EmployeeBenefitsJobs.com logo BenefitsLink.com logo

BenefitsLink Retirement Plans Newsletter

October 14, 2013          Get Health & Welfare News  |  Advertise
         Past Issues  |  Search

Employee Benefits Jobs

Retirement & Pension Plan Administration & Consulting
Retirement & Pension Plan Administration & Consulting Firm
in CT, NJ, NY

Plan Document Consultant
Lincoln Financial Group

401k Administrator
Jocelyn Pension Consulting
in CO

Defined Contribution Retirement Plan Compliance
AIG Life & Retirement
in TX

Pension Administration -- Defined Contribution Retirement Plans
AIG Life & Retirement
in TX

Sr. Implementation Consultant
AIG Life & Retirement
in TX

Post Your Job

View All Jobs

RSS feed for jobs RSS Feed: All Jobs

Webcasts and Conferences

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

Text of PBGC Monthly Interest Rate Update, October 15, 2013
"[T]he immediate interest rate for valuing lump sum payments for the month of November 2013 is 1.75% and the deferred interest rate I1 is 4.00%, I2 is 4.00%, and I3 is 4.00%.... The select and ultimate interest rates for valuing annuity benefits in single-employer plans and multiemployer plans for the month of November 2013 are 3.00% for the first 20 years following the date of plan termination, and 3.31% thereafter, respectively." (Pension Benefit Guaranty Corporation [PBGC])  


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 directly from DC experts discuss on the most pressing investment, legislative, plan design and education issues today.

[Guidance Overview]

The 'Balancing Problem' in Reporting '403(b) Policy Loans' on the Form 5500 Schedule H
"If you are wringing your hands trying to figure out how you report those 403(b) 'policy loans' on the Form 5500 Schedule H, understand that you are not alone-and that there is no easy answer to your dilemma. This problem arises from a continuing flaw in the Form 5500, which the DOL never fixed after requiring 403(b) plans to fully report financials for plan years 2009." (Business of Benefits)  

401(k) Participants Not Blocked from Suing as Class to Recover Investment Losses from Stable Value Funds
"The court stressed the importance in class certification of ensuring that a significant portion of a class not have interests adverse to that of the class representatives. The class may not be defined so broadly that some members will actually be harmed by the relief. However, the mere possibility that a trivial level of intra-class conflict may materialize as the litigation progresses does not foreclose class certification." [Abbott v. Lockheed Martin, No. 12-3736 (7th Cir. Aug. 7, 2013)] (Wolters Kluwer Law & Business)  

Required Minimum Distributions: Overview and Decision Tree (PDF)
"Upon attainment of age 70-1/2, certain participants of a tax-qualified retirement plan may be required by federal tax law to withdraw a minimum amount from such plan each year.... [A] Required Minimum Distribution Decision Tree chart is provided ... to assist you in determining whether a specific set of circumstances requires the withdrawal of RMDs." (Legacy Retirement Solutions)  

Pension Buyouts Expected to Surge, But Not Yet
"[E]xpectations of rising interest rates plus improved funding ratios for many plans will make it easier and less expensive to sell their liabilities to insurers ... Executives at annuity providers like Newark, N.J.-based Prudential Financial Inc. and Metropolitan Life Insurance Co., New York, expect a total of $2 billion to $5 billion in buyouts by the end of 2013. Year to date there's been about $1 billion in activity, but corporate plans historically ramp up their decisions on pension buyouts in the last quarter." (Pensions & Investments)  

Half of Older Workers Delay Retirement Plans
"Stung by a recession that sapped investments and home values, but expressing widespread job satisfaction, older Americans appear to have accepted the reality of a retirement that comes later in life and no longer represents a complete exit from the workforce. Some 82 percent of working Americans over 50 say it is at least somewhat likely they will work for pay in retirement ... 47 percent of working survey respondents now expect to retire later than they previously thought and, on average, plan to call it quits at about 66, or nearly three years later than their estimate when they were 40." (Associated Press via ABC News)  

Finance Class on the Web, for Students of All Ages
"In an ideal world, a master class available to everyone would reveal all the secrets to retirement planning, telling you how much to save, where to invest and what to do when the stock market crashes.... Joshua Rauh, a finance professor at the Stanford Graduate School of Business, is acutely aware of that. And it's why he felt compelled to open his graduate-level course on the finance of retirement and pensions to the masses.... There aren't many other places to turn, particularly where it costs nothing but your time." (The New York Times; subscription may be required)  

