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November 13, 2013          Get Health & Welfare News  |  Advertise
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Pensions Field Services Representative
Nationwide Financial
in CA

Benefits Policy Analyst
Saudi Aramco

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Webcasts and Conferences

NAGDCA Best Practices - Plan Administration
November 13, 2013 WEBCAST
(National Association of Government Defined Contribution Administrators)

Huge Underwriting Changes Kick In Jan. 1: Bottom-Line Impact on Health Plans
November 19, 2013 WEBCAST
(Atlantic Information Services, Inc)

Ever-changing World of Health Care Reform: Planning Ahead for 2014
November 19, 2013 WEBCAST
(Thompson Interactive)

Understanding the Alphabet Soup of FSAs, HRAs, HSAs, and EPPs Under the PPACA
November 19, 2013 WEBCAST
(National Association of Professional Employer Organizations (NAPEO))

Designing and Managing Narrow Networks: Winning Strategies for Insurers
December 10, 2013 WEBCAST
(Atlantic Information Services, Inc)

Affordable Care Act 101
December 12, 2013 WEBCAST
(U.S. Small Business Administration (SBA))

Beyond Buy and Bill: Managing Specialty Therapeutics Under the Medical Benefit
December 12, 2013 WEBCAST
(Atlantic Information Services, Inc)

COBRA: A Little of Everything
December 16, 2013 WEBCAST
(Lorman Education Services)

View All Webcasts and Conferences

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official guidance, jobs, webcasts and more.
[Guidance Overview]

2013 Year-End Update for Qualified Plans
Q&A review of year-end issues, including: What interim amendments are needed for ongoing qualified plans? Is an amendment needed due to the Supreme Court decision striking part of DOMA? Is an amendment needed for Hurricane Sandy relief? Is an amendment needed to remove the language providing for an automatic revocation of beneficiary designation on legal separation? Are any amendments needed for 403(b) plans, 457(b) plans or nonqualified 409A plans? What modifications were made to the self-funded health plan system? (SunGard Relius)  


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[Guidance Overview]

Retirement Plans: Year-End Planning Checklist
"[A]dministrative matters that should be reviewed and managed on or before January 1, 2014 [include]: Plan design changes for 2014 ... Implement 2014 retirement plan cost of living adjustment (COLA) limits... Auto escalation in a 401(k) or 403(b) plan... Required annual notices... Required minimum distributions... Plans that must be amended every 5 years... Defined contribution plans that must be amended every 6 years." (TRI-AD)  

Individual Investors Shift to Equities While Pension Funds Shift to Bonds
"A shift by household investors from bonds into equities that Bank of America Corp. dubbed the great rotation is being muted as pension funds and insurers boost fixed-income assets to match future obligations. U.S. companies with the largest defined-benefit pensions increased allocations into fixed-income to 41.3 percent from 36 percent since 2010, putting a greater share into the market than into equities ... Pension funds and insurance companies are matching their liabilities to prepare for the retirements of about 78 million U.S. baby boomers, or those born from 1946 to 1964, boosting demand for fixed-income assets." (Bloomberg)  

SEC's White: No Time Frame for a Fiduciary Standard
"[SEC Chairman Mary Jo] White said that she had assigned agency resources to determining whether a uniform standard should apply to all advisors ... One concern ... was establishing some 'clear guideposts' around what constituted a conflict of interest for brokers if they were acting under a fiduciary standard. 'Just because there are commissions [being paid] does not mean that there are conflicts of interest or that it is a violation of the fiduciary duty,' White said." (On Wall Street)  

The Participant Magazine: 'What You Need to Know About the Participants Who Depend on Your Plan', Summer/Fall 2013
Article titles include: Participant Voices; Be Fee Smart; Fixing the Leaks; The Global Demand for Investment Advice; How to Talk to Participants About Retirement Income; Imagine, Plan, Retire; The Income Equation; The Wage Replacement Tradeoff; and Framing Income Solutions. (State Street Global Advisors)  


Fast, Integrated, Affordable Form 1099 Software.

