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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IRS Provides Nonprecedential Guidance on De-Risking Transactions Involving Retirees
"The [four Private Letter Rulings addressing de-risking] involve plans at four different companies that pay benefits in a variety of forms, including single life annuities, joint and survivor annuities, years certain and life annuities and lump sums. The plans involved include 'traditional' DB plans and cash balance plans.... There are some tricky elements to the approach IRS is taking. The lump sum offer is in effect a new benefit with a new annuity starting date."
(October Three Consulting)
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Money Market Funds Getting New SEC Rules Aimed at Preventing Runs
"The SEC votes today to adopt new rules that will change the way prime money funds price their shares. Instead of a stable price of $1, which means a dollar invested can always be redeemed for $1, prime money funds would have to price their shares in a way that will reveal fluctuations. The SEC's vote concludes a four-year struggle by regulators to toughen rules after a run at one fund during the 2008 financial crisis brought the $2.6 trillion industry to near-collapse, halted only by a federal backstop."
(Financial Planning)
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Federal District Court Grants Summary Judgment to Plaintiffs in Church Plan Case
"In finding for the plaintiffs that the pension plan should be governed by ERISA, the court rejected defendants' argument that it was inequitable or unfair because of the long term reliance on the IRS rulings and that either the ERISA or a California state law statute of limitation applies. The court also found that there was no genuine issue of material fact as to Dignity Health's predecessor Catholic Healthcare West establishing the pension plan, rather than that they were either controlled by a church or that a church co-established the plan." [Rollins v. Dignity Health, No. 13-cv-01450-TEH (N.D. Cal. July 22, 2014)]
(The Lowenbaum Partnership and FRA PlanTools)
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IRA Withdrawals in the 'Crossover Zone' Can Trigger the Section 1411 Net Investment Income Tax
"[B]ecause the tax only applies to investment income above certain income thresholds, it's possible for 'non'-investment income like retirement distributions to cause the surtax on other investment income by pushing it over the line. The end result: even types of income not directly subject to the tax end out indirectly causing the 3.8% surtax after all! Given this dynamic, investors whose investment income is in the 'crossover zone' and straddles the income threshold -- such that only a portion of their investment income is subject to the surtax -- have a unique planning opportunity to shift income into other years where they do not face the crossover zone."
(Michael Kitces in Nerd's Eye View)
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Unions Swim Against the Tide as Pension Tsunami Looms (PDF)
"Especially if the current [NLRB] moves forward with its initiatives to abbreviate severely the length of time from notice of an election petition to the date of employee voting, unorganized employers should be armed as early as possible with reliable information about 'union' defined benefit pension plans for their own decision-making and to share with employees. Similarly, employers entering a new round of collective bargaining should prepare by learning the basics of contributions relative to benefit value and business risk."
(Epstein Becker Green, via Insurance Advocate)
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Does the Supreme Court's Bankruptcy Decision Affect IRAs Inherited by Spouses?
"Many experts believe that the Heffron-Clark decision will not apply to spouses who inherit an IRA. There are a number of special rules for spousal beneficiaries under the Tax Code that create a clear distinction between spouse and nonspouse beneficiaries. Another possibility, however, is that a spouse inheriting an IRA will be unable to claim an exemption for it. If so, it will make no difference from a bankruptcy perspective whether the client keeps the account as an inherited IRA or does a spousal rollover. Either way, the funds could be considered part of the surviving spouse's bankruptcy estate."
(On Wall Street)
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Why Your 401(k) Isn't Likely to Offer a Longevity Annuity
"Employers cited worry about the fiduciary responsibility of picking annuity options from the hundreds offered by insurance companies. Another key reason is administrative complication should the plan decide to change record keepers, or if employees change jobs."
(Reuters)
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All-Time High: Fidelity's Average Annual IRA Contribution Climbs to Over $4,000
"The findings ... show investors 50 years of age and over continue to save the most in Traditional and Roth IRAs. Younger investors, those in their 20s, 30s and 40s, are adopting strong savings behaviors and have made strong increases with overall average contributions -- 3.9 percent, 6.7 percent and 6.2 percent, respectively from 2012 tax year to 2013 tax year. Additionally, average contributions to Roth IRAs continue to outpace average Traditional IRA contributions on both ends of the age spectrum."
(Fidelity)
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Five Ways to Avoid a DOL Audit of Your 401(k) Plan
"[1] Respond to employee inquiries in a timely way. The most frequent trigger for a DOL audit is a complaint received from an employee.... [2] Improve employee communication.... [3] Fix your plan -- now.... Many times plan sponsors are aware that a certain provision in the plan is a friction point for employees.... [4] Conduct your own audit.... [5] Make sure your 5500 is filed correctly. The second most frequent cause of a DOL audit is problems which are identified on the annual Form 5500 filing. The most common 5500 errors include failing to follow EFAST 2 Electronic Filing Guidance, not attaching all required schedules and failing to answer multiple part questions."
(Lawton Retirement Plan Consultants)
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Benefits in General; Executive Compensation
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Notice of ERISA Advisory Council Meeting: August 19-21, 2014
"The Advisory Council will study the following issues: (1) Outsourcing Employee Benefit Plan Services, (2) [Pharmacy Benefit Manager (PBM)] Compensation and Fee Disclosure, and (3) Issues and Considerations around Facilitating Lifetime Plan Participation. The schedule for testimony and discussion of these issues generally will be one issue per day in the order noted above.... Organizations or members of the public wishing to submit a written statement may do so by submitting 40 copies on or before August 12, 2014[.]"
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)
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Taking the 'Risk' Out of De-Risking a SERP
"Beyond the financial, legal and accounting factors that arise in de-risking a pension plan, [this article] addresses the potentially overlooked impact that such strategies may have on a company's related supplemental executive retirement plan (SERP). [The authors] provide an overview of the relevant tax rules under Section 409A of the Internal Revenue Code and a summary of Section 409A and other key issues to be considered in connection with de-risking a SERP."
(Groom Law Group)
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Trends in Nonqualified Deferred Compensation During 2013
"[N]onqualified deferred compensation (NQDC) plan participants expressed an awareness about accumulating enough retirement income for the future. More participants are taking steps to help shape what their 'retirement reality' will look like, and are increasingly planning ahead. As a result, key employees enrolled in NQDC plans increasingly recognize the role of these plans in saving for retirement." [Also available are a Research Summary and an infographic of key findings.]
(Principal Financial Group)
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Press Releases
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