Does Your Company Have a Paltry 401(k) Match? This Could Be Why
"Companies typically make matching contributions to each employee's 401(k) account. The match at companies without auto-enrollment is 3.5% ... Companies with auto-enrollment pay only 3.2%. That might not sound like much of a difference, but it's statistically significant ... Why the lower rate? Because companies are trying to hold down their overall 401(k) costs[.]" (Los Angeles Times)  

Taking a Life-Only Pension Payout and Buying Life Insurance to Protect a Spouse Comes with Risks
"[P]ension max plans are often based on assumptions that may not pan out. [Some plans] provide just a 20-year term life insurance policy on the worker's life. If the husband lives longer, 'he will have to buy term life insurance in his 80s, and that will be phenomenally expensive' ... Some strategies use insurance with death benefits that grow based on market assumptions. If the market grows at a lower rate, the death benefit could be too low to cover the survivor's expenses. Also, pension max plans often don't account for taxes." (DailyFinance)  

401(k) Index and Observations Monthly Details: September 2013
"Daily transfer volumes among defined contribution participants averaged 0.026% of balance totals per trading day during September ... Daily trading heavily favored fixed income investment vehicles during September, which experienced net gains from transfer activity for 17 of the 20 trading days (85%)... Outflow activity was led by company stock funds, with $201 million (41%) transferring out." (Aon Hewitt)  

Fixing California: Troubled Cities Must Reckon with Stockton's Deal
"The most optimistic pension reformers had hoped that the decrepit city of Stockton's 2012 bankruptcy would be a 'day of reckoning' -- a point where the city's leaders would pare back overly generous retirement benefits and embark on a road to fiscal responsibility.... But as often happens with government-reform efforts, the pessimists turned out to be right. Earlier this month, the Stockton City Council approved a plan that restructures debt and fully funds the California Public Employees' Retirement System, thus leaving pension benefits for city employees unscathed." (San Diego Union-Tribune)  

Revenue-Sharing Tasks: Meeting DOL Fiduciary Requirements (PDF)
"[T]he plan sponsor must ask the recordkeeper for all relevant information, and gain an understanding of the formula and methodology the recordkeeper uses to determine credits to the ERISA expense account. The plan sponsor must then periodically monitor the recordkeeper's calculations and disbursement of revenue-sharing credits to the plan. If the plan sponsor is not confident of its ability to perform these tasks, it should hire an independent fiduciary or seek help from a plan adviser to review the ERISA expense account." (The Wagner Law Group)  

New Fiduciary Rules Create Opportunities for Retirement Plan Advisors (PDF)
"Some of the opportunities for advisors arise from dispelling commonly held misperceptions about safe harbors. This [recent] DOL document clears up two widespread safe harbor misconceptions: [1] It's not true that any Qualified Default Investment Alternative (QDIA) will do. You need to vet your selection. [2] Safety in numbers is not safe in reality. T. Rowe, Fidelity, and Vanguard do not provide fiduciary insulation. Even worse, mutual funds are not plan fiduciaries." (Target Date Solutions)  

Pension Withdrawal Liability Is Dischargeable in Bankruptcy
"[The Ninth Circuit] distinguished the duty to pay a pension contribution from the duty to pay a withdrawal liability assessment, based on the different origins of these duties. The duty to pay current pension contributions arises under a collective bargaining agreement which creates an express fiduciary duty on the employer's part to make ongoing contributions. The duty to pay withdrawal liability, however, arises not under the collective bargaining agreement, but under ERISA itself." [Carpenters Pension Trust Fund of Northern California v. Moxley, No. 11-16133 (9th Cir. Aug. 20, 2013)] (Michael Best & Friedrich LLP)  

DOL Investigators Quiz Plan Sponsors on Training of Fiduciaries
"The fact that some DOL investigators have asked plan sponsors about their fiduciary education should encourage sponsors and their advisers to address the fiduciary education process more directly ... Too many plan sponsors and their advisers are not taking full advantage of the educational opportunities that certain crucial plan-related documents can provide[.]" (Bloomberg BNA)  

