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Employee Benefits Jobs
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Webcasts and Conferences
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Hand-picked links to the web's best news articles,
official guidance, jobs, webcasts and more.
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[Guidance Overview]
From the IRS: SEP Plan Checklist and Fix-It Guide (PDF)
20 pages. Includes a chart of how to identify, fix and avoid common mistakes, along with detailed explanations of SEP operations. Updated January 2014. Excerpt: "Use this checklist to help you keep your plan in compliance with many of the important rules.... If you answered 'no' to any of the above questions, you may have a mistake in the operation of your SEP plan. this list is only a guide to a more compliant plan, so answering 'Yes' to each question may not mean your plan is 100% compliant. Many mistakes can be corrected easily, without penalty and without notifying the IRS."
(Internal Revenue Service)
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Class Action Complaint Challenges Fidelity Plan's Revenue-Sharing Arrangement
"[E]ach of the entities involved in the alleged arrangement -- the plan sponsor, mutual fund adviser and record keeper -- are members of the same corporate family. The complaint was filed Jan. 7 in the U.S. District Court for the District of Massachusetts by two participants in the FMR LLC Profit Sharing Plan. They seek certification of a class of all plan participants from Jan. 8, 2008, until the present, which the complaint contends is 'over 50,000' individuals."
(Bloomberg BNA)
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Having Good Reason to Do an IRA Rollover
"With the brokerage industry's two regulators increasing their scrutiny over 401(k) rollovers to individual retirement accounts, some compliance officers are making sure their advisers have a good reason when recommending investors make the switch.... Even some larger firms are reviewing their call center protocols, marketing, and adviser education to make sure they avoid potential run-ins with regulators, according to a source familiar with the matter."
(The Wall Street Journal; subscription may be required)
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Investment Fiduciary Best Practices: Avoid or Manage Conflicts of Interest
"A good working definition of a conflict of interest is a circumstance that makes fulfillment of the duty of loyalty less reliable.... The most serious conflict of interest involves self-dealing, when the fiduciary materially benefits from a transaction (beyond receiving a reasonable fee for services). For dually-registered advisors, 'changing hats' is another form of conflict that can be a source of confusion for clients as they are often unaware of the differences between the fiduciary and fair dealing standards of conduct and may not know when a change in roles is taking place."
(fi360)
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401(k) New Year's Resolutions: Improve Fixed Income Allocations, Build a Stronger Core, and Use Target Date Funds Effectively
"Almost eight in 10 respondents who invested during the market downturn said they are contributing as much as or more now than they did five years ago ... Seventy-six percent say their DC plan is the same or in better shape than five years ago. Seventy-eight percent think that in five years the market will be the same or in better shape than it is today. Seventy-nine percent have maintained or increased their contribution levels since the crisis. Despite this confidence, the survey uncovered indications of a shift toward more conservative investment behavior."
(State Street Corporation)
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401(k) Index & Observations Monthly Details: December 2013
"Defined contribution plan participants transferred 0.025% of total daily balances during December ... This is slightly above November's average, at 0.024%, and below the 12-month daily average of 0.029%.... Net transfer activity for December continued to favor diversified equities (equity assets excluding company stock) with $332 million (0.21%) flowing in.... On average, participants' overall equity allocation increased to 65.2% at the end of December, up from 64.6% in November."
(Aon Hewitt)
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The 30 Most Generous U.S. Companies with the Best 401(k) Plans (PDF)
"[P]lans in professional services, science and technical fields [represent] half of all plans included.... Six of the top 10 plans are fully vested the day an employee starts, while a total of thirteen plans on the list [of 30] offer immediate vesting.... [T]he average account balance for plans on this list is $470,014 -- a giant leap when compared the average balance of all plans within the BrightScope system ($99,061).... The average amount a company contributes to each plan on the list is $31,181; compared to the plan average of $4,184."
(BrightScope)
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Many Have Access to 401(k) Loans, 21 Percent Have Outstanding Balances (PDF)
"87 percent of participants in the 2012 EBRI/ICI 401(k) database were in plans offering loans at year-end 2012. Only 1 in 5 (21 percent) of those eligible for the loans had one outstanding. Among participants with outstanding 401(k) loans at the end of 2012, the average unpaid balance was $7,153, compared with $7,027 in the year-end 2011 EBRI/ICI 401(k) database. The ratio of the loan outstanding to the remaining account balance decreased slightly, from 14 percent at year-end 2011 to 13 percent in 2012."