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Wolters Kluwer Law & Business – ftwilliam.com offers web-based 1099 Software that will help simplify the 1099 preparation process. Need help with all that printing, mailing and e-filing? Ask about our Service Bureau. We'll take care of that for you.

Are Annual Contributions Into CalSTRS Adequate?
"CalSTRS relies on optimistic long-term earnings projections and very aggressive unfunded liability repayment schedules in order to pay the absolute minimum into their pension fund. If CalSTRS is required to even incrementally lower their rate-of-return projections -- something that market conditions may eventually dictate -- their funded ratio which is already only 67.0% will fall precipitously. Unless extremely favorable market conditions occur for the next several years without interruption, in order for CalSTRS to remain solvent, they need to dramatically cut retirement benefits, or increase their annual contributions by 50% or more per year." (California Public Policy Center)  

Secrets of the 401(k) Millionaires
"[Of] the 5,500 millionaires Fidelity studied closely, 1,000 -- or about 18% -- earn less than $150,000 annually.... [T]he current 401(k) millionaires: [1] Started saving early and therefore had accumulated $426,000, on average, by 2000. (Their current average balance: $1.2 million.) [2] Saved 14% of their annual pay, on average, not including their company match. [3] Took full advantage of company contributions that averaged 4.8%, by saving up to their employer's match and receiving profit-sharing contributions." (MarketWatch.com)  

CalPERS Can't Find Viable Low-Volatility Benchmark for $135 Billion Equity Portfolio
"The pension fund's investment officials explored switching from the FTSE All-World index, which covers around 10,000 securities, to a low-volatility index.... Eric Baggesen, senior investment officer, asset allocation and risk management ... said CalPERS could ask FTSE to develop a custom benchmark, but the pension fund needs to study further what parameters that benchmark would likely cover." (Pensions & Investments)  

Is Your (Financial) Relationship on the Rocks?
"[W]orkers can take some responsibility for their own protection by learning the warning signs of benefits abuse: [1] Your 401(k) or individual account statement is consistently late or comes at irregular intervals. [2] Your account balance does not appear to be accurate. [3] Your employer failed to transmit your contribution to the plan on a timely basis -- or at all. [4] Investments listed on your statement are not what you authorized. [5] Frequent and unexplained changes in investment managers or consultants.... [W]hat should you do if you suspect your 401(k) isn't working for you? A good first step is to contact your employer or the plan administrator and request an explanation -- or a correction." (Phyllis Borzi via DOL Blog)  

DOL Clarifies Anti-Criminal Rule for QPAM Exemption
"[DOL Advisory Opinion 2013-05A recently clarified that] a deferred prosecution agreement is indeed not a 'conviction' for purposes of the QPAM Exemption. This clarification may be helpful to ERISA managers who have entered into deferred prosecution agreements or whose affiliates have done so.... [U]nder certain circumstances ... this issue may have greater relevance in the context of the QPAM Exemption than in the context of Section 411 of ERISA generally, because the anti-criminal rule under the QPAM Exemption also extends to parties who are affiliated with a QPAM under the potentially broad definition of 'affiliate' set forth in Part VI(d) of the QPAM Exemption." (Dechert LLP)  

2012 Asset Allocations in Fortune 1000 Pension Plans
"Among [556 Fortune 1000 U.S. pension plan] sponsors, the total allocation to equity was 40.3%, and the total allocation to debt was 40.2%. Private equity and hedge funds held 5.1% and 4.4% of assets, respectively. Of the asset valuations, 55.7% was done at Level 2 and 31.6% was done at Level 1. At 12.7%, however, Level 3 valuations were also significant, often used for private equity, hedge funds and real estate." (Towers Watson)  

AT&T Seeking Prohibited Transaction Exemption for $9 Billion Stock Contribution
"The estimated value of the plan contribution is more than $9 billion.... The interests to be contributed would constitute a new class of preferred equity in the subsidiary. These interests do not carry voting rights or otherwise entitle the plan to participate in management of the subsidiary.... Although not stated in the exemption request, it appears that AT&T could use the contributed equity interests to establish a funding balance and/or to fully fund the plan. Either approach would appear to reduce cash requirements to zero for several years under the projected schedule of minimum required contributions in the filing." (Towers Watson)  

