Retirement Plans Newsletter

October 22, 2014

BenefitsLink.com logo EmployeeBenefitsJobs.com logo LinkedIn logo Twitter logo Facebook logo
Get Health & Welfare News  |  Advertise  |  Previous Issues  |  Search

Employee Benefits Jobs

Senior Plan Administrator
NestEggs, Inc.
in FL

Defined Contribution Plan Specialist
The City Of Phoenix
in AZ

Compliance Consultant
MassMutual Financial Group
in MA

401K Administrator
Farmer & Betts
in CO

Retirement Plan Administrator
First American Bank
in IL

Retirement Plan Consultant
CDM Retirement Consultants, Inc.
in MD

Post Your Job

View All Jobs

RSS feed for jobs RSS Feed: All Jobs


Webcasts and Conferences

Executive Compensation in ESOP Companies
October 28, 2014 WEBCAST
(National Center for Employee Ownership)

Exchanges: The Future of Health Insurance
December 10, 2014 WEBCAST
(Lorman Education Services)

Medicare Plans Serving the Disadvantaged: Strategies for Overcoming the Growing Financial Crunch
December 11, 2014 WEBCAST
(Atlantic Information Services, Inc)

What Every Organization Needs To Know About Retirement Fiduciary Compliance
January 15, 2015 WEBCAST
(Cammack Retirement Group)

View All Webcasts and Conferences



[Official Guidance]

Text of Social Security Announcement of COLA and Taxable Wage Base Amounts for 2015
"The 1.7 percent cost-of-living adjustment (COLA) will begin with benefits that more than 58 million Social Security beneficiaries receive in January 2015.... [T]he maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $118,500 from $117,000. Of the estimated 168 million workers who will pay Social Security taxes in 2015, about 10 million will pay higher taxes because of the increase in the taxable maximum." (U.S. Social Security Administration [SSA])  


[Advert.]

New! ftwProposal Pro – The newest addition to the ftwilliam.com Product line!

Sponsored by ftwilliam.com

ftwProposal Pro helps illustrate the best plan options from data that is entered or populated from the plan document or administration software. Contact us about the auto-solve tool, customized reports, how to maximize benefits and more!



[Guidance Overview]

IRS Issues Favorable Guidance on After-Tax Rollovers
"Starting in 2015, participants can avoid current taxes on retirement plan distributions that include after-tax amounts. The rules apply to defined benefit, defined contribution, 403(b) and governmental 457(b) plans. Until now, participants had to allocate pro rata portions of pre-tax and after-tax contributions to each direct rollover." (Towers Watson)  

To Have an Expert or Not: The Fiduciary's Quandary
"[A] fiduciary is not required to substitute their own knowledge for that of another if the fiduciary has a certain skill.... [T]he process of selecting and relying on an expert requires a fiduciary to go deeper than simply selecting someone who claims to know more than the fiduciary.... The due diligence of investigating and selecting someone who does in fact have an expertise defines whether a fiduciary can rely on the advice. Simply put, you can't rely on an expert if you have not first determined them to be an expert and that is only done through investigating their qualifications." (Fox Rothschild LLP)  

Venue Selection Clause in Retirement Plan is Enforceable in the Sixth Circuit
"Although a majority of the courts that have considered the issue have found venue selection clauses in an ERISA-governed plan to be enforceable, the Sixth Circuit is the first circuit court to consider the issue. Plan administrators should keep this in mind as they consider whether to add a venue selection clause to a plan. A venue selection clause may enable the plan to have a single body of law applied to the plan, creating legal consistency and administrative ease for the plan administrator." [Smith v. Aegon Companies Pension Plan, No. 13-5492 (6th Cir. Oct. 14, 2014)] (Practical Law Company)  

PBGC Topics for Single-Employer Pension Plans (PDF)
39 presentation slides. Topics include: [1] PBGC and legislative initiatives regarding 4062(e) and plant shutdown liability; [2] PBGC's early warning program and involvement in corporate transactions, including financings and capital restructurings; and [3] Plan termination issues in voluntary bankruptcies. (Morgan Lewis)  

Mortality Assumptions in Benefit Obligations: Effects of Anticipated New Mortality Tables (PDF)
"For companies with significant defined benefit pension and OPEB obligations, longer life expectancies could significantly increase the reported value of those obligations. And, for companies that immediately recognize the impact of changes in actuarial assumptions at the measurement date, that improved mortality experience could have a significant impact on fourth quarter results of operations." (PricewaterhouseCoopers)  

Frequently Asked Questions About the 401(k) Plan System
"How large are 401(k)s? ... How many Americans have 401(k)s? ... How did 401(k) participants fare through the financial crisis and economic recession? ... What role do mutual funds play in 401(k) plan investing? ... What role do retirement account investments play in the mutual fund industry? ... What is the average 401(k) plan account balance? ... How have 401(k) participants allocated their investments? ... Does age affect a 401(k) participant's asset allocation? ... How many participants borrow against their 401(k)s? ... What is the average outstanding loan balance through 401(k) plans?" (Investment Company Institute [ICI])  

Ten Mistakes That May Trigger a 401(k) Plan Audit
"[1] Missteps with the plan's eligibility requirements.... [2] Misinterpretation of the vesting period.... [3] Violation of break-in-service rules.... [4] Errors in calculating employee contributions.... [5] Miscalculations for profit-sharing contributions.... [6] Mismanagement of employee requests.... [7] Late or inconsistent payment of employee deferrals.... [8] Increasing forfeiture accounts.... [9] Improper tax withholdings when employees take distributions.... [10] Confusion over service provider contracts." (Employee Benefit News)  

Are Out-of-Plan Annuitization Options Overlooked?
"Offering an annuity in-plan sounds like such an elegant idea because it would be an easy way for DC participants to transition almost seamlessly into a predictable lifetime income stream. In reality, however, there are several obstacles to providing in-plan annuity options that make plan sponsors hesitant to include them, such as fiduciary oversight, the long-term nature of guarantees, and low participant usage." (Vanguard)  


[Advert.]

