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December 18, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Litigation Associate
Mid-Sized National Employee Benefits Law Firm
in DC

Sr. Analyst, Compliance
NADA (National Automobile Dealers Association)
in VA

Pension / Retirement Plan Administrator
Polycomp Administrative Services, Inc.
in CA

Employee Benefits Compliance Attorney
Gallagher Benefit Services, Inc.
in TX

Internal 401(k) Relationship Manager
Rapidly Growing Privately Owned Firm
in NC

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Webcasts and Conferences

No Returns? What’s Your Exchange Policy?
December 19, 2013 WEBCAST
(National Association of Professional Employer Organizations (NAPEO))

The IRS and DOL Have Spoken: Same-Gender Partner Benefits in a Post-Windsor World -- Recorded
January 3, 2014 WEBCAST
(Thompson Interactive)

Two New Half-day Specialty Topic Seminars – Denver and 16 Other Cities - January
January 9, 2014 in CO
(SunGard Relius)

Two New Half-day Specialty Topic Seminars – San Francisco and 16 Other Cities - January
January 10, 2014 in CA
(SunGard Relius)

How to Survive a Visit from the IRS
January 16, 2014 in NY
(WEB (Worldwide Employee Benefits Network) New York Chapter)

Weight Loss at the Workplace: Legal Issues in Reducing Health Care Costs and Promoting Wellness
January 17, 2014 WEBCAST
(Lorman Education Services)

3(16) Administration: Is it Just for Chumps?
January 21, 2014 WEBCAST
(American Society of Pension Professionals & Actuaries (ASPPA))

Wall Street’s 2014 Outlook for Health Plans: Forecast for the Industry and Individual Plans
January 23, 2014 WEBCAST
(Atlantic Information Services, Inc)

Mental Health Parity Final Rules: Design and Administration for Employer Health Plans
January 23, 2014 WEBCAST
(Thomson Reuters / EBIA)

Healthcare Benefits Trends to Watch in 2014
February 4, 2014 WEBCAST

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]

The Value of Alternatives: How EBSA Looks at These Investments
"The Office of the Inspector General (OIG) of the [DOL] recently released an audit report titled 'EBSA Needs to Provide Additional Guidance and Oversight to ERISA Plans Holding Hard-to-Value Alternative Investments.' As the report title suggests, the OIG was critical of [EBSA's] oversight of [ERISA] plan fiduciaries and the plans that invest in hard-to-value alternative investments. For plan sponsors considering investment in private equity, real-estate hedge funds and the like, the OIG report reveals important insights." (Groom Law Group via PLANSPONSOR Magazine)  


ASPPA On Tour- Coming to a City Near You!

Sponsored by ASPPA

ASPPA on Tour is the ultimate conference experience for retirement plan professionals. With the perfect balance of national and regional content, each of our five stops will stimulate, motivate and challenge you. Registration for LA is now open!

[Guidance Overview]

IRS Issues Notice on Expanded In-Plan Roth Conversion Option
"By broadening the pool of eligible assets, the new in-plan Roth conversion rule provides participants with a much greater opportunity to convert pre-tax dollars to Roth after-tax dollars. This is especially attractive for those individuals currently in lower tax brackets who have assets outside of the plan that can be used to pay taxes on the conversion." (Morgan Lewis)  

[Guidance Overview]

IRS Issues New Guidance on In-Plan Roth Rollovers (PDF)
"[For] sponsors of safe harbor 401(k) plans, the new guidance provides a temporary period (ending December 31, 2014) during which a mid-year change to provide for such rollovers is permitted.... For 403(b) plans, plan sponsors must still rely on the remedial period provided for in Rev. Proc. 2013-22 which allows such plans to make remedial amendments to correct form defects retroactive to January 1, 2010 (or the date the plan is established)." (Bryan Cave)  

[Guidance Overview]

IRS Issues Guidance on In-Plan Roth Rollovers (PDF)
"One question that remains is who should be responsible for tracking the recapture tax during the five-year recapture period. Depending on plan design, a participant might have an opportunity to make multiple in-plan Roth rollovers, resulting in the need to track each transaction for purposes of the recapture tax.... One of the administrative concerns keeping some recordkeepers from offering the in-plan Roth rollover provision has been the difficulty of tracking this five-year recapture period." (Buck Consultants)  

