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September 24, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Associate Pension Administrator
Alliance Pension Consultants, LLC
in IL

Sr. Pension Analyst
Hooker & Holcombe, Inc.
in CT

Retirement Plan Account Manager
Benefit Consultants Group
in NJ

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Webcasts and Conferences

Section 408(b)(2) and the Challenge of Balancing Cost and Value of Retirement Plan Services
November 6, 2013 WEBCAST
(American Society of Pension Professionals & Actuaries (ASPPA))

ERISA Workshop 2013 - Dallas
October 23, 2013 in TX
(SunGard Relius)

ERISA Workshop 2013 - Philadelphia
October 23, 2013 in PA
(SunGard Relius)

TDFs and the Impact on Participant Outcomes
October 8, 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.

All Defined Contribution Outcomes Are Not Equal
"[E]ven though the aggregate DC asset allocation is not very well diversified compared to the DB system, it is a whole lot better diversified than most of the individuals within it are. It is not unusual for one quarter or more of a plan's participants to be either 0% or 100% allocated to equity. If one individual is 100% allocated to large cap domestic stocks and another 100% allocated to short duration fixed income, then studying the aggregate investment performance of those two individuals together creates the appearance of diversification where none really exists." (Russell Investments)  


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Phyllis C. Borzi: Why Plan Sponsors Shouldn't Treat Their 401(k) Plans Like Cheap T-Shirts
"The point of the [fee disclosure] regulation is to give plan fiduciaries the information they need to make a prudent decision. Fees are obviously very important, but fiduciaries also need to consider cost considerations in relation to performance, and the services they are obtaining as well as the quality of those services for those fees. People know how much tee-shirts cost too, and most people know where to find one for $8, but if you're looking for something that will last a few years, you'll pay a little more for it. And if your objective is to purchase a shirt for somebody that will keep them covered for the rest of their life, you aren't going to look for the cheapest available option." (Fiduciary News)  

U.S. City, County Public Pension Levels Sank in 2012
"Funding levels for U.S. city and county public pension systems plummeted by 11 percentage points to 69 percent in fiscal 2012, pushed down by a poor performance of the stock market and ballooning liabilities... The 106 plans studied in a report by Wilshire Consulting had an aggregate $173.6 billion of unfunded liabilities, with $560.6 billion of liabilities they needed to pay out but just $387 billion in assets. Wilshire found that while the funds' assets rose by 2 percent, or $6.1 billion, liabilities grew even more -- by 16 percent, or $78.1 billion." (Reuters)  

Five Factors That Hurt Retirement Plans
"While the report states that participants should be able to make their own decisions about their plans, it acknowledges that left to their own devices, few investors are able to actually make decisions that lead to good outcomes.... [O]ne of the main solutions for improving outcomes in defined contribution plans is simply forcing participants to save." (ThinkAdvisor, via Treasury & Risk)  

A Review of the PBGC Pension Insurance Modeling System
"[This study] highlights three features of the existing governance system for overseeing [PBGC's Pension Insurance Modeling System (PIMS)] : (i) some of the model documentation is internally inconsistent and outdated, (ii) the process for updating data and model parameters appears, at least to external observers, ad hoc, and (iii) there does not appear to exist any publicly available, systematic inventory of the robustness checks that have been performed. Indeed, to the extent that methods or assumptions are tested, this fact is not documented in any central location, making it difficult to assess which features of the model are most critical." (The Brookings Institution)  


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

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U.S. Public Pension Investments Jump, Costs Surge Too
"Most [public employee] retirement systems ended fiscal 2013 on June 30. In the final quarter of that fiscal year the cash and securities holdings of the 100 largest public-employee pensions were $2.944 trillion, up 8.4 percent from a year earlier and the highest level since the Census began collecting pension data in 1968. Still, quarterly growth in their investments has been slowing at the same time they are having to pay more to retirees. Benefits and withdrawals also reached record highs in the quarter, jumping 16.8 percent from a year earlier to $62.2 billion." (Reuters)  

Federal Employee Thrift Savings Plan Is Having a 'Booming' September
"The C Fund, invested in common stocks, is up 4.8 percent to date ... while international stocks in the I Fund had gained 8 percent as of Monday. If the plan stays strong for the next week, September should be a welcome change from August's returns, which were in the red, save for the government securities fund. The I Fund, in particular, has had a tough 2013." (Government Executive)  


Text of Comments by American Academy of Actuaries to IRS on Annual Return / Report of Employee Benefit Plan (Form 5500) (PDF)
"The committee's concerns specifically relate to the electronic submission of the data on Schedules SB and MB, and on no other issues.... In order to achieve a complete electronic file, very often the vendor preparing Form 5500 must re-type the Schedule SB/MB information provided by the plan's Enrolled Actuary into the Form 5500. This is of grave concern to the committee as it threatens the integrity of the certified actuarial valuation results because of the possibility of a manual input error; the Enrolled Actuary does not have the ability to review that information before it is submitted as final through E-FAST." (American Academy of Actuaries)  


