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November 26, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Account Manager
National Retirement Services, Inc.
in CA

Product Specialist II -- Employer Sponsored Retirement Plans
Edward Jones
in MO

Retirement Plan Services Manager
Beltz Ianni & Associates, LLC
in NY

Retirement Plan Consultant and Coordinator
CDM Retirement Consultants, Inc.
in MD

Sr. Consultant, Retirement Benefits
The University of Maryland Medical Center
in MD

Employee Benefits Attorney
Schwabe, Williamson & Wyatt
in OR, WA

Paralegal 3
Wells Fargo
in ND

Transition Manager
AUL: OneAmerica
in IN

Counsel 3
Wells Fargo
in MN, NC

Plan Manager - Trust
AUL: OneAmerica
in IN

Plan Services Consultant II
AUL: OneAmerica
in IN

Regulatory Services Analyst
AUL: OneAmerica
in IN

Client Service Manager
The Newport Group
in NC

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Webcasts and Conferences

Annual HR Forum
June 3, 2013 in PA
(Corporate Synergies)

Next Generation of LDI Strategies
December 12, 2013 WEBCAST

Annual HR Forum
May 7, 2014 in DC
(Corporate Synergies)

Annual HR Forum
May 14, 2014 in NY
(Corporate Synergies)

Annual HR Forum
June 3, 2014 in PA
(Corporate Synergies)

View All Webcasts and Conferences

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

Text of GASB Statement 71: Pension Transition for Contributions Made Subsequent to the Measurement Date (Amendment to Statement 68)
"This Statement amends paragraph 137 of Statement 68 to require that, at transition, a government recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the measurement date of the beginning net pension liability. Statement 68, as amended, continues to require that beginning balances for other deferred outflows of resources and deferred inflows of resources related to pensions be reported at transition only if it is practical to determine all such amounts." (Governmental Accounting Standards Board)  


DATAIR! More Choices -- Better Guidance -- Less Cost

Sponsored by DATAIR Employee Benefit Systems, Inc.

Documents, SPDs, Amendments, Administrative Forms
401(k)/Profit Sharing, 403(b), DB and Cash Balance Plans
(888) 328-2474    Sales@DATAIR.com    www.DATAIR.com

[Guidance Overview]

IRS Allows Mid-Year Elimination of Safe Harbor Contributions
"Plan sponsors already have the ability to establish a conditional safe harbor plan by providing a notice to participants before the beginning of the plan year that says the plan sponsor may make a nonelective 3% safe harbor contribution for the plan year, and then providing a supplemental notice later in the year if the contribution is going to be made. Nothing has changed here. If this is the type of notice you have issued, you can stop reading.... If you have a mandatory nonelective safe harbor plan, you'll want to put something in your safe harbor notice now that says the plan may be amended mid-year to eliminate the contribution." (Warner Norcross & Judd LLP)  

[Guidance Overview]

Investment Manager Not Disqualified from Acting as QPAM Because of Deferred Prosecution Agreements Entered Into by Affiliate
"EBSA noted that the only judicial action described in Part I(g) of PTE 84-14 is a criminal conviction. The party seeking the EBSA opinion believed that the deferred prosecution agreements did not constitute criminal convictions [because]: under a deferred prosecution agreement, the government files a charging document with the court, but at the same time requests that the prosecution be deferred to allow the defendant company to demonstrate its good conduct.... EBSA concluded that the deferred prosecution agreements did not constitute criminal convictions of the affiliate. [DOL Advisory Opinion 2013-05A]" (Wolters Kluwer Law & Business)  

Sixth Circuit Rejects Claim for Reinstatement of Erroneous Benefit Payments to Ineligible Retiree
"[T]he court rejected the plaintiff's collateral estoppel and res judicata claims that she was an employee for purposes of the plan based on a previous state administrative agency's determination that she was an employee in the 1970s and her employer's failure to deny that she was an employee before a state worker's compensation appeal board. The court rejected both arguments noting that 'employee' carries a different meaning under the state worker's compensation statute and that ERISA-covered pension plans are governed by their own terms." [Adams v. General Motors Company, No. 12-2084 (6th Cir. Oct. 24, 2013)] (Proskauer's ERISA Practice Center)  

Text of Recommendations of the SEC Investor Advisory Committee: Broker-Dealer Fiduciary Duty (PDF)
10 pages. Excerpt: "The [SEC] should conduct a rulemaking to impose a fiduciary duty on broker-dealers when they provide personalized investment advice to retail investors.... [T]he question is not whether broker-dealers are adequately regulated when they act as salespeople but whether they are adequately regulated when they act as advisers. In the view of the Committee, the existing securities regulatory scheme that treat broker-dealers as salespeople does not offer adequate investor protection when broker-dealers offer advisory services, since under a suitability standard they generally remain free to put their own interests ahead of those of their customers.... As part of its rulemaking, the Commission should adopt a uniform, plain English disclosure document to be provided to customers and potential customers of broker-dealers and investment advisers at the start of the engagement, and periodically thereafter, that covers basic information about the nature of services offered, fees and compensation, conflicts of interest, and disciplinary record." (Investor Advisory Committee, U.S. Securities and Exchange Commission)  

Bankrupt San Bernardino to Dispute Debt with CalPERS
"CalPERS says that after San Bernardino halted its employer contribution to the fund for an entire year after filing for bankruptcy protection in August last year ... its arrears stand at just under $16.5 million, plus growing interest. City officials say it is unclear exactly how the arrears figure has been calculated. They say they owe CalPERS about $13 million. City officials also want to seek as long a period as possible to repay the deficit, and block potentially onerous interest charges and other fees." (Reuters)  

