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Employee Benefits Jobs
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Webcasts and Conferences
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[Advert.]
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The Fiduciary Duty to Hire Expert Advisers (PDF)
34 pages. "When should fiduciaries obtain advice? And, if advice is needed, how is the fiduciary obligated to obtain and use the advice? ... Laws that tell fiduciaries when to seek advice need to be broad enough to apply to a tremendously wide variety of circumstances but narrow enough to provide meaningful guidance. [This article] begins with an overview of the threshold skill level people must have to become plan fiduciaries ... [then] explains when fiduciaries are obligated to obtain advice ... [and] reviews the three specific steps courts expect fiduciaries to follow when they obtain and use expert advice."
(Thomas Peller of Fidelity Investments, via Journal of Deferred Compensation)
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Courts Redefine ERISA's Church Plan Exemption (PDF)
"At least one court, in a thorough analysis of the issue, has concluded that the broad interpretation of the exemption should continue ... A small sampling of other courts has now gone the other way, finding that a benefit plan can only fall within the exemption, and therefore not have to comply with ERISA, if the plan itself was established by a church or similar religious entity. There is no clear answer to the question of which of these courts is correct, because the language of the statute is not crystal clear."
(Stephen Rosenberg, of The Wagner Law Group, via Plan Consultant)
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The Retirement Readiness Challenge: Five Way Employers Can Improve Their 401(k)s (PDF)
Contains results of the 15th Annual Transamerica Retirement Survey survey of U.S. business employers and workers. "95 percent of employers that offer a 401(k) or similar plan agree that their employees are satisfied with the plan ... In stark contrast, only 80 percent of workers who are offered such a plan agree that they are satisfied with their employers' plans ... 74 percent of employers believe their employees prefer not to think about or concern themselves with retirement investing until they get closer to their retirement date; yet only 38 percent of workers feel this way; and, 63 percent of workers would like more education and advice from their employers, yet only 38 percent of employers believe this to be the case. Only 23 percent of employers have surveyed their employees on retirement benefits[.]"
(Transamerica Center for Retirement Studies)
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Federal District Court Dismisses Stock Drop Case Against UBS
"U.S. District Judge Richard J. Sullivan ... first noted that to establish standing, a participant must show a personal injury was suffered due to the breaches alleged to have been committed by plan fiduciaries. He rejected plaintiff Debra Taveras argument that a plan participant need not show a direct, individualized injury to establish standing." [In re UBS ERISA Litigation, No. 08-cv-6696 (S.D.N.Y. Sept. 29, 2014)]
(PLANSPONSOR)
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SSI Monthly Statistics, September 2014 (Released October, 2014)
Reports include the following data for September 2013-September 2014: [1] Recipients (by type of payment), total payments, and average monthly payment; [2] Recipients, by eligibility category and age; [3] Recipients of federal payment only, by eligibility category and age; [4] Recipients of federal payment and state supplementation, by eligibility category and age; [5] Recipients of state supplementation only, by eligibility category and age; [6] Total payments, by eligibility category, age, and source of payment; [7] Average monthly payment, by eligibility category, age, and source of payment; [8] Awards of SSI Federally Administered Payments; and [9] All awards, by eligibility category and age of awardee.
(U.S. Social Security Administration [SSA])
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Analysis of Specific Changes Proposed for Modifying Social Security
"Listed [on this page] is a broad range of policy options that would address Trust Fund solvency and other issues related to Social Security benefits and financing.... For each provision ... [the Office of the Chief Actuary] provide[s] an estimate of the financial effect on the OASDI program over the long-range period (the next 75 years) and for the 75th year. In addition, [they] provide graphs and detailed single year tables. [They] base all estimates on the intermediate assumptions described in the 2014 Trustees Report."
(Office of the Chief Actuary, U.S. Social Security Administration [SSA])
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Stable Value Continues Its Dominance in Defined Contribution Plans
"Stable value funds have $721 billion in assets and are found in about half of all defined contribution plans ... The portfolios have been positioned to take advantage of a rising interest rate environment with lower than average durations, as compared to the recent past. [The authors] see rates increasing gradually over the course of 2015 and expect to see the asset class responding in a positive fashion."
(Prudential)
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The October 31 IRA Trust Deadline: The Who, What, When and Why
"There is still one more IRA deadline to meet for this month.... It applies to: [1] IRAs with a trust as the beneficiary; [2] The IRA owner died in 2013.... A copy of the trust or a list of the beneficiaries and their entitlements must be provided to the IRA custodian.... Most individuals who name a trust as the beneficiary of their IRA do so with the understanding that the required distributions from the IRA will continue to be made to the trust using the age of the oldest trust beneficiary. This will NOT happen unless the October 31 deadline is met."
(Slott Report)
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A Tax Advantage to Retiring Single
"[F]ederal tax laws favor retired folks who are single if they have income outside of Social Security benefits -- a statute that prompts some couples to divorce at retirement. You will be taxed on as much as 85% of your Social Security benefits if your combined income exceeds certain limits."
