Defined Contribution Compliance Specialist
Shore Tompkins Actuarial Resources, LLC
in ANY STATE

Conversion Specialist/Trust Accountant
Shore Tompkins Actuarial Resources, LLC
in ANY STATE

Customer Service-Retirement Services - Entry Level
MassMutual Financial Group
in MA

Manager, Health Plan Claims
Directors Guild of America - Producer Pension and Health Plans
in CA

Retirement Plans Management Director
University of Oregon
in OR

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Los Angeles Advanced Pension Conference
January 22, 2015 in CA
(ASPPA College of Pension Actuaries [ACOPA])

Business Executives and Managers Conference
January 25, 2015 in TX
(ASPPA [American Society of Pension Professionals & Actuaries])

Form 5500 Reporting Update
January 30, 2015 WEBCAST
(Lorman Education Services)

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[Guidance Overview]

Tax-Free Transfers to Charities Available Through December 31 for IRA Owners 70-1/2 or Older; Rollovers This Month Can Still Count for 2014
"IRA owners age 70-1/2 or older have until Wednesday, Dec. 31 to make a direct transfer of part or all of their IRA distributions to an eligible charity. The Tax Increase Prevention Act, enacted Dec. 19, extended for 2014 the provision authorizing these qualified charitable distributions (QCDs). The provision had expired at the end of 2013. With this retroactive renewal, any eligible IRA distribution during 2014 properly transferred to a qualified charity counts as a QCD." (Internal Revenue Service [IRS])  

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[Guidance Overview]

Multiemployer Pension Reform Act of 2014 Zone Status Changes
"The new law, beginning with the 2015 plan year, requires the actuary to certify whether the plan is in one of seven categories ... Each of the possible certification categories carries with it different consequences. [A] table shows what happens under each category.... Effectively, the change provides that a plan that is projected to be safe (green) in 10 years without any changes does not need to go through the trouble of developing a funding improvement plan.... [T]he new status that has the most consequences is the status of 'critical and declining.'... Reductions in normal retirement accrued benefits and benefits of retirees in pay status, which have received much press coverage, can be made only for a plan that is in critical and declining status." (Cheiron)  

Pension Accounting Research Series 2015 (Updated for 2014 Disclosures)
12 pages. "What Discount Rate Should Plan Sponsors Use for Year-end 2014? ... Looking Back at 2013: Discount Rate Changes from 2012 Disclosure to 2013 Disclosure ... Impact on 2015 Pension Expense ... What Return on Assets (ROA) Assumption Should Plan Sponsors Use for 2015?" (SEI)  

GAO Report on 401(k) Plans: Greater Protections Needed for Forced Transfers and Inactive Accounts
"GAO examined: [1] what happens over time to the savings of participants forced out of their plans, [2] the challenges 401(k) plan participants face keeping track of retirement savings in general, and [3] how other countries address similar challenges of inactive accounts.... GAO recommends that Congress consider [1] amending current law to permit alternative default destinations for plans to use when transferring participant accounts out of plans, and [2] repealing a provision that allows plans to disregard rollovers when identifying balances eligible for transfer to an IRA. Among other things, GAO also recommends that DOL convene a taskforce to explore the possibility of establishing a national pension registry. DOL and SSA each disagreed with one of GAO's recommendations. GAO maintains the need for all its recommendations." [Published: Nov 21, 2014. Publicly Released: Dec 22, 2014.] (U.S. Government Accountability Office [GAO])  

One in Five Investors Have Tapped Into 401(k) Prematurely
"The majority of nonretired investors in the U.S. say their employer offers a 401(k) plan, and of these, 89% say they participate in it. Yet 21% of those who participate in such a plan say they have either taken out a 401(k) loan or even taken an early withdrawal from the plan in the last five years.... [N]ot only have a fifth of investors tapped into 401(k) funds prematurely, but also barely more than half of those with a plan, 55%, say they understand the tax consequences of early 401(k) withdrawals 'extremely well.' Most of the rest, 40%, say they understand the consequences 'somewhat well,' and 5% say 'not very well' or 'not at all.' " (Gallup)  

In Post-Dudenhoeffer Decision, Class Action Plaintiffs Are Allowed to Pursue Claims for Fiduciary Breach Against Eastman Kodak Plans
"The court found that Dudenhoeffer, given its different facts, provided little explicit guidance, except to make clear that there is no presumption that a fiduciary acts prudently by investing, as a plan document requires, in a plan sponsor's company stock ... The Gedek complaints alleged a history 'not just of Kodak's inexorable slide toward bankruptcy, but of publicly available information contemporaneously documenting that slide, step by painful step, and accurately forecasting Kodak's bleak future.' If the plaintiffs' allegations proved to be true, then the plan fiduciaries should have shifted the plan assets into more stable investments, as the plan documents permitted and as ERISA's duty of prudence would have required." [Gedek et al. v. Perez, No. 12-CV-6051L (W.D.N.Y. Dec. 17, 2014)] (Williams Mullen)  

