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Employee Benefits Jobs
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Webcasts and Conferences
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[Official Guidance]
Text of PBGC Submission for OMB Review and Comment Request: Survey of Nonparticipating Single Premium Group Annuity Rates
"Each month PBGC publishes the interest rates to be used under those regulations for plans terminating or undergoing mass withdrawal during the next month. The interest rates are intended to reflect current conditions in the annuity markets. To determine these interest rates, PBGC gathers pricing data from insurance companies that are providing annuity contracts to terminating pension plans.... [This] survey is directed at insurance companies that have volunteered to participate, most, or all, of which are members of the American Council of Life Insurers. The survey is conducted quarterly and will be sent to approximately 22 insurance companies. Based on experience under the current approval, PBGC estimates that 6 insurance companies will complete and return the survey. PBGC further estimates that the average annual burden of this collection of information is 12 hours and $480."
(Pension Benefit Guaranty Corporation [PBGC])
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My IRA Custodian Won't Let Me Do What?!
"IRA custodians and employer plans can sometimes limit your options. One reason they might do this is to make it easier for them to manage and process your transactions.... Stretch IRAs and spousal rollovers are basic IRA planning options. Make sure your custodian allows them. It is easy to move your funds during your lifetime; it may be difficult or impossible for your beneficiaries to accomplish a move after your death."
(Slott Report)
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Corporate Defined Benefit Pension Risk Management: Solving the Equity Investment Conundrum (PDF)
"The conundrum faced by plan sponsors is this: you cannot easily de-risk a pension plan on an accounting basis and simultaneously de-risk on an ERISA contribution basis. The dominant risk faced by most plan sponsors on an accounting basis is the risk that long-term bond yields continue to fall which increases the present value of liabilities.... [On] the ERISA basis ... moving more into long-term bonds does not fully reduce the risk that contributions will rise and can actually potentially increase that risk. Under MA-21 and now HATFA, plan sponsors use 2-year smoothed interest rates that are constrained by corridor around a 25-year average of corporate bond yields to calculate their liabilities. In practice, this means that liabilities have very little sensitivity to changes in long-term bond yields in the short run."
(P-Solve LLC)
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DOL Addressing ESOP Valuations Guidance, Lifetime Income Illustrations
"The [DOL] has been focusing on employee stock ownership plan appraisals in its enforcement program, because they have become 'a chronic problem,' so much so that the agency can't address all of them that will come up each year, a DOL official said.... The issue that the DOL sees 'over and over again' is that the person who selects the appraiser -- a fiduciary function -- is the company owner -- that is, the seller. And the seller is 'the guy from the exact opposite side from the plan[.]' "
(Bloomberg BNA)
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Why RIA Advocates Still Fear FINRA Oversight
"There is no consensus within the SEC for how to address advisor oversight. Both the user-fee proposal and the idea of tapping FINRA or some other self-regulatory organization to examine advisory practices would require an act of Congress. But last year, Commissioner Daniel Gallagher floated the idea of the SEC acting on its own authority to require advisors to engage a third party, such as an accounting or auditing firm, to review their practices."
(On Wall Street)
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[Advert.]
2015 SPARK National Conference -- June 7-9, Washington DC
The retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda is designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Third Party Administrators.
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California May Enhance Info for CalSTRS Participants, Set 403(b) Solicitation Policy
"The bill would: [1] require the investment information [website] to include a side-by-side comparison of each registered vendor; [2] require all local school districts, community college districts and county offices of education to adopt a policy addressing the solicitation of 403(b) products by vendors on school campuses; and [3] impose a state-mandated local program."
(National Tax-Deferred Savings Association [NTSA])
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Pension Indicator, Updated for February 2015
"The Pension Indicator had a nice rebound in February after the terrible start in January. Bond yields moved off those historical lows to give relief on the liability side. Meanwhile equities bounced back, highlighted by the NASDAQ flirting with its all time high after nearly 15 years."
