WEB - Worldwide Employee Benefits Network

Institutional Trust & Custody Relationship Manager
U.S. Bank
in CA

DB Administrator
Summit Benefit & Actuarial Services, Inc.
in ANY STATE

Retirement Plan Sales and Administration Specialist
UBS Institutional Retirement Group
in IL

Junior Plan Administrator
Established TPA firm
in FL

Compliance Consultant
DWC ERISA Consultants, LLC
in ANY STATE

Retirement Plan Administrator
Pension Firm in New York City
in NY

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Annual Legislative Update
December 4, 2014 in IL
(Worldwide Employee Benefits Network [WEB] - Chicago West Chapter)

Ethics: New Rules and Old Problems
December 9, 2014 WEBCAST
(SunGard Relius)

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[Guidance Overview]

DOL Guidance on Missing Participants in Terminated Plans
"[DOL FAB 2014-01] provides guidance on [1] how fiduciaries should go about searching for missing participants or beneficiaries in terminated defined contribution plans; and [2] how to properly distribute the account balances of missing participants so that the assets are no longer plan assets and the missing individual is no longer a participant under the plan. The DOL identifies four required steps that a fiduciary must, at a minimum, follow when searching for a missing participant or beneficiary. If the participant is still missing after completing the four required steps, the fiduciary must then consider if additional search steps are appropriate based on factors such as the size of a participant's account balance and the cost of further search efforts." (Holland & Knight)  

[Advert.]

ASPPA's New Business Executives and Managers Conference -- January 2015

The Business Executives and Managers Conference (BEAM), is a must attend for small business TPA owners, executives, managers, and decision makers. This event offers valuable knowledge and ideas in best practices; register today!

10 Best Practices in Using Retirement Plan TPA Service Agreements
"Using a service agreement on most engagements is a simple matter of risk and return, [Norman Levinrad of Summit Benefits] noted: 'Without a service agreement, if there is a dispute, it will fall to the lawyers to sort it out.' ... What should be in a service agreement? Levinrad outlined 10 key elements[.]" (American Society of Pension Professionals & Actuaries [ASPPA])  

MassMutual Settles Excessive Fee Lawsuit
"The settlement agreement ... allows for two settlement classes to be approved: [1] the Monetary Relief Class and [2] the Structural Changes Class. The Monetary Relief Class covers current and past retirements plan customers of MassMutual, while the Structural Changes Class covers current and future retirement plan customers of MassMutual.... [T]he lawsuit brought by MassMutual's own employees is not affected by this lawsuit[.]" [Goldenstar, Inc. v. MassMutual Life Ins. Co., No. 11-cv-30235-MGM (D. Mass., settlement agreements part 1 and part 2 filed Oct. 31, 2014)] (The Lowenbaum Partnership and FRA PlanTools)  

Old Pensions Continue to Top New Headlines with Purchase of Group Annuity Contracts
"From the insurer's perspective, this type of liability and asset management is right up their alley. For one, the group annuity liability is a natural hedge to an insurer's life insurance business (one business does better when people are living longer and vice versa). Additionally, managing fixed income assets to make annuity payments that are due well into the future is the primary business of insurance companies. Thus, from an efficiency standpoint they may be better suited to manage these types of assets and liabilities than, say, a company whose primary business is to make widgets or consult on gizmos." (Vanguard)  

Text of District Court Opinion: Wife's Claim for Share of Husband's Retirement Plan Was Included in Her Bankruptcy Estate Because Not Reduced to a QDRO at Time of Bankruptcy Filing (PDF)
"As part of his divorce complaint, [the husband] requested equitable distribution of their marital property ... [A]t the time Appellant filed her bankruptcy petition, no final state court order had been entered related to any of the matters raised in the complaint and counterclaim in the divorce action.... Pursuant to the Bankruptcy Code, ... [a] debtor may exempt 'retirement funds' if they are in an 'account that is exempt from taxation' under certain enumerated provisions of the Internal Revenue Code.... Appellant does not qualify for the claimed exemptions." [Urmann v. Walsh, No. 14-718 (W.D. Pa. Oct. 24, 2014)] (United States District Court for the Western District of Pennsylvania)  

[Advert.]

