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May 1, 2014          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Director of Marketing
Index Fund Advisors, Inc.
in CA

Qualified Plan Administrator
Pen-Cal Administrators, Inc.
in CA

Paralegal
Law Firm, Washington DC
in DC

Retirement Plan Administrator
Compensation Benefit Planning, Inc.
in MO

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Webcasts and Conferences

DOL Investigations and Audit Quality Initiatives
May 8, 2014 in AZ
(Worldwide Employee Benefits Network [WEB] - Phoenix Chapter)

ECFC's 2nd Wednesday Teleconference: Pay or Play Revisited - The Practical Impact
May 14, 2014 WEBCAST
(ECFC [Employers Council on Flexible Compensation])

Is it Time to Self Fund?
May 14, 2014 in TX
(Worldwide Employee Benefits Network [WEB] - Houston Chapter)

Spring Cleaning And ERISA Audits: How To Keep Your Plans Sparkling
May 15, 2014 in OH
(Worldwide Employee Benefits Network [WEB] - Cleveland Chapter)

Prototype Plan Seminar
May 20, 2014 in MA
(McKay Hochman Co., Inc.)

Capital Forum on Pensions 2014
May 21, 2014 in CA
(Western Pension & Benefits Council - Sacramento Chapter)

Tax Forms Workshop: 5500 and More - New York
May 29, 2014 in NY
(SunGard Relius)

Why Retirement Income is a Critical Issue for 401[k] and 403[b] Plans
May 29, 2014 WEBCAST
(Drinker Biddle & Reath LLP)

401(k) Plan Workshop 2014 - Kansas City
May 29, 2014 in KS
(SunGard Relius)

Employee Benefits in Mergers & Acquisitions
June 5, 2014 in NY
(ABA Joint Committee on Employee Benefits)

Benefits Communication Master Class #5 -- Beyond a Two-Week Window: 10 Ways to Make Annual Enrollment a Success in an Era of Health Care Reform
July 10, 2014 WEBCAST
(Benz Communications)

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]

IRS 403(b) Checklist (PDF)
"[E]very year it is important to review the requirements for operating your 403(b) retirement plan. Use this checklist to help you keep your plan in compliance with many of the important rules.... [C]lick on 'More' in any of the questions for additional information (including examples) on how to find, fix and avoid each mistake." (Internal Revenue Service [IRS])  


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[Guidance Overview]

IRS 403(b) Fix-It Guide (PDF)
Chart shows potential issues in plan administration. Includes how to find, fix and avoid common plan errors. (Internal Revenue Service [IRS])  

Remarks on Multiemployer Pension Reform by Congressman John Kline
"The multiemployer pension system is a ticking time bomb that will inflict a lot of pain on homes and workplaces. According to the best information available, multiemployer plans have $818 billion in benefit liabilities yet only $397 billion in assets, which means collectively plans face a $421 billion funding shortfall. The [PBGC] warns its multiemployer pension program will be insolvent in fewer than 10 years, thanks to more obligations and fewer resources.... If we do nothing, benefits will be cut. Let me repeat that: If we do nothing, benefits will be cut. It's only a question of when and by whom." (Committee on Education and the Workforce, U.S. House of Representatives)  

401(k)/403(b) Best Practices: Decision-Making and Documentation
"Form an Investment Committee to make decisions about plan issues.... [D]evelop an Investment Policy Statement (IPS) to guide the selection and monitoring of your plan's investments. Review and update the IPS each year.... [M]ake sure your plan documents are up-to-date.... You cannot pick and choose which plan provisions to follow and which to ignore.... Think you are following prudent processes when making decisions? There is no way to know when looking back at prior decisions unless you documented it." (Lawton Retirement Plan Consultants)  

The Continuing Evolution of the Safe Harbor 401(k) Plan
"While safe harbor plans can be amended just like any other, there are restrictions on the timing.... If forfeitures cannot be used to pay for the safe harbor contribution and there are not enough plan expenses to absorb them, the only other choice is to allocate them as additional contributions. However, if the accumulated forfeitures are not 'discovered' until a future year, the only option is to allocate them as profit sharing contributions. This risks the loss of the plan's exemption from the top-heavy rules ... [EPCRS] does not address is how to correct a situation when an employer either does not provide a safe harbor notice at all or provides it after the deadline." (Markley Actuarial)  


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The Key to the Uncashed Checks Dilemma (PDF)
10 pages. Excerpt: "Many plan distribution checks are not received or acknowledged by the former employee ... These uncashed checks represent plan assets and are consequently an ongoing burden for plan sponsors. Uncashed checks ... increase plan costs, complicate plan administration and prevent fiduciary responsibilities from being fulfilled. Automatic rollover IRAs provide a simple, effective solution to this problem." (Millennium Trust Company)  

