office)  

Reducing Retirement Risk with a Rising Equity Glide-Path
"In scenarios that threaten retirement sustainability ... a declining equity exposure over time will lead the retiree to have the least in stocks if/when the good returns finally show up in the second half of retirement ... With a rising equity glide-path, the retiree is less exposed to losses when most vulnerable in early retirement and the equity exposure is greater by the time subsequent good returns finally show up. In turn, this helps to sustain greater retirement income over the entire time period." (Wade D. Pfau and Michael Kitces via SSRN)  

Generation X Americans Are More Concerned About Having Enough Money for Retirement than Other Generations
"Only a quarter of Generation Y consumers (aged 18 to 32) and 3 in 10 Baby Boomers (age 49-68) were very concerned about having enough money for retirement, compared to 36 percent of Gen X consumers.... Fewer than 20 percent of all Americans are very confident they will have a secure retirement. Boomers and Gen X were least likely to feel very confident about achieving a secure retirement (13 percent and 14 percent respectively), while 21 percent of Gen Y said they were very confident they would have a secure retirement." (LIMRA)  

Do Financial Networks Matter in Retirement Investment Decisions?
"[R]espondents' financial literacy is positively related to their selection on 'no default.' Second, respondents having a high level of financial literacy or network intensity are likely to allocate more to stocks. Last, a positive relationship between financial literacy and stock allocation is significant only among those who have high network intensity. The finding suggests that the positive effects of financial literacy on stock allocation documented by the literature can be limited to those who have strong networks with financially literate people." (Yunhyung Chung and Youngkyun Park via SSRN)  


CFP Board's Ongoing Fee-Only Compensation Disclosure Debacle
"If the ultimate intention of the CFP Board is to truly change the compensation disclosure rules to what they are now -- after recognizing it's a deviation from what the rules have been! -- such alterations need to occur through a public comment process that allows the stakeholders to have a constructive role in the discussion.... [It] seems time for the CFP Board to take a step back, acknowledge that -- intentional or not -- its current interpretation of the rules is in fact a material change from how the stakeholder community may have intended them when the rules were last changed in 2008, as evidenced by the sheer number of advisors who have been 'out of compliance' simply by trying to disclose what their clients actually pay." (Michael Kitces in Nerd's Eye View)  


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.


Just Say 'No' to ERISA-Type Funding Rules for Public Plans
"[The author sees] two problems with an ERISA for public plans. States and cities with severely underfunded pension plans should already be shut out of the market. What bond fund would be celebrating getting a good price on Detroit debentures? ... Having a government define funding rules for other governments could undermine real reform efforts as regulators create official funded ratios that could mirror those currently coming out of the politician/union/actuary obfuscation complex." (Burypensions)  


Text of Comments by SunTrust to SEC on Proposed Money Market Reforms (PDF)
"SunTrust does not believe that the findings ... support making fundamental sweeping changes to the longstanding and well understood amortized cost method of pricing money market fund shares.... SunTrust urges the Commission to reject Alternative 1 and its recommendation that all money market funds abandon stable amortized cost pricing methodologies.... SunTrust would strongly prefer that the focused and more efficacious redemption gates contemplated by the Release's Alternative 2 be adopted and that the disruptive and destabilizing recommendations advanced as the Release's Alternative 1 be rejected." (SunTrust)  


Memo from Pension Rights Center to Saint Peter's University Hospital Retirement Plan Participants About IRS Church Plan Ruling (PDF)
"Beyond the technicalities, the IRS's private letter ruling allows Saint Peter's to break the promise of guaranteed pensions that it repeatedly made to you throughout your work lives. As far as we are able to tell, the only reason for the ruling is that IRS officials do not want to admit that the agency has been misreading the law for many years.... [A] Saint Peter's retiree has filed a lawsuit in the New Jersey federal district court. The correctness of the IRS ruling, as well as other issues, will be addressed in that proceeding." (Pension Rights Center)  


