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December 20, 2013          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Senior Defined Benefit Calculation Analyst
Transamerica Retirement Solutions
in MA

Processor - Distributions and Contributions
Continental Benefits Group, Inc.
in NJ

Defined Benefit Pension Plan Administrator
The Ryding Company
in CA

Employee Benefits Attorney
Baker & Hostetler LLP
in OH

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

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Webcasts and Conferences

"A New Day for Roth Rollovers" Web Seminar
January 6, 2014 WEBCAST
(SunGard Relius)

Target Date Trends & Evaluation
January 14, 2014 WEBCAST
(National Association of Plan Advisors (NAPA) )

Two New Half-day Specialty Topic Seminars Philadelphia and 16 Other Cities - January
January 17, 2014 in PA
(SunGard Relius)

Preconference Sessions -- Employee Ownership Conference
April 7, 2014 in GA
(National Center for Employee Ownership)

Employee Ownership Conference
April 8, 2014 in GA
(National Center for Employee Ownership)

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 PBGC Submission of Information Collection for OMB Review and Comment Request: Termination of Single-Employer Plans, Missing Participants
"The modifications include a new requirement that plan administrators of plans terminating in a standard termination attach copies of the Notice of Intent to Terminate and sample Notices of Plan Benefits to the Standard Termination Notice (Form 500) filed with PBGC. PBGC is reorganizing the distress termination forms and instructions, including removing information items that PBGC no longer needs or can gather in other ways, adding a few information items that PBGC typically has been requesting as additional information under 29 CFR 4041.45(c), and moving some information items from one form to another. PBGC is also making clarifying, simplifying, editorial, and other changes to the current standard termination, distress termination, and missing participants forms and instructions." (Pension Benefit Guaranty Corporation)  


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!

[Official Guidance]

Text of IRS Rev. Rul. 2014-3: Covered Compensation Tables for 2014 (PDF)
"This revenue ruling provides tables of covered compensation under Section 401(l)(5)(E) of the Internal Revenue Code and the Income Tax Regulations thereunder, for the 2014 plan year.... For purposes of determining covered compensation for the 2014 year, the taxable wage base is $117,000. The following tables provide covered compensation for 2014." (Internal Revenue Service)  

[Guidance Overview]

IRS Employee Plans News, December 19, 2013 (PDF)
Topics covered: [1] Closing agreement requests allow plan sponsors to resolve income or excise tax issues that can't be corrected under [EPCRS]; [2] Limited, temporary relief from nondiscrimination requirements for closed defined benefit plans; [3] 2013 Cumulative List of changes in qualification requirements; [4] Tips to expedite your determination letter application review; [5] Monika Templeman, EP Exam Director, bids farewell; [6] Charitable contributions of up to $100,000 per year by IRA owners, age 70-1/2 or over, directly transferred to an eligible charity before December 31 are tax-free; and [7] In-plan Roth rollovers: deadline extended to add Roth provisions for 2013. (Internal Revenue Service)  

[Guidance Overview]

Guidance on In-Plan Roth Conversions
"Notice 2013-74 states that amending out the IRR provision is subject to the anti-abuse provision of 1.401(a)(4)-5 and should not have the effect of discriminating significantly in favor of the HCEs or former HCEs.... An IRR is a 'related rollover' for top heavy purposes and must be counted in the determination date balances as a related rollover." (McKay Hochman)  

[Guidance Overview]

New Opportunities For In-Plan Roth Rollovers
"To the extent the pre-tax amounts converted through the rollover process had distribution restrictions attached to them, the rolled-over amounts will continue to be subject to those restrictions after the rollover is completed. In practice, this means that the rolled-over amounts may not be as readily distributable as 'true' Roth contributions might be." (Ogletree Deakins)  


401(k) Plan Duties and Liability Update: What You Need to Know and Do

Sponsored by Lorman and BenefitsLink

This Jan. 28 webinar will provide a best practices review and overview of ERISA fiduciary concepts, with a focus on fees and expenses, and what you need to do now to stay ahead of the curve. Special BenefitsLink discount.

[Guidance Overview]

FATCA 30% Withholding on Payments to Non-U.S. Retirement Plans: Six-Month Delay on Withholding and Other Recent Developments (PDF)
"[In] IRS Notice 2013-43, the IRS announced that the January 1, 2014 beginning date for US payors ('withholding agents') to institute the 30% withholding has been pushed back to payments made after June 30, 2014.... [B]ecause the US Treasury is still negotiating IGAs with a number of jurisdictions ... Treasury intends to soon provide a list of jurisdictions that will be treated as having an IGA in effect even though that IGA may not have entered into force as of July 1, 2014. However, because IGAs typically list with great specificity which types of retirement plans may be considered exempt beneficial owners and thus exempt from withholding, without the actual IGA to refer to, it is unclear how a particular retirement plan in a country whose IGA is still in negotiation will avail itself of an IGA exemption." (Groom Law Group)  

Six More Countries Sign FATCA Agreements with U.S.
"[T]he United States has signed six more bilateral agreements to implement the reporting and withholding provisions of the Foreign Account Tax Compliance Act (FATCA), P.L. 111-147. The agreements with the Netherlands, Malta, Bermuda, Jersey, Guernsey, and the Isle of Man bring the number of signed FATCA intergovernmental agreements to 18." (Journal of Accountancy)  

Is the Target-Date Fund Glide Path an Illusion?
"Much of the research that sheds doubt on TDFs uses historical information to show two simple ideas. First, equities have delivered a higher return than bonds over time. Second, given perfect foresight, allocating to asset classes with higher returns is more advantageous than allocating to asset classes with lower returns.... [I]nvestors may not have the stomach for the volatility experienced in equities, particularly as they accumulate more assets. As a result, it's important to consider volatility throughout the investing time horizon and not just at an end point." (Vanguard)  

