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

Retirement Plan Sales Consultant
Trinity Pension Consultants, Inc.
in OH

Human Resources Benefits Manager
The University of Scranton
in PA

Senior Associate / Manager
Dixon Hughes Goodman, L.L.P.
in VA

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Webcasts and Conferences

Implications of Supreme Court’s Defense of Marriage Act (DOMA) Ruling
October 23, 2013 WEBCAST
(Jackson Lewis LLP)

ERISA Workshop 2013 - Seattle
November 15, 2013 in WA
(SunGard Relius)

2013 Fall Forum - Las Vegas
November 18, 2013 in NV

Most Common Mistakes Made by Qualified Plan Sponsors and How to Fix Them
November 21, 2013 WEBCAST
(Lorman Education Services)

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

COLA-Adjusted Figures Expected Soon for 2014 Tax Code Limitations and Social Security Wage Base
"September 2013 CPI data are scheduled to be released on Wednesday, October 30, 2013, at 8:30 A.M. Eastern Time." [The Consumer Price Index is used by the Internal Revenue Service to calculate adjustments to various Internal Revenue Code limitations applicable to employee benefit plans, and by the Social Security Administration to determine the Social Security wage base.] (U.S. Bureau of Labor Statistics)  


Don't miss the ASPPA 2013 Annual Conference at Natl. Harbor, MD!

Sponsored by ASPPA

Attend ASPPA's Annual Conference to inform Congress that they can't overlook pension issues! Registration includes: visits to Capitol Hill, 70+ sessions on topics shaping the industry, networking with 1,500+ retirement plan professionals, and more!

CalPERS Files Notice of Appeal in San Bernardino Bankruptcy
"The California Public Employees' Retirement System has filed an appeal of the judgment that granted the City of San Bernardino eligibility to proceed in its bankruptcy. CalPERS argues in its filing that the City did not file for bankruptcy in good faith and with any concept of a plan of adjustment -- two prerequisites of the Bankruptcy Code. The Pension Fund further states that the City failed to explore any alternatives to bankruptcy and failed to make any meaningful financial information available to creditors during the course of the bankruptcy process." (CalPERS)  

Regulatory and Fiduciary Framework for Providing Lifetime Income from Defined Contribution Plans (PDF)
"[T]hough more guidance is necessary in order to accommodate the wide variety of types of annuity products that currently exist and that will be developed, and ... care should be taken when designing a lifetime income within a DC plan, it is possible to properly provide lifetime income through DC plans under current law. Though the current regulatory and legal structure cannot support all of the types of products coming to market, the current rules can support a number of them as well as traditional annuitization." (Robert J. Toth, Jr. and Evan Giller via NYU Review of Employee Benefits and Executive Compensation)  

Roth 401(k) In-Plan Conversions: Where Are We Now?
"Over the last several months, infrastructure has been put in place to handle Roth in-plan conversions for many 401(k) plans.... But there has not been a rush to make the change ... There are a number of unanswered questions about how the new in-plan Roth conversions will work, guidance for which has not yet provided by the Internal Revenue Service." (The Retirement Plan Blog)  

Case in Detroit Highlights Costs of 'Extra' Pension Payments
"[Detroit's] pension system made extra payments for decades to thousands of people ... The pension board thought it found the money for the extra payments by skimming off 'the excess' when returns on investments exceeded the plan's target ... New York City; Phoenix; San Jose, Calif.; and Tampa, Fla., along with some of the public plans in Illinois, Indiana, Texas and Mississippi also have the add-ons.... The pension extras have cost Detroit billions of dollars over the years, hastening the city's downfall, yet state laws say the extra payments must continue." (The New York Times; subscription may be required)  


Look to SunGard for Plan Restatements Solutions.

Sponsored by SunGard's Relius

SunGard's Restatement Management Services can help manage your restatement process from start to finish. Serving as your back-office, our experienced team will work with you to create a customized, seamless process for your clients. Contact 800.326.7235.

