Voluntary Benefits Account Manager
Buck Consultants a Xerox Company
in CA, CO, GA, TX

Employee Benefits Associate
Bass Berry & Sims
in TN

Retirement Plan Sales Specialist
Envoy Financial
in CO

Retirement Fulfillment Operations Manager
University of California Office of the President
in CA

Business Analyst
General Board of Pension and Health Benefits
in IL

Retirement Specialist
Nationwide
in CA

401(k) Client Service and Support Manager
Paychex, Inc.
in NY

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Governmental Pension Reporting — The New Standards
October 8, 2014 in
(Accounting Continuing Professional Education Network [ACPEN])

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[Official Guidance]

Text of IRS Final Regs: Employee Retirement Benefit Plan Returns Required on Magnetic Media
"This document contains final regulations relating to the requirements for filing certain employee retirement benefit plan statements, returns, and reports on magnetic media. The term magnetic media includes electronic filing, as well as other magnetic media specifically permitted under applicable regulations, revenue procedures, publications, forms, instructions, or other guidance on the IRS.gov Internet website.... With respect to the filing requirements under sections 6058 and 6059, these regulations extend the effective date by 12 months, so that the regulations generally apply to returns and actuarial reports required to be filed for plan years that begin on or after January 1, 2015, but only for filings with a filing deadline (not taking into account extensions) after December 31, 2015. As announced in the proposed regulations, the IRS anticipates adding items on the Form 5500 and Form 5500-SF relating solely to Code requirements and intends to provide an optional paper-only form containing those Code-related items for use by small filers. It is anticipated that the form will be available to satisfy the filing requirements with respect to the 2015 plan year." (Internal Revenue Service [IRS])  

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Advantages of a Continuous Death Audit (PDF)
"[E]ach traditional method of reporting has limitations that will not prevent all overpayments related to annuitant deaths, and it is most effective to employ multiple approaches to manage and minimize the risk.... As a result of the recent legislation, it is preferable to find a service provider with certified access to the [Death Master File] in order to receive new and updated information from the Social Security Administration." (Milliman)  

Fiduciary Risk from Use of Insurer Ratings in Purchase of Lifetime Income Products
"Advisors and attorneys often struggle with [choosing the right insurer] ... [T]here are some sound ways to do this, particularly since trustees have been buying annuity contacts for centuries ... What is NOT sound, however, is a mere reliance on an insurer's ratings in deciding what insurer to choose -- or even the improper use of a rating in the decision making process.... There are, in fact, circumstances under which relying solely on the current level of an insurer's ratings may actually cause the fiduciary to engage in a breach." (Business of Benefits)  

Moody's Sees Continued Public Pension Funding Gaps
"Between 2004 and 2012, Moody's calculated that the pension systems' unfunded liabilities tripled to an estimated $1.99 trillion, with a compound annual growth rate of 17.7% for the period, in part because of inadequate sponsor contributions. The contribution shortage will continue to grow as public plan sponsors shift to a new pension accounting and disclosure regime from [GASB], Moody's warned." (Pensions & Investments)  

Truth and Consequence: Status Report of the New Jersey Pension and Health Benefit Study Commission (PDF)
45 pages. "[This report] examines the history and current challenges faced by these systems, and looks at the responses to similar challenges by other state government entities and comparable pension and health benefits in both the public and private sectors.... This problem is dire and will only become worse if meaningful steps are not taken quickly." (New Jersey Pension and Health Benefit Study Commission)  

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Hibernation Versus Termination: Evaluating the Choice for a Frozen Pension Plan (PDF)
11 pages. "If a long view is taken, the choice to terminate a frozen pension plan is a 'when, not if' decision.... [P]lan sponsors should first evaluate the relative cost of each decision -- termination versus hibernation.... [The authors] present a framework for comparing the upfront fixed costs of plan termination to the long-term costs, and uncertain outcomes, of plan hibernation." (Russell Investments)  

Final Cash Balance Regs Expand Rate Options
"The final regulations allow plan sponsors who choose the actual rate of return as the [interest crediting rate (ICR)] to create different investment strategies for different groups of participants.... The option to allow participant choice of investments for the ICR is 'under further study' by the IRS." (Society for Human Resource Management [SHRM])  

Retirement Assets Total $24.0 Trillion in Second Quarter 2014
"Assets in individual retirement accounts (IRAs) totaled $7.2 trillion at the end of the second quarter of 2014, an increase of 3.3 percent from the end of the first quarter. Defined contribution (DC) plan assets rose 3.6 percent in the second quarter to $6.6 trillion. Government defined benefit (DB) plans -- including federal, state, and local government plans -- held $5.1 trillion in assets as of the end of June, a 1.4 percent increase from the end of March. Private-sector DB plans held $3.2 trillion in assets at the end of the second quarter of 2014, and annuity reserves outside of retirement accounts accounted for another $2.0 trillion." (Investment Company Institute [ICI])  

