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September 26, 2013          Get Health & Welfare News  |  Advertise
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Alliance Pension Consultants, LLC
in IL

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Webcasts and Conferences

2013 Advisor Conference
October 7, 2013 in TX
(Center for Due Diligence)

ERISA Workshop 2013 - Houston
October 24, 2013 in TX
(SunGard Relius)

ERISA Workshop 2013 - Cincinnati
October 25, 2013 in OH
(SunGard Relius)

Industry Update: Finally, Clarity on Defined Contribution -- Recorded
September 30, 2013 WEBCAST
(Health Partners America)

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]

Defined Contribution Plan Sponsors Must Annually 'Notice' Their Participants (PDF)
"Sponsors of defined contribution plans with certain features are required to provide annual notices to participants.... As the 2013 plan year is nearing its end, it is important to look ahead at the notices that may need to be provided before the start of the 2014 plan year. This publication provides a summary of the annual notice requirements ... including timing, recipients, contents, and method of delivery." (Prudential)  


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Retirement Preparedness Has Slightly Improved Since Last Year
17 pages. Excerpt: "Twenty percent of employees that have taken a financial wellness assessment report being on track to reach their income-replacement goal in retirement, up from 18% last year and 14% the year prior.... A majority of the improvement seems to be coming from market appreciation and improvements in investor behavior, but not from savings behavior.... Only 17% of Millennials indicated that they were on track to reach their income-replacement goal in retirement, down from 19% last year." (Financial Finesse; free registration for download of full report)  

Women are from Facebook, Men are from LinkedIn
"The results of a nationwide survey of American workers who are eligible to participate in an employer-sponsored defined contribution retirement plan indicate there is growing appetite for learning about retirement and other financial topics through social media outlets -- but the way information is consumed varies by age, gender and income level.... 74% of women routinely using Facebook vs. 59% of men. The opposite holds true of LinkedIn where about twice as many participant users are men -- 32% vs. 15% of women. The gender difference is more pronounced in this most recent study compared to 2011. Twitter also has more male participant users at 17% compared to 10% women." (MassMutual)  

Help Prepare Your Employees for Retirement
"Never stop marketing your plan.... Make your plan easy to join, and adopt features (such as negative enrollment and automatic escalation) that make it convenient for your employees to save. Design your retirement plan so that it discourages employees from taking loans and early withdrawals.... Provide counseling and transition assistance to laid-off workers." (PayScale)  

Detroit Spent Billions Extra on Pensions
"Detroit's municipal pension fund made payments for decades to retirees, active workers and others above and beyond normal benefits ... [T]he outside actuary's analysis ... concluded that the extra payments had cost the city nearly $2 billion ... 'People were having a hard time, living hand-to-mouth, and we thought we would give them some extra,' [said a spokeswoman for Detroit's pension trustees]." (The New York Times; subscription may be required)  


Growth and Increased Retention Through Plan Transfers & IRA Rollovers

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Join top-level speakers for networking opportunities and in-depth sessions on key topics to boost success in the IRA Rollover and "money in motion" marketplace. October 17-18, Boston -- Mention FMP164 during registration to receive 10% discount.

Are These Fees Unreasonable?
"What is challenging about benchmarking Investment Management Fees, and admittedly makes [the chart in this article] by definition incomplete, is properly taking revenue sharing into consideration.... There is no single right answer when it comes to revenue sharing. At a minimum, plan fiduciaries must understand the amount of revenue sharing, who is paying it, who is receiving it, and why they are receiving it.... What makes this an especially challenging task is that mutual fund complexes negotiate different revenue sharing amounts with different platforms." (FRA PlanTools, LLC)  

Evaluating Pension Insurance Pricing
"This paper's comments are focused almost entirely upon PBGC's termination liabilities, and address four pressing issues: (1) the need to discount the liability stream by current riskless interest rates instead of using corporate bond rates that reflect credit risk, call risk, and other risks, or using some ad hoc prescribed average of past rates; (2) the need to use a term structure of interest rates; (3) the need to employ more useful investment management benchmarks; and (4) how to implement a relevant and rigorous liability benchmark." (Pension Research Council, Wharton School of the University of Pennsylvania; free registration required)  

Integrated Risk Management for Defined Benefit Pensions: Models and Metrics
"[T]he questions most pertinent to the PBGC are what key risk factors can produce underfunding in a DB plan, and how can these risk factors be quantified? [The authors] explore the most important risk factors that produce DB pension underfunding, namely investment risk and liability risk.... [An] integrated risk management model (an Integrated Asset/Liability Model) can help better understand DB pension plan funding risk." (Pension Research Council, Wharton School of the University of Pennsylvania; free registration required)  

ERISA Advisory Council to Recommend Updated Guidance on Finding Lost and Missing Plan Participants, and on Pension Risk Transfer
"The council ... [would] like the DOL to specify plan fiduciary obligations of plan sponsors in attempting to locate missing and nonresponsive plan participants in active and frozen defined contribution plans.... The council also expects to recommend that the DOL should consider providing guidance under ERISA Section 502(a)(9) to clarify for plan fiduciaries the consequences of a breach of fiduciary duty in connection with the purchase of an annuity contract from an insurer for the distribution of benefits under the plan." (Bloomberg BNA)  


Free online seminar from PenChecks Trust. Register now.

