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November 4, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Internal Sales Consultant
The Newport Group
in NC

Retirement Plan Consultant
The Standard
in MD

Daily Valuation Associate
Retirement Planners
in VA

Benefits Consultant, Small Group
Northwestern Benefit Corporation of Georgia
in GA

Retirement Specialist
Nationwide Insurance
in MN

ERISA Legal Counsel Director
Charles Schwab
in TX

Defined Contribution Consultant
The Benefit Practice
in CT, FL

Defined Contribution Plan Administrator
BenefitWorks
in PA

Retirement Plan Sales Officer
Heartland Financial USA
in AZ, CO, KS, MN

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Webcasts and Conferences

New Use-or-Lose Rule for Health FSAs: Timing and Administration of Permitted Carryovers
November 11, 2013 WEBCAST
(Thomson Reuters / EBIA)

Designated Roth Accounts and Roth Conversions
November 12, 2013 WEBCAST
(McKay Hochman Co., Inc.)

IRS Issues Long-Awaited Rollover Guidance for FSAs
November 13, 2013 WEBCAST
(Employers Council on Flexible Compensation (ECFC))

Seizing Pension Risk Transfer Opportunities in 2014
November 20, 2013 WEBCAST
(Mercer)

Voluntary Insurance Products in the Workplace: Compliance Issues and Changing Legal Requirements
November 21, 2013 WEBCAST
(Thomson Reuters / EBIA)

Washington Update
December 3, 2013 in FL
(ASPPA Benefits Council (ABC) of North Florida)

Pension De-Risking for Employee Benefit Sponsors
December 10, 2013 WEBCAST
(Strafford)

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]

IRS Employee Plans News, November 1, 2013 (PDF)
Topics include: [1] COLAs -- 2014 cost-of-living limits for retirement plans; [2] PBGC Insights -- news from PBGC 2014 (Missing participants in individual account plans, and Premium proposed rule); and [3] PTIN renewal season delayed. (Internal Revenue Service)  


[Advert.]

Don't Miss the ASPPA Cincinnati Pension Conference!

Sponsored by ASPPA

Obtaining a high level of technical knowledge is necessary for employers that sponsor pension plans. Attend the ASPPA Cinci Pension Conf. to learn from industry experts that will expand your knowledge and keep you up to date on the important issues!



CalPERS Members Live Longer, May Push Up Rates Further
"After years of keeping employer rates low, CalPERS in April switched from an actuarial method that spread investment gains and losses over 15 years to a more direct method, boosting employer rates roughly 50 percent over the next seven years. Now the next phase of a CalPERS plan to reach full funding looks at three things that could push rates even higher: investment allocation, earnings forecast used to offset or discount pension obligations and demographic changes including mortality." (Calpensions)  

Beyond the Automatic 401(k)
"Using 'nudge economics,' auto-401(k) features turned the two main weaknesses of plan participants' behavior -- inertia and procrastination -- into virtues by automatically enrolling workers, automatically defaulting them into target date funds and, in some cases, automatically bumping up their salary deferral rate each year.... But much more needs to be done, and nudge economics alone can't deliver better retirement outcomes.... [I]nnovations in 401(k) plan designs and product solutions that help workers shift from the accumulation to distributions will be essential in the next phase of the retirement system evolution." (InvestmentNews)  

Can Simple Informational Nudges Increase Employee Participation in a 401(k) Plan?
"[The authors] report results from a field experiment in which a randomized subset of newly hired workers at a large financial institution received a flyer containing information about the employer's 401(k) plan and the value of contributions compounding over a career. Younger workers who received the flyer were significantly more likely to begin contributing to the plan relative to their peers in the control group." (National Bureau of Economic Research [NBER])  

Schwab Makes Case for Its Long-Awaited ETF 401(k)
"We expect to reduce average plan operating expense ratios by as much as 30%, from around 16 basis points [or 0.16%] with index funds down to 10 to 14 basis points using ETFs.... Outside of the biggest plans, low-fee, institutional mutual funds aren't available to the majority of plan sponsors. ETFs level that playing field. A $20 million plan gets the same pricing as a $2 billion plan. Most plans in this segment simply haven't had access to this kind of pricing until now." (The Wall Street Journal; subscription may be required)  

