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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]
IRS Adds New Condition for Resolving Late Form 5500 Filing Penalties
"The DOL permits a plan sponsor of an employee benefit plan (welfare or retirement) to resolve a delinquent filing of a Form 5500 under the Delinquent Filer Voluntary Compliance program (DFVC).... In Notice 2014-35, the IRS announced an additional condition a plan sponsor must satisfy to qualify for the waiver of the IRS penalties.... A plan seeking to qualify for relief from the IRS late filing penalties must file the Form 8955-SSA on paper (i.e., not electronically) with the IRS by the later of [1] 30 days following the DFVC filing, or [2] December 31, 2014."
(SunGard Relius)
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[Advert.]
Retirement Education, Plan Documents, and more.
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[Guidance Overview]
Death, Taxes and ... ERISA Disclosure Regulations?
"[U]nless revised or clarified, the proposed amendment would presumably prohibit a covered service provider from including the guide as an exhibit or attachment to another document (e.g., as an exhibit or attachment to a subscription agreement or an investment management agreement).... [It] is not clear whether the guide requirement will only apply on a prospective basis (i.e., to contracts or arrangements entered into, renewed or extended after the effective date of the finalized amendment) or to existing arrangements as well. Accordingly, it is possible that a covered service provider would need to deliver a guide even in situations where it had already sent out 408(b)(2) disclosures in compliance with the final regulations."
(Proskauer's ERISA Practice Center)
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Fiduciary Committee Best Practices: The Basics
"The key fiduciary responsibility requirements of ERISA do not vary based on the size or sophistication of the employer.... [1] Establish a committee.... Let the role and responsibilities of the committee guide your choices for committee members.... [2] [A]dopt a charter to structure its operations.... [3] Adopt an investment policy statement ... written in a way that committee members understand. [4] Use experts (as needed)....[5] Keep minutes."
(Verrill Dana LLP)
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IRS Resource Page for Employers: 'Lots of Benefits -- When You Set Up an Employee Retirement Plan'
"Did You Know... that retirement can last for 30 years or more? you might need up to 80% of your current annual income to retire comfortably? the average monthly benefit paid by the Social Security Administration is $1,200? ... A retirement plan has lots of benefits for you, your business and your employees. Retirement plans allow you to invest now for financial security when you and your employees retire. As a bonus, you and your employees get significant tax advantages and other incentives."
(Internal Revenue Service [IRS])
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How Small Business 401(k) Plan Clients Use Low-Cost Investments
"[The authors' poll] found that low-cost index investments (including mutual funds, ETFs and indexed target date funds) account for approximately 50% of plan assets for those plans making investment choices in 2011, 57% for 2012 and 66% for plans choosing investments in 2013. Conventional wisdom holds that small business 401k plans are less sophisticated and pay higher fees in general because of a lack of 'buying power.' A growing number of [plans] challenge this belief, holding low-cost investments with annual expenses that are often less than 20 bps (0.20%)."
(Employee Fiduciary)
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The Top Ten Roth Conversion Mistakes
"[1] Making a contribution when you are not eligible ... [2] Contributing more than the annual limit... [3] Funds being moved from an IRA to an IRA get put into a Roth IRA instead ... [4] Doing a 'back-door' Roth conversion and not using the pro-rata rule ... [5] Incorrect valuation of assets."
(The Slott Report)
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New York's Pension 'Smoothing' May Short-Change Retirement Fund
"[L]ocal and state authorities that need money are permitted to either defer making pension payments for as long as 12 years, or borrow directly from the pension fund. So far about $3.3 billion in pension payments has been deferred, including $1.4 billion in 2013.... [T]he fund stands to have about $735 million less in its coffers in 2024 based on the $3.3 billion that's already been deferred, an amount that will rise in coming years as the program goes on."
(Reuters)
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Three Approaches to Income-Replacement Ratios in Retirement
"It's fruitless to seek the correct income-replacement ratio, as individual circumstances vary broadly. However, one can seek a reasonable starting point.... Low earners tend to have income-replacement ratios from 70% to 80%, while high earners are mostly from 60% to 70% (with a few lower estimates)."
(John Rekenthaler, for Morningstar Advisor)
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Employee Ownership Update for May 15, 2014
Topics include: Delta Airlines Wins Stock-Drop Lawsuit; Australian Government Delays Employee Ownership Reforms; DOL Has "Slowed Pace" In Drafting Fiduciary Rules; List of 10 Largest Public Company ESOPs.
(National Center for Employee Ownership [NCEO])
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Would Lifetime Income Estimates Lead to Behavior Change? (PDF)
"[M]ore than half (58 percent) of workers who were currently contributing to an employer plan found the estimated monthly income was in line with their expectations, and perhaps as a result, relatively few (only 17 percent of the respondents) said they would increase their retirement savings contributions or anticipated retirement age as a result of hearing the monthly income estimate. However, of those responding that their illustrated value was much less or somewhat less than expected, more than a third (35 percent) indicated they would increase their contributions."
(Employee Benefit Research Institute [EBRI])
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[Opinion]
Should Everyone Join the Same Retirement Plan as Members of Congress?
"While Rubio's effort to improve retirement savings among American workers furthers an important discussion on this national issue, the proposal to expand the size and role of the TSP deserves closer scrutiny.... BlackRock, the largest money manager in terms of worldwide assets, currently manages all four of TSP's index funds. Even if only one out of 10 eligible workers under Rubio's plan were to participate in the TSP, it would nearly triple the size of what is already the largest defined-contribution plan in the nation."
(The Heritage Foundation)
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Benefits in General; Executive Compensation
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[Guidance Overview]
Health Insurance Premium Payments by Qualified Retirement Plans are Taxable
"[T]he final regulations include an important exception to the general rule. The payments a qualified plan makes to an insurance company for disability insurance premiums are not treated as taxable distributions under Code Section 402(a), and instead constitute incidental accident or health insurance, but only if [two] conditions are satisfied ... If these conditions are not met, the premium payments made to provide disability benefits to the employee would be treated as taxable distributions to the employee under Code Section 402(a) and benefits paid to the plan would constitute contributions."
(Ice Miller LLP)
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Restrictive Covenants in Stock Award Agreements: Important Lessons for Employees Who Receive Stock Awards
"The consideration of a stock award is not diminished or made illusory by the company's right to terminate the employee at any time for any reason after making the award, which would cause the employee to forfeit the award.... Just because one award agreement does not impose restrictive covenants does not mean that the next one will not ... [N]o matter how solid the former employee's promises not to disclose confidential information and how pure his/her intentions not to disclose confidential information, the former employee's knowledge of the former employer is so extensive that such disclosure would be inevitable." [Newell Rubbermaid Inc. v. Storm, No. 9398-VCN (Del. Ch. Mar. 27, 2014)]
(Winston & Strawn LLP)
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IRS Begins Targeted Examinations of Large Employers for Section 409A Compliance
"Prior IRS audit activity has focused on key section 409A problem areas, such as: [1] Impermissible payment triggers (e.g., signing of a release of claims); [2] Six-month delay and identifying 'specified employees'; [3] Faulty reliance on short-term deferral exception; [4] Bad 'good reason' definition; [5] Lack of 409A 'savings clause'; [6] Accelerated vesting of equity and cash awards on 'retirement'; and [7] Application of the 409A 'substitution rule' (particularly in severance situations)."
(Kilpatrick Townsend)
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Press Releases
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