DATAIR Employee Benefit Systems, Inc.

Benefits Educator
General Board of Pension and Health Benefits
in IL

Plan Administration Manager
TPA
in TX

DB Administrator/Enrolled Actuary
Associated Pension Consultants
in CA

Sales Support Coordinator
JPMorgan Chase
in KS

Senior Administrator
Findley Davies, Inc.
in OH

National Practice Lead - Retirement Plan Services
New York Life Retirement Plan Services
in MA

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How to Cut Your Company’s Health Care Costs and Provide Employees Better Care
April 15, 2014 WEBCAST
(Clear Law Institute)

2014 Proxy Season: Executive Pay Trends
April 16, 2014 WEBCAST
(Towers Watson)

401(k) Plan Workshop 2014 - Bloomington
May 1, 2014 in IL
(SunGard Relius)

401(k) Plan Workshop 2014 - Cleveland
May 1, 2014 in OH
(SunGard Relius)

Symposium on Sustainable U.S. Health Spending: The Quest for Value
July 15, 2014 in DC
(Altarum Institute)

View All Webcasts and Conferences

[Official Guidance]

Text of IRS Rev. Rul. 2014-9: Reasonable Belief by Administrator When Accepting Rollover into Qualified Retirement Plan (PDF)
"[I]f a plan accepts an invalid rollover contribution, the contribution will be treated ... as if it were a valid rollover contribution if [two conditions are met, the first of which is that,] when accepting the amount from the employee as a rollover contribution, the plan administrator for the receiving plan must reasonably conclude that the contribution is a valid rollover contribution.... [In Situation 1 of this revenue ruling,] it is reasonable for the plan administrator for [the receiving] Plan M to conclude that [the distributing] Plan O is intended to be a qualified plan [because the administrator of Plan M had accessed the EFAST2 database maintained by the DOL at www.efast.dol.gov and determined that line 8a of the most recently filed Form 5500 for Plan O did not contain code 3C, which would have indicated that the plan was not intended to be qualified under Code section 401, 403, or 408.]" (Internal Revenue Service [IRS])  

[Advert.]

Southern Retirement Plan Conference – Register by 4/7, Save $100

Pensions on Peachtree – presented by SunGard's Relius Education and the Atlanta-based law firm of Ferenczy + Paul LLP - Sessions cover current developments, plan design, and fiduciary concerns. 15 CE hrs, incl. 2 Ethics. Register online.

[Guidance Overview]

IRS Issues Guidance Facilitating Rollovers to Qualified Retirement Plans
"Today's ruling simplifies the rollover process by introducing an easy way for a receiving plan to confirm the sending plan's tax-qualified status. The plan administrator for the receiving plan can now simply check a recent annual report filing for the sending plan on a database that is readily available to the public online. This eliminates the need for the two plans to communicate (with the individual as go-between), expedites the rollover process, and reduces associated paperwork." (Internal Revenue Service [IRS])  

[Guidance Overview]

PBGC Proposes Additional Guarantee for Rollover Benefits (PDF)
"Although promoted as enabling rollovers from defined contribution plans, the amendment refers to rollovers in general and would encompass rollovers of lump sums from other defined benefit plans. This appears to allow an individual to obtain a greater guarantee from two defined benefit plans than would otherwise be available." (Buck Consultants)  

[Guidance Overview]

New PBGC Premium Rules Require Attention, Action in Some Cases
"Certain small plans (as defined in the revised regulations) value their benefits at a date that is too late for purposes of meeting the new uniform premium due date (October 15th for calendar year plans). The proposed and final revised regulations allow small plans to value their benefits by 'looking back' at data from the prior year. This will allow these plans to calculate their variable-rate premiums in time to meet the new uniform premium due dates." (Cheiron)  

Supreme Court Justices on the Edge About Protections for Inherited IRAs in Bankruptcy
"Obviously well prepared [at the oral argument ], the Justices gave neither side much breathing room, peppering both lawyers from beginning to end with probing questions about the weak points of their position. So only moments after Kannon Shanmugam (representing Clark) began to speak, Justice Kennedy pressed on the weakest point of Shanmugam's position, noting that 'it seems to me that you really rendered the words "retirement funds" superfluous.'" [Clark v. William J. Rameker, Trustee, et al., No. 13-299, on appeal from the 7th Circuit.] (SCOTUSblog)  

[Advert.]