Analysis of the J.P. Morgan 'Target Date Compass' as a Tool for Plan Fiduciaries (PDF)
"Fiduciaries have more guidance on what information to review in selecting TDFs, but this greater clarity has brought with it a need to review earlier decisions. Half a dozen years ago, fiduciaries might have felt comfortable choosing a TDF family offered by a reputable provider. This is no longer the case.... This white paper analyzes [plan sponsor fiduciary] responsibilities for participant-directed 401(k) plans and explains how the Target Date Compass helps fiduciaries meet or exceed their legal obligations by giving them a mechanism to: [1] prudently evaluate the suitability of the TDF families available in the marketplace ... and [2] assist the fiduciaries in prudently selecting a particular TDF family that meets the needs of the plan and its participants." (Fred Reish and Bruce Ashton, for J.P. Morgan Asset Management)  

Supreme Court Considering Fiduciary Responsibility for 401(k) Plan Company Stock Funds and Other Employee Stock Ownership Plans (PDF)
"[T]he Supreme Court received a total of 12 briefs in the case.... The briefs appeared to agree on one point only: that a stock price drop by itself is insufficient proof of a breach of fiduciary duty.... [L]ittle was said during the argument about the dilemma of fiduciaries at risk for dismantling a company stock fund too early as opposed to late. And the Justices gave scant attention to the question of whether a presumption of prudence, if sustained, applies at the beginning of a case or should only be considered after a full record has been developed. This omission was surprising since it was the different views in the lower courts on this particular point that was central to the Court's decision to hear the case in the first place." [Fifth Third Bancorp v. Dudenhoeffer petition for certiorari filed Dec. 2012] (Arthur J. Gallagher & Co.)  

SEC Hits Utah-Based Firm and Its Founder with Fraud Charges
"The basis of the SEC's complaint goes back to 2005, when [Curtis L. DeYoung] and [American Pension Services, Inc.] allegedly solicited investors to open self-directed IRA accounts with APS. He allegedly touted 'genuine self-direction' for people who wanted alternatives to traditional asset classes, namely stocks, bonds and mutual funds, according to the complaint." (InvestmentNews)  


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What Will the IRS Be Looking into Next?
"The agency is initiating a defaulted loan project under its Learn/Educate/Self-Correct/Enforce (LESE) program ... [Other] future projects by the IRS will include a late corrective distribution project under its Learn/Educate/Self-Correct/Enforce (LESE) program, and projects for 401(k) plans with a Roth feature, small employers with multiple plans, and non-qualified 401(k)s under its Employee Plans Compliance Unit (EPCU)." (planadviser)  

Is the Four Percent Rule Still Relevant for Retirees?
"Perhaps the safe number is now 3.5 or 2.8 percent. Here are a few other reasons the 4 percent rule might not work for you: You have an atypical investment allocation.... You have set aside a big cash pile.... Taxes will make a big difference.... Investment expenses will eat into the returns.... Making a one-time big purchase that violates the withdrawal rules will cause havoc... You want to withdraw more in the early years and dial it back in the later years... A pension or annuity without inflation adjustments makes the math more complicated." (U.S.News & World Report)  

Lifetime Income Scores: Assessment of Retirement Preparedness (PDF)
"For the second year in a row, working Americans are on track to replace 61% of their household income in retirement. The significant rise in equity markets in 2013 did not raise the [lifetime income score] for everyone, as cash and bond allocations remain high in many retirement portfolios. Deferring 10% or more to a workplace savings plan and using a financial advisor continue to have a major impact on retirement preparedness. Plan eligibility, participation, and auto-plan features continue to be core elements of successful retirement planning for most American workers." (Putnam Investments)  

District Court Rules That Church Hospitals Cannot Establish Non-ERISA Church Plans (PDF)
"No doubt, plaintiffs' counsel will likely rely on these two cases as persuasive authority in order to convince other judges to rule in their favor. However, given the judges' narrow reading of the statute, the factual differences of each particular case, and the weight of federal agency and court authority against these two judges' opinions, it is still too early to tell the import of these district judges' decisions." [Kaplan v. Saint Peter's Healthcare System, No. 13-2941 (D.N.J. Mar. 31, 2014)] (Groom Law Group)  

Do State and Local Pensions Lock in Mid-Career Employees?
"State and local pension plans often allow employees who have completed 25 or 30 years of service to collect benefits regardless of their age, instead of waiting until they reach their plan's normal retirement age. The lifetime value of their pension surges when they qualify for early benefits.... [On] average, half the benefits employees have accumulated by their early 50s or late 40s are earned from a single year of work. These patterns create strong incentives for mid-career workers to remain on the payroll until they realize these windfalls, including those ill-suited for their jobs." (Urban Institute)  