ESOP and 401(k) Coordination Tips in a Post-Disclosure World
"ESOP companies should look for providers that have a consultative and holistic approach in this new world of disclosure. When you provide more than one qualified plan to your employees, plan administration should be done in harmony. The delivery of compliance services should be seamless.... Your TPA should be independent, have no asset-based charges and all fees should be fully disclosed. A dedicated team of ESOP and 401(k) specialists provides a coordinated approach to the delivery of services for both plans[.]" (Blue Ridge ESOP Associates)  

Most Middle Class Retirement Savers Avoid the Stock Market
"About half (52%) say they don't invest in the stock market because 'I am afraid to lose my nest egg in the ups and downs of the market.' The apprehension about the market is stronger for those age 25 to 29, with 56% expressing fear of losing their nest egg. When asked if given $5,000 for retirement where they would invest, 58% of those age 25 to 29 say they would invest in a savings account/CD." (Wells Fargo)  

PBGC Not Entitled to Administrative Deference for Involuntary Plan Termination
"PBGC argued that the Court should defer to the PBGC's determination to involuntary terminate the plan ... because the determination was the end result of an 'informal adjudication' and therefore 'agency action' under the [Administrative Procedures Act]. The Court disagreed, noting that ERISA ... requires the Court to determine whether to involuntarily terminate the plan. Indeed, the Court noted that the PBGC's determination has no legal or binding effect without a court order." (Proskauer's ERISA Practice Center)  

So You've Frozen Your DB Plan -- Now What? (Part 4)
"A best practice when determining an asset allocation strategy is to have an asset liability modeling (ALM) study prepared. In an ALM study, a DB plan's assets and liabilities are modeled to help evaluate the effect of various asset allocations on a termination strategy.... [T]ermination may take years to complete, so monitoring progress is critical. A change in the markets may necessitate either a change in strategy or a change in the termination timetable, or possibly both." (The Principal Blog)  

Stealth Bill Would Allow Cuts to Current Pensions
"The law says pension plans can't cut the pensions of those already retired. But some multi-employer plans are in big trouble, so their unions and employers are uniting to lobby for the right to slash members' benefits.... The proposal on its way to Congress would give plan trustees the authority to cut pensions now to 110 percent of the PBGC-guaranteed figure, or $14,157 a year for the best-off." (LaborNotes)  

Social Security's Real Retirement Age Is 70
"Due to increases in Social Security's Delayed Retirement Credit, the effective retirement age is now 70, with monthly benefits reduced for earlier claiming. Benefit levels at 70 appear appropriate given that rising deductions for Medicare and greater benefit taxation have reduced Social Security's net replacement rates. The shift to 70 should be feasible for many workers given increases in lifespans, health, and education. But vulnerable workers forced to claim early will have low benefits and will be particularly harmed by any further cuts. Policymakers need to inform those who can work that 70 is the new retirement age and devise ways to protect those who cannot work." (Alicia H. Munnell, Center for Retirement Research at Boston College)  

Factors Limiting the Opportunities for Partial Retirement
"Principal results indicate that higher income earners, those working in larger companies, and blue-collar workers have limited opportunities for partial retirement. Older workers are much more likely but those who value work for itself rather than for the compensation are much less likely to be discouraged by the labor market restrictions that might make partial retirement less attractive." (Tunga Kantarci via SSRN)  

Public Pension Plans Report Increasing Confidence, Lower Costs, Growing Returns (PDF)
"Respondents provided an overall confidence rating of 7.8 on a 10-point scale, up slightly from 7.7 in 2012.... Returns on three-year investments were 10 percent, up from four percent in 2012; returns on 10-year investments were seven percent, up from five percent in 2012 ... The overall average expense to administer public pension plans and to pay investment manager fees decreased ... from the 2012 level of 73.1 basis points to 57.3 basis points." (National Conference on Public Employee Retirement Systems [NCPERS])  

Financial Literacy, Financial Education and Downstream Financial Behaviors
"[T]he partial effects of financial literacy diminish dramatically when one controls for psychological traits that have been omitted in prior research or when one uses an instrument for financial literacy to control for omitted variables. Financial education as studied to date has serious limitations that have been masked by the apparently larger effects in correlational studies.... [The authors] suggest a real but narrower role for 'just in time' financial education tied to specific behaviors it intends to help." (Daniel Fernandes, John G. Lynch, and Richard G. Netemeyer via SSRN)  