How Will Your Benefit Plans Navigate Today's Stormy Seas?

BOSTON, May 4-7. Earn 15.5 HRCI credits. 45+ expert-led sessions on such critical issues as ACA's play or pay rules, private exchanges, avoiding ERISA litigation, retirement plan fees and much more. Register by April 11 and save $100.

Transcript of April 2 Oral Argument Before the Supreme Court in ESOP Stock-Drop Case (PDF)
70 pages. Excerpt: "CHIEF JUSTICE ROBERTS: Well, what exactly, [in] concrete terms, what do you do as the [ESOP] trustee? You have this information, inside information that says that the stock is overvalued. Do you sell? In which case the beneficiaries' holdings go way down and they sue you, or do you not sell? In which case when the information comes out, the beneficiaries sue you because their value goes down. What are you supposed to do?" [Fifth Third Bancorp v. Dudenhoeffer, petition for certiorari filed Dec. 2012] (Supreme Court of the United States)  

Supreme Court Hears Oral Argument in Fifth Third Bank Case
"This was an argument that was dominated by practical questions -- and not just why have a duty of prudence, or what to do about inside information, but also how many ESOPs have inside trustees ... what the SEC thinks about the inside information argument ... and the scope of ESOPs ... [w]hich makes it very difficult to assess what sort of decision may emerge when many of the Justices appeared to be struggling with the practical implications of the arguments and issues presented." (James E. Arnold & Associates, LPA)  

Justices Hear Arguments in First ERISA Stock-Drop Case to Reach High Court
"The issue of inside information dominated the back-and-forth between U.S. Supreme Court justices and attorneys debating the pro-fiduciary presumption of prudence during oral argument April 2 in the first [ERISA] stock-drop case to reach the high court. The justices' questions to counsel suggest that they see the central issue as how a prudent fiduciary of an employer stock plan should respond to inside information affecting the value of the stock price." (Bloomberg BNA)  

The 'Teflon Fiduciary': Could Your Investment Adviser Avoid Responsibility for Bad Advice?
"[The Fifth Circuit's recent decision in Tiblier v. Dlabal] deserves lots of attention because it provides a blueprint for investment advisers to avoid responsibility for self-dealing and bad advice. The decision also constitutes a persuasive argument why the U.S. Department of Labor needs to continue its controversial efforts to update its regulations on when giving investment advice makes a person a fiduciary." (Osler, Hoskin & Harcourt LLP)  

A Fiduciary Perspective on 401(k) Fees
"The early results of fee disclosure regulations point to two developing issues: [1] adviser fees are coming down as a deflationary fee spiral has set in and, [2] more and more advisors are acknowledging fiduciary status with the plan. As more third party experts are hired to help busy small to mid-size companies police their fiduciary duty, the power of a prudent process will flush out both losers in performance and high expenses." (401kFeeDisclosure.com)  

New Flavor of Outsourced Fiduciary for Retirement Plans Hits the Market
"The 3(16) plan administrator fiduciary holds the keys to the retirement plan's day-to-day operation: He or she is responsible for timely reporting and disclosure of participant fees and Form [5500] This person also handles distributions of benefits and administers plan loans and qualified domestic relation orders.... But there are potential traps for plan sponsors when it comes to relying heavily on outsourcing those duties." (InvestmentNews)  

