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

Health & Group Benefits Consultant
in TX

DB Administrator
Summit Benefit & Actuarial Services, Inc.

Internal Sales Support Specialist
United Retirement Plan Consultants
in CO

Defined Contribution Pension Plan Administrator
Lafayette Life Insurance Company
in OH

Retirement Plan Consultant
General Pension Planning, a TWG Benefits company
in OH

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Webcasts and Conferences

Making Sense of Required Minimum Distributions 2013
December 5, 2013 WEBCAST
(SunGard Relius)

Ethics For Compensation And Benefits Lawyers
December 10, 2013 WEBCAST
(ABA Joint Committee on Employee Benefits)

Race & Retirement Insecurity in the United States
December 10, 2013 WEBCAST
(National Institute on Retirement Security)

Final Exiting Regulations: Birth of the 'Maybe Not' Notice - Encore Presentation
December 11, 2013 WEBCAST
(SunGard Relius)

Defined Benefit Plans and Cross Testing Overview
December 11, 2013 WEBCAST
(NH Hicks)

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

WEB Atlanta Holiday Luncheon
December 12, 2013 in GA
(Worldwide Employee Benefits Network (WEB) - Atlanta Chapter)

End of the Year Tax Planning for Tax Advisors using 412(e)(3) Plans
December 12, 2013 WEBCAST
(National Pension Partners)

New Strategies to Maximize Your Medicare Star Ratings
January 29, 2014 WEBCAST
(Atlantic Information Services, Inc)

10th Annual Executive Forum on Rewarding Healthy Behaviors
February 4, 2014 in NV
(World Congress)

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]

DOL Clarifies QPAM Exemption's Anti-Criminal Rule (PDF)
"According to [DOL Advisory Opinion 2013-05A], under a [deferred prosecution agreement (DPA)], the government files a charging document with a court, but requests that the prosecution be deferred to allow the defendant to demonstrate its good conduct over a period of time. If the defendant successfully completes the DPA, the charges may be dismissed and the dismissal is not treated as a conviction. Under these facts, the DOL concluded that the DPAs do not constitute criminal convictions such that the QPAM status of affiliates would be jeopardized." (Groom Law Group)  


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How Safe Is Your ADP/ACP Safe Harbor? (PDF)
8 pages. Excerpt: "There are a large number of ancillary rules that are also a part of obtaining safe harbor status, and employers focus heavily on the major components of the safe harbor test -- such as minimum contribution levels, vesting and restrictions on in-service withdrawal.... [E]mployers that do not pay attention to this full set of requirements are exposed to the risk that their 'safe harbor' design may not be so safe after all. In fact, IRS has put investigations of safe harbor plans high on its fiscal 2013 work plan." (Aon Hewitt)  

The New Fiduciary Paradox (PDF)
"[W]ith 408(b)(2), the Department of Labor was trying to force plan sponsors to engage in the fiduciary process and identify unreasonable fees and compensation. In the event that plan sponsors failed to engage, the expectation was that 404(a)(5) would cause employees to complain thus putting pressure on plan sponsors focus on fees.... Under the new rule, it's the plan sponsor's responsibility to ensure that its [covered service provider] complies with 408(b)(2)! Paradoxically, the hen must ask the fox if the chicks are safe. The new fiduciary paradox lies in the fact that 408(b)(2) requires plan sponsors to ensure that the experts upon which they so often rely to comply with 401(k) requirements, are in fact complying with the new requirements of 408(b)(2)." (Wealthcare Way Journal via Dalbar)  

Majority of U.S. Workers Find Retirement Income Projections Helpful
"A new study ... reveals that 9 in 10 U.S. workers find retirement income projections somewhat or very helpful.... Forty-five percent of workers who found the retirement income estimates less than 'very helpful' said they did not understand the calculations behind the projections or were not confident in the accuracy of the results. Two in five said the information was too hypothetical, and 17 percent said the projections didn't capture all of their retirement savings." (LIMRA Secure Retirement Institute)  

That Retirement Crisis? Not So Bad, After All
"In mid-2013, the average U.S. household held $167,800 in retirement assets, including traditional pensions, in inflation-adjusted dollars. Compare that with the inflation-adjusted $56,200 in 1985 or $27,300 in 1975. Near-retirees (those between 60 and 64) have nearly $360,0000 in their defined contribution accounts and IRAs, on average ... The good news represents a change in tone for the financial services industry, which continues to use frightening messages to push workers to bump up their 401(k) and individual retirement account savings." (Reuters)  

Our Strong Retirement System: An American Success Story (PDF)
"The evidence is compelling: the current retirement savings system is fostering economic security in retirement for Americans across all income levels. Defined contribution plans have grown in importance in U.S. retirement accumulations, rising to be a key component of the voluntary, private-sector employer-sponsored system. Defined contribution plans, which offer workers a portable benefit that grows throughout their careers, are a flexible platform for further innovation and improvement. Defined contribution plans are not just 'working', they are strong." (American Council of Life Insurers [ACLI], American Benefits Council, and Investment Company Institute [ICI])  