Private Equity Funds Appeal Sun Capital Decision to Supreme Court
"Three private equity funds organized by Sun Capital Advisors, Inc., have filed a petition for a writ of certiorari, asking the Supreme Court to reverse a decision of the U.S. Court of Appeals for the First Circuit that held that the separate activities of a private equity fund's manager caused the fund managed by such manager to be engaged in a 'trade or business.' While the case addresses the 'trade or business' issue in an ERISA context, the determination of when a fund is engaged in a 'trade or business' could have significant tax ramifications for the fund industry, potentially affecting fund formations, future fund operations, and sources of capital." (Sutherland)  

How Should the 401(k) Fiduciary Address 'Leakage'?
"What could a plan sponsor do to cut back on leakage? 'Hardship withdrawals are not subject to Internal Revenue Code section 411(d)(6) anti-cutback provisions,' says [employee benefits attorney Jack Towarnicky]. 'As a result, a plan that previously offered hardship withdrawals can eliminate them. In-service withdrawals and post-separation withdrawals are subject to those tax code provisions -- so, prospective changes are necessary. Limiting withdrawals need not create any issue so long as the plan allows loans -- and specifically, loans where administration and structure are designed to prompt repayment in almost every situation.'" (Fiduciary News)  

Market-Based Cash Balance Plans: Myths and Reality
"Traditional (fixed-rate and/or bond-yield) CB plans provide a unique combination of increased sponsor risk and weak participant returns -- the worst of both worlds. The risk they present to the sponsor is completely unhedgeable (in this sense, they are worse than a traditional DB plan, which can be 'de-risked' with a bond portfolio.) ... A well-run [ReDefined Benefit (ReDB)] plan works, in essence, like a DC plan -- minimizing sponsor investment risk and providing participants the opportunity to reap real, market-based returns." (October Three Consulting)  

Further Action Needed on Pensions, OECD Says
"The global financial crisis has led to an 'astonishing' acceleration in the reform of public pension plans across developed economies, but further changes are needed if retirees are to receive adequate incomes without placing too much stress on government finances ... In its annual report on pensions, the [OECD] said future changes to pension systems will have to take account of the high levels of home ownership among retirees, as well as their financial wealth and access to public services, all of which boost their real incomes." (The Wall Street Journal; subscription may be required)  

Mercer U.S. Pension Buyout Index, October 2013
"During October ... the cost of purchasing annuities from an insurer decreased from 108.9% to 108.3% while the economic cost of maintaining the liability remained level at 108.2% of the balance sheet liability.... [I]nterest rates decreased slightly but for many sponsors this was offset by positive equity and fixed income market performance. As such, the aggregate funded status of pension plans sponsored by companies in the S&P 1500 stands at an estimated 91% as of October 31, 2013, up from 74% at the end of 2012. For many plans, this rise in funding levels has reduced the potential cash and funded status impact of a buyout." (Mercer)  


OECD Warns Pension Safety Net Fraying
"The findings [of the OECD report, Pensions at a Glance 2013] are worrisome for Canada because of the rise in poverty among seniors and the fact that public and private pensions replace about 45% of pre-retirement gross income, well below the two thirds experts recommend." (Pension Pulse)  

Benefits in General; Executive Compensation

[Guidance Overview]

New Pension and Other Postretirement Accounting for Insurance Companies (PDF)
"The National Association of Insurance Commissioners (NAIC) has changed employers' accounting for pensions and other postretirement benefits.... For employers filing under US GAAP as well as SAP, the new guidance may simplify the process of determining employee benefit obligations and net periodic plan cost ... However, the requirement to recognize the unfunded benefit obligation, including obligations for nonvested plan participants, may prove onerous for many employers, especially employers who provide other postretirement benefits, since obligations for employees who are not yet eligible to retire are generally considered to be nonvested." (PricewaterhouseCoopers)  

2013 Plan Sponsor Year End 'To Do' List: Executive Compensation
"Last Chance to Correct Certain Section 409A Document Failures Discovered in 2013 ... Consider Shareholder Reapproval of Section 162(m) Performance Compensation Plans Approved in 2009 ... Review Whether Your Equity-Based Compensation Plan Has Sufficient Shares Remaining for 2014 Grants ... Consider Adding Separate Annual Limits on Director Equity Awards ... Code Section 6039 Information Statements Due by January 31, 2014 ... Review Grant Procedures for Upcoming Equity-Based Grants." (Snell & Wilmer L.L.P.)  

U.S. Senate Bill Would Penalize Employers for Innocent Independent Contractor Misclassifications
"Ignoring the risks of independent contractor misclassification may become more costly for employers under a bill introduced this month by U.S. Senator Bob Casey (D-PA).... The bill is part of a targeted initiative by the current administration to eliminate worker misclassification. According to the bill's sponsor, in addition to being 'payroll fraud,' worker misclassification evades tax laws and deprives workers of benefits and legal protections." (Faegre Baker Daniels LLP)  

More Pitfalls for Current-Year Bonus Deductions Arising in IRS Audits
"While its status as 'guidance' is not clear (for example, the memo was issued by an IRS Field Counsel Office rather than the National Office), this new IRS advice highlights how a company's discretion to reduce bonus payments -- whether outright or as part of certifying and approving performance results -- can result in the all events test not being met, and therefore delay the tax year when bonus amounts are deductible." (Groom Law Group)  

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