Access Bloomberg BNA's Report on Considerations for Pension Plan Sponsors

Download now. Bloomberg BNA's Special Report, Insourcing, Advice, or Outsourcing: Considerations for Pension Plan Sponsors. Gain an in-depth look at the five assessment criteria that should be used to evaluate Investment Managers for DB or DC plans.

What Can We Learn From Six Common Annuity Purchase Misconceptions?
"Misconception #1: Funded ratios aren't impacted by annuity purchase for 'fully funded' plans.... #2: Annuity purchases always reduce PBGC premiums.... #3: Ongoing DB plan accounting expense is always lower after an annuity purchase.... #4: Purchasing annuities now for a frozen plan is likely to reduce the overall termination cost.... #5: Purchasing annuities is likely to reduce funded status volatility.... #6: If I purchase an annuity, there is no need to do anything else to manage pension risk." (Principal Financial Group)  

Do I Have a Required Distribution From My IRA This Year?
"We are down to the last two months of the year. It is time for those who have required minimum distributions (RMDs) from a retirement plan to make sure that those distributions are taken.... [1] Individuals age 70-1/2 or older by December 31 of the year.... [2] Individuals who have set up a 72(t) distribution plan.... [3] Beneficiaries of all retirement accounts.... [4] Deceased account owners." (Slott Report)  

The Art of Borrowing from Your IRA and Rolling Back in Time to Avoid Income Taxation
"[A] taxpayer may exclude the distribution from gross income if that distribution is returned to an IRA ('rolled over') 'not later than the 60th day after the day on which he receives the payment or distribution.' Even if the taxpayer does not place the entire amount into an IRA by the 60th day, to the extent a partial amount is rolled over, that part is excluded.... The Eighth Circuit [recently] reversed the Tax Court's rather simplistic denial of the taxpayer's partial rollover of distributions he had taken from IRAs in order to lend the monies, on what hopefully would be a very short-term basis, to two companies which were bidding on a governmental contract and which relied on the taxpayer's software in order to conduct their businesses." [Haury v. Comm., No. 13-1780 (8th Cir. May 12, 2014)] (Bloomberg BNA)  

2014 Actuarial Valuation Report for the Teachers Retirement System of Illinois (PDF)
"The funded ratio for TRS is among the worst in the United States. This is due to: [1] A lack of commitment from policy makers to keep the Retirement System well-funded; [2] A history of appropriating and contributing amounts far below that which a prudent actuary would recommend; [3] A funding policy that systematically underfunds TRS; [4] Changes in benefits that were unfunded and granted when the funded ratio of TRS is quite low[.]" (Illinois Teachers Retirement System)  

Change in Average 401(k) Account Balances from January 1, 2013 Through November 1, 2014 (PDF)
This report shows change in average account balances grouped by age and tenure, from January 1, 2013 through November 1, 2014, for 'consistent' participants (those who had an account balance as of December 31, 2012). (Employee Benefit Research Institute [EBRI])  

Social Security: Cost-of-Living Adjustments (PDF)
This is the latest annual update of a CRS report describing how the COLAs are calculated and various other benefits affected by the Social Security COLA. "To compensate for the effects of inflation, Social Security recipients usually receive an annual cost-of-living adjustment (COLA). Benefits will be increased by 1.7% in 2015, following an increase of 1.5% in 2014." (Congressional Research Service [CRS])  

[Opinion]