Courts Question Law Leaving Pension Participants Ineligible for PBGC Protection
"New rulings against Catholic hospital chains on both coasts have intensified a faceoff between religiously affiliated employers and workers who are alarmed by the companies' efforts to avoid insuring or funding their pensions.... While the rulings hinge on a little-known bit of law, the debate over so-called 'church plans' could affect some of the nation's largest hospital networks and thousands of people counting on them for retirement benefits." (Associated Press)  

Wells Fargo Wins Second Part of Securities Lending Case
"The pension plan for Blue Cross Blue Shield of Minnesota, along with other pension funds, has lost a legal battle with Wells Fargo & Co. over tens of millions of dollars the funds lost in the bank's former securities lending program. The San Francisco-based bank did not breach its fiduciary duties to the pension funds, U.S. District Judge Donovan Frank said ... However, he explained in the 12-page order that he was 'constrained' by law to adopt the decision a jury reached last August in the case ... 'Significantly, however, the court notes that if it were not so bound, the court would find, based on the evidence presented at trial, that defendant breached its fiduciary duties to the ERISA plaintiffs,' Frank wrote in a footnote." (StarTribune)  

Perspectives on Custom Target-Date Fund Strategies in DC Plans
16 pages. Excerpt: "Implementing a custom TDF strategy entails a trade-off between benefits and costs. Benefits may include the fiduciaries' expected risk or return characteristics of the custom strategy or intangible benefits like glide path 'fit' or TDF 'control.' Costs will include the direct investment and administrative costs associated with a custom strategy, plus the time, resources, and skills needed to oversee a plan-specific offering ... One way to evaluate the merits of customization is to use a low-cost passive target-date strategy as a decision-making benchmark[.]" (Vanguard)  

Participant Trading: What Is Behind the Low Numbers?
"[O]nly 10% of retirement plan participants engaged in trading in 2013 -- down from 20% in 2004.... This is good news for sponsors and participants, as research shows that active traders, on average, don't fare as well as nontraders. One classic gender-based trading study, for example, documented that men trade 45% more than women and that trading reduced men's net returns by 2.65 percentage points a year -- as opposed to a reduction of 1.72 percentage points for women." (Vanguard)  

Financial Education for Today's Workforce: 2014 IFEBP Survey Results
"Approximately half of all organizations offer benefits literacy and retirement security education. Nearly two in five organizations feel a responsibility to educate workers on pension and benefit options, encourage retirement savings and help them become financially literate mangers of their money. Half of organizations surveyed have experienced an increase in demand from employees/participants for financial education in the last five years." (International Foundation of Employee Benefit Plans [IFEBP])  

Don't Rely on Your IRA Custodian to Take Responsibility for Your Required Minimum Distribution
"While the custodian is responsible for notifying you about your RMD, the custodian is not responsible for making sure you actually take it. You should have been notified about your 2013 RMD by January 31, 2013.... Beyond the RMD notification, there is no rule that forces custodians to make another attempt to contact you and make sure you took your RMD." (The Slott Report)  

Use IRS Audit FAQs, Agent Training Manuals to Prepare for Potential Examination (PDF)
"IRS makes a distinction between an [Employee Plans Team Audit (EPTA)] and a non-EPTA audit, but indicates that chances are an employer plan would be subject to an EPTA audit. So, what's the difference? The EPTA audit looks first to the employer's internal controls, and believes what is discovered should direct the nature and depth of the remainder of the audit. The non-EPTA audit is not a team audit. It focuses on specific qualification issues identified at the beginning of the audit, including things such as the plan sponsor's industry or a specific problem such as defaulted loans or a merger or acquisition involving the plan sponsor." (ERISAdiagnostics, Inc., via Thompson Pension Plan Fix-It Handbook)  

Retirees Are Living Longer -- But That Shouldn't Take Anyone by Surprise
"For a very long time, life expectancy has been increasing, so every few years the assumptions used for valuing pension plans need to be updated to capture that. Because the table currently in use (RP-2000) has become out of date, it's creating a situation in which mortality experience for most plans is systematically creating losses at each new valuation." (Russell Investments)  

