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May 7, 2014          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Compensation Analyst
Western & Southern Financial Group
in OH

Human Resources Coordinator
Western & Southern Financial Group
in OH

Retirement Planning Consultant
Transamerica Retirement Solutions
in WI

Technical Editor - Tax Specialist [Qualified Retirement Plans]
Thomson Reuters
in TX

Sr. Retirement Compliance
National Rural Electric Cooperative Association [NRECA]
in VA

Enrolled Actuary DB/Cash Balance Administrator
Phoenix Arizona TPA
in AZ, IL

Benefits Administrator
Benefit Outsourcing Solutions
in MI

Pension Analyst
Hooker & Holcombe, Inc.
in CT

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Webcasts and Conferences

How to Launch a Successful Financial Wellness Program
May 15, 2014 WEBCAST
(International Foundation of Employee Benefit Plans)

401(k) Plan Workshop 2014 - Dallas
June 4, 2014 in TX
(SunGard Relius)

PPA Pre-Approved Plans Workshop - Corbel Document - Portland
June 4, 2014 in OR
(SunGard Relius)

Retirement Plan Boot Camp
June 5, 2014 in PA
(PEBA [Penjerdel Employee Benefits and Compensation Association])

The Journey to High-Quality Health Care: New Business Models Emerge
June 10, 2014 WEBCAST
(Deloitte)

One-Day Healthcare Reform Training & Certification Event
June 17, 2014 in FL
(Constangy, Brooks & Smith, LLP)

Fiduciary Governance
June 25, 2014 in IL
(Worldwide Employee Benefits Network [WEB] - Chicago Downtown Chapter )

401[k] Plan Duties and Liability Update: What You Need to Know and Do
July 9, 2014 WEBCAST
(Lorman Education Services)

ACOPA Actuarial Symposium
August 15, 2014 in IL
(ASPPA College of Pension Actuaries [ACOPA])

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]

Checklist: Qualified Plan Issues Raised by the Windsor Decision and IRS Notice 2014-19
"[I]f you go through the checklist and are confident that you are in compliance with the ramifications of the Windsor decision, think about some 'what if' scenarios. What if benefit payments which began on or after June 26, 2013 and/or September 16, 2013 (for purposes of the state of celebration rules) were not administered correctly due to the retroactive nature of the guidance? ... What if a same-gender married partner died on or after June 26 but before September 16?" (ERISAdiagnostics)  


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[Guidance Overview]

ERISA Fee Disclosures in the Marketplace
"The DOL's position is that a provider's compensation is presumptively unreasonable, and the hiring fiduciaries have engaged in a prohibited transaction if they don't receive the required disclosures and neglect to report the failure to the DOL ... The focus groups should enable the DOL to: [1] Target areas where there are deficiencies in fiduciary compliance. [2] Evaluate whether a mandated format of some sort would help fiduciaries of small plans find the information more readily by putting it in the same place in each provider's disclosure." (Practical Law Company)  

[Guidance Overview]

IRS Relaxes Rollover Rules for Receiving Plans -- Or Does It?
"While Revenue Ruling 2014-9 should give plan administrators welcome relief about accepting rollovers, the revised Form 5310 instructions should also give them pause. Hopefully, the IRS will not enforce the requirement to submit proof that a sending plan is a qualified plan or IRA when processing Forms 5310. If it does, it appears to be another attempt by the IRS to discourage determination letter requests when a plan is terminated[.]" (Miller Johnson)  

Limited Scope Plan Audits: Advanced Issues
"In a limited scope audit, the auditor is still required to test all significant audit areas, such as contributions, benefit payments, participant loan processing, hardship distributions, participant data, eligibility to all plan features, and payroll. The extent of the audit procedures applied to each plan feature will vary from plan to plan, depending on the risk level assessed by the auditor using walk-through procedures for the plan processes, and examination of SOC 1 reports on the effectiveness of controls at service organizations." (Belfint Lyons & Shuman, CPAs)  

Second Unfavorable Court Ruling on Church Plan Status
"The Saint Peter's and Dignity Health decisions run counter to more than 30 years of regulatory and judicial precedent, and signal a worrisome trend. These decisions could trigger additional lawsuits against other sponsors that rely on the alternative definition of 'church plan' under ERISA. Potentially affected sponsors should determine if there are ways to strengthen church plan status and/or whether electing ERISA coverage makes sense." [Kaplan v. Saint Peter's Healthcare System, No. 13-2941 (D.N.J. Mar. 31, 2014)] (Towers Watson)  

The Small Business 401(k) Plan in 2014: Redefining Conventional Wisdom
"[B]usiness owners are beginning to equate higher fees with a willingness by some investment managers to court high-risk high-reward investments.... Plan participants understand that an appropriate asset allocation is key to achieving investment goals.... [T]he idea of a nest egg makes a growing number of investors planning for retirement down right ornery and protective regarding how they invest their retirement savings.... Investments appear to be moving toward commoditization, and limited ability for providers to add value using traditional pricing strategies will be pressured." (Employee Fiduciary)  

Retirement Income Security Prospects of American Workers: A Critique of Recent Assessments
"Several recent assessments suggest that the majority of U.S. workers are at risk of having inadequate resources to maintain their work-life standards of living in retirement. These assessments are often based on models that fail to reflect patterns of income, consumption and savings that vary over workers' life cycles.... Although clearly some workers are not saving sufficiently to maintain their standards of living throughout retirement, the situation is less dire than a number of studies have suggested." (Gaobo Pang and Sylvester J. Schieber via SSRN)  