More 401(k) Plans Add Retirement Planning Advice
"According to a [recent] survey ... 79 percent of retirement plan participants report that their employer offers advice in their plan, up from 72 percent in 2011. About one-fifth of these participants actually seek this advice, and ... these participants report higher confidence in their retirement than workers who pass up the advice. Whether such advice can help you depends on your circumstances, including where you are in your work-life cycle. Whether the advice is worth the cost also depends on how much you might pay for such advice from another source." (CBS MoneyWatch)  

S&P 1500 Pension Plans Continue Year-Long Improvement, Reach Five Year High Funded Ratio
"Funding levels of pension plans sponsored by S&P 1500 companies continued their improvement in funded status in 2013, with a further 2% improvement November, resulting in a funded ratio (assets divided by liabilities) of 93% at the end of the month, up 19% year-to-date. This funded ratio corresponds to a deficit of $138 billion as of November 30, 2013, down from $185 billion a month ago, and a significant reduction from the estimated deficit of $557 billion as of December 31, 2012[.]" (Mercer)  

TIAA-CREF Hires Hundreds of Advisors After RIAs, and Fidelity, Pose New Threats
"The non-profit [TIAA-CREF] ... is still working with independent RIAs. But that initiative is playing second fiddle to the ... initiative, announced in October -- to add more than 200 advisors to its internal ranks bringing the number of advisors to nearly 650 by end of 2014. The growth of more than 45% in this division is part of the company's concentrated efforts to reach individuals who are close to retiring and have some $250,000 or more in investable assets." (RIABiz)  


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Illinois Lawmakers Approve Major Pension Overhaul
"The Illinois General Assembly [on December 2] narrowly approved a major overhaul of the state government worker pension system following hours of debate on the controversial plan strongly opposed by employee unions.... [The measure] aims to wipe out a worst-in-the-nation $100 billion pension debt by reducing and skipping cost-of-living increases, requiring workers to retire later and creating a 401(k) option for a limited number of employees.... A coalition of union groups blasted the vote and threatened legal action if [Illinois Gov. Pat] Quinn signs it." (Chicago Tribune; subscription may be required)  

Wal-Mart Keeps Bank of America to Run $18 Billion 401(k) Plan
"Wal-Mart Stores Inc is sticking with Bank of America's Merrill Lynch unit to run its 401(k) program with $18 billion in assets ... Earlier this year, the ... retailer put its retirement plan -- the largest private plan in the U.S. in terms of participants -- up for review.... The average Wal-Mart employee has about $18,000 in their retirement account, according to BrightScope ... That's much smaller than the average worker's account balance of about $84,000 at the end of the third quarter[.]" (Chicago Tribune; subscription may be required)  

Is Age 70 Retirement the New Normal?
"A recent paper by the Center for Retirement Research found that 'over 85% of households would be prepared to retire by age 70. Thus, many individuals will need to work longer than their parents did, but they will still be able to enjoy a reasonable period of retirement, especially as health and longevity continue to improve.' ... As Americans live longer, end-of-life expenses -- health care and, especially, long-term care -- are becoming a bigger part of the 'adequacy equation.' Working longer doesn't reduce those costs, unless you work until you die." (October Three Consulting)  

Accumulation-Oriented Variable Annuities Gain Momentum (PDF)
"Accumulation-oriented variable annuities are expected to have a positive impact on the industry because they diversify the risk taken on by insurers when issuing contracts, and they are likely to increase sales by attracting new investors with differing needs.... The growth-oriented variable annuity offers multiple investment styles and appeals to those looking to maximize account value growth. Structured variable annuities are designed to offer some upside (growth) potential with limited downside (loss) protection, which generally appeals to more conservative investors." (Insured Retirement Institute [IRI])  

401(k)s: Time for a Checkup
"A balanced 401(k) menu offers a variety of funds: equity and index, fixed-income, balanced, target-date (or life-cycle) and more. But such menus can be quite long in practice, and just as in a restaurant, the sheer number of choices can be overwhelming. The continuing trend in plan design, therefore, has been: keep it simple." (CFO)  


Detroit's Bankruptcy Breakthrough: Pension Impairment Allowed by Judge
"If pension benefits are immune from bankruptcy, then unions would have even less incentive than they do now to consider the economic condition of a city when they press politicians for more benefits.... The Detroit pension precedent will strengthen the case for other bankrupt cities that want to modify retirement benefits including San Bernardino, California, which is currently fighting [CalPERS] in court. Judge Rhodes's wise ruling is a warning to unions and their political bodyguards that Chapter 9 is not a pension safe harbor." (The Wall Street Journal; subscription may be required)  


Illinois Slays Its Pension Dragon?
"The unions are going to challenge this in court and they're right, the primary reason behind this colossal pension mess is decades of mismanagement by the state of Illinois which failed to top up public pension plans for years. But fiscal mismanagement is only part of the story, albeit a big part.... [L]ike so many other states, all stakeholders including unions held onto the pension rate of return fantasy, foolishly believing that they will magically consistently earn their 8% bogey on a sustained basis over many years." (Pension Pulse)  