(Findley Davies)
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[Opinion]
Fiduciary Definition Has Another Charlie Brown Moment
"[S]ome of us that advocate for the fiduciary standard feel exasperated by the latest thinking from the DOL concerning its proposed fiduciary definition. If such indications turn out to be accurate, then we will end up with the worst of all worlds: continuing in place certain business models -- which largely are the reason many participants in retirement plans get the short end of the stick in the first place -- as long as they are coupled with disclosures of conflicts of interest, and then blessing all with the fiduciary moniker. Voilá! Presenting a new fiduciary standard twisted into a simple bundled disclosure of conflicts."
(W. Scott Simon, in Morningstar Advisor)
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Benefits in General; Executive Compensation
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[Official Guidance]
Text of ISS FAQs on the 2015 U.S. Equity Plan Scorecard (Updated March 3, 2015) (PDF)
13 pages. "EPSC factors are not equally weighted. Each factor is assigned a maximum number of potential points, which may vary by model. Some are binary, but others may generate partial points. For all models, the total maximum points that may be accrued is 100. The passing score is 53 in all cases, i.e., slightly more than half of the potential maximum factor scores. [A chart] summarizes the scoring basis for each factor."
(Institutional Shareholder Services)
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[Guidance Overview]
ISS Releases Four Sets of FAQs, Glass Lewis Provides an Update, and FASB and IASB Make Certain Decisions Relevant to Equity Compensation Plans (PDF)
"ISS [has] issued additional frequently asked questions on 'Selected Topics,' which ... are effective for annual meetings after February 1, 2015.... Glass Lewis [has] announced ... certain 'enhancements' to performance metrics that it uses in its US and Canadian pay-for-performance models and its US equity plan model ... FASB [has] added to its agenda a project to improve and simplify accounting for stock compensation under FASB Accounting Standards Codification (ASC) 718.... [And IASB has] proposed changes to also address the classification of share-based payment transactions where a portion of the shares are withheld for taxes.... Each of these accounting developments is likely to have some impact on equity awards and/or equity compensation plans."
(Morgan Lewis)
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Text of Sixth Circuit Opinion Denying Recovery of Disgorged Profits in Addition to Improperly Denied Benefits (PDF)
43 pages, including concurrence and dissent. "ERISA remedies are concerned with the adequacy of relief to redress the claimant's injury, not the nature of the defendant's wrongdoing. The district court's use of equitable relief under Section 502(a)(3) as the vehicle for its disgorgement award misses the mark. Instead of focusing on the relief available to make Rochow whole, the award reflects concern that LINA had wrongfully gained something [by denying Rochow's benefit claim], a consideration beyond the ken of ERISA make-whole remedies.... By withholding payment of benefits until the denial was either finalized or rectified, LINA did not violate a second, distinct duty owed to Rochow and did not inflict a second injury. " [Rochow v. LINA (Life Ins. Co. of N. Am.), No. 12-2074 (6th Cir. Mar. 5, 2015)]
(U.S. Court of Appeals for the Sixth Circuit)
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Panel Proposes Rules for Unclaimed Insurance Policies and Annuities
"Insurance companies will be allowed to keep funds in unclaimed insurance policies and annuities for three years, under uniform rules being drafted by [Committee to Revise the Uniform Unclaimed Property Act of the Uniform Law Commission (ULC)]. However, they will be required to use the Social Security Death Master File (DMF) or a similar database.... The draft rules will include a dormancy period of three years running from the date of notice of death, unless the insurance company is unable to confirm the death[.]"
(InsuranceNewsNet.com)
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Be Careful What You Promise Employees Who Leave Your Employment
"Clients sometimes like to ease the transition for employees who are retiring or whom the client would like to encourage to leave. One strategy is to continue the employee 'on payroll' for a period of time with the expectation that all benefits will remain in place. However, the practice makes benefits lawyers nervous because the benefits that are supposed to continue may be offered under plans that do not recognize an employee who has stopped working as eligible for continued benefits." [Sanford v. Life Insurance Company of North America, No. 14-5332 (6th Cir. Feb. 13, 2015)]
(Stinson Leonard Street)
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Press Releases
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