Key 401(k) Supreme Court Suit Will Shake Up Retirement Plan Advisers
"It'll be some time before the Supreme Court comes up with a decision, but the amicus briefs highlighted the fact that fiduciaries -- namely 401(k) advisers and plan sponsors -- will need to refine their due diligence processes around fund and service provider selection. It won't be enough to just go all-index in 401(k) investment menus; advisers will have to delve into the differences between share classes and seek details on revenue sharing arrangements." (InvestmentNews)  

J. Mark Iwry's Dispatches from the Pension Wars
"We've been calling the aggregate of good 401(k) automatic features and practices 401(k) 3.0, because they go beyond the do-it-yourself 401(k) of the 1980s and 1990s -- 401(k) 1.0 -- and the rudimentary 3 percent automatic enrollment of new hires -- 401(k) 2.0. All of that is part of an overall fabric that's designed to be responsive to the decline of the defined benefit pension. On one hand, we're trying to keep the defined benefit pension alive where we can, and nurture it where we can. On the other hand, we're trying to reincarnate it within the much more active and growing 401(k) plan....Many of these strategies are now filtering down to the smaller market." (Institutional Investor)  

How to Fix the 401(k) Retirement System That Emerged by Accident
"Few people expect a return to traditional pensions so proposals tend to focus on making the current system work better. Here are some of the more interesting ideas and those gaining attention: Hybrid Plans ... Thrift Savings ... Avoiding Leaks ... Plan Disparity ... Fees Debate ... Reduce Balances." (Bloomberg)  

Countdown to a Better DC Plan (PDF)
"Citing results from Callan's annual DC Trends Survey, [this article explores] plan sponsor adoption of PPA provisions to see how they have benefited, where they have met challenges, and where they could do more. [The authors] also offer seven takeaways to help sponsors better position their plans in 2015 as we approach the decade mark for this legislation." (Callan Associates)  

DB to DC Move Hits Major League Baseball
"The Los Angeles Angels and the Boston Red Sox are among the first teams to discontinue defined benefit pension plans for non-uniformed staff.... Two- to three-hundred non-uniformed employees from the Angels and Red Sox were informed in November that as of January 1, the teams would no longer contribute to the pension plans, and new hires would not be able to enroll in them. Other teams are expected to follow suit[.]" (PLANSPONSOR)  

Big Public Pension Funds' Hedge Fund Portfolios Outperform Their Indexes
"Bucking persistent criticism of hedge fund returns coming from many quarters this year, chief investment officers of big state pension funds were able to report strong returns for their hedge fund portfolios.... The median of the big public funds topped the 6.4% return of the industry's most commonly used index -- the HFRI (Hedge) Fund Weighted Composite, as well as MSCI InvestorForce's Trust Funds' median hedge fund returns for public and corporate defined benefit plans (7.1% and 7%, respectively)[.]" (Pensions & Investments)  

Wisconsin Supreme Court Decides Public Employees Have No Vested Right in Pension Multiplier
"A Wisconsin Supreme Court majority (5-2) has concluded that Milwaukee County had legal authority to prospectively reduce pension amounts that accrue while employees are still working, a loss for health care workers and its union.... 'We conclude that the legislature preserved [the employees'] rights and benefits already accrued but also gave Milwaukee County home rule authority with the flexibility to enact such prospective-only changes,' wrote Justice Annette Ziegler for the majority." [Stoker v. Milwaukee County, No. 2012AP2466 (Wis. Dec. 19, 2014) (State Bar of Wisconsin)  

[Opinion]

A Response to JP Morgan's Analysis of Target Date Fund Costs and Risks
"[A] 'robust evaluation framework' should place a very high emphasis on fees, and investment managers should be evaluated on their ability to add value net of fees.... Plan sponsors need to ask any plan vendor: What value will I get for my money, and how does it compare to other provider fee/service offerings? ... There is no reason that small 401k plan sponsors need to purchase investment management and participant education from same vendor.... Make the hires separately -- it could well be the same provider, but there is no reason it has to be.... Every participant needs to recognize how their portfolio will change over time -- especially as they get nearer to retirement age. We need more clarity and transparency on glide paths, be they actively managed or indexed." (Employee Fiduciary)  

[Guidance Overview]

Text of 2014 Instructions for Form 8959: Additional Medicare Tax (PDF)
"Your employer is responsible for withholding the 0.9% Additional Medicare Tax on your Medicare wages or railroad retirement (RRTA) compensation paid in excess of $200,000 in a calendar year. Your employer is required to begin withholding Additional Medicare Tax in the pay period in which your wages or compensation for the year exceed $200,000 and continue to withhold it in each pay period for the remainder of the calendar year.... All wages that are subject to Medicare tax are subject to Additional Medicare Tax to the extent they exceed the threshold amount for your filing status." (Internal Revenue Service [IRS])  

Society of Actuaries and Health Care Cost Institute Sign Health Data Agreement
Society of Actuaries

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