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Wellness and Reducing Healthcare Costs
March 5, 2015 WEBCAST
(Trion)

401(k) Advisor Symposium in Orlando, FL on March 19th
March 19, 2015 in FL
(401k Rekon)

Pensions on Peachtree
April 16, 2015 in GA
(SunGard Relius)

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Text of GAO Report on Private Pensions: Participants Need Better Information When Offered Lump Sums That Replace Their Lifetime Benefits
"This report focuses on [1] the prevalence of lump sum offers and sponsors' incentives to use them, [2] the implications for participants, and [3] the extent to which selected lump sum materials provided to participants include key information.... GAO recommends that DOL improve oversight by requiring plan sponsors to notify the agency when they implement lump sum windows, and coordinate with Treasury to clarify guidance on the information sponsors provide to participants. Further, Treasury should reassess regulations governing relative value statements, as well as the interest rates and mortality tables used in calculating lump sums. Agencies generally agreed with GAO's recommendations." [Published: Jan 27, 2015. Publicly released: Feb. 26, 2015] (U.S. Government Accountability Office [GAO])  

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Register for P&I's 401(k) Investment Lineup Summit

The evolution of the 401k: Get your plan to the next level. Register for this FREE 1-day event where industry experts will present innovative investment approaches to help DC plan sponsors best prepare portfolios and plan participants for the future.

Employer All But Concedes in Supreme Court Dispute Over ERISA Monitoring
"The major point on which debate focused was whether a periodic duty exists in general -- such monitoring as a 'prudent' trustee would do -- or instead is predicated on some showing that circumstances have changed enough to justify reinvestigation of the assets in the portfolio.... [The attorney for the defendant, Edison International,] tried to insist that the record demonstrated that the employees simply had not made the case that the employer had failed to engage in proper monitoring." (SCOTUSblog)  

Tibble Goes to the Supreme Court
"The justices appeared to be uncomfortable with the Ninth Circuit's change of circumstances test that, in the words of Justices Sotomayor and Scalia, was tantamount to selecting a new fund. As a result, it is unlikely that the defendant will get the dismissal it seeks. In all probability, the Court will confirm that the monitoring function is ongoing for all plan investments and either craft a new standard for how an investment is to be monitored or remand to the lower courts to develop a such a test. This, in turn, will determine whether the plaintiffs are allowed to take the matter of the 1999 funds to trial." [Tibble v. Edison International, No. 13-550 (9th Cir. Aug. 1, 2013; cert pet. granted Oct. 2, 2014, argued Feb. 24, 2015)] (The Wagner Law Group)  

Pivotal 401(k) Fee Lawsuit in Front of Supreme Court Means Big Changes for Plan Advisers
"In a practical sense, this case reinforces to advisers and plan fiduciaries that funds aren't merely selected and forgotten. 'Fiduciaries need to monitor and look at the investments each year to see if there are changes and are they appropriate for the plan,' said [Fred Reish, partner at Drinker Biddle Reath]. That review should be expanded to include grandfathered options that predate the fiduciary who is now overseeing the plan. Don't wait for the case to resolve. Go and review that lineup." [Tibble v. Edison International, No. 13-550 (9th Cir. Aug. 1, 2013; cert pet. granted Oct. 2, 2014, argued Feb. 24, 2015)] (InvestmentNews)  

The Blindsided Fiduciary: Ignorance is Not Bliss
"Alliance Bernstein recently released the shocking result of a survey it had taken of plan sponsors: a whopping 37% of those fiduciaries surveyed didn't know that they were fiduciaries. Obviously, it is unlikely that these individuals are fulfilling their fiduciary responsibilities if they are unaware of their status.... ERISA has a functional definition of fiduciary, which means that you become a fiduciary based on what you do.... Another form of ignorance can complicate this problem, because it is also possible to believe that your plan service providers are fiduciaries when they are not." (Osler, Hoskin & Harcourt LLP)  

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Registration Now Open for NCEO Denver Annual Conference

NCEO's 2015 Employee Ownership Conference will take place at the Sheraton Downtown Denver Hotel. NEW: See Preconference Session on Compensation Issues and our Agenda to view sessions marked CB -- a track dedicated to compensation and benefits issues in employee-owned companies.