(Employee Benefit Research Institute [EBRI])
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Report Says Some Pension Funding Deeply Flawed; Federal Role Needed
"The report, by the Nelson A. Rockefeller Institute of Government, makes recommendations about how to fix the defined-benefit public pension system so that benefits are funded more securely. These include ensuring that pension funds and governments value liabilities using a discount rate that assumes a low risk that obligations will not be paid and pay realistic actuarially determined contributions."
(The Bond Buyer)
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Retirement Policy Issues for 2014
"[R]etirement policy is coming to be viewed (as it has in the past) as low hanging fruit for those seeking new revenues. On the current short list [are] ... PBGC premiums (although given the end-of-2013 increase, another increase seems unlikely); elimination of stretch IRAs; and additional defined benefit plan funding relief. The elimination of the deduction for dividends on employer stock and expansion of Roth IRAs, 401(k)s and conversions have also been proposed as revenue raisers[.]"
(October Three Consulting)
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Parents' Longevity Sways Participants' Retirement Intentions
"Men, for example, think they have about a 7 out of 10 chance, on average, of living to age 75 -- based on their parents' experience -- and so they make their plans to retire at 64. But men who think that they have half those odds of making it to 75 will plan to retire about four months earlier than their peers. Subjective life expectancy also influences women's plans, and the magnitude of the impact is similar to men.... It could be a mistake, however, to assume we'll be like our parents. Life expectancy has risen rapidly in recent decades, so people are living much longer."
(Center for Retirement Research at Boston College)
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Teachers' Unions Lose Challenge to Michigan Pension Plan Changes
"Teachers will have to contribute to their pensions, after a Michigan Court of Appeals panel rejected a challenge from state teachers' unions. The unions contended that changes to state law requiring the contributions were contrary to promises made in pamphlets, brochures and other documents regarding the retirement system. Judge Kirsten F. Kelly wrote in the appellate ruling that information published by the state about the retirement system did not constitute a contract overruling the changes lawmakers approved to the system."
(mLive.com)
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Puerto Rico Supreme Court Halts Teacher Pension Reform
"[T]he Puerto Rico Supreme Court ... halted implementation of a teachers pension system reform as it agreed to hear a lawsuit seeking to have the reform overturned as unconstitutional. The reform, enacted December 24, is one of a series of steps the Puerto Rico government has taken in a bid to retain its investment-grade credit rating, which stands just a single notch above junk-bond status ... In halting the reform, the Supreme Court said the plaintiffs could suffer material harm from its implementation."
(Reuters)
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Benefits in General; Executive Compensation
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NASDAQ Amends Compensation Committee Independence Rules
"As a result of this amendment, NASDAQ-listed companies should reexamine the composition of their compensation committees to ensure compliance with amended listing rules prior to the implementation deadline. NASDAQ-listed companies should also review their committee charters, directors' and officers' (D&O) questionnaires, and corporate governance guidelines or policies to determine whether any changes are required. For example, companies may need to update their D&O questionnaires for the 2014 proxy season to include additional questions soliciting information on the sources of compensation of directors and, if applicable, remove the exemption of fixed amounts of compensation under a retirement plan from existing questions relating to fees received by directors."
(Morgan Lewis)
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Executive Pay: Corporate Directors, Institutional Investors See Things Very Differently
"Only one in five (20%) directors say the executive pay model in the U.S. has led to excessive CEO pay levels, a sharp drop in the past five years, while nearly three in four (72%) investors say the pay model has led to excessive pay levels. Seven in 10 (70%) directors say the executive pay model at most companies is closely linked to company strategy, compared with just one in three (34%) investors. Less than one-fourth (23%) of directors say executive pay is overly influenced by management, versus two-thirds (66%) of investors."
(Towers Watson)
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Non-Qualified Plan Litigation Reversal: Snatching Victory from the Jaws of Defeat
"Many of the putative class members actually vested in and received more shares under the Retirement Award vesting schedule than they would have if they had been paid under ERISA's minimum vesting schedules. Plan participants who have already been paid benefits equal to or in excess of what they would have received under ERISA vesting have no viable cause of action in this case." [Bond v. Marriott Int'l, Inc. (D. Md. Aug. 9, 2013)]
(Winston & Strawn LLP)
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Reinhart Employee Benefits Update, January 2014 (PDF)
Topics include: U.S. Supreme Court upholds plan provision shortening limitations period; Bipartisan Budget Act affects single employer pension plans; Determination letters update; IRS releases post-Windsor guidance regarding same-sex spouses and cafeteria plan; Departments issue proposed regulations expanding the definition of excepted benefits; Sixth Circuit expands scope of relief available upon unlawful denial of benefits; and DOL issues expanded form 5500 for use in reporting for 2013 plan year."
(Reinhart Boerner Van Deuren s.c.)
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Press Releases
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