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November 5, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Retirement Planning Consultant
Transamerica Retirement Solutions
in ME, NH

Defined Benefits Pension Administrator
Industry TPA
in OR

Plan Administrator
Nationwide Financial
in OH

Regional Director
Unite Here Health
in IL

Retirement Plan Analyst
United Retirement Plan Consultants
in WA

ERISA Attorney
Cary Kane LLP
in NY

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Webcasts and Conferences

401(k) Essentials Plus Series
November 12, 2013 WEBCAST
(McKay Hochman Co., Inc.)

Benefits Education: The Time is Right
December 3, 2013 WEBCAST
(Kushner & Company)

11th Annual Made In America: Taft-Hartley Benefits Summit
February 10, 2014 in FL
(Financial Research Associates)

View All Webcasts and Conferences

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

After Windsor, Same-Sex Marriage Laws Continue to Present Challenges for Retirement Plan Sponsors (PDF)
"[P]lan sponsors [should] pay special attention to the following items: [1] Payment of RMDs. A participant who has been receiving payments based on an unmarried status due to the application of DOMA may request that payments be recalculated based on a married status by providing the spouse's date of birth. [2] QPSA and QJSA payments and death benefits under certain defined contribution plans ... [3] In-service withdrawals and loans ... [4] QDROs." (Prudential)  


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.

ERISA Preempted Plan Participant's Suit Against Actuaries
"The court ... acknowledged an earlier decision by the Ninth Circuit ... [which] allowed a participant claim against an actuarial firm in a situation where the participants were intended third party beneficiaries of the firm's contract with the Plan. In [the current case] however, the court dismissed the negligence claim against the service provider because there was no provision making participants beneficiaries, and the negligence claim had direct bearing on relations regulated by ERISA." [Parsons v. Bd. of Trs. of the Nev. Resort Ass'n -- I.A.T.S.E. Local 702 Retirement Plan No. 2:12-cv-00299-LDG (D. Nev. Sept. 20, 2013)] (Reinhart Boerner Van Deuren s.c.)  

Are 401(k) Plan Sponsors Poised to Cut Matching Contributions?
"Behavioral finance studies have shown that sponsors are subliminally telling their employees what to do when they set their defaults ... If they set the match at 50% of the first 6% of pay, many employees will save 6% ... [S]tretching the match can be very effective. Instead of 50% of the first 6% (which nets the employee 3% of their pay), why not set the match at 30% of the first 10%? Or 25% of the first 12%? The company spends the same 3%, but employees will save more of their pay to receive those dollars." (Fiduciary News)  

Six Reasons That a Frozen Pension Plan Is Different
"Freezing a plan gives it a finite life span. The dynamics of plan demography change.... Funding decisions are normally less flexible ... [It] can be difficult to get money out again once it has been put in.... Investment policy needs to reflect not just what the plan is today, but what it will be in the years to come.... 'Fully funded' is a higher target ... Plan termination itself is a demanding and time-consuming exercise; the timeline typically exceeds two years at present (the majority of the time being taken up on the administrative process)." (Russell Investments)  

Flexible Pensions: Giving Control Back to Employers Through Variable Annuities
"The challenge with a defined benefit (DB) plan is just that: the benefit is defined. The economy is fluid. Industries are dynamic. Yet 'traditional' pension plans are intractable.... [E]mployers (and by extension, employees) need a pension plan in which the benefit is not so obstinately defined.... [T]he plan and the benefits it provides need to be flexible; they need to be able to adjust to the seemingly whimsical undulations of modern macroeconomics." (Retirement Town Hall)  

What's the Gold Standard for a Section 3(16) Plan Administrator?
"So, you've found a full-service 3(16) plan administrator who submits themselves to annual monitoring and states their fiduciary liability in their contract. Have you struck gold? Not so fast.... What characteristics does a full-service 3(16) plan administrator have to demonstrate to truly set the standard for the industry?" (Roland|Criss)  

Why Not Prepare for the DOL 408(b)(2) Investigation Before You Get That Nasty Notice Letter?
"In order to make the DOL investigator 'go away' you will need to have documentation in plan files that includes a basic minimum of: [1] Up-to-date and executed copies of all service provider agreements. [2] All service provider required disclosures. [3] Written substantiation of your review of the service provider disclosures. [4] Written substantiation of your consideration of the reasonableness of fees." (Fiduciary Plan Governance, LLC)  

Pensions Spared as Stockton Prepares to Exit Bankruptcy
"[U]nder the terms of recent settlements, bond insurers who are backing about $240 million in city debt will accept a 'haircut' of as much as 50 percent on some bonds. Retirees will keep their full pensions, though 1,100 of them will lose their retiree health insurance.... Stockton voters are likely to approve a sales tax increase that could all but seal a surprisingly speedy end to the city's bankruptcy case. With that, the much-anticipated showdown over pensions will move to Detroit or another city seeking court protection from creditors." (Reuters)  

Bankruptcy Judge Presses Detroit Emergency Manager Over Proposed Pension Cuts
"Kevyn Orr, Detroit's state-appointed emergency manager, testified ... that he did not mean to mislead city retirees when he said during a June 10 public meeting that pension rights were 'sacrosanct' under Michigan's constitution.... 'I was trying to say we understood these issues around pensions,' Orr said. 'What would you say to that retiree now about his rights?' asked U.S. Bankruptcy Judge Steven Rhodes, who is overseeing the case. 'I would say that his rights are in bankruptcy now,' Orr said." (Reuters)  