6th Annual Financial Advisor Retirement Symposium - April 1-2, 2015

Sponsored by Financial Advisor

The editors of Financial Advisor and Private Wealth magazines bring together industry experts to share insights and strategies on retirement at a conference that promises to energize advisors with new practice-building ideas. BenefitsLink Discount.



Five Things to Tell 401(k) Participants About Volatile Markets
"Plan Sponsors and their investment advisors should help participants remain calm during these periods of intense market fluctuations by sharing the following: Don't stop contributing.... Don't make significant changes in your account.... There is always help.... Stick with your plan.... Volatile markets do not last forever." (Lawton Retirement Plan Consultants)  

An Actuarial Perspective on the 2014 Social Security Trustees Report (PDF)
"The total change in the projected tenth-year trust fund ratio was a decline of 18 percentage points. The majority of the expected decline is caused by moving the Short-Range Estimate period one year forward. Changes to the OASI trust fund ratios ... : [1] Moving the Short-Range Estimate period forward one year (reduced ratio by 15 percentage points); [2] Changes in economic data and assumptions (reduced ratio by 2 percentage points); and [3] Methodology changes (reduced ratio by 1 percentage point)." (American Academy of Actuaries)  

Saving for Retirement Is Not Happening for a Third of Middle Class
"While a majority of middle-class Americans say that they are not sacrificing a lot to save for retirement, 72% of all middle-class Americans say they should have started saving earlier for retirement, up from 65% in 2013.... 56% say they would give up treating themselves to indulgences like spa treatments, jewelry, or impulse purchases; 55% say they'd cut eating out at restaurants 'as often'; and 51% say they would give up a major purchase like a car, a computer or a home renovation. Notably, fewer people (38%) report that they would forgo a vacation to save for retirement." (Wells Fargo)  

Higher Education Institutions Implement Changes to Improve Retirement Readiness of Employees
"Higher Education institutions are responding to the shifting retirement landscape by adopting practices more commonly seen in the corporate sector, such as working with plan advisors, monitoring the retirement readiness of employees, implementing automatic enrollment features and streamlining retirement plans[.]" (Transamerica Retirement Solutions)  

[Opinion]

Financial Independence in Lieu of Retirement, and Other Phrases That Should Be Banished from Retirement Planning
"[T]he focus of generating retirement spending from retirement 'income' creates ... unnatural distortions, as retirees potentially stretch for income (especially in low-yield environments!), introducing new risks, and possibly confusing appealing-sounding retirement 'income' products that are actually just returning principal ... If we talk about retirement 'cash flows' instead, and move away from an income-centric conversation, it opens the door to looking more holistically at the retirement portfolio and how it can support retirement spending. But perhaps the most crucial change in our language of retirement planning is simply to rename 'retirement' itself." (Michael Kitces in Nerd's Eye View)  

[Opinion]

The Misleading Arguments of Those Who Fight Against Public Sector Pension Reform
"Those who fight against pension reform ... continue to claim public sector pension benefits average only around $25,000 per year, ignoring the fact that pension benefits for people who spent 30 years or more earning a pension ... average well over $60,000 per year. Public safety unions still spread the falsehood that their retirees die prematurely, when, for example, CalPERS own actuarial data proves that even firefighters retire today with a life-expectancy virtually identical to the general population. Propagandists who oppose urgently needed reform should recognize that pension reform is bipartisan, it is a financial imperative, and it is a moral imperative." (UnionWatch)  

Benefits in General; Executive Compensation

Proposed Bankruptcy Fairness and Employee Benefits Protection Act of 2014 Would Place Significant Restrictions on Employers in Bankruptcy
"Various changes to the Bankruptcy Code would place greater restrictions on corporations going through a bankruptcy by limiting reductions in the compensation and benefits of employees and retirees, requiring funding of retiree health benefits in excess of that approved by the bankruptcy court, increasing the amount of unpaid wages that receive priority treatment, limiting payments and bonuses to insiders, and forcing employers to continue funding pension plans after filing for bankruptcy protection." (Thompson Coburn)  

Press Releases

Connect   LinkedIn   Twitter   Facebook

Additional useful links:

BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Phone (407) 644-4146
Fax (407) 644-2151

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright 2014 BenefitsLink.com, Inc. — but feel free to forward this newsletter without further permission from us, if you do not modify the newsletter in any way (including this lower portion).

All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

Links to Web sites other than those owned by BenefitsLink.com, Inc. are offered as a service to readers. The editorial staff of BenefitsLink.com, Inc. was not involved in their production and is not responsible for their content.

We are proud of our Privacy Policy.

Thanks for reading this newsletter!