Retirement Plans Newsletter

March 13, 2015

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Employee Benefits Jobs

401(k) Pension Administrator
Nicholas Pension Consultants
in CA

Recordkeeper
Wellington Companies
in VA

Client Administrator - Defined Benefit Plans
Markley Actuarial Services, Inc.
in PA

Experienced DC Retirement Plan Analyst/Administrator
Dynamic Pension Services, Inc.
in OH

Defined Contribution Client Manager
Milliman
in OR

Entry Level Actuarial Position
Venuti & Associates
in CA

Regional Sales Director-Midwest
Fringe Benefit Group
in MO

Consulting Actuary
Actuarial Consultants, Inc.
in CA

Regulatory Services Technician
OneAmerica Financial Partners, Inc
in IN

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Webcasts and Conferences

Employee Benefits Update - Hot Topics for 2015
RECORDED
(Snell & Wilmer)

Employee Plans Compliance Resolution System (EPCRS) - 1/2 Day Program
March 19, 2015 in PA
(ASPPA Benefits Council [ABC] of Greater Philadelphia)

CFO Playbook on Human Capital: Developments in Employee Benefits and Compensation
April 6, 2015 WEBCAST
(CFO.com)

401(k) Investment Lineup Summit 2015
April 7, 2015 in CA
(Pensions & Investments)

Health Care Reform
May 14, 2015 in MN
(Thomson Reuters / EBIA)

COBRA Compliance for Group Health Plans
May 15, 2015 in MN
(Thomson Reuters / EBIA)

ASPPA Regional Conference
June 4, 2015 in IL
(ASPPA [American Society of Pension Professionals & Actuaries])

View All Webcasts and Conferences



[Official Guidance]

Text of IRS Notice 2015-24: Weighted Average Interest Rates, Yield Curves, and Segment Rates Applicable for March 2015 (PDF)
"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities ... as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate ... The rates in this notice reflect the application of Section 430(h)(2)(C)(iv), which was added by [MAP-21] and amended by [HATFA]." [Also see: corporate bond yield curve spot rates (XLS)] (Internal Revenue Service [IRS])  


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The Upcoming Conflict of Interest Rule: What Will it Look Like, and Why?
"The new proposal is not publicly available and won't be until OMB completes its review. But the statements, reports, FAQs, fact sheets, and the President's speech do tell us a number of things. In this article, based on that information, [the authors] discuss [1] the Administration's view of the importance of this proposal, [2] how it intends to support its adoption and [3] what (in bare outline) the proposal may look like." (October Three Consulting)  

How Old Is Your DB Plan? Matching Pension Investing to Plan Demographics
"In the 2000s, pension plan investing for corporations became more focused on lower risk, liability-driven strategies. As time goes on and funded statuses improve ... plans will become more sophisticated about how they match their assets with their liabilities. One key consideration of matching (a.k.a. hedging) strategies ... is the demographics of the plan population. [This paper explains] why demographics have become increasingly important and how a plan sponsor can use this shift to better structure a pension investment strategy." (Nuveen Asset Management)  

Retirement Plan Investment in Company Stock Depends on Employer Goal
"[The National Center for Employee Ownership (NCEO)] has found that employee ownership makes employees more productive and ESOP companies tend to perform better. If a plan sponsor is choosing to offer company stock for these reasons, it could offer the ESOP as a stand-alone plan fully funded and only funded by the company, and offer a separate retirement plan.... [C]losely held companies are more likely to offer a retirement savings plan separate from the ESOP than any company is to offer any retirement plan." (PLANSPONSOR)  

Young People Who Want to Have a Lot of Money in Retirement Better Understand This Chart
"Young people just joining the labor force can reasonably expect they won't have a pension waiting for them come retirement. We've moved to the age of 401(k)s and individual retirement accounts, which gives us more control over our future.... Compound interest is a friend to young people, if they start saving early." (Business Insider)  