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Key Regulatory and Legislative Items Advisors Should Watch For
"[M]ajor legislative and regulatory issues that advisors should be on the lookout for in the months ahead: [1] Fiduciary reform ... [2] Tax deferral shifts ... [3] The Treasury Department's proposed rule regarding longevity annuities ... [4] Treasury's proposed partial annuitization rule ... [5] A pair of efforts -- one from the [DOL] and another, the Lifetime Income Disclosure Act, making its way through Congress -- [that] would offer clients more information about retirement income.... [6] National licensing push[.]" (On Wall Street)  

Post-65 Income Replacement Rates in a Longitudinal Sample
"[I]n a large number of households at least one member continues to work after age 65, part-time in many cases, and may not fully retire until sometime after the traditional retirement age of 65. Limiting the analysis of retirement income to retired households would result in ignoring such households, who, ironically, might be delaying retirement because of insufficient income. Consequently, the current study analyzes the post-65 to pre-65 income ratios that households experience and how they vary across the retired population." (Employee Benefit Research Institute [EBRI])  


'Fiduciariness' -- What the Financial Industry Promises to 401(k) Plan Sponsors
"[D]efined: The selling by financial service industry the concept or fact of assumption of fiduciary status to 401(k) plan sponsors who want it to be true, rather than it actually being true. Fiduciariness provides plan sponsors false comfort and is always associated with the goal of realizing large fees. Fiduciariness is frequently accompanied by representations of great expertise and fiduciary warranties." (Fiduciary Plan Governance, LLC)  


Testimony of Urban Institute to Senate Special Committee on Aging: Retirement Income Challenges in the Twenty-First Century (PDF)
"A generation ago most people working at large firms could leave their retirement planning on auto pilot, because their employers guaranteed retirees lifetime income streams based typically on how much they earned near the end of their careers and how long they worked. Today, those traditional defined benefit pension plans have largely been supplanted by 401(k)-type plans ... The evidence suggests that for most Americans 401(k) plans have fallen short so far[.]" (Richard W. Johnson, Director, Program on Retirement Policy, Urban Institute)  


Text of Comments by American Academy of Actuaries to FASB on Pension Accounting (PDF)
"We support accounting treatment for single employer pension plans that immediately reflects economic reality and therefore does not result in the misallocation of resources. Current accounting treatment under FAS 87 and 88, as modified by FAS 132 and 158, could be improved. Particularly noticeable problems include: [1] the distortion of reported corporate earnings created by both the anticipation of pension asset earnings not yet achieved and various smoothing and deferral devices; and [2] incentives to engage or not engage in financial transactions, created by settlement and curtailment recognitions unrelated to the direct economic impact of those transactions." (American Academy of Actuaries)  


Text of Comments by U.S. Chamber of Commerce to PBGC on Proposed Regs for Premium Rates and Payment of Premiums (PDF)
"[The Chamber believes] that the proposed rule alleviates unnecessary complexity and burdens.... [L]owering the cap for voluntary corrections from 100% of premium payments to 50% reinforces the incentive to participate in voluntary correction programs.... [P]roviding a 7 day grace period encourages employers to comply with the rules without having to worry about being penalized for a minor timing error." (U.S. Chamber of Commerce)  

Benefits in General; Executive Compensation

[Official Guidance]

Text of IRS Notice 2013-65: Special Per Diem Rates for 2013-2014 (PDF)
"This annual notice provides the 2013-2014 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically (1) the special transportation industry meal and incidental expenses (M&IE) rates, (2) the rate for the incidental expenses only deduction, and (3) the rates and list of high-cost localities for purposes of the high-low substantiation method." (Internal Revenue Service)  

[Guidance Overview]

SEC Proposes CEO Pay Ratio Disclosure Rules
"Issuers may wish to identify possible methodologies for calculating the pay ratio and prepare a preliminary estimate of the pay ratio. Going through this process will help inform compensation committees with respect to their executive compensation decisions, assist internal administrators in identifying processes that will be necessary to collect the information required to determine the pay ratio, and give issuers a general sense of their pay ratio. The burden and expense of updating systems and developing processes to collect information will be significant, especially for issuers that do not have centralized systems or who have personnel in many jurisdictions." (Wilson Sonsini Goodrich & Rosati)  

Performance Awards: Strings Attached?
"Performance Awards are being issued in record numbers, with about 50% of S&P 500 companies awarding performance-linked equity compensation.... Company metrics are more controllable than total shareholder return .... Don't count your chickens before they hatch (or your performance shares before targets are met).... The responsibility to file SEC Forms 3, 4 and 5 rests with the Executive and not the Company.... Despite a few uncertainties, performance awards usually work out reasonably well for most executives." (SFG Wealth Planning Services, Inc.)  

U.S. Postal Service: Health and Pension Benefits Proposals Involve Trade-offs
"GAO has reported that USPS would likely realize large financial gains from its proposal to withdraw its employees and retirees from the Federal Employees Health Benefits Program (FEHBP) and establish its own health plan.... As Congress considers proposals for a USPS health care plan, it should weigh the impact on Medicare, which also faces fiscal pressure, and other issues, including establishing safeguards for assets of the USPS health plan and ensuring protections for plan participants are comparable to those in FEHBP.... This testimony discusses (1) funding USPS retiree health benefits; (2) USPS's proposal to withdraw its employees and retirees from FEHBP and establish its own health plan; and (3) a potential surplus in funding postal pensions under FERS. This testimony is based primarily on GAO's past work." (U.S. Government Accountability Office)  

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