ASPPA

Retirement Plan Administrator
RCM&D
in MD

Retirement Plan Administrator
Pension Administration, Actuarial & Consulting firm
in TN

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SHOP Marketplace Series
January 20, 2015 WEBCAST
(Centers for Medicare & Medicaid Services [CMS])

Employee Handbooks 101
January 23, 2015 WEBCAST
(Clear Law Institute)

SHOP Marketplace Series
January 27, 2015 WEBCAST
(Centers for Medicare & Medicaid Services [CMS])

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After 13 Years, Haddock v. Nationwide Settles for $140,000,000
"Originally filed in 2001, the lawsuit concerned the plaintiffs' allegation that Nationwide received undisclosed revenue sharing payments from non-proprietary mutual funds in violation of ERISA.... The settlement also calls for extensive non-monetary relief ... [T]his is the most substantial settlement ever in an ERISA fiduciary breach case involving the receipt of revenue sharing by a service provider." (The Lowenbaum Partnership and FRA PlanTools)  

[Advert.]

3 Live Workshops -- January 2015 –- Registration Open

Our workshops are presented in limited dates and locations. We scheduled our two new workshops back-to-back in the same city and multi-program discounts are available. The first program starts on 1/15/15. CE credits available. Register now.

Text of Amicus Brief by Benefits Law Professors to Supreme Court in Tibble v. Edison (PDF)
"[T]he Ninth Circuit appears to have confused two distinct requirements imposed by ERISA's duty of prudent investing: the duty to be prudent in the selection of plan investment options, and the duty thereafter prudently to monitor the selected investment options, to ensure that those options remain prudent choices.... Contrary to congressional intent, this interpretation of ERISA's six-year statute of limitations insulates fiduciaries from liability for imprudent behavior -- namely, omitting to provide prudent monitoring -- with regard to ongoing plan investment options, as long as that imprudent behavior occurs more than six years after the initial investment selection." [Tibble v. Edison International, No. 13-550 (9th Cir. Aug. 1, 2013; cert. pet. granted Oct. 2, 2014)] (Eight Law Professors Specializing in ERISA, via American Bar Association)  

Text of Brief by Cambridge Financial Services, LLP Urging Supreme Court to Overturn Ninth Circuit Decision in Tibble v. Edison (PDF)
"CFS's experience in advising and counseling ERISA fiduciaries and its knowledge and understanding of prevailing and evolving best practices and 3 standards of care yields four key observations: [1] many plan fiduciaries, especially among large plans, already follow good monitoring practices, meaning that reversing the Ninth Circuit will not result in increased costs for these fiduciaries or their employers; [2] the cost of regular monitoring includes a small amount for 'benchmarking' plan fees in all service categories -- investment, administration, trustee, consulting, and the like, and is, in many cases, largely born by plan participants, not employers or fiduciaries; [3] the Ninth Circuit's decision threatens to erode the past decade's progress on fee reductions in defined contribution plans, driven in part by private lawsuits, which has saved plan participants billions of dollars ; and [4] the Ninth Circuit's standard of 'material' changed circumstances is unworkable and illogical." (Cambridge Financial Services, LLP via CEFEX)  

Bill to Let Multiemployer Pensions Cut Benefits Passes
"Severely distressed multiemployer pensions will be able to reduce benefits paid to retirees under an amendment to the omnibus spending bill approved by the U.S. Senate on Dec. 13, two days after House passage. The bill now goes to the White House for an expected presidential signature." (Society for Human Resource Management [SHRM])  

Sen. Orrin Hatch Outlines Priorities for Pension Reform and Retirement Savings
"Many aspects of the U.S. income tax system discourage savings and investment by individuals, thereby hindering long-term growth. Tax reform should result in a tax system that actually encourages people to save and invest.... We have spent a lot of time in recent years defending the gains we have achieved in the 401(k) system. But in 2015 we can, and in my opinion should, go on offense. Toward that end, we must encourage employers who don't sponsor plans to set them up.... I believe the Starter 401(k) plan in my legislation could help to revolutionize retirement savings for employees of small businesses throughout the country." (U.S. Senate Committee on Finance)  

[Advert.]