Companies Retool 401(k) Plans After Backlash
"Fees and investment options in the 401(k) field have come under greater scrutiny, with federal regulators last year requiring employers to provide more detailed information. The combination of legal threats and increased transparency have helped somewhat. Fees charged to workers in 401(k)-type programs in 2013 have fallen to their lowest levels in the [past] eight years[.]" (USA TODAY)  

Poland Moves Forward on Bill That Would Transfer Private Pensions to State
"Critics have likened the move to a Soviet-style nationalization of private assets, or an asset seizure.... But the center-right government of Prime Minister Donald Tusk insists that the pensions revamp is nothing more than an accounting change that will not undermine pensioners. Moreover, it says that the changes do not amount to nationalization since the private funds will still manage equities." (The New York Times; subscription may be required)  


Pensions Going Postal
"[P]ension plans influence corporate finance activity in several ways. First, they are collectively and, in some cases, individually, large and hard-to-ignore investors. Second, benefit economics can sometimes mean the difference between a deal such as a restructuring or merger or acquisition moving forward or getting stalled. The over subscribed Initial Public Offering of the venerable postal system organization known as the Royal Mail Group, Ltd. is a good example of pension plan sway." (Pension Risk Matters)  

Benefits in General; Executive Compensation

Opening Up the Courthouse Door: The Second Circuit Weighs In on Exhaustion of Administrative Remedies (PDF)
"As we move more and more into a world in which employees ... are the ones responsible for their retirements, and in many instances for much of the cost and even management of their health benefits, the competency of plan operations becomes more and more central to our, as well as courts', thinking about ERISA plans, responsibilities, and liabilities. This is becoming an explicit and literal concern ... with legal doctrines governing ERISA litigation moving towards a framework in which problems with competence can more readily be remedied through the court system." (Stephen Rosenberg of The McCormack Firm, LLC, via Journal of Pension Benefits)  

A Preview of Key Executive Compensation Issues for the 2014 Proxy Season: Results of ISS' 2013-2014 Policy Survey
"In contrast with last year's survey which focused on numerous executive compensation topics (e.g. peer group selection, measuring pay including granted vs. realizable pay, pay for failure, and executives' and/or board members' pledging of company stock), this year's survey concentrated on broader high-level corporate governance themes including board responsiveness, director tenure/rotation and director assessment, with the primary executive compensation survey questions relating to equity plan evaluations." (Steven Hall & Partners)  

The Importance of Commenting on the Proposed CEO Pay Ratio Rules
"In [a recent speech, SEC Chair Mary Jo] White recognized the importance of disclosure to investors, but stated that disclosure which strayed beyond the SEC's core purposes could lead to information overload which would harm investors. She also noted that certain Congressional mandates appeared more directed at exerting societal pressures on companies to change their behavior rather than at disclosing financial information to inform investment decisions.... Companies ... should not assume that the final rules could not be more burdensome than the proposed rules and need to support what the SEC has done, as well as suggest improvements." (The Conference Board)  

2013 'Say on Pay' Voting Results
"3,011 companies have held Say on Pay votes in 2013. 60 companies have failed with an average 60% 'Against' vote. Ten companies have failed previous votes. 71% of companies have received a greater than 90% 'For' vote. Average vote among all companies: 90% 'For' vote 8% 'Against' vote 2% Abstentions." (Steven Hall & Partners)  

How Does Retiree Health Insurance Influence Public Sector Employee Saving?
"[T]his paper utilizes a unique data file on three baseline cohorts from the Health and Retirement Study to explore how employer-provided retiree health insurance may influence net household wealth among public sector employees, where retiree healthcare benefits are still quite prevalent. We find that most full-time public sector employees who anticipate receiving employer-provided health insurance coverage in retirement save less than their private sector uncovered counterparts." (National Bureau of Economic Research [NBER])  

SEC's Pay Ratio Proposal: Costs, Complexities, and Contradictions
"Several companies discussed their preliminary thoughts on compliance, with the conclusion being that some companies have centralized data that may be useful in identifying the median employee, but only if the SEC permits sufficient flexibility in how 'reasonable estimates' are obtained. One company [indicated] that to have precise data across all databases by implementing a global HRIS system, it would take $9 million and as long as eight years." (HR Policy Association)  

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: