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May 22, 2014          Get Health & Welfare News  |  Advertise
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Employee Benefits Jobs

Part Time On Call Retirement Planning Consultant
Transamerica Retirement Solutions
in AR, CA, HI, IL, MI, MO, NJ, NY, TN, UT

Marketing & Communication Specialist
Burke Group
in NY

401(k) Relationship Manager
LegacyAdvisors, LLC
in PA

Plan Documents Manager
Primark Benefits
in CA

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Webcasts and Conferences

Back to the Future: The Return of Fixed Annuities in Defined Contribution Retirement Plans
May 28, 2014 WEBCAST
(Multnomah Group)

Roadmap to Understanding What Employers and Plans Must Report to the IRS and Employees to Comply with the ACA
June 3, 2014 WEBCAST
(American Bar Association [ABA])

Consumer Choices for Self-Directed Health Care
June 11, 2014 in TX
(Worldwide Employee Benefits Network [WEB] - Houston Chapter)

2014 Ethics Case Studies Two
June 19, 2014 WEBCAST
(McKay Hochman Co., Inc.)

Health Benefits Laws Compliance Assistance Seminar
June 24, 2014 in NY
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Moving from Defined Benefit to Defined Contribution: How Exchanges, HSAs and Technology Are Accelerating a Health Care Shift
June 26, 2014 WEBCAST
(Employee Benefit News)

ACO Summit: West
August 13, 2014 in CA
(Opal Events)

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]

As Clear as Mud? The 403(b) Plan Termination Rule (PDF)
"All a plan sponsor needs to do to complete the process is: [1] Establish a plan termination date; [2] Cease contributions; [2] Fully vest any non-vested employer contributions (elective deferrals are always 100% vested); and [4] Authorize the distribution of benefits as soon as administratively practical. Sound simple? While the first three steps are straightforward, it is in last step that the process begins to break down." (Cammack Retirement Group)  


[Advert.]

NIPA Membership Increases Your Productivity & Grows Your Revenue

Sponsored by NIPA [National Institute of Pension Administrators]

NIPA serves TPA business owners by creating environments with world-class education, best practice exchanges, and deep peer-to-peer relationships. Our members' revenue grows dramatically, processes are streamlined and productivity increases.



[Guidance Overview]

Plan-to-Plan Rollover Guidance Issued by IRS
"Rev. Rul. 2014-9 may simplify the direct rollover process for some participants and sponsors. The processes outlined in it are simpler than current practice for some plans. A fundamental problem, however, remains: qualified plan sponsors have to make a determination with respect to incoming rollovers -- that they represent only qualified plan money -- that does not have to be made with respect to a rollover to an IRA." (October Three Consulting)  

Eighth Circuit Denies Both Rehearing Petitions in Tussey v. ABB
"Without explanation, both the original panel of three judges and the court en banc, meaning all active judges of the 8th Circuit, declined to rehear the case.... If the Supreme Court declines to hear either party's appeal in Tussey, then the case will ultimately be remanded back to the district court to re-decide the investment claims under an abuse of discretion standard. And in that scenario, the following issues will be considered final regardless of the remand: [1] Fidelity will have succeeded in defeating all claims against it, and [2] ABB will have have been found liable for paying excessive recordkeeping fees to Fidelity." [Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014)] (The Lowenbaum Partnership and FRA PlanTools)  

ERISA Issues Related to 'In-House' Plan Use of Proprietary Products and Services
"[T]he first two sections of [this article] provide an overview of the principal ERISA issues that arise in connection with the use of proprietary products and services, and highlight the prohibited transaction exemptions that may be utilized to avoid violations of ERISA's prohibited transaction rules. [The authors] then address the major themes in the litigation related to proprietary products and services. Finally, [they] describe strategies and approaches for complying with ERISA and mitigating litigation risk when using proprietary products and services. [An accompanying] chart identifies the lawsuits that have been filed to date, describes the claims that have been asserted in the lawsuits, and summarizes the substantive court rulings and the procedural status of the cases." (Groom Law Group)  

Penalty Relief Pilot for Small Retirement Plans Begins in June (PDF)
"The [IRS] will begin a one-year pilot program in June to help small businesses with retirement plans that owe penalties for not filing reporting documents. By filing current and prior year forms during this pilot program, they can avoid penalties. The IRS is reaching out to certain small businesses that maintain retirement plans and may have been unaware that they had a filing requirement." (Internal Revenue Service [IRS])  


[Advert.]

Learn, Network and Sell at the SPARK National Conference

Sponsored by SPARK

Join senior executives from leading retirement services firms for unequaled networking, educational and sales opportunities. Gain insights into the latest market trends, business strategies, regulatory and legislative issues, and product developments. June 15-17. Register now.



Could the myRA Be the Beginning of the End of the 401(k)?
"[U]nlike a pension plan that was paid in addition to an employee's salary, the defined contribution plan often amounts to little more than an employee saving his/her own money in the first place, perhaps plus a moderate match that is losing its purpose as a behavior incentive when more and more plans include automatic enrollment and automatic escalation of contributions in future years.... [If] employers simply paid a greater salary (with a raise equivalent to what the match would have been) and let employees choose whether to save, is there really any need for a 401(k) plan at all? And with the MyRA coming soon ... could we be witnessing the beginning of the end of the 401(k) plan altogether?" (Michael Kitces in Nerd's Eye View)  

Only About 1 in 4 Workers Who Obtained Professional Investment Advice Followed All of It (PDF)
"The reasons most often offered for not following all of the advice include: [1] Not trusting the advice (34 percent of workers and 31 percent of retirees). [2] Having other ideas or other plans or goals (16 percent of workers and 29 percent of retirees). [3] Not being able to afford it (20 percent of workers and 6 percent of retirees)." (Employee Benefit Research Institute [EBRI])  