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Does Front-Loading Taxation Increase Savings? Evidence from Roth 401(k) Introductions
"Using administrative data from eleven companies that added a Roth contribution option to their existing 401(k) plan between 2006 and 2010, we find no evidence that total 401(k) contribution rates differ between employees hired before versus after the Roth introduction, which means that the amount of retirement consumption being purchased by 401(k) contributions increases after the Roth introduction. A survey experiment suggests two behavioral factors play a role in the unresponsiveness of contribution rates to their tax treatment: [1] employee confusion about or neglect of the tax properties of Roth balances and [2] partition dependence." (National Bureau of Economic Research [NBER])  

Society of Actuaries Releases New Mortality Tables
"A 5 to 10% increase in the Plan liability may not seem significant. However, we recently compared a Plan's termination liability using the current mortality with the liability using the new mortality. Plan assets are $45 million.... With the new mortality approach, the liability increased 6% but the Plan's underfunding increased 60% on a Plan termination basis." (Markley Actuarial)  

Industry-Specific Mortality Assumptions for Pension Plans
"Some DB plan sponsors may benefit by as much as 10% by adopting industry-specific mortality assumptions instead of the new Society of Actuaries (SOA) mortality tables... The following three [industry groupings] have higher mortality rates than the overall new SOA life expectancy assumptions: Consumer goods and food and drink -- 9.5% higher mortality rates; Auto, transportation and industrial goods -- 7% higher mortality rates; Basic materials, paper and packaging -- 4.5% higher mortality rates. Industries with lower mortality experience than the SOA assumptions ... include Healthcare and Hospitals (4.75% lower mortality rates), as well as Banking, Finance and Insurance (3.25% lower mortality rates). Companies in the Chemicals, Oil & Gas and Utilities Industries showed similar mortality rates to the SOA tables." (Mercer)  

2015 Reporting and Disclosure Requirements: Ongoing Qualified Calendar-Year Plans (PDF)
Detailed chart of requirements with deadlines and recipients identified. (Towers Watson)  

IRS Amends Safe Harbor Rollover Notices for Revised Allocation Rules and In-Plan Roth Conversions
"Notice 2014-74 lists each change to the current safe harbor notices, and then restates both safe harbor notices in their entirety. Plan sponsors and administrators who have tailored the notices to their plans will find the list of changes in Part III particularly helpful." (Thomson Reuters / EBIA)  

IRS Issues 2014 Cumulative List of Changes for Cycle E Plans, Gives Two-Day Extension for Cycle D Plans
"Items that appeared on the 2009 Cumulative List -- and thus should have been reviewed during a plan's initial Cycle E submission -- have been deleted from the Cumulative List for 2014.... [T]he IRS has extended the filing deadline for Cycle D submissions that are being reviewed for compliance with items on the 2013 Cumulative List from Saturday, January 31, 2015 to Monday, February 2, 2015.... Sponsors of plans with target date funds, longevity annuities, Roth or other after-tax amounts, and plans with language that needs to be revised in light of the Windsor decision will want to take special note of the items marked new on the 2014 Cumulative List." (Thomson Reuters / EBIA)  

Why Workers Undervalue Traditional Pension Plans
"With growing acknowledgment that lifetime income is critical, and largely missing from most workers' plans, it seems odd that so many workers would value a 401(k) over a traditional pension. This may be because guaranteed income doesn't seem so important while you are still at work or, as has lately been the case, the stock market is rising at a rapid pace. It may also be that the 401(k) is the only savings plan many young workers have ever known, and they value having control over their assets." (TIME)  

401(k) Tips for Job Hoppers
"Here's how to make the most of a 401(k) plan as a short-term employee: Sign up as soon as the waiting period ends.... Watch out for 401(k) match delays.... Meet savings requirements.... Don't leave before you're vested.... Simplify your accounts.... Avoid cashing out." (U.S. News & World Report)  

