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November 1, 2013          Get Health & Welfare News  |  Advertise
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Fiduciary and Legal Review
November 7, 2013 WEBCAST
(NH Hicks)

FSA Rollover Provision: What You Need to Know
November 7, 2013 WEBCAST
(Alegeus Technologies, LLC)

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[Official Guidance]

Chart of COLA-Adjusted Tax Code Limitations Particular to Retirement Plans, 1989-2014 (PDF)
Includes the new 2014 figures. This chart prepared by the IRS includes 21 different dollar limitations and items having specific application to retirement plans, including the section 401(a)(17) compensation limit, 402(g)(1) limit on annual deferrals, 415(b)(1)(A) defined benefit limit, and the OASDI taxable wage base. (Internal Revenue Service)  


Learn About PPA Restatements from our Experts and Earn CE Credit Free!

Sponsored by ftwilliam.com

On 11/5 join us for an overview of the ftwilliam.com PPA Document. We will cover new features and options in the draft document submitted to the IRS and what to expect during restatements. You will also see a tour of the new and improved user interface.

What's the Impact of the 2014 IRS Retirement Plan Limits?
"Highly-paid participants will now have more of their compensation 'counted' towards qualified plan benefits and less towards non-qualified plans. This helps for both nondiscrimination testing as well as for benefits.... When the HCE compensation threshold doesn't increase to keep pace with employee salary increases, employers may find that more of their well-paid employees become classified as HCEs." (Van Iwaarden Associates)  

2013 JCEB Q&As Offer Nonbinding DOL Responses on Prohibited Transactions and Service Provider Required Disclosure Rules
"Although the DOL representatives did not provide answers for several of the questions presented (including a question addressing summary of benefit and coverage penalties and multiemployer plans), those questions for which the agency did provide its informal views may be instructive for plan administrators and their advisors. In particular, given the potentially significant errors for filing incomplete or inaccurate Form 5500s, in addition to other consequences, the representatives' response to the question on service provider disclosures should be of particular interest to plan fiduciaries." (Practical Law Company)  

CalPERS Files Amicus Brief Supporting State Dispute with City of San Bernardino
"The California Public Employees' Retirement System has filed an amicus brief in support of two other State agencies ... CalPERS outlines why the 11th Amendment to the U.S. Constitution protects State agencies, like the Pension Fund, from being haled into federal court against their will by a municipality, which is a creation of the State of California. CalPERS further argues that bankruptcy is no exception to this essential attribute of State sovereignty that is vital to the concept of federalism, which recognizes that the federal government must respect the rights of states." (CalPERS)  

Improvements Needed for Multiemployer Pension System
"While attendees of a U.S. House subcommittee hearing agreed that the U.S. multiemployer pension system needs to be improved, they had differing opinions on how to achieve this.... [Subcommittee chair David P. Roe] cautioned that inaction could have a chilling effect on the current problems.... While he acknowledged that a number of multiemployer plans are recovering, Roe reminded hearing attendees, 'We cannot lose sight of the sizeable number of large plans that remain in financial trouble.'" (PLANADVISER.com)  

The Seven '403(b) Administrative' Sins (Part 2)
"Sin #4: Qualified Domestic Relations Orders (QDROs) ... A typical example is that a QDRO to the plan simply provides an asset split percentage to an alternative payee. However, upon implementation, not all plan assets were taken into account, and one or more provider contracts with respect to that participant were missed. The inadequate QDRO procedures results in a plan violation, but more importantly, it's a violation of a court order, and is patently unfair to the alternate payee." (The Principal Blog)  

Average 401(k) Balance Has Nearly Doubled Since 2008
"[T]he average American 401(k) account balance reached $94,482 at the end of 2011, the most recent period tracked in ICI's database of accounts.... [That] figure represents the average among 'consistent participants' who had 401(k) accounts at the end of each year from 2007 through 2011. That group represents only about 40% of the accounts in ICI's database. If you expand the study to include all accounts, the average balance at the end of 2011 was about 60% lower, at just under $59,000." (MarketWatch.com)  

Change in Average 401(k) Account Balances as of November 1, 2013 (PDF)
Report shows change in average account balances grouped by age and tenure, from January 1, 2011 through November 1, 2013, for "consistent" participants (those who had an account balance at the end of each of those years). (Employee Benefit Research Institute [EBRI])  

