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Employee Benefits Jobs
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Hand-picked links to the web's best news articles,
official guidance, jobs, webcasts and more.
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'Church Plan' Challengers in Colorado May Win
"Siding with two federal courts and disagreeing with a third, Magistrate Judge Kristen L. Mix's July 9 report and recommendation looked to the 'unambiguous language' of [ERISA's] church plan exemption to conclude that the plan wasn't a church plan because it wasn't 'established and maintained by a church.' The magistrate also ... rejected Catholic Health's argument that it was entitled to a 'correction period' in which to satisfy the requirements of the church plan exemption, finding that such a correction period applied only to plans established by churches." [Medina v. Catholic Health Initiatives, No. 1:13-cv-01249-REB-KLM (D. Colo. July 9, 2014)]
(Bloomberg BNA)
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The Moench Presumption Is Dead; Long Live the Dudenhoeffer Presumption
"The Court noted that ERISA fiduciaries have little hope of outperforming the market, and so may, as a general matter, prudently rely on market price. Under this standard, is it even possible to plead a breach of fiduciary prudence as it relates to investment decisions involving a publicly-traded company stock fund? ... Unlike the Moench presumption, which was rebuttable, the Dudenhoeffer presumption appears to be virtually irrebuttable. To our brethren in the plaintiffs' bar who make their living handling stock drop cases, we offer the following words of encouragement: Good luck with that." [Fifth Third Bancorp v. Dudenhoeffer, No. 12-751 (U.S. June 25, 2014)]
(Benefits Bryan Cave)
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Recent Fiduciary and Tax Decisions Have Special Importance to Plan Sponsors and Fiduciaries
12 pages. Excerpt: "First is a discussion of the U.S. Supreme Court's recent decision in Fifth Third Bancorp v. Dudenhoeffer ... Second is an article on breach of fiduciary duty claims due to the payment of excessive mutual fund fees and recordkeeping fees.... Third, the Supreme Court held arbitration clauses enforceable that are linked to class action waivers ... Thus, the risk of class actions could be significantly reduced by having plan participants enter into an arbitration agreement that includes a class action waiver.... Finally, the Supreme Court addressed whether supplemental unemployment benefits, i.e. severance pay, is subject to FICA tax withholding."
(Pillsbury Winthrop Shaw Pittman LLP)
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Practitioners Say QLAC Rules Widen Choices, But Plans May Be Reluctant to Offer Them (PDF)
"Recent final rules on qualifying longevity annuity contracts (QLACs) ... received praise from retirement insiders, but the new guidance doesn't guarantee that the products will be embraced ... Questions remain about whether employer-sponsored plans will be interested in offering them because of possible fiduciary liability, among other issues. In addition, consumers may be cautious to buy them because of the money involved."
(Bloomberg BNA Pension & Benefits Reporter)
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Registered Nurses Are Delaying Retirement
"[T]he size of the RN workforce is particularly sensitive to changes in retirement age, given the large number of baby-boomer RNs now in the workforce.... [In] the period 1969-90, for a given number of RNs working at age fifty, 47 percent were still working at age sixty-two and 9 percent were working at age 69. In contrast, in the period 1991-2012 the proportions were 74 percent at age 62 and 24 percent at age 69. This trend, which largely predates the recent recession, extended nursing careers by 2.5 years after age fifty and increased the 2012 RN workforce by 136,000 people."
(Health Affairs)
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Pogo Stick Retirement Planning for the Younger Generations
"Historically, retirement planning has been likened to a three-legged stool -- consisting of a corporate pension, Social Security and personal savings. Baby boomers saw the pension fade from existence, leaving them to balance on retirement planning stilts. For younger generations, ... it feels like it's all on us. We're left with only a retirement planning pogo stick.... Younger generations should simply expect that we'll be working indefinitely, and, facing that reality, we should labor tirelessly to seek and find the career that doesn't feel like work."
(Forbes)
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Phoenix Pension Reform Will Remain in Effect During Lawsuit
"A county judge Wednesday denied Phoenix police officers an injunction that would have put the city's pension-spiking prohibition on hold while the larger case works its way through court.... Faced with public pressure, the council in May approved new contracts with both police and firefighters that ban the practice known as pension spiking, generally seen as the artificial inflation of a city employee's income toward the end of a career to boost retirement benefits."