Federalism and Fiduciaries: A New Framework for Protecting State and Local Government Benefit Funds
"This Article proposes an alternative: a uniform state code, like other uniform state laws such as the Uniform Commercial Code, that states could adopt to govern both state and local benefit plans. The proposed uniform code is based on common statewide financing. Funds would be administered by a nonpolitical council that would employ actuaries and inspectors to protect the integrity of funds inspected and disbursed according to standards set by the code... Making the code uniform would enable adopting states to follow each others' practices and interpretation of code provisions. Moreover, with congressional approval, it would facilitate compacts among groups of states to pool benefit and emergency funds, giving them greater overall safety, ability to diversify, and leverage over financial intermediaries." (Richard E. Mendales, Charleston School of Law via SSRN)  

The Economic Impact of CalPERS in California (PDF)
14 pages. Excerpt: "In Fiscal Year (FY) 2011-12, CalPERS provided nearly $13 billion in benefits to 452,750 California residents. These benefits created 113,664 jobs throughout California.... In FY 2011-12, CalPERS benefits created an additional $17.6 billion in business revenue. The total economic revenue generated by CalPERS benefits was nearly $30.4 billion or 1.6 percent of California's Gross Regional Product." (CalPERS)  

[Opinion]

ERISA Section 404(c) Turns Forty This Year; Here's a Proposal for Meaningful Reform
"Two issues -- What is a 'prudent' standard for investment selection? When is the ability to diversify deemed to be met? Regulators have no definitive answers. The result is a cacophony of well-intentioned opinions on how to comply. It is a confusing issue for some of the largest employers. And it is an absolute mental quagmire for small business 401(k) plans. Here is [a] proposal to answer both questions." (Employee Fiduciary)  

[Opinion]

Retirement Class Warfare Is Coming to America
"Companies and politicians know a problem, of biblical proportions, is brewing in America when tens of millions of Americans cannot afford to retire and their companies want to replace them with younger, cheaper employees. Who is to blame? Start with Wall Street that convinced thousands of companies to dump their defined [benefit] plans and transfer investment risk to their employees. You could blame the companies that went along with Wall Street. You could blame the politicians who let this happen, but most of them are retired. Or, you could blame Americans who do not have the income and discipline to save on their own. The only practical solutions are deferred retirement dates and part-time jobs. The war is coming and 78 million baby boomers will light the fire." (Paladin Research & Registry)  

[Opinion]

Decision in Saint Peter's 'Church Plan' Case Is Victory for Workers and Retirees; Lawsuit Against Hospital Can Proceed
"This is a great victory for the 4,700 Saint Peter's employees and retirees, many of whom worked their entire careers counting on a federally guaranteed pension ... While there are still many steps to go in the legal process, the Saint Peter's decision makes plain that Congress only exempted plans established by churches from the law. This makes sense since only those plans are backed by churches." (Pension Rights Center)  

Exit Packages for Executives Shrink Amid Shareholder Pressure
"Of the companies polled, 85 percent said their equity arrangements vest upon a 'single trigger.' However, many more companies are moving to a 'double trigger,' with 63 percent having at least one equity plan that provides for a 'double trigger' vesting, up dramatically from 28 percent of companies studied in 2009.... There has also been a shift to smaller cash severance multiples for CEOs. The most common ones are between two and three times compensation (among 43 percent of respondents), while use of a three times multiple fell to 42 percent in 2013 from 51 percent in 2011.... [E]ntitlements to gross-ups declined significantly to 30 percent in 2013 from 61 percent in 2009." (Corporate Secretary)  

Leading Technology Company bswift to Accelerate Growth with Investment from Great Hill Partners
bswift

Littler Named Law Firm of the Year for Labor and Employment by Who’s Who Legal
Littler Mendelson

SEC Charges Transamerica Financial Advisors With Improperly Calculating Advisory Fees and Overcharging Clients
U.S. Securities and Exchange Commission

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