[Guidance Overview]

IRS Provides New Guidance on In-Plan Roth Rollovers
"[T]he following amounts are now eligible for in-plan Roth rollovers, regardless of whether the amounts otherwise satisfy conditions for distributions: [1] elective deferrals in 401(k) plans and 403(b) plans; [2] matching contributions and nonelective contributions, including qualified matching contributions and qualified nonelective contributions; and [3] annual deferrals made to governmental 457(b) plans. Notice 2013-74 clarifies that an amount rolled over to an individual's designated Roth account pursuant to an in-plan Roth rollover remains subject to the plan's distribution restrictions otherwise applicable to that amount before the in-plan Roth rollover." (Proskauer's ERISA Practice Center)  


WEB's mission is to further the development of benefits professionals

Sponsored by WEB - Worldwide Employee Benefits Network

We are committed to helping define the role of the benefits professional in the 21st century, and as changing market forces reshape the profession, WEB will help its members meet the challenges ahead.

Why Qualified Charitable Distributions from IRAs Are Often Not Best for Year-End Contributions
"[While Qualified Charitable Distributions (QCDs)] from IRAs do have favorable tax treatment, they are generally still less favorable than donating appreciated securities to satisfy charitable goals. While the former allows for entirely pre-tax charitable contributions (directly from an IRA), the latter effectively provides a 'double tax' benefit, as contributions are deductible (making them pre-tax) and donations of appreciated securities permanently avoid taxes on the associated capital gains." (Michael Kitces in Nerd's Eye View)  

Federal Court Ruling Is Unfavorable for Church Pension Plan Sponsors
"In denying Dignity Health's motion to dismiss, the court rejected the 'committee' model for church plan sponsorship, which is relied upon by a number of tax-exempt organizations such as hospitals and universities that are affiliated with churches. The court agreed with the plaintiff's contention that while a church-affiliated entity may 'maintain' an ERISA-exempt church plan, only plans established directly by a church or convention of churches qualify as church plans." (DrinkerBiddle)  

Preview of 2014 Lump Sum Interest Rates: Lump Sum Payouts and Annuity Purchases Become More Attractive
"[1] If you haven't already considered a lump sum payout window, the 2014 lump sum rates may make this option much more affordable than in 2013. [2] With the scheduled increase in PBGC flat-rate and variable-rate premiums due to MAP-21 (plus the proposed additional premium increases in the Bipartisan Budget Act of 2013) there's an incentive to 'right-size' a pension plan to reduce the long-term cost of PBGC premiums. [3] In addition to lump sum payout programs, plan sponsors should consider annuity purchases and additional plan funding as ways to reduce long-term plan costs/risks." (Van Iwaarden Associates)  

How Much Would it Take? Achieving Retirement Income Equivalency between Final-Average-Pay DB Plan Accruals and Voluntary Enrollment 401(k) Plans in the Private Sector (PDF)
"[T]he median DB accrual that males with 31-40 years of plan eligibility would need to generate the same retirement income that they are projected to have with a 401(k) is 2.0 percent of final compensation, if they are in the lowest-income quartile. This increases to 2.2 percent for the next income quartile and 2.5 percent for the third income quartile. Those in the highest-income quartile would need a 3.0 percent accrual for equivalency." (Employee Benefit Research Institute [EBRI])  

Retirement Security Lags Asset Gains
"You would think that gains in the stock market and the rebound in housing values would be improving the retirement security of many Americans. But ... according to a recent analysis... Despite the gains, there was only a modest improvement in the National Retirement Risk Index ... [which] measures the percentage of working-age households at risk of being unable to maintain their current standard of living once they enter retirement. Given 2013 asset prices, half of households were figured to be 'at risk.' That's down from 53 percent in 2010, yet still up from 44 percent in 2007." (National Center for Policy Analysis)  