Three Options for Taking Your RMD When Your IRA Holds an Illiquid Asset
"[1] RMDs from IRAs can be aggregated.... You cannot aggregate your owned IRAs with those of your spouse or with IRAs that you have inherited. [2] You can satisfy an RMD by taking a distribution in-kind of a portion of the asset that is equal to or more than your RMD amount....[3] You can skip the RMD." (Slott Report)  

CalPERS: Extra Contributions Can Yield Big Savings
"Annual CalPERS reports to 1,581 local government agencies this fall began showing estimates of future savings when extra payments, going beyond the required amount, are made to the pension fund....Newport Beach adopted a plan last year to pay off the unfunded liability earlier than the CalPERS standard of 30 years. But the savings were reduced by a CalPERS rate hike to cover an increase in the expected life span of retirees." (Calpensions)  

[Opinion]

Multiemployer Pension Cuts: Reasons Why
"The multiemployer plan pension-cut bill about to be enacted makes sense if you consider: Employers in these plans, who are the source of its funding, have almost no say after they sign up.... Funding rules, though stricter than government plans, still allow for discretion in selecting assumptions ... [T]he cost of withdrawal may dwarf what [the employer] had been paying for what they believed was the cost of benefits for their employees.... Fund employees, lawyers, actuaries, accountants, and investment advisers take money directly out of these plans that would be curbed with a [PBGC] takeover." (Burypensions)  

[Opinion]

Tug of War: Pension Plan Participants vs. Bankruptcy Claimants
"[C]ustomer risk is real for organizations such as Franklin Templeton. Unless its higher costs can be passed along to customers, expect some lenders and suppliers to say 'never mind' and look elsewhere for business. This would logically reduce the supply of capital and services and could mean higher costs for all municipalities, not just those seeking bankruptcy protection.... The best outcome is that pension-plagued municipalities seeking to exit from bankruptcy get their financial house in order as quickly as possible." (Pension Risk Matters)  

Federal District Court Rejects Fiduciary Duty Breach by Claims Administrator Acting on Behalf of Plan Sponsor
"The court determined that an act not typical of a claims administrator's responsibilities performed at the instruction of the plan sponsor and administrator did not establish a fiduciary relationship with the plan's participants and, as such, did not give rise to a claim for breach of fiduciary duty.... Reliance Standard, as the claims administrator, did not have discretionary authority for plan administration purposes and as the [form] mailing was a one-time 'favor to a client' done at [the employer's] instruction, it was not undertaken by Reliance Standard in a fiduciary capacity." [Van Loo v. Cajun Operating Co., No. 2:2014cv10604 (E.D. Mich. Dec. 1, 2014)] (Wilson Elser)  

The 2015 ABC's of Employee Benefits (A-M)
"Given the tremendous amount of activity and volatility in the employee benefits space, 2015's version of EBN's annual benefits ABC's can be summed up in one sentence: Surround yourself with quality, interested and engaged help or else it will be a very long and painful year." (Ed Bray, in Employee Benefit News)  

Bogged-Down Global Benefit Managers Are Missing Opportunities
"Nearly two-thirds (62%) of global pension and benefit managers claim that day-to-day operational activities are limiting their ability to add value and hampering their strategic contribution to the company ... [T]hree-quarters (75%) of [survey] participants also feel that there is increasing pressure for them to do more with less, suggesting they are going to have to change the way they do things if they are to create the time to focus on more value added activities." (Towers Watson)  

ISS Adopts Discretion in Evaluating Management Equity Plan Proposals
"What has not yet caught on despite numerous shareholder proposals are post-termination holding periods. Many of the shareholder proposals require an executive to hold 50% of his/her equity for two years post termination. CEO post-termination holding periods will become more popular starting in 2015 for companies with concerns about the passage of their equity plan proposals." (Orrick)  

NFP Expands Corporate Benefits Capabilities with Acquisition of Benefits Services Group
National Financial Partners Corp. [NFP]

Prudential Retirement Creates Gibraltar Ventures
Prudential Retirement

Appointees to ERISA Advisory Council Announced by US Department of Labor
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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