Stated Preference Analysis of Full and Partial Retirement in the U.S.
"The models developed to explain the retirement decisions of older workers are typically estimated using data on actual retirement behavior, from which it is difficult to identify the retirement options available to employees.... [This study uses] stated preference data to identify the preferences of individuals for full and partial retirement plans.... [The authors] analyze how the choices vary with financial incentives and other factors." (Tunga Kantarci and Arthur Van Soest via SSRN)  


Text of ASPPA Response to IRS Request for Comments on Employee Retirement Benefit Plan Returns Required on Magnetic Media
"The IRS should confirm that use of the existing Filing Information Returns Electronically (FIRE) system will satisfy the electronic filing requirement for the Form 8955-SSA through calendar year 2016.... make system enhancements that include an efficient batch submission feature for the FIRE system as well as a free interface for use by employers or other filers of the Form 8955-SSA ... clarify how the proposed regulations interact with existing filing requirements of the Form 5500-EZ for certain 'one-participant' plans ... [and] make available an electronic filing option for the Form 5558 when used to extend the filing deadlines for the Form 5500 series and/or the Form 8955-SSA." (American Society of Pension Professionals & Actuaries [ASPPA])  


Extreme Makeover For U.S. Retirement Plan Menus?
"The guiding principle for rethinking any aspect of a DC plan's investment menu should be helping plan participants make appropriate investment decisions, not overwhelming or confusing the participants. At what level does choice overload begin? ... One effect of choice overload is that some participants toss in the decision towel and simply allocate an equal percentage to each option. With that in mind, how can you tell when to trim the investment menu to avoid unnecessary overlap or too heavy a leaning toward either risk or safety?" (Seeking Alpha; free registration may be required)  

Benefits in General; Executive Compensation


The U.K.'s Largest Infrastructure Deal? Pension Fund to Purchase Stake in Heathrow Airport
"[Is] this more evidence that pensions (and sovereign wealth funds) are inflating an infrastructure bubble? ... [W]hy are the Ferrovials and Hochtiefs of this world selling their stakes in airports to large pension funds and sovereign wealth funds? Is it really part of a 'diversification strategy' or are they worried of the changing regulatory landscape? ... These are long-term investments which make perfect sense to pensions from an asset-liability standpoint. But infrastructure assets carry significant risks, the most important one being regulatory risk." (Pension Pulse)  

An ERISA Claim Walks Into a Bar... Supreme Court Hears Oral Arguments on ERISA Statute of Limitations
"The Justices did not seem to be impressed by the argument that the limitations clock could run out during the administrative appeal process.... The Assistant to the Solicitor General, as amicus curiae, countered that some administrative decisions can take four to five years given the time frame flexibility in [DOL] regulations ... The Justices, however, did not seem to be very convinced that it could take this long and scant evidence was presented where this actually happened (9 cases in all)." [Heimeshoff v. Hartford Life & Accident Ins. Co., No. 12-729 (Oct. 15, 2013)] (Bloomberg BNA)  

Twitter's IPO Registration Statement Reveals Extensive Use of Restricted Stock Units
"The IPO of Twitter -- about as high-profile as you can get -- is expected to occur by mid-November. Twitter's Form S-1 ... discloses its extensive use of restricted stock units [RSUs] over stock options ... Apart from awarding stock options to its senior executives ... and using options in relation to acquisitions ... Twitter seems to exclusively grant RSUs." (myStockOptions.com)  

Compensation for Board of Directors Increased in 2012
"Mercer's latest analysis of directors' compensation shows median total direct compensation increased 3% -- the lowest year-over-year change in years -- for directors at S&P 500 companies.... For the S&P 500, the median cash retainer increased from $65,000 in 2010 to $75,000 in 2012. The largest increases were at the 400 smaller companies ($60,000 to $75,000), while the median at the S&P 100 increased from $85,000 to $90,000." (Mercer)  

ISS Issues Draft Policy Changes for 2014
"ISS is proposing to change the Relative Degree of Alignment (RDA) metric to evenly weight the impacts of each of the past three years' performance and compensation. In the past, the RDA metric emphasized the most recent year of performance and compensation data. ISS is still working to identify where to set the thresholds for medium and high levels of quantitative concern." (Winston & Strawn LLP)  

Press Releases

IRI Launches New IRIonline.org Website
Insured Retirement Institute (IRI)

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