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August 25, 2014          Get Health & Welfare News  |  Advertise
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ERISA Attorney
Employee Benefits Law Firm
in CA

Employee Benefits Attorney
Graydon Head & Ritchey, LLP
in OH

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QBI
in CA

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Benefit Services Group, Inc.
in IL

Installation Coordinator
July Business Services
in ANY STATE

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NestEggs, Inc.
in FL

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Insperity
in TX

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County of San Diego
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Webcasts and Conferences

2nd Wednesday Teleconference: Employer Penalty and MEC Reporting
September 10, 2014 WEBCAST
(ECFC [Employers Council on Flexible Compensation])

Critical Illness Insurance Forum
September 15, 2014 in MD
(Society of Actuaries)

DI & LTC Insurers’ Forum
September 17, 2014 in MD
(Society of Actuaries)

10 Steps to Successful ESOP Administration
November 20, 2014 WEBCAST
(Beyster Institute)

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]

DOL Updates Guidance on Missing or Unresponsive Participants
"[FAB 2014-01] provides a helpful update to the DOL's earlier guidance, taking into account intervening developments and offering a more detailed explanation of the DOL's position.... The FAB acknowledges that Congress has directed the PBGC to expand its missing participant program to include distributions from terminating defined contribution plans and indicates that the DOL will revisit its guidance when the PBGC issues final regulations." (Thomson Reuters / EBIA)  


[Advert.]

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The Impact of SEC Money Market Reform on ERISA Plans
"The SEC has acknowledged these concerns in the preamble of the regulations and has promised to work with the [DOL] to answer these questions. In the meantime, however, plan sponsors and fiduciaries should consider several issues. [1] General Fiduciary Responsibilities Prime MMFs.... [2] QDIAs.... [3] RMDs and Refunds." (Porter Wright Morris & Arthur LLP)  

Two IRA Rollovers from One Account in One Year: Nothing Good Happens
"If you request two distributions on two different dates, then you can decide which one you want to rollover with the 60-day rollover period. As long as you have the funds, the smart choice is to roll over as much as you can of the larger distribution. This reduces the amount you will have to include in income for the year and any 10% early distribution penalties you might owe.... When the excess contribution is not timely corrected, then the client will owe a penalty of 6% per year for every year that the excess amount remains in the IRA." (The Slott Report)  

The Rising Challenge of Measuring and Managing Longevity Risk
"There is no doubt that over the past century life spans have increased -- a trend that has accelerated in recent decades. But when it comes to planning for retirement income security, budgeting economic resources or even creating shareholder value in public companies, expanding life expectancy is wreaking havoc on balance sheets and heightening financial risk for governments and individuals alike.... In actuarial terms the new SOA data means pension fund sponsors and individuals will need to set aside an additional 5 to 6 percent in assets, before factoring in inflation. People are just coming to grips with this now[.]" (Institutional Investor)  

Automated Investment Management and Fiduciary Liability
"Setting up an algorithm and then expecting things to run smoothly on autopilot could fast lead to disappointment.... [T]here are at least ten things that need to be done as part of mitigating model risk. One key task is to assess the conditions under which a model will implode or, worse yet, generate wholly inappropriate predictions that in turn are used to give bad recommendations." (Good Risk Governance Pays)  

Insurance Against Outliving Your Retirement Savings
"New federal tax rules, published in July, make it possible for individuals to buy so-called longevity annuities in their individual retirement accounts and 401(k) plans. Like a plain-vanilla immediate annuity, a longevity policy allows purchasers to convert a lump sum into a pension-like stream of income for life.... But these policies have downsides." (The Wall Street Journal; subscription may be required)  

The Golden State's Pension Reforms Get Spiked
"CalPERS did not provide a cost estimate for how much employers' pension costs might rise due to the inclusion of the 99 special pay categories to newer employees' pensionable income, but the costs of special pay items do add up. As the San Diego County Taxpayers Association noted in a 2013 study, if a 60-year-old pads his or her salary with $7,850 in special benefits in the final year of employment and lives to be 80, the specialty benefits result in an extra $118,000 in pension benefits over the retiree's lifetime." (Reason.com)  

Union Group Seeks Quick Ruling on Illinois Pension Reform Lawsuit
"'We Are One Illinois' and other parties ... [asked] for a ruling in their favor in light of a July Illinois Supreme Court decision ... on July 3 that health care for retired state workers is a pension benefit protected by a state constitutional provision prohibiting the diminishment or impairment of those benefits.... The law reduces and suspends cost-of-living increases for pensions, raises retirement ages and limits the salaries on which pensions are based." (Reuters)  

A 401(k) Rollover Checklist for Plan Participants
"[A]t a minimum, holding multiple retirement accounts here and there means that you have more holdings to monitor. And if the old 401(k) is subpar, you may actually hinder your returns by staying put.... [1] Check your account value.... [2] Determine whether to stay within the 401(k) confines.... [3] Assess the quality of your 401(k) options.... [4] Find the right IRA provider.... [5] Decide whether to convert your Traditional 401(k) assets to Roth.... [6] Execute.... [ 7] Determine what to invest in." (Morningstar)  

401(k) Plans Work in a Balanced Approach to Retirement Security
"The retirement resource pyramid is working for most Americans. Research shows that workers are accumulating sufficient resources to maintain their standard of living in retirement, while analysis of the transition into retirement shows that most households maintain both consumption and after-tax income at the same level in the first years after retirement as when they were working. Moreover, studies that examine households later in retirement find that, on average, retirees maintain sufficient wealth to generate as much income as they could early in retirement." (Investment Company Institute [ICI])  

Retirement Savings: A Tale of Decisions and Defaults
"This paper examines the default behaviour of the members of an industry-wide pension fund to assess both the prevalence of defaults and their impact on retirement accumulation. Preliminary empirical investigations indicate that preferences, demographic characteristics, and labor mobility can go a long way towards explaining the low active plan choice (or high defaulting) and overall level of savings.... [T]he default structure, which specifies individual's outcomes when no choices are made, strongly influences wealth accumulation. We also find that defaults tend to be quite sticky, both over time and across decisions." (Loretti Dobrescu, Xiaodong Fan, Hazel Bateman, Ben Newell, Andreas Ortmann, Susan Thorp, via SSRN)  

Proposing a New Age of Retirement Plan Reconstruction
"The rise of the defined contribution system, which was never meant as a primary retirement pillar, has led to no less than 14 different kinds of defined contribution plans sponsored either by employers or initiated by individuals.... Critics of the nation's defined contribution system say the plethora of retirement strategies are costly, confusing and unwieldy. In many cases, they don't even generate the returns investors think they are getting." (InsuranceNewsNet.com)  

[Opinion]

A New DC Plan Proposal to Replace the Current Patchwork System
"We recommend legislation that will create a single private DC system that can cover all working Americans with a single set of rules. A key part is that all employers who currently deduct payroll taxes -- unless they sponsor a defined benefit plan -- would be required to arrange for payroll deduction of a percentage of each employee's pay to be contributed to a trusteed retirement fund.... Sponsors of these TRFs would be trustees, with fiduciary responsibilities. Each TRF would have a trust deed, a published investment strategy and annual audits. The strategy would specify the fund's objectives, the broad diversification of its investments, its level of risk and its fee structure." (Russell Olson and Douglas Phillips, via Pensions & Investments)  

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