ERISA Advisory Council Examines the Outsourcing of Employee Benefit Plan Services (PDF)
"The council's goals are to understand current practices and developing trends, and to identify steps the DOL should take that would be helpful for plan sponsors, participants, and service providers. The council has convened two meetings on this topic so far, with another scheduled for [September 29]." (Buck Consultants at Xerox)  

Which Employees Are Delaying Retirement and Why
"34% of workers under 40 believe that retirement delays among older workers are restricting their career opportunities. Aside from retirement savings, health and stress have the strongest links to retirement timing. Offering employees greater retirement security can help employers cultivate a less stressed, healthier and more engaged workforce." (Towers Watson)  

How Would You Fix Social Security?
"The common solutions for solving the Social Security shortfall generally fall into two camps: cut benefits or raise revenue. In the end, fixing the program may involve a little of both. What changes would you make to improve Social Security? [This article lets you interactively] explore the solutions and make your picks -- and see how they compare with those of other readers." (The Washington Post; subscription may be required)  

Louisiana Appellate Judges Again Side with New Orleans Firefighters Over Pension Fund
"The [Louisiana] 4th Circuit Court of Appeal voted 2-1 this week to reject [New Orleans Mayor Mitch Landrieu's] demands that the city be relieved from covering the pension fund's losses resulting from bad investments. The court also denied the mayor's request that the reins of the fund's financial management be handed over to City Hall. The ruling is the latest twist in the months-long fight Landrieu has waged to avoid paying a court-ordered $17.5 million that his administration shorted the firefighters' retirement benefits account in 2012." (The Times-Picayune)  

[Opinion]

What the New Jersey Pension Panel Failed To Say
"Ask yourself how a plan returning 16.9% in trust earnings when it is assuming 7.9% worsens their shortfall. It's primarily because of a flaw in basic actuarial math which is not being adjusted for since getting it right is not what public plan actuaries are paid for when right means higher contributions.... In the private sector the shift to cash balance plans worked because older employees could be forced (or tricked into) accepting them. It would take a massive amount of 'creativity' and will to work the same magic in the public sector where employees have more leverage and politicians are not bargaining with their own money." (Burypensions)  

Companies with Company Stock Funds in 401(k) Plan or ESOP Should Review Compliance in Light of Recent SEC Enforcement Actions
"Section 16(a) of the Securities Exchange Act of 1934 requires that 'insiders' must electronically file a Form 4 Statement of Changes of Beneficial Ownership of Securities with the SEC on or before the 2nd business day after nearly any transaction involving company stock. Examples of transactions that an insider must report include: [1] Grants of stock options; [2] Cashless exercise of stock options (and any sale of shares); ... [3] Open market purchases or sales of company stock; ... [and] [4] 'Discretionary Transactions' under a 401(k) plan, ESOP, Non-qualified excess benefit plan, or stock purchase plan (ESPP)." (Winston & Strawn LLP)  

Misclassified Employees Not Barred from Recovering Damages Based on Value of ERISA Plan Benefits They Should Have Been Provided
"[This case] reminds us that not every dispute referring to ERISA-regulated benefit plans will support the preemption defense. The Gray court's systematic analysis of the preemption defense provides useful instruction on how to apply it. [It] also offers a caution that the misclassification of workers as independent contractors can have broader consequences than just an impact on the calculation of wages and payroll taxes." [Gray v. FedEx, No. 4:06-CV-00422 (E.D. Mo. Sept. 5, 2014)] (Williams Mullen)  

IRS Issues Final Rules on Compensation Deduction Limit for Health Insurers
"The final rules are similar to the proposed regulations that were released in 2013 in many respects but add several rules clarifying the treatment of members of a controlled group after a corporate transaction, modify several rules for applying the limit to deferred compensation and other specific types of compensation, and clarify certain rules for determining the premiums for health insurance. The final regulations also retain the de minimis rule that was announced in Notice 2011-2 with certain clarifications." (Sutherland Asbill & Brennan LLP)  

Seasoned Senior Account Executive Joins Burnham Benefits
Burnham Benefits Insurance Services Inc.

CalPERS Signs Montreal Carbon Pledge to Measure, Disclose Carbon Footprint of Investment Portfolio
CalPERS [California Public Employees' Retirement System]

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