Funded Status of U.S. Corporate Pensions Rises to 91.8 Percent in October
"Strong equity and fixed income returns in October contributed to rising assets for corporate defined benefit plans, public defined benefit plans, and endowments and foundations in the U.S.... The funded status of the typical U.S. corporate plan rose 0.8 percentage points to 91.8 percent in October ... Corporate plans led the three groups as public equities outperformed alternatives in October. However, public pension plans and endowments and foundations in the U.S. also exceeded their targets during the month[.]" (BNY Mellon)  

In Pursuit of Procedural Prudence (PDF)
"Prudence is the most important [of ERISA's fiduciary duties] because it underpins the fulfillment of the other key ERISA duties. Therefore ... [it] carries the greatest amount of risk relative to the other duties.... [A] plan sponsor's actions will be evaluated by the process used to make the decision (procedural prudence) and the result of the decision (substantive prudence). Anyone can follow a 'process', but a 'prudent process' requires looking at the right information in the right way." (Portfolio Evaluations, Inc.)  

Ninth Circuit Revisits Harris v. Amgen
"The Ninth Circuit denied [Amgen's] petition [for rehearing] and issued an amended opinion further explaining its reasoning on the ERISA aspects of securities law in this case.... [T]he court explained that the defendants did more than merely file and distribute Amgen's SEC filings. Instead, they explicitly incorporated the SEC filings by reference into the Amgen plans' [SPDs], which the court held constituted a fiduciary act under ERISA." (Trucker Huss)  

Pension Finance Update, as of October 31, 2013 (PDF)
"Financial markets shook off the government debt imbroglio last month, building on an already outstanding year for pension sponsors. The two 'model' plans we track each saw improvements, with traditional 'Plan A' and the more conservative 'Plan B' both gaining 1% during October. For the year, Plan A has enjoyed an eye-popping 20% improvement in funded status while Plan B is up about 6%." (October Three Consulting)  

Cypen & Cypen Newsletter, October 31, 2013
Article titles include: [1] Defined Benefit Pensions Still Best Bang for the Buck; [2] DC Plans Still Hesitant About Lifetime Income; [3] Gauging the Burden of Public Pensions on Cities; [4] Debt Savers in Defined Contribution Plans; and [4] Thousands of Federal Employees Withdrew Retirement Investments During Shutdown. (Cypen & Cypen)  

Top 20 International Stock Funds in the DC Marketplace (PDF)
"Noteworthy findings since ... September 2011: [1] Top four hold strong ... maintain[ing] their respective positions as #1-4 on the list; [2] The returning funds proved their long-term viability ... showing either growth and consistency for all top six funds; [3] Newcomers dominate the second half of the list... [4] Four funds have dropped off the list since 2011." (BrightScope)  

Disappearing Pensions? Illinois Teachers Get Halloween Scare
"'Without changes to the pension code to ensure sustained and adequate funding, TRS faces the very real possibility that in a few decades the System will not have enough money to pay benefits to retirees,' [said Dick Ingram, executive director of the Illinois Teachers' Retirement System (TRS)].... Illinois' teacher pension fund is worth $40 billion, but it is also underfunded by $55 billion. That unfunded liability actually rose $3 billion over the past year, despite TRS seeing a 12.8 percent return on investments." (Quincy Journal)  

High Stakes in Court Fight Over Permitted Spiking in Public Pension Plan
"For years, Contra Costa's public employee retirement system has ... ignored legal advice in 1997 and 2009 that its overly generous rules conflicted with state Supreme Court and appellate court rulings.... [Last week] they faced a Superior Court judge who will soon rule whether the sweetheart deal allowing the spiking violates state law. Judge David Flinn's decision ... could also affect similar practices in Merced, Alameda and, possibly, Marin counties. But Contra Costa is the poster child, the home of the greatest sanctioned abuses." (Contra Costa Times)  

