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5-Minute Fiduciary: Winter Advisory - Expecting Drifting Mutual Funds
March 21, 2014 WEBCAST
(Conrad Siegel Actuaries)

401(k) Investment Lineup Summit - New York
April 10, 2014 in NY
(Pensions & Investments)

2014NAFE Virtual Conference
April 27, 2014 WEBCAST
(National Institute of Pension Administrators)

Cafeteria Plans
June 3, 2014 in OH
(Thomson Reuters / EBIA)

HSAs, HRAs, and Consumer-Driven Health Care
June 4, 2014 in OH
(Thomson Reuters / EBIA)

View All Webcasts and Conferences

[Guidance Overview]

GASB 67/68: Relationship Between Valuation Date, Measurement Date, and Reporting Date (PDF)
"New accounting rules for public pension plans in the United States are set to take effect beginning in 2014. Successful implementation of the new rules will require an understanding of a variety of technical concepts regarding the various newly required calculations. This article explores the relationship between the actuarial valuation date, the measurement date, and the reporting date -- critical dates that should be strategically determined in the early planning stages of implementation of GASB 67 and 68." (Milliman)  

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Implementing and Administering Roth 401(k) Plans (PDF)
"This Note gives a general overview of the designated Roth option and explains:[1] The benefits of using a Roth 401(k). [2] The IRC requirements governing designated Roth plans. [3] The treatment of contributions to and distributions from Roth 401(k) plans. [4] In-plan rollovers of distributions from non-Roth accounts to Roth options within an employer's plan. [5] Issues for employers to consider before implementing Roth 401(k) programs." (Groom Law Group, for Practical Law)  

Third-Party Section 3(38) Investment Manager Contracts May Leave Plan Sponsor Exposed to Flawed Process
"Analysis of [language of a typical ERISA section 3(38) contract] shows how a plan sponsor deciding to retain this third-party 3(38) that is not independent of a record-keeper -- instead of a 3(38) that has no dependence on any record-keeper -- could subject the plan participants (and their beneficiaries) for which it has fiduciary responsibility to an inferior and conflicted process." (W. Scott Simon for Morningstar Advisor)  

The Key Factor in Adviser Liability Risk Management
"Investment advisers and other financial advisers who create asset allocation recommendations based solely upon the belief that a client's time horizon is the most important investment factor should go ahead and call their E&O carriers and put them on notice. The argument commonly advanced in favor of time horizon being the most important factor in asset allocation claim [is] that time reduces risk. Various studies have shown that that simply is not true.... Attempting to designate one factor as the most important factor in evaluating a client simply makes no sense." (The Prudent Investment Adviser Rules)  

2014 Earned Income Needed to Deduct Contribution Equal to 415 Limit for Sole Proprietor 401(k) Plan
"[If] a sole proprietor has Schedule C income of $182,194 in 2014, the 164(f) deduction for 50% of the self-employment tax is $9,694. Subtract that and you have adjusted net earnings from self-employment of $172,500. Subtract $52,000 for a pension contribution and the earned income is $120,500. Add back $17,500 of elective deferrals and you have total plan compensation of 138,000. By contrast in 2013, the same sole proprietor would have needed $176,918 to get the full $51,000 415 limit which applied in 2013." (SunGard Relius)  

Pension Index Bounces Back in February
"Following a very rocky start to the year in January, positive capital market results in February allowed pension finances to recover at least a portion of the lost ground. Strong equity returns dominated the month's results, though the positive impact was offset by a slight decline in interest rates. The Towers Watson Pension Index increased 2.0% for the month, to 75.7." (Towers Watson)  

DB Funded Status Improves by $11 Billion in February Due to Robust Investment Performance (PDF)
"The funded status of the 100 largest corporate defined benefit pension plans improved by $11 billion during February ... The deficit fell to $131 billion from $142 billion at the end of January, due to strong investment performance offsetting an increase in the pension benefit obligation. As of February 28, the funded ratio increased to 91.8%, up from 91.0% at the end of January. The funded ratio has declined in the first two months of 2014 when compared with the 95.2% funded ratio as of December 31, 2013." (Milliman)  

Department of Defense Proposes Extensive Changes in Retirement Benefits
"The changes would preserve the current system's defining feature of a 20-year, 'cliff-vesting,' fixed-income pension. But it would ultimately provide smaller monthly checks ... To compensate for that, the new proposal would offer three new cash payments to be provided long before old age -- a 401(k)-style defined contribution benefit awarded to all troops who serve at least six years; a cash retention bonus at around 12 years of service; and a potentially large lump-sum 'transition pay' provided upon retirement to those who serve 20 years or more.... [S]everal options show a roughly 10 percent reduction in cumulative lifetime payments." (Army Times, via WLTX)  