After a Law Paves the Way, No Rush to Roth
"As of year-end 2013, more than half (52%) of Vanguard-recordkept defined contribution (DC) plans offered Roth elective deferrals -- but only 8% of plans offered Roth in-plan conversions. Participant statistics show a similar story. Less than 1% (0.3%) of participants with access to the Roth in-plan conversion option converted assets between 2010 and 2013.... [One strategy] for participants is tax diversification -- holding both pre-tax and Roth balances as a hedge against changes in future tax rates." (Vanguard)  

Optimize the Pension Service Delivery Model
"Pension administration is optimized when consistency and automation is maximized. If two employees each request a pension distribution, the process by which they receive their request should be the same regardless of their personal differences. This is not always the case though if there are differences between the employees such as gaps in historical data or a grandfathered benefit that is not automated. In these situations, technology cannot be fully utilized relying instead on manual steps that cost both time and money." (Findley Davies)  

Internal Controls, Good Communications Are Key to Reducing Retirement Plan Errors
"The IRS wants sponsors to find and fix plan errors on their own, put in procedures to prevent further errors and document the procedures they have taken ... If a sponsor can document that it has addressed its plan's errors internally and has documented the process by which it tackled those problems, the IRS may shift its focus to other plans[.]" (Bloomberg BNA)  

Qualified Plans Should Not Hope to Get a Qualified Audit Opinion
"New accounting pronouncements have changed the phraseology used to indicate the plan's financial statements are not materially misstated from 'unqualified opinion' to 'unmodified opinion.' Unfortunately, they did not take the extra step to rename the 'qualified opinion' as a 'modified opinion,' so the changes only eliminated half the problem." (Belfint Lyons & Shuman, CPAs)  

CalPERS Acts to Contain Rate Increases for Small Employers
"The new actuarial policies create significant changes to the risk pooling structures by: [1] Combining 12 risk pools into two, one for all miscellaneous plans and one for all safety plans; and [2] Changing the mechanisms of how the employer's unfunded liability is determined and collected, and what portion of their contributions will be used first to pay down these unfunded liability obligations." (CalPERS)  

NAFI Plans: Federal Retirement Programs Not Funded by the Government
"Non-Appropriated Fund Instrumentalities (NAFIs)... are part of the federal government but they do not receive funding from Congress.... NAFI plans are not covered by the retirement systems for federal employees or by [ERISA], the federal law that covers most retirement plans offered by private-sector employers. As a result, NAFI plans may not have all of the features that most private-sector employees have come to expect from their retirement plans.... Since the Department of Labor has oversight of ERISA plans only, it cannot assist people in NAFI plans." (Pension Rights Center)  

[Opinion]

Rating Rubio's Retirement Policy Recommendations
"There will be winners and losers with each proposed change. However, it appears the majority of Americans impacted would experience meaningful, positive change." (Lawton Retirement Plan Consultants)  

Benefits in General; Executive Compensation

Is Double Recovery Coming to an ERISA Suit Near You? (PDF)
"Since 1996, it has been generally understood that equitable relief under ERISA Section 502(a)(3) is not appropriate if ERISA otherwise provides a specific remedy.... Under the Rochow approach, however, every single benefits claim, no matter how routine, would come with an additional claim for disgorgement. Furthermore, applying the Rochow majority's disgorgement calculation methodology could result in multimillion dollar awards to many, if not most claimants, who can establish that benefits were improperly withheld." [Rochow v. Life Insurance Company of America, No. 12-2074 (6th Cir. Dec. 6, 2013); rehearing granted Feb. 19, 2014, oral argument scheduled for June 18, 2014] (Alston & Bird, LLP)  

The Tradeoff Between Health and Wealth in Retirement Decisions
"This paper uses administrative data from the California Department of Education to estimate the rate at which individuals' trade off post-retirement health insurance benefits for a longer retirement and for retirement income benefits.... The results imply that individuals will delay retirement to become eligible for retiree health benefits, but that the effect is small relative to the effect of pension benefits on retirement timing." (Center for Retirement Research at Boston College)  

New IRS Guidance on Retiree Health Benefits Funded Through Captive Insurance Subsidiaries
"While [Rev. Rul. 2014-15] provides favorable tax precedent, it does not address all ERISA implications. In particular, it is a prohibited transaction to use plan assets to purchase insurance from a captive insurance company in the employer's controlled group and no statutory or class exemption is available. Accordingly, an individual prohibited transaction exemption must be obtained to avoid excise taxes or Department of Labor penalties." (Benefits Bryan Cave)  

Do Some Clawback Policies Trigger Variable Stock Plan Accounting?
"Recent memos from two of the big four accounting firms suggest that companies must be extremely careful that their clawback policies do not subject their equity grants to variable accounting treatment.... This could have the unintended consequence of discouraging companies from offering balanced compensation programs that include equity grants for fear of the potential for an unlimited compensation expense due to stock price increases down the road. This is not to say that Dodd-Frank clawbacks will be neutral in their effect on executive pay programs, but that forthcoming SEC clawback regulations should not drive significant changes in the current executive pay model." (Towers Watson)  

Press Releases

CalPERS Board Approves Pension Beliefs to Guide Pension Fund Practices and Decisions
CalPERS [California Public Employees' Retirement System]

PBGC to Pay Benefits for Interfaith Medical Center Employees
PBGC [Pension Benefit Guaranty Corporation]

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