Pension Finance Watch, April 2014
"Bond yields continued their recent pattern of decline, while equity returns were mildly positive in April. Liability values increased more than assets and thus the Towers Watson Pension Index dropped 1.2% for the month, to 74.3." (Towers Watson)  

Early Withdrawals from 401(k) Plans Replace Homes as American Piggy Bank
"Adjusted for inflation, the government collects 37 percent more money from early-withdrawal penalties than it did in 2003. Meanwhile, the amount of home-equity loans outstanding was $704 billion in 2013, down 38 percent from the 2007 peak[.]" (Bloomberg)  

State and Local Government Spending on Public Employee Retirement Systems (PDF)
"On a nationwide basis, pension contributions made by state and local governments account for roughly 3.7 percent of direct general spending.... [S]pending levels for states and cities do vary ... from just over one percent to more than six percent.... One study estimates that total required spending on pensions could consume as much as 13 percent of one state 's budget[.]" (National Association of State Retirement Administrators [NASRA])  

The Vanishing Defined Benefit Pension and Its Discontents
"Corporate America has been running away from defined-benefit pensions for decades, and many experts see that as a key cause of our retirement security crisis. Pensions provide a guaranteed lifetime income stream, while owners of 401(k)s and individual retirement accounts take on two impossible-to-control risks: stock market volatility and uncertainty about their own longevity. But were traditional pensions ever really the golden goose of American retirement? And do workers really value them as highly as policy gurus think they should?" (Reuters)  

American Airlines Employees Grounded from Trading 401(k) Funds
"From 2011 to 2013, some 1,300 [American Airlines (AA)] employees were barred from trading into T. Rowe funds in their 401(k) plans -- some for a year, some for life.... [Is] it really all that wrong that these airline workers took their plans off autopilot in hope of getting a boost? The fund companies argue that it is, since the kind of trading they're doing can hurt long-term investors ... Meanwhile, subscribers contend they should be able to invest any way they please. But they're missing a more important point: Frequent trading probably won't give them the lift they're hoping for." (CNNMoney.com)  

Fewer Americans Plan to Rely on 401(k) Plans in Retirement
"Before the Great Recession, most Americans said they planned to rely on their 401(k), IRA, Keogh or other retirement savings when they left the workforce ... Today, only 48% say they would use these savings in retirement, and numbers have yet to rebound to where they were before the 2008 sell off. Respondents said they would be using IRAs, CDs, savings accounts and more, in addition to their 401(k) plans." (Fox Business)  

[Opinion]

The Big Alternatives Gamble?
"I am not against alternative investments or paying fees to alternative investment managers who are performing exceptionally well. I just think it's high time institutional investors get beyond the hedge fund curse and slash fees wherever they can, especially to large, lazy asset gatherers collecting billions in management fees while ignoring performance altogether." (Pension Pulse)  

Benefits in General; Executive Compensation

Compensation Costs for Private Industry Workers Up 1.7 Percent in Year Ending March 2014
"Wages and salaries increased 1.7 percent for the current 12-month period ending March 2014, unchanged from March 2013. The increase in the cost of benefits was 1.8 percent for the 12-month period ending March 2014. In March 2013, the increase in the cost of benefits was 2.0 percent." (U.S. Bureau of Labor Statistics)  

Evaluating Total Unfunded Public Employee Retirement Liabilities in 20 California Counties
"[T]hese 20 counties combined have a population of 29.3 million, constituting 77% of Californians. Their total unfunded pension liability ... is $37.2 billion. Their total unfunded retirement liabilities, ... including pension obligations bonds and unfunded healthcare liabilities, is $72.3 billion. As a percentage, their total funded ratio just for pensions (assets as a percent of liabilities) is 74%. Their total retirement funding percentage, taking into account pensions, healthcare, and pension obligation bonds, is only 60%. This total obligation, $7,369 per household vs. $3,932 if you only include pension funds, is a daunting amount." (California Policy Center)  

Why Commonality is Relatively Easy to Prove in ERISA Class Actions
"[In] general, breaches of fiduciary duty related to an ERISA plan affect all participants and beneficiaries in the same manner ... The only real trick in this regard is for the plaintiffs to make sure they account for any aspects of the breach in question that might render only some participants (for instance, those in the plan during a certain time period) and not others subject to the violation, and to then draw appropriate lines around the makeup of the class so as to laser out any plan participants who were not affected and harmed by the particular conduct in question. Do this, and commonality exists." (Stephen Rosenberg of The McCormack Firm, LLC)  

Update on the Simon Property Group 162(m)/Excessive Compensation Lawsuit
"Last year ... a disappointing ruling ... [was issued by] the Delaware Chancery Court.... [T]he transcript of the bench ruling, the Court's interpretation of the facts, and its willful refusal to distinguish between base salary and a time-vested RSU award may suggest a shift in some Delaware courts' attitudes toward executive compensation lawsuits. Apparently, the parties recently settled the case, with the following commitments by the company: ..." (Winston & Strawn LLP)  

Series of Limited Scope 409A Audits Underway
"The IRS has launched an audit initiative aimed at compliance with the rules for nonqualified deferred compensation plans under Code section 409A....The IRS will assess what further steps, if any, to take after the results of these audits are in. While IRS agents have sometimes raised section 409A issues on audits, this appears to be the first systematic IRS initiative to review compliance with the complex regulatory scheme under Code section 409A.... [This] article [outlines] some actions that employers may consider to prepare for a potential audit on section 409A issues." (Groom Law Group)  

Press Releases

TRA Appoints a New National Sales Manager
The Retirement Advantage [TRA]

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