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Coalition Opposes Oregon Proposal for State-Run Retirement Plan for Private Employers
"The American Council of Life Insurers and nine other business and financial groups have formed a new coalition seeking to block the state of Oregon's efforts to create a state-managed retirement savings plan for people who do not have access to a pension, 401(k) or Individual Retirement Account through their employer.... The coalition opposes the legislation because they worry it could force the state's employers to follow [ERISA] and subject them to the fiscal liabilities contained in this law. They also think the state should encourage employers to take part in the private retirement savings plan marketplace ... on a voluntary basis instead of forcing them to take part in a government-managed plan." (The Bulletin)  

[Opinion]

Wall Street Is Not (Primarily) to Blame for America's Retirement Mess
"[M]any households do not pay any financial-services firm even a dime to manage their money -- because they have no investments. Nearly half of families do not save anything for any purpose, according to the Federal Reserve. As a result, the median family in the United States has financial assets of just $21,200, according to the Fed, and just more than half have no retirement account." (Morningstar)  

[Opinion]

Employer-Provided Retirement Benefit Estimates: A Critical Part of Planning for Federal Employees
"Employees at some [federal] agencies are being told they can't request a retirement estimate unless it is part of their application for retirement. Others have been told they must rely on an online estimator until they are within a year of retirement, at which point they can request an estimate from a human resources specialist. A retirement estimate provides valuable information to employees that not only helps them to plan for retirement, but to make sure they're getting credit for all the federal service they've performed." (Government Executive)  

Benefits in General; Executive Compensation

Average Employer Cost for Union Workers Is $46.50 Per Hour
"Private industry employers spent an average of $31.32 per hour worked for employee compensation in December 2014. Wages and salaries averaged $21.72 per hour worked and accounted for 69.4 percent of these costs. Benefits averaged $9.60 and accounted for the remaining 30.6 percent. Total compensation costs for union workers averaged $46.50 per hour worked in December 2014. The average for nonunion workers was $29.83. Benefits accounted for 40.3 percent of compensation costs for union workers, compared with 29.2 percent for nonunion workers." (U.S. Bureau of Labor Statistics [BLS])  

Sixth Circuit Overturns $2.8 Million ERISA Award for Unjust Enrichment
"The fact that LINA made money off the denied claim did not aggravate Rochow's injury, the circuit court said. The opinion stated that if Rochow's logic held, then all wrongful denials of benefits that enables insurers to make gains could subject plan fiduciaries to ERISA enforcement for disgorgement of profits. The earlier Rochow ruling focused on the company's gain, but that was beyond consideration for ERISA relief. Since there was no showing that the benefit recovery, attorney's fee and (potential) prejudgment interest would be inadequate, the further award was inappropriate." [Rochow v. LINA, No. 12-2074 (6th Cir. Mar. 5, 2015)] (Thompson SmartHR Manager)  

2015 Workplace Threats Survey: Are Measles or Cyber Attacks the Number One Concern?
"Despite seemingly common workplace fears like disease outbreaks, violence and natural disasters, the number one concern for organizations is a cyber attack.... 37 percent of organizations said a cyber attack was their number one concern, compared to other potential threats. In response, organizations are more financially prepared -- 64% are spending more now than they did 5 years ago for workplace threat prevention." (International Foundation of Employee Benefit Plans [IFEBP])  

Senate Panel Mulls Changes in Rules on Nonqualified Deferred Compensation
"Sen. Ron Wyden (D-OR), released a report on tax avoidance strategies that outlines possible recommendations for reforming nonqualified deferred compensation (NQDC) as part of an expected tax reform proposal.... The report outlines several options for reforming NQDC, including proposals that would: [1] Include NQDC in gross income for the taxable year in which it vests; [2] Limit the amount of NQDC (for example, to $1 million); and [3] Impose the 162(m) deduction limit on former employees." (Towers Watson)  

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