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Employee Benefits Jobs
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Webcasts and Conferences
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[Official Guidance]
Text of PBGC Technical Update 14-2: Effect of HATFA on 4010 Reporting
"If a 4010 filing contains actuarial information for 2013 based on segment rates that differ from those the plan ultimately uses, ordinarily the filing would need to be amended. PBGC appreciates that it would be unduly burdensome to require such amendments. Therefore, 4010 filings need not be amended solely to revise actuarial information that changed because of a decision to use HATFA rates for the 2013 plan year of a plan reported in the filing.... PBGC reserves the right to request that a filer submit revised actuarial information for 2013 reflecting the rates the plan ultimately uses for 2013, in the event PBGC decides it needs the information for its monitoring and enforcement activities. If PBGC requests such information, it will provide sufficient time to comply with the request."
(Pension Benefit Guaranty Corporation [PBGC])
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[Official Guidance]
Text of PBGC Submission of Information Collection Request to OMB; Request for Public Comments on Proposed Changes to Schedules MB and SB of Form 5500
"Based on a recommendation made by practitioners, PBGC is proposing to modify the Schedule MB to require plan administrators of all multiemployer plans to report on line 4 the funded percentage for monitoring the plan's status. Currently, only plan administrators of multiemployer plans in critical or endangered status are required to report this information ... The Schedule MB and instructions would also be modified to add a new question in line 8b that would require large multiemployer plans (500 or more total participants as of the valuation date) to provide in an attachment a projection of expected benefit payments to be paid for the entire plan (not including expected expenses) for each of the next ten plan years starting with the plan year to which the filing relate ... PBGC is proposing to modify the Schedule SB instructions to simplify the alternative age/service scatters that
cash balance plans with 1,000 or more active participants have an option to report on an attachment to line 26."
(Pension Benefit Guaranty Corporation [PBGC])
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[Official Guidance]
Text of PBGC Submission of Information Collection Request to OMB; Request for Public Comments on Continued Collection of Certain Information About Termination of Single-Employer Plans and Missing Participants
"PBGC is proposing to require that a plan administrator of a plan terminating in a standard termination (or a distress termination that closes out in the private sector) must submit with the post-distribution certification the following information: [1] The most recent plan document. [2] Proof of benefit distributions for lump sums paid and annuities purchased, including an accurate list of annuity providers, with the group contract numbers and contact information for each annuity provider, and a list of participants entitled to an annuity from each annuity provider. These new information requirements will help PBGC address inquiries from individuals who claim they are owed benefits from terminated plans and, where appropriate, pay benefits to individuals entitled to them or to direct them to insurers that are holding annuities for them."
(Pension Benefit Guaranty Corporation [PBGC])
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[Guidance Overview]
IRS Simplifies Tax Relief for Individuals in Canadian Retirement Plans (PDF)
"The Revenue Ruling provides that 'eligible individuals' who did not previously make an election ... to defer current U.S. income taxation on the undistributed income of a Canadian retirement plan will be treated as having made the election in the first year in which the individual would have been entitled to elect the benefits ... with respect to the plan.... However, the individual must still report on their U.S. Federal income tax return any income that has accrued in the plan when it is distributed."
(Groom Law Group)
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[Guidance Overview]
IRS Releases Highly Anticipated Cash Balance Plan Regs
"The Final Regulations ... retain an exclusive list of permissible interest rates (including fixed rates, variable rates and combinations of rates) that meet the market rate of return requirement.... The Proposed Regulations set forth specific correction procedures for each noncompliant feature of a noncompliant interest crediting rate. If the noncompliant interest crediting rate has more than one noncompliant feature, then each noncompliant feature must be separately addressed ... The Proposed Regulations only permit modification of the noncompliant features of the interest crediting rates, while requiring maintenance of any compliant features."
(McDermott Will & Emery)
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Tibble v. Edison: What Will It Mean for Plan Sponsors and Fiduciaries?
"[S]ponsors focus on implicit administration fees when usually 70% or more of the plan's total cost comes from the expense ratios of the plan's investment options. One important best practice is to ensure that any revenue sharing embedded in a fund's expense ratio is used to benefit the participants invested in that fund ... This is referred to as 'fee-leveling' and while it is becoming a best practice there are still a large number of sponsors who don't understand the issue and simply don't know the solutions."
(Milliman Retirement Town Hall)
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Target Date Funds: Are They Right for You?
"The Pros: TDFs can be great for those of you who don't have the time, interest, or ability to actively review, select, and pick your own retirement funds.... The investment mix chosen by the managers of these funds is not chosen with the goal in mind to outperform the markets.... Target-date funds take the guess work out of this for you and ensure your investment mix stays on track.... The Cons: TDFs are usually built for the 'average investor'.... TDFs are more complicated than they seem ... TDFs are usually proprietary." (AFS 401(k) Retirement Services)
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Europe's Pensions Regulator Criticized for Costly New Rules
"Europe's pensions regulator has come under fire ... for pressing ahead with what some pensions managers say are excessively burdensome new rules. But Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority, told the U.K.'s National Association of Pension Funds ... that he wasn't prepared to compromise on his priorities despite strong disagreement from some parts of the pensions industry.... He conceded, however, that European authorities had not gone about ensuring transparency in the correct way.... Mr. Bernardino said: 'We definitely agree that we have made a mistake in putting an emphasis on providing more and more information that people don't read.'"