(AZCentral)
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Delphi Retirees Impatient with PBGC
"Sen. Sherrod Brown, D-Ohio ... asked Labor Secretary Thomas Perez ... to intervene. 'This delay is unsatisfactory and deeply troubling -- contradicting the PBGC's policy to reach a final determination within 3 years of a plan's termination,' they wrote, asking for 'a clear timetable' from the PBGC and a response from Mr. Perez within a month. Mr. Perez's office declined to comment."
(Pensions & Investments)
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[Advert.]
Transamerica Job Fair - Cincinnati - July 24
The Transamerica Cincinnati Service Center is expanding and hiring experienced professionals in the retirement services industry. We're hosting an onsite Job Fair on Thursday, July 24 from 5pm to 8pm in our West Chester, OH office. Pre-registration to this event is required: click here
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[Opinion]
PBGC: A Four-Letter Word to DB Plan Sponsors
"Seeing PBGC premium levels as unjust, plan sponsors are looking for any way possible to reduce them. Paying lump sums and purchasing annuities are valid considerations to reduce plan size, but analysis shows their impact on premiums for underfunded plans is often minimal (and could even be negative). In the long term, the only way to control premiums is to reduce unfunded liability and keep it from reappearing."
(The Principal Blog)
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[Opinion]
A Proposal to Increase Annuitization of 401(k) Wealth Using Automatic Features
9 slides of a presentation by Bill Gale to the American Academy of Actuaries. Excerpt: "[Bill Gale,] with David C. John, J. Mark Iwry, and Lina Walker, proposed and explained a policy to automatically default 401(k) holders into a partial and temporary annuity.... [In his presentation describing the proposal, Gale] referenced various barriers to market expansion, such as consumer biases and lack of experience converting large cash balances to annual flows. He called for a reframing of retirement income choices and emphasized the need to provide people with information on and experience with periodic retirement payments before asking them to make a long-term commitment."
(The Brookings Institution)
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[Opinion]
The Tricky Gimmick Congress Will Use to Fund Your Highways: Pension Smoothing
"Congress in the past has turned to the [pension smoothing] tactic in dire situations ... because it is pro-employer and a revenue raiser in the short-term. Since the [CBO] scores bills in 10-year windows, supporters of the House and Senate bills to save the Highway Trust Fund can avoid questions about raising deficits in the long-term. It's no one's ideal revenue raiser."
(Time, Inc.)
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Benefits in General; Executive Compensation
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When Did Benefits Become a Burden?
"[A]ccording to the Bureau of Labor Statistics, only 73% of private industry workers who were offered employer-sponsored medical benefits choose to participate, and 64% of all private workers have access to a retirement plan in which 49% of all private workers with or without access participate, for a take-up rate of 76% ... The fact that HR departments are spending more time and resources coupled with the fact that employee benefit plans are not being fully utilized by employees can create a frustrating combination."
(PLANSPONSOR)
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ERISA's Governmental Plan Exemption Applies to Plan of Staffing Agency 'Intertwined' with Government Hospital
"The plan sponsor, a staffing company, was a nonprofit corporation whose sole member was a hospital created by the state of Florida as a 'special taxing district.' The staffing company employed the hospital's entire workforce.... The plan's insurer, seeking to keep the case in federal court, argued that the plan was subject to ERISA because its participants were not state employees. The court disagreed, finding that the staffing company was sufficiently intertwined with the hospital -- which the parties had agreed was a political subdivision of the state -- that it was an agency or instrumentality of the state." [Gunn v. United of Omaha Life Ins. Co., No. 6:13-cv-1731-Orl-36TBS (M.D. Fla. May 22, 2014)]
(Thomson Reuters / EBIA)
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[Opinion]
Congress Needs to Boost Disability Insurance Share of Payroll Tax by 2016
"SSDI's anticipated trust fund depletion does not indicate that the program is out of control or that it is 'bankrupt;' if the trust fund were depleted and policymakers took no action, the program could still pay about 80 percent of benefits. But cutting benefits by one-fifth for an extremely vulnerable group of severely disabled Americans is unacceptable.... [It] would be best to replenish the DI trust fund as part of a package that restores solvency to the Social Security program as a whole -- that is, that extends the solvency of both trust funds well beyond 2033. That prospect seems highly unlikely to occur, however, between now and 2016."
(Center on Budget and Policy Priorities)
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Press Releases
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