Lump-Sum Distributions at Job Change, Distributions Through 2012
"The average amount of [lump sum distributions (LSD)] in 2012 dollars was $20,781, with a median (mid-point) amount of $12,355. In terms of the value at the time of the distributions, the average amount was $15,934 and the median amount was $10,000. Preservation of benefits appears to have improved after 1986, with some evidence it has continued to improve through 2012. Moreover, recipients who did not use their LSD for tax-qualified savings were more likely to use it to improve their financial condition, paying down debt or buying a home, rather than spending it on pure consumption." (Employee Benefit Research Institute [EBRI])  

An Analysis of the Treatment of Employee Pension and Wage Claims in Insolvency and Under Guarantee Schemes in OECD Countries
"[M]ost OECD countries have adopted hybrid systems which combine both some form of priority for both pension and wage claims, as well as some form of guarantee fund to complement the insolvency system.... [G]iven the relative vulnerability of employees and the sophistication of most lenders, the United States should balance these interests to provide increased protection for employment claims during municipal and corporate insolvency proceedings through giving heightened priority treatment to employees pension and wage claims in bankruptcy in tandem with a federally-operated guarantee scheme for both pension and wages claims." (Paul M. Secunda via SSRN)  


Text of Comments by the Financial Planning Coalition to the SEC on Investor as Purchaser Subcommittee Recommendation on Broker-Dealer Fiduciary Duty (PDF)
"We support the SEC staff's recommendation to adopt an over-arching fiduciary duty for investment advisers and broker-dealers if, as mandated by the Dodd-Frank Act, it is no less stringent than the existing standard under the Advisers Act. To achieve this, it is important that a uniform fiduciary duty standard, when promulgated, contain both the rules and practical guidance to clarify how the standard would apply to the broker-dealer business model." (Financial Planning Coalition)  

Benefits in General; Executive Compensation

Communicating Total Compensation to Employees in a Meaningful Way
"[T]he total compensation message often goes unnoticed or underappreciated by employees who may not understand what they are reading....To ease the general overwhelm and confusion over total compensation ... [1] Include all benefits, incentives, and performance pay in the statement.... [2] Use a total compensation statement builder to make it personal.... [3] Focus on employee retention first, recruitment second.... [4] Communicate total compensation often, using multiple mediums." (PayScale)  

Preparing for the 2014 Proxy Season
"This is a good time to start gathering the information you need to prepare your 2014 proxy statement. You should also review your equity and short- and long-term incentive plans to determine ... whether shareholders need to approve: [1] An increase in the share limit; [2] An extension of the term; or [3] Performance goals so that awards qualify as 'performance-based compensation' under Section 162(m).... When drafting your CD&A and other disclosures, you should focus on the quality of the disclosure, rather than the quantity." (McKenna Long & Aldridge LLP)  


A Small Loophole Inserted 20 Years Ago Helps Companies Avoid Paying the U.S. Treasury Big Money (PDF)
"The top 20 highest-paid CEOs in the most recent version of the AFL-CIO's annual list of highest-paid CEOs were paid base salaries totaling $28 million, but had performance-based, tax-deductible compensation totaling more than $738 million. Assuming that these CEOs' companies paid a corporate tax rate of 35 percent, tax-deductible performance-based compensation for these CEOs cost American taxpayers as much as $235 million in lost tax revenue." (Public Citizen)  


Text of Comments by FuelCell Energy, Inc. to SEC on Proposed Pay Ratio Rules (PDF)
"My company is one of the more than 3,800 U.S. issuers that would be required to prepare this new pay ratio disclosure. While we appreciate the Commission's intent to draft a rule that would provide more flexibility to issuers, we believe that the SEC can do more to reduce the rule's enormous compliance burdens while ensuring that investors receive accurate and useful information. We expect that our costs of complying with the proposed rule will far exceed the benefits that our investors would receive." (FuelCell Energy, Inc.)  

Press Releases

Steven H. Sandell Grant Program and Dissertation Fellowship Program
Center for Retirement Research at Boston College

CMS Announces New Data Sharing Tool
Centers for Medicare & Medicaid Services (CMS)

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