How Will State and County Government Employees Fare under Kentucky's New Cash Balance Pension Plan?
"Employees who join the government payroll at relatively young ages and remain for no more than 25 years will accumulate more benefits in the cash balance plan than the traditional plan, while many of those with more years of service and hired at older ages will accumulate less. More than half of employees hired in 2014 who complete at least five years of service will fare better in the cash balance plan, which distributes benefits more evenly across the workforce." (Urban Institute)  

Jacksonville to Start Pension Reform Talks with Public Meetings
"The sessions are slated to be in a City Hall conference room, a turnabout from last year's talks that took place in federal court-ordered mediation sessions that weren't open to the public.... Neither the city nor the Police and Fire Pension Fund asked U.S. District Judge Marcia Morales Howard to convene more federal mediation sessions." (The Florida Times-Union)  

[Opinion]

Is a Gutted Fiduciary in Our Future?
"Dodd-Frank never authorized the SEC staff to study whether B/Ds (along with RIAs) should be subject to a 'uniform' or 'harmonized' fiduciary standard of conduct but rather, as noted, whether B/Ds should become subject to the best interests fiduciary standard of conduct in accordance with the '40 Act when providing personalized investment advice about securities to their retail customers.... The consequence of the SEC staff's recommendations is nothing less than a wholesale gutting of the fiduciary standard." (W. Scott Simon, for Morningstar Advisor)  

[Opinion]

The Real Retirement Crisis
"The crisis is that the economic collapse that started in 2007, triggered by fraudulent and risky financial schemes, wiped out many Americans' personal savings and decimated many state and city pension investments.... The crisis is that the median retirement savings for all working-age households -- according to the Federal Reserve -- is $3,000, and only $12,000 for those near retirement. And that retirement insecurity is made worse by state-sponsored pension theft in places like Illinois, where public employees are being robbed of pension funds they earned and contributed to over decades of public service." (The Huffington Post)  

Benefits in General; Executive Compensation

Illinois District Court Dismisses Claim for Disgorgement of Profits (PDF)
"Numerous courts in this district agree that a plaintiff cannot pursue a claim under ERISA Section 502(a)(3) if a claim for benefits is available under Section 502(a)(1)(B).... The Court further notes that the Sixth Circuit recently granted rehearing en banc and vacated a panel opinion upholding the district court's award of disgorged profits of $3.8 million under Section 502(a)(3). [Rochow v. LINA] ... Sexton's attempt to characterize the disgorgement of profits in this case as an equitable remedy separate and distinct from the remedy available under Section 502(a)(1)(B) is unavailing.... 'ERISA specifically provides a remedy for breaches of fiduciary duty with respect to the interpretation of plan documents and the payment of claims.' ... Because Section 502(a)(1)(B) provides Sexton with her remedy, the Court discerns no basis for allowing her to proceed with Count II." [Sexton v. Standard Insurance Co., No: 13-C-77 (N.D. Ill. Apr. 30, 2014)] (U.S. District Court for the Northern District of Illinois)  

Sixth Circuit Rules That 'Clear Notice' Standard Should Apply When Determining Whether to Impose ERISA Penalty for Failing to Furnish a Document Upon Request
"[The employee's] counsel ... broadly phrased the request as one for 'all documents comprising the administrative record and/or supporting Nationwide's decision.' The Court said that, although such language would not pass the clear-notice test for most of the documents identified in section 104(b)(4), one is hard-pressed to believe that the BAC should not have known that the accidental-death policy was the key document supporting its decision to deny Nicole's claim." [Cultrona v. Nationwide Life Ins. Co., Nos. 13-3558/3585 (6th Cir. Apr. 9, 2014)] (Cary Kane ERISA Lawyer Blog)  

You Have No Class! Spotting Lack of Commonality and Typicality In ERISA Class Actions
"ERISA actions often are ripe for class certification because ERISA plans, by definition, each apply to a class of people. But before you grab your wallet when faced with a putative ERISA class action, consider this admittedly partial, but helpful, list on how to attack a certification motion[.]" (Seyfarth Shaw LLP)  

Principles and Elements of Effective Executive Compensation Design
"[This article provides] a detailed and flexible framework of recommendations and considerations for pay program design that can help EC practitioners, corporate management and boards make better decisions about what -- and how -- to pay their top executives. The principles touch on virtually all aspects of EC and the process by which pay decisions are made -- from the overarching pay philosophy, to the art of peer group selection and benchmarking, to the fundamentals of performance-based pay program design and beyond." (Towers Watson)  

Press Releases

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David Rhett Baker, J.D., Editor and Publisher
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