Solving PBGC Insolvency: More Funding of Plans by Sponsors or More DB Premiums, Take Your Pick
"Sponsors for whom the math makes sense are simply de-risking -- and funding -- plan liabilities, in order, among other things, to avoid paying PBGC premiums. Sponsors whose borrowing costs exceed their PBGC premium costs are continuing to pay the PBGC for backstopping their liabilities. The problem with this approach -- whether you think of the PBGC as providing credit or insurance -- is that, over time, the agency will be stuck with lower-quality risks.... Other than a (politically unrealistic) proposal that it be given discretion to determine the variable-rate premium structure, [the author sees] little evidence that the PBGC is addressing that issue. Generally, this agency seems to think that higher premiums are always better." (PLANSPONSOR)  

[Opinion]

PBGC's Real Financial Condition and Real Risks
"PBGC is wildly overcharging most companies for its 'insurance,' while undercharging some very risky companies. PBGC is well aware of the latter point -- it is why they want to move to a more risk-based system. But Congress is (in the current political situation) never going to give them discretion to set premiums ... [And what] the heck PBGC is going to do with the multiemployer fund ... [which] is melting down[?] ... Let's have everybody that ever maintained a multiemployer plan contribute to the wind-up of that system ... And let's have everybody that ever maintained a single employer DB plan contribute to the liquidation of the losses in that system that have been dumped on the PBGC." (money vs. time)  

Text of District Court Opinion: Plaintiff Not Entitled to Benefit Described on Distribution Election Form, Where Contrary to Plan Document
"[Plaintiff] argues that the Pension Election Documents should control over the Plan, given the contradictory language and her reliance on the summary documents. In doing so, she relies on a [2003] decision of the United States Court of Appeals for the Third Circuit [('Burstein')] ... Conversely, Defendant rests its case on the Plan language, citing to a recent Supreme Court case, Cigna Corp. v. Amara ... which, inter alia, held that disclosures set forth in the SPD could not be enforced pursuant to ERISA Section 502(a)(1)(B) as terms of the plan itself.... Burstein is no longer good law on the issue of which document controls the availability of benefits, given the Supreme Court's ensuing decision in Cigna." [Keiser v. Conagra Foods, Inc., No.4:13-cv-00159 (M.D. Pa. Oct. 27, 2014)] (U.S. District Court for the Middle District of Pennsylvania)  

[Opinion]

Center on Executive Compensation Criticizes Proposed ISS Equity Scorecard Over Unintended Consequences, Increased Uncertainty
"The impact of the changes is potentially significant, as the new scorecard (which will form the basis of ISS's recommendations for binding shareholder votes on stock plans) incorporates several criteria that up until now only had been part of ISS's recommendations for nonbinding say on pay votes. Under the new process, ISS will shift from a series of pass/fail stand-alone tests focused on the cost of the equity plan and so-called egregious practices to a more 'holistic' approach that takes into account cost, plan features and grant practices using a qualitative review." (HR Policy Association)  

[Opinion]

Text of Comments by SH&P to ISS on Proposed Equity Plan Scorecard Policy
"[Steven Hall & Partners is] very concerned about any approach which limits the ability of our clients to predict with certainty whether or not they are likely to secure a favorable vote recommendation from ISS before the proxy is filed.... An unexpected Against vote recommendation from ISS can be very disruptive, and requires a last minute mobilization of resources which is expensive, time-consuming and distracting. We believe shareholders would be better served by a process which permits companies to weigh plan design trade-offs in a thoughtful and deliberate way with full knowledge of how these choices will impact the ISS vote recommendation before making the decision which they believe to be in the best interests of shareholders. This would permit appropriate and timely engagement with shareholders, if required." (Steven Hall & Partners)  

Trustees and Owner of DirecTV Installer Ordered to Restore More Than $6.48M to Pension Plans
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

CPI-HR’s Korner Named to List of Most Influential Women in Benefit Advising
CPI-HR

Houston Municipal Employees Pension System is Certified for Fiduciary Excellence
Centre for Fiduciary Excellence [CEFEX]

Plan Now to Get Full Benefit of Saver’s Credit; Tax Credit Helps Low- and Moderate-Income Workers Save for Retirement
IRS [Internal Revenue Service]

Aetna to Acquire Insurance Exchange Technology Provider bswift
bswift

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