(The Wall Street Journal; subscription may be required)
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[Opinion]
Re-Thinking Company Stock
"[A] lot of the ESOP rules found their way into ERISA because of notions about employee ownership that few people nowadays would share. Most would argue that, as a retirement savings investment, company stock is even worse than non-company stock, because of the not-inconceivable possibility that you might lose your job just when the stock loses all value -- think of the Enron-employee company stock investors. So why is this special treatment of company stock allowed at all? Partly just because of inertia.... Fifth Third was a unanimous decision by the Supreme Court. There are grounds for hope that the federal judiciary as a whole, and not just the nine Justices of the Supreme Court, may at some point get it and stop allowing these cases."
(Michael Barry, via BenefitsLink)
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[Opinion]
Behind Private Equity's Curtain
"From New York to California, Wisconsin to Texas, hundreds of thousands of teachers, firefighters, police officers and other public employees are relying on their pensions for financial security. Private equity firms are relying on their pensions, too. Over the last 10 years, pension funds have piled into private equity buyout funds. But in exchange for what they hope will be hefty returns, many pension funds have signed onto a kind of omerta, or code of silence, about the terms of the funds' investments."
(The New York Times; subscription may be required)
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[Opinion]
Cities Could Save Pensions in Bankruptcy
"Stockton never asked to adjust pensions (it wants to pay pension bills in full and give bondholders just pennies on the dollar). And the gargantuan [CalPERS] -- which has long (and some say arrogantly) argued that pension obligations are sacrosanct, even in federal court -- says, 'The real precedent ... is that even if municipalities are allowed to impair pensions in the rare situation of bankruptcy, cities like Stockton can make the smart decision to protect the pension promises for their public employees.' They could. But that doesn't mean a bankruptcy judge will agree."
(Orange County Register)
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[Opinion]
California Judge Rules That There's Nothing Sacred About Pension Promises
"The Stockton ruling is a harsh reminder of how frail the retirement system in the U.S. has become. Scores of both private and public pensions are underfunded, and Social Security is scheduled to become insolvent in 2033. The system is not going to disappear. But change will come and almost certainly result in benefit cuts for some."
(TIME)
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Benefits in General; Executive Compensation
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[Guidance Overview]
IRS and DOL Publish Rules on E-Filing (PDF)
"Public access and electronic confirmation will substantially eliminate any challenge to a claim that a statement or notice was filed. Conversely, it will be impossible for a plan administrator to claim that a statement or notice was filed unless it has, in fact, been filed.... Plan sponsors filing at least 250 forms using the form count in IRS' rule are likely already filing the Form 5500 and Schedule SB and MB electronically under the DOL's EFAST program. The effect of the final regulations will be to spur more electronic filings of Form 8955-SSA."
(Buck Consultants at Xerox)
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Advisory Council on Employee Welfare and Pension Benefit Plans to Meet November 3-4
"The purpose of the open meeting on November 3 and the morning of November 4 is for the Advisory Council members to finalize the recommendations they will present to the Secretary. At the November 4 afternoon session, the Council members will receive an update from the Assistant Secretary of Labor for [EBSA] and present their recommendations. The Council recommendations will be on the following issues: [1] PBM Compensation and Fee Disclosure, [2] Outsourcing Employee Benefit Plan Services, and [3] Issues and Considerations around Facilitating Lifetime Plan Participation. Descriptions of these topics are available on the Advisory Council page of the EBSA Web site[.]"
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)
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Shareholder 'No' Votes on Pay Show Uptick
"Broadridge Financial Solutions and PwC's Center for Board Governance found that while the percentage of shares voted in support of pay plans was 89% -- the same as in 2013 -- support levels slipped for the plans of mid-, small-, and micro-cap companies. Among mid-caps, the percentage of plans that failed to attain majority support doubled from 3% to 6%, while, among small caps, the equivalent percentage increased to 4% from 0%. Overall, 123 plans failed to win majority support in 2014, compared to 104 last year."
(CFO)
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ISS Proposes New Approach to Evaluating Equity Plan Proposals
"The Scorecard proposal leaves many questions unanswered. ISS requested comments on the proposal and specifically asked for feedback on two issues. [1] Are there certain factors outlined above in our proposed scorecard approach that should be more heavily weighted when evaluating equity plan proposals? ... [2] Do you see any unintended consequences from shifting to a scorecard approach? ... ISS expects to release final 2015 policies on or around November 7[.]"
(Winston & Strawn LLP)
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[Opinion]
Time for ISS to Decide: Is Stock Price Movement a Measure of Performance or Not?
"There is [an] internal inconsistency with ISS's position on standard time-vesting stock options. How can one fundamentally distinguish between: [1] Stock options (not performance-based pay according to ISS), which deliver value based exclusively on stock price movement and continued service, and [2] Stock awards tied to relative total shareholder return (TSR) (performance-based pay according to ISS), which also deliver value exclusively based on stock price movement and continued service. In fact, one could argue that stock options are the more performance-based vehicle since they deliver no compensation with negative stock price performance, which is often not true for relative TSR awards. To say that one vehicle is performance-based pay and the other is not is inconsistent."
(Towers Watson)
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Press Releases
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David Rhett Baker, J.D., Editor and Publisher
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