The Long, Sorry Tale of Public Pension Promises
"Private pensions gradually faded as an issue because many employers with pension plans failed, and newer companies ... never started them. But the problem with cities and states has mushroomed.... Much has been written about the poor investing performance of public pension plans. But ... the real problem is that politicians across the country have failed to fund." (The Wall Street Journal; subscription may be required)  

Benefits in General; Executive Compensation

[Guidance Overview]

Annual Proxy Considerations in Executive Compensation (PDF)
"Preparing to file of an annual proxy statement raises many questions for HR teams, executives, and directors, particularly compensation committee members. As a concise summary, this chart addresses some of the more common and significant questions raised in this process for a larger NYSE- or NASDAQ-listed company." (Steven Hall & Partners)  

[Guidance Overview]

The Five Most Important Things Companies Need to Know and Do About the SEC's Proposed CEO Pay Ratio Rules
"[T]he SEC has provided companies with substantial flexibility ... for determining employee compensation and has allowed the use of simplified compensation measures to identify the company's median employee ... The rules are most inflexible and administratively expensive and burdensome in requiring that all employees of a company and its subsidiaries (broadly defined) be taken into account in identifying the median employee ... During the next 60 days, companies should determine how they would go about gathering and analyzing the information necessary to comply with the rules and should file comments with the SEC discussing the costs and burdens of doing so, using the SEC's 69 requests for comments as a guide." (The Conference Board)  

[Guidance Overview]

SEC Proposes Rules for CEO Pay Ratio Disclosure
"[1] Disclosure required in Form 10-K would be permitted to be incorporated from subsequently filed proxy statement. [2] Median determination would be with respect to all employees of the company and its subsidiaries as of the last day of prior fiscal year, including part-time, temporary, seasonal and non-U.S. employees.... [3] After identifying the median employee, companies would be required to apply the proxy pay calculation rules to calculate the pay of only that employee and the CEO to determine the pay ratio." (Dechert LLP)  

SEC Issues Proposed Rule on Pay Ratio Disclosure
"Commissioner Gallagher noted that the rule is broadly construed and, if finalized, will have a negative competitive impact that could disproportionately fall on U.S. companies with large work forces and global operations.... Commissioner Piwowar expressed concerns that the pay ratio disclosure is not a relevant indicator of a company's economic strength and could ultimately stifle capital formation and harm investors by providing them with distracting and misleading information. Even Commissioner Aguilar, who ultimately voted in favor of the proposed rule, acknowledged that superfluous benchmarking based on the disclosures could result in 'economic decisions that are not economically efficient.'" (Ballard Spahr)  

DOL Joins IRS in Recognizing All Legal Same-Sex Marriages for Federal Tax and ERISA Purposes
"It is important to recognize that this guidance does not apply to non-ERISA rules under the DOL's purview. For example, it does not affect the recently revised DOL Wage and Hour Division fact sheet, under which a state-of-domicile rule applies for FMLA purposes ... This could lead to complexity where the different sets of rules interact. But it is certainly welcome news for plan administrators that same-sex marriages are treated the same for purposes of ERISA and the Code." (Thomson Reuters / EBIA)  

Guarding Fiduciaries and Optimizing Committees
"Traditionally, benefit plan committees oversaw administration, investments -- everything to do with sponsoring and administering an employer-sponsored plan. However, as financial responsibilities have changed, so have committee dynamics ... [It] is best to have one committee for administration oversight and a separate committee for investment selection and oversight. If a plan sponsor does have a blended committee, each member should understand his or her role and whether they are acting in a fiduciary capacity or not." (PLANADVISER.com)  


A Better Way to Compare CEO Pay
"[T]he new rule will do little to help shareholders understand whether the executive pay awarded by their companies is appropriate and if not, how off the charts it is. A far more meaningful comparison for regulators is the peer groups public companies choose to use as benchmarks when setting their pay packages. These peer groups, which are supposed to include similar companies, often don't." (The New York Times; subscription may be required)  

Press Releases

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