An Increasing Number of Americans Are Unfamiliar with Investment Options in Their Retirement Plans
"[N]early half of Americans (46 percent) are concerned about running out of money in retirement. Some of this concern may be justified by the fact that 39 percent of Americans say they are not familiar with their retirement plan investment options -- an increase from 33 percent in 2014.... [D]espite the number of people who are unfamiliar with the investment options in their retirement plan, the vast majority of respondents (85 percent) say they feel comfortable with the choices they have made. This gap highlights individuals' need for advice and education on how to save enough to create a steady stream of income in retirement." (TIAA-CREF)  

How to Create a Retirement Spending Plan That Lasts
"When shifting from saving to spending your retirement funds, use multiple building blocks to help generate cash flow. While interest and dividends can be one source of income, don't let them drive your retirement spending. After non-portfolio income sources such as Social Security, part-time work, a pension or an annuity, we suggest using cash and short-term investments, interest and dividends, and capital gains to help fund your spending needs." (Charles Schwab)  

2014 Survey of GASB Accounting Measures for Public Pension Plans (PDF)
"For public pension plans, the new measures under GASB Statement No. 67 are effective for plan fiscal years beginning after June 15, 2013. As a result, the new measures are available in the financial reports of state and local government pension plans for fiscal years ending on June 30, 2014 and thereafter. To obtain a better sense of the new measures and what they mean, this research report surveys the June 30, 2014 financial reports of 44 large public pension plans covering general employees and teachers." (Gabriel Roeder Smith & Company)  

Cracks Starting to Appear in Public Pensions' Armor
"The states have long argued that because they are legal sovereigns, federal pension law does not apply to them. When states, cities and other local governments try to rein in pension costs, they often create new 'tiers' of much smaller benefits for workers they expect to hire in the future, and call it a reform. But there is no freeze for existing workers, who keep accruing the same benefits as before. In some places, it is increasingly clear that reducing benefits only for future hires does not save enough money to preserve overstretched pension plans, especially in places where retirees outnumber current workers." (The New York Times; subscription may be required)  

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Is the Illinois Secure Choice Savings Program Act Really Exempt from ERISA?
"There are several factors that indicate that the ISCSP could be deemed an employee pension benefit plan subject to ERISA. While employees can opt-out of making contributions under the ISCSP, there is still an involuntary element present where an employee fails to take action and automatically must make contributions equal to 3% of wages.... The Act could be interpreted to only require employers to enroll employees, collect and remit contributions and put participants on notice of the program. Such minimal involvement, arguably, could land the program within the ERISA safe harbor." (Bloomberg BNA)  

Improving Retirement Security for Marylanders (PDF)
"Every Marylander should have access to an automatic payroll deduction retirement savings plan through their employer. People who are self-employed or unemployed should be able to make contributions at the same time that they pay their State taxes... They must be able to keep their retirement savings plan when they change jobs.... Consumer protection, disclosure, and other protections are essential, but these and other regulatory responsibilities should be undertaken by the program itself and not imposed on businesses." (Governor's Task Force to Ensure Retirement Security for All Marylanders)  

New Jersey Assembly Tightens Pay-to-Play Laws for State Pension Investments
"New Jersey lawmakers sent a bill to Gov. Christie on Monday that would expand restrictions on investments of state pension funds with outside money managers who donate to national political committees. The legislation also would require the state Treasury Department to regularly publish reports disclosing fees paid to private managers who invest state pension funds." (Philadelphia Inquirer)  

[Opinion]