Text of Comments by ERIC to PBGC on Proposed Regs Relating to Premium Rates and Payment of Premiums (PDF)
"ERIC applauds the PBGC for proposing to cap the self-correction penalty for underpayments at 50%. We support the PBGC's efforts to provide greater incentives for companies to identify and self-correct underpayments -- both recent underpayments and those that have existed for some time.... ERIC believes that the premiums for at-risk plans should not include the loading factor.... Reading the loading factors from the funding rules into the premium calculation would blend these provisions together in a manner that is inconsistent with both the language of ERISA and the differing purposes of the two provisions." (The ERISA Industry Committee [ERIC])  


Winston & Strawn Compensation and Benefits Training Programs

Sponsored by Winston & Strawn, LLP

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Early CFP Board Leader Says Future of Certification in Jeopardy
"The CFP Board's strategy of punishing some certificate holders over compensation disclosure issues in what critics charge is an arbitrary manner threatens the future of the CFP designation, according to one of the early leaders of the board who also chaired its disciplinary commission.... It's a startling statement from one of the financial planners who first banded together in the late '70s and early '80s to create organizations that preceded the formation of both the CFP Board and the FPA." (Financial Planning)  

Benefits in General; Executive Compensation

[Guidance Overview]

DOL Guidance Clarifies Action Steps for Puerto Rico Retirement Plan Sponsors on Definitions of 'Spouse' and 'Marriage' (PDF)
"Retirement plans intended to be qualified only under the provisions of the Puerto Rico Internal Revenue Code of 2011... are generally not subject to the provisions of the U.S. Internal Revenue Code ... or the jurisdiction of the IRS (PR-Only Plans). Consequently, the IRS interpretations in RR 2013-17 are not applicable to PR-Only Plans. Nevertheless, PR-Only Plans are subject to the provisions of Title I of ERISA and to the jurisdiction of the DOL. Consequently, TR 2013-04 is fully applicable to PR-Only plans for purposes of Title I of ERISA (e.g., spousal consent requirements, beneficiary designations). On the other hand, it would appear that the current definitions of 'spouse' and 'marriage' under Puerto Rico law (i.e., no same-sex marriages and no domestic partnerships or civil unions) continue to apply with respect to those provisions and requirements of the PR Code which are not subject to ERISA (e.g., hardship withdrawals)." (Groom Law Group)  

[Guidance Overview]

New Pay Ratio Disclosure Rule: Will the Employee with the Median Level of Compensation Please Raise Your Hand?
"The proposed rule is the product of the SEC's review of nearly 23,000 comment letters -- many highlighting the burdens and complexities of implementation. While the proposed rule itself is approximately 6 pages, the SEC explained the proposed rule in over 83 pages of preamble heavily citing comment letters and another 55 pages of economic analysis. [This memo] summarize[s] some of the main points of the proposed rule." (Groom Law Group)  

[Guidance Overview]

SEC Proposes Rule on Required CEO Pay Ratio Disclosure
"The SEC's proposed rule will require most listed companies to disclose the following: The median of the annual total compensation of all employees, excluding the CEO; The annual total compensation of the CEO; The ratio of these two amounts. The SEC contemplates that its proposed rule may be effective for the 2016 proxy season. We expect, however, that the SEC will receive many adverse comments on the proposed rule, despite the flexibility that the rule is intended to permit, because the calculation of the median compensation will be burdensome -- particularly for large multinational companies." (Morgan Lewis)  

[Guidance Overview]

SEC Issues Proposed CEO Pay Ratio Rule (PDF)
"The SEC estimated that of 4,000 registrants that will be subject to the rule, approximately 50% have an organizational structure which would allow the registrant to use a simple random sampling method. Of these companies, the majority would still have a sample size of 500 or more. The remaining 50% have multiple business and/or geographical segments. For these companies, statistical sampling will be much more difficult." (Exequity)  

[Guidance Overview]

At Long Last: SEC Proposes New Rules to Compel Disclosure of CEO Pay as Ratio to Median Employee Pay
"Among other things, the Proposed Rules articulate: which companies and which SEC filings must contain the Pay Ratio Disclosure; how to determine annual total compensation; how to identify the median; what disclosures must be provided on the underlying methodology, assumptions and estimates used in preparing the Pay Ratio Disclosure; and when the Pay Ratio Disclosure requirements would become applicable. [This article] provides a brief overview of the Proposed Rules in question and answer format." (SheppardMullin)  

Struggling, San Jose Tests a Way to Cut Benefits
"San Jose now spends one-fifth of its $1.1 billion general fund on pensions and retiree health care, and the amount keeps rising.... [A] plan to reduce benefits ... [was] passed by 70 percent of voters in a referendum last year. The plan is being opposed in court by unions that represent city workers and say it is illegal under state law. It would introduce a second tier for new city employees involving much lower pension and health benefits. It would also alter pension benefits for existing workers, allowing them to choose either a similar, second-tier benefits plan or to pay significantly more out of their own pockets for the benefits they had come to expect." (The New York Times; subscription may be required)  

Press Releases

NAPA Launches Research Institute with Warren Cormier
National Association of Plan Advisors (NAPA)

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