2014 Pension De-Risking: Deferred Vested Liability
"To get a feel for how much these changes are 'worth,' let's ... compare how much it would cost to 'de-risk' a terminated vested participant in 2013 vs. 2014. In each case, we'll assume the participant is 50 years old and is due a monthly life annuity benefit beginning at age 65 of $100 per month. We'll compare the de-risking cost at 2013 interest rates/PBGC premiums vs. 2014 interest rates/PBGC premiums[.]" (October Three Consulting)  

Concerns Over Pension De-Risking
"Clearly the participant advocate community has some significant problems with current de-risking practice. DOL's position is, at this point, unclear, but the [ERISA Advisory Council] at least believes that something should be done. Enhanced disclosure seems to be an obvious place to start. Whether there will be enough support for, e.g., a ban on lump sums for retirees or strict limits on the ability of sponsors to distribute annuities remains an open question." (October Three Consulting)  

Rising Stocks Push U.S. Public Pension Assets to Record Highs
"The cash and security holdings for the 100 largest public-employee retirement systems in the country, representing almost all public pensions, reached $3.06 trillion in the third quarter of 2013, a 9.8 percent rise from the same quarter in 2012 and a 4 percent increase from the previous quarter.... Altogether, the pensions' investment earnings totaled $120.13 billion in the three months that ended on Sept. 30, the largest quarterly gain since the first quarter of 2012." (Reuters)  

Pension Accounting Disclosure Assumptions for 2014
"[W]hile plan sponsors were increasingly conservative by selecting lower discount rates for valuing pension liabilities last year, the rates are increasing for 2013.... [T]he study analyzed a database of 688 corporate defined benefit plan sponsors, revealing a 102 basis point (bps) range of discount rates used for 2012 pension expense. The study also points to the effects of discount rates increasing 90 bps during 2013. The results of the study provide companies with guidance for setting the discount rate and return on asset (ROA) assumptions that pension plan sponsors will use for 2013 year-end disclosures." (SEI)  

Rethinking Defined Contribution Communication and Education (PDF)
"[1] Don't assume your participants are as passionate as you are.... [2] Use simplistic terms in benefits communications.... [3] Aim to improve participants' financial literacy.... [4] Take advantage of participants' inflection points.... [5] Evolve toward modular communication and education." (Defined Contribution Institutional Investment Association [DCIIA])  


Open Letter to DOL: Fix Fee Disclosure Faux Pas Now
"The root of the problem lies solely at the feet of the DOL, although the recordkeeper provided participant statement is clearly the source of the problem. Recordkeepers, though, have no template regarding how to disclose fees. They have loose guidelines. Unfortunately, some of them haven't grasped the various nuances of the industry and the role played by different service providers." (BenefitsPro)  


Text of ICI Comments to EBSA on Timing of Annual DC Plan Participant Disclosures (PDF)
"While we support the idea of providing a compliance window, and believe that a 45-day window would be a reasonable approach to providing necessary flexibility, the Institute believes that an 18-month standard (as opposed to 12 months with a 45-day window) would be optimal and still preserve participants' and beneficiaries' receipt of regular and timely information.... Even with an 18-month window, plans are likely to continue to provide the disclosures every 12 months so as to maintain regularity, but will have greater ability to adapt to changing circumstances." (Investment Company Institute [ICI])  

Benefits in General; Executive Compensation

GAO Wants More Clarity for Pension Reporting and Disclosure by Plan Sponsors AND by the Government
"The GAO identified 70 different reports and 60 different disclosures arising from provisions of ERISA and the Internal Revenue Code. The GAO evaluated the DOL and other ERISA agencies online resources and found them to be 'not clear, comprehensive or up-to-date.' Additionally, the GAO noted that the DOL's guide listing required reports and disclosures had not been updated since October 2008 ... The GAO tested ten model notices from the agencies against federal plain language guidelines and found that several of the model notices failed to meet such guidelines." (Benefits Bryan Cave)  

Supreme Court Upholds a Three-Year Limitations Period and Commencement Date Imposed by Terms of a Benefit Plan
"Although the Supreme Court did not identify any universally acceptable minimum limitations period, and although the Court was influenced in part by the federal regulations that set forth specific time periods for processing disability claims, this decision appears to sanction any limitations period and commencement date that can be considered to be reasonable. In that regard, using a three-year limitations period that runs from the commencement of the process now appears to be reasonable, and other lower courts have in the past upheld periods as short as one year from the date of the plan's final decision." [Heimeshoff v. Hartford Life and Accident Ins. Co., No. 12-729 (S.Ct. Dec. 16, 2013)] (Buchanan Ingersoll & Rooney PC)  

Tips and Traps for Taking Current Year Deductions for Bonus Programs Fixed by End of Year (PDF)
"The employer must be committed to pay no less than the approved bonus pool amount, with no ability to reduce or change the aggregate amounts payable. Any further approvals or modifications to individual award amounts that result in a reduction of the approved bonus pool amount cause the entire bonus pool amount to be considered deductible in the year paid. The new insight from the IRS is their position that individual allocations from the approved bonus pool amount may be made after the close of the tax year without running afoul of the 'all events' tests, but any discretion or application of individual performance standards that results in a reduction of the approved bonus pool amount after the close of the tax year will cause the entire bonus pool amount to fail the 'all events' test for the prior tax year." (Bryan Cave)  

Seven Tips for Good Compensation Committee Minutes (PDF)
"[1] Advance Preparation/Choreography ... [2] Who Should Attend ... [3] Have the Right Person Take the Minutes ... [4] Less is More ... [5] A Winning CD&A ... [6] Limit Note Taking by Directors ... [7] Consider Using Board Portals." (Orrick)  

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