Senate Committee Hearing on The Role of Social Security, Defined Benefits, and Private Retirement Accounts in the Face of the Retirement Crisis
Page includes streaming video, with links to written testimony by Robert G. Romasco, President, AARP; Andrew G. Biggs, Resident Scholar, American Enterprise Institute; Dean Baker, Co-Director, Center for Economic and Policy Research; and John F. Sweeney, Executive Vice President, Fidelity Investments. (U.S. Senate Committee on Finance)  

What Plan Sponsors Want From Their DC Plans -- And What They Are Doing About It (PDF)
"[P]lan sponsors are clearly committed to achieving a range of 'highly important' goals through their DC plans. These aspirations include the traditional and also shorter-term objectives of recruiting and retaining quality employees and demonstrating a level of caring for them. But plan sponsors are equally committed to helping employees achieve the long-term goal of a financially secure retirement. As exhibited most clearly by the larger plans in [this] survey (those with assets greater than $250 million), plan sponsors are taking steps to fortify their plans to improve participants' retirement outcomes." (J.P. Morgan)  

Multiemployer Plan Reporting: Financial Statement Disclosures
"[These] disclosures ... are required for nonpublic entities for fiscal years ending after December 15, 2012, and disclosures should be made for all prior periods presented. Construction contractors that are signatories to a collective bargaining agreement that includes contributions to a multiemployer pension plan must work with their accountants and the plan's actuary to obtain the necessary information to comply with the Financial Accounting Standards Board disclosure requirements." (Belfint Lyons & Shuman, CPAs)  

CBO Provides Additional Information About the 2013 Long-Term Projections for Social Security (PDF)
27 pages. Excerpt: "The shortfalls for Social Security that CBO is currently projecting are larger than those the agency projected a year ago.... This year, rather than using the Social Security trustees' projections of life expectancy (as done for earlier analyses), CBO used its own, which incorporate faster growth of that measure than the Social Security trustees anticipate.... Of the 1.4 percentage-point increase in the 75-year imbalance, a higher projection of life expectancy accounts for 0.6 percentage points, a higher projection of the disability incidence rate accounts for 0.1 percentage point, reductions in income tax rates enacted in January 2013 ... account for 0.4 percentage points, and other factors ... account for 0.4 percentage points." (Congressional Budget Office)  

MAP-21: An Offer Most Corporations Could Refuse
"[T]he extent to which plan sponsors eschewed the opportunity to reduce contributions may come as a surprise ... [S]ponsors who pay only the minimum in the short term are likely to see significant jumps in required contributions from 2015 on.... MAP-21 increased [the PBGC variable rate] premium from $9 per $1,000 of unfunded vested benefits to $18 by 2015. So every dollar of plan shortfall was set to incur, in effect, a tax of 1.8% each year." (Russell Investments)  

DC Plan Participant Distribution Decisions: Implications for Target Date Fund Design, Retirement Income Payment Options
"The overwhelming majority of retirement-age defined contribution (DC) plan participants leave their employer's retirement plan within five years of separation from service, mostly for a rollover individual retirement account (IRA). The Great Recession and more recent financial market volatility did not appear to have had an impact on the distribution decisions made by retirement-age plan participants. This finding has implications for the 'to versus through' debate in target-date fund design, as well as for the demand for in-plan versus out-of-plan retirement income programs." (Vanguard)  

State of the Insured Retirement Industry: 2013 Review and 2014 Outlook
"Key trends coming out of 2013 into 2014: [1] After industry-wide sales decreased in 2012, annuity sales have stabilized as equity markets increased, interest rates rose, and companies instituted new risk management strategies.... [2] New research has questioned [the 4%] rule of thumb and reveals a changing mindset toward asset drawdown strategies during retirement.... [3] While interest rates remain at historically low levels, the rise in interest rates has helped ease macroeconomic headwinds facing the industry.... [4] Deferred income annuity (DIA) sales are likely to exceed $2 billion in 2013, a doubling of sales over the previous year." (Insured Retirement Institute [IRI])  