The Two Faces of a Fiduciary Standard: Positive and Punitive
"The purpose for defining a Positive fiduciary standard is to provide the details on how the advisor can improve their investment decision-making process.... The purpose for defining a Punitive fiduciary standard is to define rules which will restrict or prohibit all advisors from certain activities.... Most of the fiduciary advocacy we have seen since the Dodd-Frank Act was signed in 2010 is Punitive.... We've lost our way in defining a Positive fiduciary standard." (Donald B. Trone, via 401kHelpCenter.com)  

[Opinion]

If You Like Your Annuity, You Can Keep Your Annuity!
"Does that headline sound familiar? It should because more than likely it will be the next response to opposition of a soon-to-be-introduced Fiduciary Rule from the Department of Labor. Make no mistake, this not about protecting consumers, modernizing public policy or anything else. This is about federal regulation of annuities sold in 401(k) plans and other employer-sponsored retirement plans. While there are other financial products used inside these plans, annuities are specifically being targeted." (InsuranceNewsNet.com)  

[Opinion]

Why Does the U.S. Chamber of Commerce Oppose the DOL Fiduciary Rule?
"The fact of the matter is that the DOL/EBSA re-proposal of the 'fiduciary' definition is critical to all businesses, and their owners, that sponsor a qualified retirement plan. Far too often, plan sponsors have been sued for 'relying' upon the advice of non-fiduciary 'retirement consultants.' Yet, these 'consultants' escape liability as they hide behind the low 'suitability' standard for the 'recommendations' they provided.... [T]he plan sponsor has great difficulty holding the 'retirement plan consultant' to account, given the low standard of conduct applicable to measure the potential liability of a non-fiduciary consultant. The plan sponsor is the victim of poor (and non-fiduciary) advice, in such cases, and has no effective remedy for the conflict-ridden recommendations it received. And most business owners don't even realize that they cannot rely upon such non-fiduciary advisors." (Ron Rhoades)  

2015 ERISA Advisory Council to Hold First Meeting March 20
"Open to the public, the meeting will begin with the introduction of the new council chair and vice chair. An update on the activities of [EBSA] and a determination of topics to be addressed by the 2015 advisory council will follow." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

CEO Pay Three Times That of Other Named Executive Officers
"CEO pay is 2.93 times that of the other named executive officers at companies in the S&P 500. Median multiples of CEO to named executive officer (NEO) pay ranged from 2.61 to 3.65 at information technology and materials companies, respectively ... Unlike the CEO to median employee ratio, the CEO to NEO ratio can provide insight on the executive team in charge of the company, including talent development, succession planning and retention." (Steven Hall & Partners)  

Key Executive Comp Issues to Address in M&A Due Diligence
"[1] Severance plans and individual executive severance agreements.... [2] Executive ownership levels at the target company.... [3] Guaranteed compensation in employment agreements.... [4] Retention plans.... [5] Noncompete and nonsolicitation agreements.... [6] Public company disclosures." (Towers Watson)  

Investor Seeks to Link Exec Pay to Worker Engagement
"Connecticut's state pension fund leader has proposed linking a portion of Wal-Mart Stores' executive compensation to a measure of 'employee engagement,' ... [The proposal] defines engagement as the extent to which workers are motivated to 'apply discretionary effort to accomplish organizational goals' and calls on Wal-Mart's compensation committee to work with outside experts to measure engagement, which would complement financial metrics in determining pay. 'Essentially, the idea is to tie executive pay to how happy and productive the company's low-wage workers are,' ThinkProgress reported[.]" (CFO)  

Groom Law Group Welcomes Two Experts on ACA Implementation and Enforcement: Lisa Campbell and Rachel Leiser Levy Join Firm
Groom Law Group

Fidelity Investments Looks to Boost Retirement Preparedness by Introducing The IRA Match
Fidelity Investments

Vanguard Expands Target-Date Lineup, More Diversification
Vanguard

Judgment Adds to $12M Recovered for Michigan and Iowa-based Pension Plans
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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