IRA Contributors: Do You Max?
"An analysis of IRA contributions made by Vanguard clients since 2007 shows that half of investors that made a contribution, contributed the maximum amount.... [S]ome portion of the other half are likely contributing the max as well, but splitting their contribution among investment companies.... It's not just older investors who are investing the maximum amount allowed.... By age 25, nearly half of investors maxed out their savings." (Vanguard)  

Drinker Biddle Retirement Income Team Newsletter, October 2013 (PDF)
Topics include: [1] Update on Retirement Income Projections; [2] The Role of Managed Payout Funds in Retirement; [3] Variable Annuity Contracts May Require Continuing Attention -- What Broker-Dealers Need to Know; and [4] Selecting an Annuity Provider: Part III. (Drinker Biddle)  

Employee Ownership Update for November 1, 2013
Topics include: [1] House Passes Bill to Block SEC and DOL Fiduciary Regulations; [2] NCEO Launches the Retired ESOP Company Executive Directory; [3] Fiduciaries of California ESOP to Repay Plan Funds; [4] Companies Sought for Study on Ownership Behaviors; and [4] "We The Owners" Makes Splash at Film Festivals. (National Center for Employee Ownership [NCEO])  

Text of D.C. Court of Appeals Order Dismissing U.S. Airways Pilots' Challenge to PBGC Benefit Determinations (PDF)
23 pages. Excerpt: "Appellants are approximately 1,700 retired U.S. Airways pilots and their beneficiaries ... They appeal the grant of summary judgment to the [PBGC] on their claims regarding pension benefits payable under the terminated Retirement Income Plan for U.S. Airways Pilots. Of the Pilots' twelve claims, three claims are not appealed and four claims that are appealed but were not briefed are forfeited. For the following reasons, upon de novo review ... we affirm as to the five remaining claims." (U.S. Court of Appeals for the District of Columbia Circuit)  

[Opinion]

Can Pensions Afford Recovery?
"[A]re pensions held hostage to the 'conflictual power logic of capitalism' and therefore contributing to increasing inequality instead of reducing it? I hope enhanced public pensions will be a 'game changer' in terms of redistributing income downward but ... so far the evidence does not support this assertion. In fact, the evidence shows pensions are contributing to higher inequality." (Pension Pulse)  

Benefits in General; Executive Compensation

[Guidance Overview]

Year-End Checklist for Plan Sponsors of Retirement and Group Health Plans
"Over the next few months, employers and plan sponsors will probably focus most of their attention on the changes mandated by the [ACA], for health plans, and the effect of U.S. v. Windsor on both retirement and group health plans. With all the planning, there will hardly be time to keep up with all the normal plan maintenance issues. This article will help ease the transition by serving as a to-do list for plan sponsors in meeting its annual notice obligations and any additional actions that may be required or need to be assessed in the wake of ACA and/or the Windsor decision." (Troutman Sanders)  

[Guidance Overview]

California Reduces Section 409A Tax Penalty from 20% to 5%
"[T]his reduced CA 409A tax penalty is applicable for taxable years beginning on or after January 1, 2013, so the reduced rate applies retroactively to the beginning of 2013.... Federal Section 409A and the other provisions of CA 409A are unaffected by the new law, and employers continue to have the same obligation to report Federal Section 409A and CA 409A violations and withhold ordinary income recognized under such arrangements." (Goodwin Procter)  

Tell All Employees About DOMA Changes
"[T]here is a lot for employers to think about regarding DOMA, especially as more states ... legalize same-sex marriage. And it is important that as you communicate your response, you don't make the mistake of assuming you know which of your employees is affected. You really have no way of knowing who may or may not be involved in a same-sex relationship, or who is now legally married. You need to communicate to everyone." (Idaho Business Review)  

Press Releases

Nominations for the NCEO Board of Directors Now Open
National Center for Employee Ownership

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