Performance-Based Bonuses for Investment Managers Double at CalPERS as Markets Recover
"[CalPERS] paid 130 employees and executives a combined $7.7 million in bonuses last year, more than twice the $3.6 million in the previous year.... The bonuses, based on three-year investment returns, signal that public pension funds are recovering from the 18-month recession that ended in June 2009, which wiped out a third of CalPERS' value. Still, the crisis left U.S. pensions short more than an estimated $1 trillion needed to cover benefits promised to government workers. Taxpayers have been asked to make up the shortfall." (Pensions & Investments)  

S&P 1500 Pension Plans Funding Position Holds Steady for October
"Funding levels of pension plans sponsored by S&P 1500 companies remained stable during the month of October, with a funded ratio ... of 91% at the end of the month, equal to a month ago when it reached the highest level seen since October 2008. This funded ratio corresponds to a deficit of $185 billion as of October 31, 2013, up slightly from $182 billion a month ago ... This is a significant reduction from the estimated deficit of $557 billion as of December 31, 2012." (Mercer)  

Solid Performance in Q3 for U.S. Institutional Plan Sponsors
"The median plan in the Public Funds segment gained 4.9 percent in the third quarter, while Corporate ERISA plans gained 4.4 percent ... Public Funds were helped by a larger allocation to international equities, where the median investment program in the Northern Trust Universe gained 9.3 percent in the third quarter. The median Public Fund plan had 19.1 percent of its assets invested in international equity, while Corporate ERISA plans had 11.8 percent ... in that asset class, as of September 30." (Northern Trust)  

Chained CPI Would Have Resulted In a Larger COLA Increase for 2014, Not a Smaller One
"If the more accurate chained CPI was used to determine the 2014 cost of living increase, seniors would see a 1.7 percent increase as opposed to this year's increase of 1.5 percent. What does a 1.7 percent increase mean? On average, that is an extra $21.60 each month for seniors to use on groceries, bills and medicine." (Committee on Ways and Means, U.S. House of Representatives)  

2013 Trends & Experience in Defined Contribution Plans (PDF)
"Currently, the most common match provided is a $1.00 per $1.00 match on the first 6% of employee deferrals. Previously, a match of $0.50 per $1.00 on the first 6% was the most popular.... [N]early all employers (98%) provide some sort of employer contribution to the plan.... [M]ore than three-quarters of plan sponsors report that they now allow their workers to start participating in the plan immediately.... Over the last six years, the percentage of employers that allow Roth contributions has increased from 11% to 50%." (Aon Hewitt)  

Some U.K. Police Dogs to Get a Pension Plan
"A UK police force has become the first in the country to offer pensions for retired police dogs. Crime-fighting canines will be rewarded with up to 1,500 GBP each under the Nottinghamshire Police scheme. Previously, ex-police dogs received no contributions towards their upkeep and would be kept by their handlers as pets or rehomed." (Daily Mail)  


Where Is the Illinois Pension Fix?
"The fund that pays for Illinois teacher retirements reported last week that it posted investment gains of 12.8 percent for the fiscal year that ended June 30 ... but its unfunded liability still rose by $3.6 billion.... The gap rose to $55.7 billion from $52.1 billion. That's just the teachers' fund. Four other pension funds cover state employees, university workers, General Assembly retirees and judges. Together those pension funds are short nearly $100 billion." (Chicago Tribune; subscription may be required)  


Text of Comments by American Benefits Council to IRS on Employee Retirement Benefit Plan Returns Required on Electronic Media (PDF)
"[We] urge the Service and Treasury to proceed taking into account that there may be implementation challenges that plan sponsors face, and to adjust the timeline for the effective date of these new rules with these challenges in mind.... Systems programming for administrative changes typically takes 1-2 years .... Form 8955-SSA is not typically released prior to the year to which it applies.... Final regulations and layout specifications may not be completed until well into 2014 .... Significant lead time should apply for any new questions." (American Benefits Council)  

Benefits in General; Executive Compensation

Text of IRS Chief Counsel Memorandum 20134301F on Timing of Deduction under Cash Bonus Plan (PDF)
"All of the bonuses are paid after the end of the taxable year but no later than the 15th day of the third month following the end of the taxable year.... The principal question in this case is whether the Taxpayer's reservation of the right to unilaterally modify or eliminate the bonuses presents the fact of liability and amount of liability prongs of the all events test from being met with respect to amounts paid under the Plans any earlier than the date the bonuses are paid. [The Office of Chief Counsel concludes that] neither prong of the all events test is satisfied as of year-end." (Internal Revenue Service, via Bloomberg BNA)  

CFO Pay Trend Strong, but Slowing
"Median total compensation for chief financial officers in large U.S. companies grew almost 7% last year ... Last year's growth is down from the 8.7% increase in median total CFO compensation reported for 2011. While median salaries for CFOs grew 3.3% in 2012, cash bonuses declined slightly at the median (-1.3%) and median stock awards grew by 7.2%, down from just over 10% the prior year." (Towers Watson)  

Deadline Looming for Comments on SEC Proposed Rules on CEO Pay Ratio Disclosure
"The deadline for submitting comments is December 2, 2013. This client alert summarizes the proposed rules and includes ... ten categories of questions for which the SEC is seeking comments. A review of the SEC's questions evidences the many opportunities for providing comments and possibly influencing drafting of the final rules." (Proskauer Rose LLP)  

Press Releases

Protecting Pennfield’s Pensions
Pension Benefit Guaranty Corporation (PBGC)

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