Expanding Retirement Savings Opportunities
"With regard to extending coverage to the un-covered ... Can low-paid employees afford to save, and, if they can, how can they be persuaded to do so? Should coverage be extended within the current employer-mediated system? Should new retirement savings be invested through current institutions (most obviously, mutual funds) or through an alternative?" (October Three Consulting)  

Your 401(k) Plan and the Shape of the Earth
"There are several ways in which already-existing [DOL] initiatives, if adopted, would improve the situation the professors describe without getting the government involved in designing plan menus and testing participants. Vendors, and not just individual plan fiduciaries, are responsible for the ways fees are set and how investments are chosen today.... When market practices that do not adequately control for conflicts of interest are reined in, fiduciaries such as investment committees will be able to provide better investment menus with lower fees without government mandates." (Osler, Hoskin & Harcourt LLP)  

401(k) Employee Education Tip: Helping Participants Make Better Decisions
"[I]nvestors are much more afraid of making a bad investment decision than they are of doing nothing and missing an opportunity.... When older investors were asked about those decisions they regretted most, 25% responded that they regretted the bad decisions they made. Conversely, 75% indicated they regretted not taking action when faced with an opportunity. Study results showed that, while the initial feelings of action regret were stronger, they also faded quicker. In contrast, feelings of inaction regret that were initially low, grew over time." (Lawton Retirement Plan Consultants, LLC)  

Boeing Will Freeze 68,000 Nonunion Workers' Pensions by 2016
"Boeing is curbing pension expenses that, at $3.45 billion over the last 12 months, are the third-highest among large U.S. corporations ... Boeing plans to contribute amounts equaling 9 percent of employees' eligible income in 2016, 8 percent in 2017, 7 percent in 2018 and 3 percent to 5 percent after that." (Bloomberg)  

Tax Court May Not Agree with IRS' Final Regs on Section 83 and Definition of Substantial Risk of Forfeiture
"The Court looked beyond the wording of the regulations, at the history of section 1.83-3(c)(2), which in the Court's view 'strongly suggests that discharge "for cause," like discharge "for committing a crime," refers to a narrow and serious form of employee misconduct that is very unlikely to occur and is thus properly regarded as too remote -- as a matter of law -- to create a "substantial risk of forfeiture."' The IRS, in a post-hearing memorandum, had essentially agreed with this construction ... This decision suggests that the definition of 'substantial risk of forfeiture' may be broader than most of us had believed -- and broader than the recently published final regulations suggest." [Austin v. Comm'r, 141 T.C. No. 18 (Dec. 16, 2013)] (Winston & Strawn LLP)  

IRS Finalizes Regs Addressing 'Substantial Risk of Forfeiture' Under Section 83
"The regulations respond to the question of whether any other conditions imposed on the transfer of property would constitute a substantial risk of forfeiture by clarifying that a substantial risk of forfeiture arises only through a future service condition or a condition related to the purpose of the transfer.... [In] determining whether a substantial risk of forfeiture exists based on a condition related to the purpose of the transfer, both the likelihood that the forfeiture event will occur and the likelihood that the forfeiture will be enforced must be considered." (EisnerAmper)  

Equity Compensation Update for March 6, 2014
"The 2013 National Compensation Survey from the Bureau of Labor Statistics shows that 8% of private sector employees, or 9.2 million employees, are in what the BLS defines as 'stock option' plans. Unfortunately, the BLS definition simply defines these plans as 'plans [that] allow establishment employees the right to buy company stock at a fixed price by a fixed time.' ... More useful are the data the BLS compiles on the distributions of participation by sector and employee type. Not surprisingly, the plans are most common in the information industry, where 31% of employees participate, and least common in leisure, health care, and education (many businesses in these sectors are nonprofits)." (National Center for Employee Ownership [NCEO])  

ERISA Advisory Council to Meet on March 26
"The purpose of the open meeting, which will run from 1:30 p.m. to approximately 4:30 p. m. Eastern Standard Time, is to welcome the new members, introduce the Council Chair and Vice Chair, receive an update from the Assistant Secretary of Labor for the Employee Benefits Security Administration, and determine the topics to be addressed by the Council in 2014. Organizations or members of the public wishing to submit a written statement may do so ... on or before March 18, 2014[.]" (Employee Benefits Security Administration)  

Holland & Hart Welcomes ERISA Attorney Bret Clark to its Boise Office
Holland & Hart LLP

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