Benefits in General; Executive Compensation

Supreme Court Holds that ERISA Plan Can Enforce Contractual Limitations Provision to Bar Benefit Claim Lawsuit
"The Court left unanswered the question of when the statute of limitations will begin to run when benefits are terminated years after an initial 'proof of loss' is required. While many employee benefits call for a one-time claim decision, others, like the disability benefits at issue in this case, require ongoing administration and may be terminated after years of payments if the participant is no longer eligible. Courts may find that a limitations period based upon 'proof of loss' is inapplicable by its own terms if the language does not apply to the circumstances under which benefits were denied." [Heimeshoff v. Hartford Life and Accident Ins. Co., No. 12-729 (S.Ct. Dec. 16, 2013)] (Littler)  

Supreme Court Upholds ERISA Plan Document's Three-Year Statute of Limitations for Benefit Claims
"[The DOL] as amicus curiae got it backwards with their argument that ERISA, not the plan, controls, and that the plan terms violated ERISA's structure.... [T]he U.S. Supreme Court decided on Friday to review Dudenhoeffer v. Fifth Third Bancorp. In that case, the United States has made virtually the same argument, regarding plan provisions requiring investment primarily in employer securities that purportedly violate ERISA structure." [Heimeshoff v. Hartford Life and Accident Ins. Co., No. 12-729 (S.Ct. Dec. 16, 2013)] (Porter Wright Morris & Arthur LLP)  

Supreme Court Upholds ERISA Plan's Three-Year Deadline to File a Lawsuit
"By including a limitations period in an ERISA benefit plan, a plan sponsor can provide uniformity to claim accrual across various states.... [C]ourts generally apply the most applicable state statute of limitations for benefit claims, which is typically the state breach of contract statutory period. State limitations periods vary broadly, with some states applying as short as a two-year limitations period while others utilize as long as a fifteen-year period. In addition, a limitations period written into the ERISA plan typically will drastically shorten the applicable limitations period, as courts have upheld as reasonable contractual limitations provisions as short as 90 days." [Heimeshoff v. Hartford Life and Accident Ins. Co., No. 12-729 (S.Ct. Dec. 16, 2013)] (McDermott Will & Emery)  

Federal District Court (In Its Capacity As An Employer) Must Reimburse Employee for the Cost of Health Benefits for Her Same-Sex Domestic Partner
"[The Ninth Circuit] Judicial Council held that the denial of benefits violated Oregon's nondiscrimination law because the clerk and her partner were being treated differently from opposite sex partners who could marry and receive spousal health benefits from the federal government. The Council found that, while 'Oregon's statutory scheme purports to confer upon same-sex domestic partners the same rights and legal status as those conferred on married partners,' in actuality it does not, since those partners are denied benefits provided to married couples.... [This] decision has far-reaching consequences inasmuch as it appears to require federal government employers to provide health benefits to unmarried same-sex domestic partners who reside in states that provide them with rights equivalent to marriage, even though Windsor only conferred rights on married partners (and has been interpreted as not applying to couples in domestic partnerships and civil unions)." (Proskauer's ERISA Practice Center)  

IRS Guidance on the Deductibility of Annual Bonus Payments
"The IRS Chief Counsel concluded that neither the fact of liability prong nor the amount of liability prong was met with respect to bonuses so long as (i) the taxpayer retains the unilateral right to modify or eliminate the bonuses at any time prior to payment, (ii) the bonuses are subject to board or committee approval, or (iii) subjective calculation need to be made to calculate the amount of the bonuses. These conclusions are generally consistent with previous IRS interpretations of the all events test." [IRS Field Attorney Advice Memorandum 20134301F] (Winston & Strawn LLP)  

Strong Market Gains Put Pressure on Companies to Hit Heightened Performance Expectations
"By most accounts, the third year of say on pay in 2013 was a non-event for most companies, and 2014 is expected to follow suit. With 30% [Total shareholder return (TSR)] gains year to date, it's reasonable to assume that the fourth year of say-on-pay votes in the U.S. will be even less challenging." (Towers Watson)  

Press Releases

IRS Announces New ETAAC Members, Chairperson
Internal Revenue Service (IRS)

Six-month Free NCEO Membership Offer
National Center for Employee Ownership

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