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October 8, 2013          Get Health & Welfare News  |  Advertise
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Webcasts and Conferences

ERISA Workshop 2013 - Appleton
November 6, 2013 in WI
(SunGard Relius)

ERISA Workshop 2013 - Chicago
November 7, 2013 in IL
(SunGard Relius)

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

Two Hot Topics for 401(k) Sponsors (PDF)
25 presentation slides. Topics: [1] The Real Reason to Offer a Roth 401(k) Plan; and [2] Peanut Butter & Jelly Sandwiches and 401(k) Non-Discrimination Testing. (Alston & Bird via American Benefits Council)  


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Selecting Investment Consultants for Pension Plans
"[A] threshold evaluation can and should be made based on the thoroughness and responsiveness of the written proposals.... [T]he selection process will also have to involve the much more time consuming work of interviewing the firms and asking pointed questions to learn about how the firm goes about developing their recommendations ... how they work with clients ... and then following up with the client references they provide[.]" (Verrill Dana LLP)  

Four Reasons to Sue Your 401(k) Plan Administrator
"Here's what you need to know before you contact a lawyer: Are your plan fees in line with other plans of similar size and features? ... Is your plan prudently managed? ... Does your plan have conflicts? ... Is your fund administrator looking out for your best interest? ... You have a right to demand a prudently managed plan: it's not the company's money, it's yours." (Forbes)  

Schwab ETF Platform for 401(k)s Hits Regulatory Speed Bump
"The offering, which would make exchange-traded funds available to retirement plans, has run into a snag with regulators, according to Steve Anderson, executive vice president at Schwab Retirement Plan Services. He ... noted that some of the work the firm is doing on the ETF platform is related to how the nature of the investments themselves. 'To use ETFs appropriately in the intraday market, you want to be able to trade with fractional shares, and these don't have them,' Mr. Anderson said. 'We have to find a way to accommodate that.'" (InvestmentNews)  

Corporate Pension Funded Ratio in September Exceeds 91%, a Level Last Observed in 2008 (PDF)
"The funded status of the 100 largest corporate defined benefit pension plans improved by $32 billion during September as measured by the Milliman 100 Pension Funding Index (PFI). The deficit dropped to $132 billion from $164 billion at the end of August, primarily due to a robust investment gain of more than 2% during September. The PFI funded ratio increased to 91.4% from 89.3% at the end of August." (Milliman)  


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How Does 401(k) Auto-Enrollment Relate to the Employer Match and Total Compensation?
"While auto-enrollment boosts 401(k) participation, the resulting cost pressure on matching contributions could prompt employers to reduce their match. Analysis using the National Compensation Survey finds that plans with auto-enrollment do have lower match rates than plans without auto-enrollment. This finding suggests that employers may, indeed, be lowering their match rates to keep their total 401(k) costs from rising. Consistent with this notion, a separate analysis found no evidence of higher 401(k) costs for firms with auto-enrollment." (Center for Retirement Research at Boston College)  

Are 401(k) MEPs as Safe as Any Other 401(k) Plan?
"[A] quick review of the year-to-date listing on the DOL's Current News Releases and Archives site shows dozens of fraud and abuse cases. It appears every single case involves single employer plans.... 'Individuals have committed fraud or theft against all types of retirement plans since before ERISA' [said Terrance P. Power, President of The Platinum 401k] ... 'MEPs -- or the more 'a la carte' 3(16) plan administrator arrangement -- can offer a huge fiduciary liability offload for an employer.... The decision as to which is better depends on the employer.'" (Fiduciary News)  

Pension Finance Watch, September 2013
"A strong equity market drove September financial results. The benchmark asset portfolio earned almost 3% for the month, driving the Towers Watson Pension Index up 2.6% to 74.7. With this increase, the index is now up almost 20% for the year." (Towers Watson)  

Solutions to 'Fiduciariness' (Part 2)
"A PAPA is a professional administrator plan arrangement under which an independent administrator or IPA such as a bank agrees to assume fiduciary responsibilities for the plan sponsor as a named fiduciary, plan administrator and trustee. What is good about a PAPA besides the name? Plan sponsors get what they have wanted all along: they are saved from a significant bit of fiduciary liability and administrative burden." (Charles Humphrey via Fiduciary Plan Governance, LLC)  

Public Pension Plans and Inflation: Assumptions Used at the State and Local Level (PDF)
"Between 2001 and 2009 ... U.S. state and local government pension plans used an average inflation assumption of between 3.45% (2008) and 3.85% (2001). This was at a time when the World Bank World Development Indicators U.S. Inflation Rate generally ranged from 1.60% (2002) and 3.80% (2008); in 2009 US inflation was -0.40%.... [O]ver these years, average inflation assumptions used by state and local plans in U.S. ranged from actual inflation by a difference of between 2.24 percentage points ... and 0.16 percentage points ... with an average difference during this time period of 1.13 percentage points[.]" (Revue Analyse Financiere, via World Pension Council)  

Current Employee Attitudes About Saving for Retirement
"[S]lightly more than 1 in 10 not-for-profit employees had no tolerance for investment risk and another third had only a little tolerance. By contrast, private sector employees were more accepting of risk with 9 percent not willing to accept any and 25 percent willing to accept a little risk." (LIMRA)  

[Opinion]

Why the Whiff of Another Delay of Schwab's ETF-Only 401(k) Plan Is Drawing So Much Attention
"Schwab is the only company making an effort to cross the treacherous technical and regulatory divide of putting ETFs into 401(k) plans. If Schwab succeeds, it would make it a rare instance of a rival disrupting a 401(k) business where Fidelity is clearly pulling away.... But since Schwab first announced its plan, news about it has revolved around setbacks." (RIABiz)  

[Opinion]

Pull Closet Indexing Out of the Closet?
"[John Authers of the Financial Times reports that everyone] 'can agree that there is no case for closet indexing -- the practice of running an "active" fund, charging active management fees but, in practice, offering an investment that merely hugs the index.' ... [T]he fact that billions in fees are doled out annually to funds that hug an index and underperform low cost index funds is nothing short of scandalous. It's a testament to the failure to of our society to educate people on how to properly invest their money and make sure they're not being robbed blind by funds gorging on them with slick marketing presentations and television ads." (Pension Pulse)  

Benefits in General; Executive Compensation

Substantial Health and Economic Returns from Delayed Aging May Warrant a New Focus for Medical Research
"The economic value of delayed aging is estimated to be $7.1 trillion over fifty years. In contrast, addressing heart disease and cancer separately would yield diminishing improvements in health and longevity by 2060 -- mainly due to competing risks. Delayed aging would greatly increase entitlement outlays, especially for Social Security. However, these changes could be offset by increasing the Medicare eligibility age and the normal retirement age for Social Security." (Health Affairs)  

2013 Talent Management and Rewards Study -- North America
"With health care reform underway, nearly half of U.S. employers (45%) are considering making changes to their total rewards programs or talent management strategies. Employers continue to take a conservative approach to funding their bonus pools and the average projected bonus funding for current-year performance is 87% of target." (Towers Watson)  

Press Releases

Postponed: Hearing on Proposed Multiemployer Pension Reforms
U.S. House Education and the Workforce Committee

Head of IRS ObamaCare Implementation to Testify Before Oversight Committee
U.S. House Committee on Oversight & Government Reform

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