Big News in Muni Bond Land About Public Pensions
"As the result of a historic decision to possibly curtail pension benefits, in hopes of a speedier economic recovery, impacted persons are making a beeline to the court.... [The author predicts] that there will be numerous legal actions filed against organizations that comprise the municipal bond eco-system, including, but not limited to, underwriters, rating agencies, advisors, mutual fund portfolio managers and actuaries. You may not agree that litigation is the right course of action but it is clear that we have now moved to a new paradigm. Lots of questions will be asked about who knew what and when." (Good Risk Governance Pays)  


Text of ASPPA Recommendations to EBSA for Further Guidance Under Technical Release 2013-04 and Windsor Decision
"Plan distributions under pre-Windsor rules should be deemed compliant.... Participant and spouse notifications should not be required.... Participants have a duty to notify the plan administrator about a same-gender spouse.... Prohibited transaction exemptions should be granted for pre-Windsor transactions.... Model language should be provided for summary plan descriptions and summaries of material modification.... Relief should be granted when a form 5500 series should have been filed on a different form." (American Society of Pension Professionals & Actuaries [ASPPA])  

Benefits in General; Executive Compensation

[Official Guidance]

Text of Disaster Relief Relating to PBGC and IRS Deadlines in Response to Severe Storms, Straight-Line Winds and Tornadoes in Illinois
"This Disaster Relief Announcement provides relief relating to PBGC deadlines as described below to Designated Persons. A 'Designated Person' is any person responsible for meeting a PBGC deadline (e.g., a plan administrator or contributing sponsor) that is located in the disaster area for which the Internal Revenue Service has provided relief in IL/KS/MO-2013-50, Nov. 27, 2013, in connection with filing extensions for Form 5500 series returns, or cannot reasonably obtain information or other assistance needed to meet the deadline from a service provider, bank, or other person whose operations are directly affected by the Severe Storms, Straight-line Winds and Tornadoes that began on November 17, 2013, in Illinois." (Pension Benefit Guaranty Corporation [PBGC] and Internal Revenue Service [IRS])  

Third Circuit Wrestles with Which Spouse to Recognize
"The definition of spouse in your benefit plans needs to be carefully drafted. Plans have long seen unique real life situations of serial marriages without divorces when an employee passes away leaving multiple persons claiming as the surviving spouse (this is not a situation that is unique to any particular state or employer -- these real life situations help to demonstrate why employee benefits is not boring)." [Hill v. Bell/Rozelle NFL Player Retirement Plan No. 10-4577 (3rd Cir. Nov. 26, 2013)] (Winstead P.C.)  

Dodd-Frank Affects Private Companies Too
"Although the executive compensation provisions of the Dodd-Frank Act directly apply only to public companies, best practices may increasingly dictate that some of these provisions be applied to certain private companies, especially those with institutional investors. For example, the boards of private companies should consider reviewing the independence of their compensation committees and/or compensation consultants to make sure their practices in this area are consistent with their fiduciary duties." (DLA Piper)  

Too Much Discretion With Respect to Annual Bonuses May Cause Deferral of the Employer's Deduction
"Many accrual basis taxpayers have operated under the belief that so long as discretionary bonus amounts are paid within 2-1/2 months following the end of the plan year, the amounts are fully deductible for the prior year. However, for bonus plans based on subjective performance criteria, the IRS may challenge the timing of the bonus deduction under the reasoning in its recent Memorandum." (Leonard, Street and Deinard)  


Complete List of Links to Comments by Organizations and Individuals to SEC on Proposed Rule on Pay Ratio Disclosure
This SEC page includes links to comments filed by various organizations and individuals on the proposed Dodd-Frank Pay Ratio Disclosure Rules. A total of over 110,000 comments is reported, including most recently those from CalPERS, the Financial Services Institute, CalSTRS, Exxon Mobil Corporation, the U.S. Chamber of Commerce, the AFL-CIO Office of Investment, and Business Roundtable. (U.S. Securities and Exchange Commission)  


Text of Comments by Steven Hall & Partners to the SEC on Proposed Pay Ratio Disclosure Rules
"[O]nly those employees working in the United States of America should be included in determining the median employee.... [T]he pay ratio would be more meaningful if temporary and seasonal employees were excluded when identifying the median.... [A]llowing adjustments only for purposes of identifying the median employee, and not permitting parallel adjustments in the calculation of total compensation for the pay ratio, would result in a skewed calculation of the pay ratio." (Steven Hall & Partners)  


Text of Comments by National Association of Manufacturers to SEC on Proposed Pay Ratio Rule (PDF)
"[R]equiring companies to regularly disclose the ratio of employees' median pay to the compensation of the company's chief executive represents a costly and onerous administrative burden on companies that will not produce useful information for investors.... [T]he cost burden will be particularly high for global companies with multiple payroll and human resource systems.... Manufacturers are concerned that the SEC has not adequately considered the challenge posed by the varying types and standards of compensation that [exist] between countries." (National Association of Manufacturers)  

Press Releases

NCPERS Objects to Detroit Bankruptcy Ruling
National Conference on Public Employee Retirement Systems

CalPERS Calls Detroit Bankruptcy Ruling "Short-Sighted"
CalPERS (California Public Employees' Retirement System)

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