(The Wall Street Journal; subscription may be required)
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The Hidden Risk in the World's Best Pension System
"Compared with defined-benefit plans in the U.S. -- rare, underfunded, and governed by accounting standards derided by almost every economist -- the Dutch pension system looks even better. It does have a weakness, though, one that's often overlooked, even though it may be the only aspect of the Dutch system that's likely to be adopted here: In the Netherlands, annual cost-of-living increases depend (PDF) on the health of the pension's balance sheet. If returns fall, benefits don't increase. If the fund performs badly enough, pensioners may even suffer benefit cuts."
(Bloomberg Businessweek)
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[Opinion]
What Are EBSA's Plans for Regulating Brokerage Windows?
"Despite backing down in FAB 2012-02R, EBSA left the door ajar for possible future action.... The DOL's Semiannual Regulatory Agenda released in May of this year listed 'Standards for Brokerage Windows -- PreRule' as a priority. This agenda item was fulfilled with EBSA's August RFI. A reading of the 39 questions and their subparts does not give comfort to those who fear that EBSA is committed to restricting the use of brokerage windows, one way or another."
(Todd Berghuis, for Ascensus)
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[Opinion]
The Millennial Retirement Plan
"Sixty percent of American millennials, the approximately 85 million of us born from 1980 to 1999, expect to retire at age 65 or earlier ... [We] fancy ourselves a new breed. We think freely. We never unplug. We invented Pinterest. So even if we did have the financial wherewithal to retire in 40 years, should we want to? ... Does it make us happier to officially transition to a new phase so late in life? Perhaps retirement, this august institution that came of age in the era of World War II, has reached its own retirement date."
(TIME)
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[Opinion]
White House 'Financial Capability' Council Bypasses Retirement Planning
"One of the Council's stated goals is to 'identify and test promising and tested approaches for increasing planning, savings and investing for retirement by young people.' Unfortunately, other than a passing reference to President Obama's MyRA program, retirement planning was omitted from the two-plus hours of discussion."
(American Society of Pension Professionals & Actuaries [ASPPA])
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[Opinion]
A Closer Look at Our Public Sector Pension Envy
"Critics say public sector plans are unaffordable and unfair, and should be wound up. But would it really be cheaper and fairer to do so? ... Private and public sector goals are different.... Large, well-run defined benefit plans are efficient.... The only way a defined contribution plan can lower costs is by decreasing benefits."
(thestar.com)
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Benefits in General; Executive Compensation
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Text of Eleventh Circuit Opinion: Definition of Plan Term Found Only in Extrinsic Documents Does Not Render Plan Document Ambiguous (PDF)
"[B]ecause the Plan defines 'Normal Retirement Date' in reference to Meadowcraft's 'published or accepted personnel practices,' it was necessary for the district court to examine extrinsic evidence of Meadowcraft's personnel practices to determine the Normal Retirement Date. This does not mean the contract was ambiguous. Courts routinely examine extrinsic evidence to determine the meaning of contract terms even while holding that the contract is unambiguous." [Snow v. Boston Mutual Life Ins. Co., No. 13-15067 (11th Cir. Oct. 16, 2014)]
(U.S. Court of Appeals for the Eleventh Circuit)
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What Are the Costs and Risks to Administrators When District Courts Remand Benefit Denials Back to Them?
"[Two recent cases] form an interesting counter to the preference of administrators and their lawyers to seek a remand, rather than an outright reversal, when a district court finds problems with an administrator's benefit determination. They stand for the proposition that administrators may be able to seek that relief, but if they get it, they will have to pay attorney's fees to the participant and will not have an opportunity to test the remand order on appeal until the entire benefit dispute has been conclusively resolved once and for all at the district court level."
(Stephen Rosenberg of The Wagner Law Group)
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ISS Releases 2015 Draft Policies
"ISS is proposing to use an equity plan scorecard composed of three categories: Plan Cost; Plan Features; and, Grant Practices. In some respects, it appears that ISS is simply reshuffling some of the existing components of its equity plan proposal policy.... ISS also indicated that the Equity Plan Scorecard would have its factors and weightings keyed to company size and status ... ISS also indicates that its options overhang carve-out policy would no longer be available. Likewise, companies would no longer be able to make a burn rate commitment as they had in the past to avoid a negative ISS vote recommendation when their burn rate exceeded their industry burn rate cap."
(EdwardHauder.com)
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Press Releases
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