What 'Average' 401(k) Balance Statistics Can Miss (PDF)
"While annual updates of the EBRI/ICI 401(k) database provide an invaluable perspective of 401(k) account balances, asset allocation, and loan activity across wide cross-sections of participants ... the cross-sectional analysis is not well-suited to addressing the question of the impact of participation in 401(k) plans over time.... [In] order to accurately assess the impact of participation in 401(k) plans over time, and to understand how 401(k) plan participants have fared over an extended period, it is important to analyze a group of consistent participants -- a longitudinal sample." (Employee Benefit Research Institute [EBRI])  

Can Expanding Social Security Solve the Retirement Crisis?
"[W]hile conservatives worried about deficits argue for Social Security cuts, a group of progressive economists, policy experts, labor leaders and politicians ... met [recently] to argue not only that Social Security can address retirement inequality -- but that it is by far the most logical available platform for addressing the problem, due to its risk pooling and progressive approach to income distribution.... [T]hese experts made the case that Social Security should be expanded -- not cut." (Reuters)  

Characteristics of Mutual Fund Investors, 2013 (PDF)
"Saving for retirement was one of the financial goals for 92 percent of mutual fund-owning households, and almost three-quarters indicated that retirement saving was the household's primary financial goal.... Sixty-three percent of mutual fund-owning households that purchased their first fund in 2005 or later purchased that fund through an employer-sponsored retirement plan, compared with 52 percent of those that made their first purchase before 1990." (Investment Company Institute [ICI])  

ICI Annual Mutual Fund Shareholder Tracking Survey, 2013 (PDF)
48 pages. Excerpt: "In 2013, 47.1 percent of U.S. households owned shares of mutual funds or other U.S.-registered investment companies ... representing an estimated 57.7 million households and 97.9 million investors.... More than twice as many U.S. households owned mutual funds through tax-deferred accounts -- employer-sponsored retirement plans, IRAs, and variable annuities -- as owned mutual funds outside such accounts" (Investment Company Institute [ICI])  

Como Se Dice 'Opportunity' en Espanol? Retirement Communication Is More Complicated Than Just Speaking Spanish.
"[A recent whitepaper] estimates in the next 20 years Hispanics will represent 31% of the work force.... Although retirement is not a new concept to U.S. Latinos, planning for retirement does have different meanings, and 'saving' may not necessarily be part of it, especially for those who are in the early stages of an immigrant experience. Working with Hispanic employees is more than just speaking Spanish. It's about cultural influence." (The Principal Blog)  


Text of Comments by Eight Fund Managers to SEC on Proposed Money Market Reforms (PDF)
"[T]he Proposed Rule creates an exemption for retail money market funds from the floating NAV requirement. The Commission has proposed to define a retail fund as a fund that 'does not permit any shareholder of record to redeem more than $1,000,000 of redeemable securities on any one business day.' ... [T]his proposed daily redemption limit would be burdensome to implement for both funds and third party intermediaries, resulting in significant costs and operational complexity. More importantly, investors do not want a continuous limitation on their ability to redeem shares.... [W]e believe that there is a simpler and more cost effective way to achieve the Commission's goal of providing an exemption for retail investors." (BlackRock, Inc. and seven other investment firms)  

Benefits in General; Executive Compensation

Perpetual Shortfall: Maryland's Pension and Benefit Funds (PDF)
"[In 2008,] Maryland's state ... pension system faced an $11 billion long-term shortfall, and cost estimates for retiree healthcare ranged from $8 billion to $15 billion. This report updates the 2008 report with new data from the 2012 fiscal year ... Currently the state's pension system faces a long-term shortfall estimated at over $19 billion. The long-term shortfall for state retiree healthcare is estimated to be $9.4 billion. With a few exceptions, the situation in many Maryland counties is just as dismal." (Maryland Public Policy Institute)  

Oracle Shareholders Reject Executive Pay, Again
"[CalSTRS and two other large pension fund managers] sent a letter to Oracle shareholders, saying they have 'severe concerns about executive compensation and proper board accountability at Oracle.' [CalPERS] also said it was voting against Oracle's pay plan and Mr. Chizen, chairman of the board's compensation committee. It's the second straight year shareholders have rejected executive pay packages; the vote is non-binding." (Pensions & Investments)  

Press Releases

Judge Orders Restoration of More than $1.6 Million to Sunkist Growers Inc. Retirement Plans
Employee Benefits Security Administration (EBSA), U.S. Department of Labor

CalSTRS Releases RFP for 403(b)/457(b) Recordkeeper
California State Teachers' Retirement System (CalSTRS)

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