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Employee Benefits Jobs
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Webcasts and Conferences
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Using IRS Reference Checklists in Determination Letter Applications
"[A] single Form 5300 determination letter application for an ongoing plan will generally involve five Reference Lists -- one for each plan year in the plan's five-year determination letter cycle. The online Reference Lists provide hyperlinks to related IRS guidance for each listed qualification requirement."
(Towers Watson)
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Federal District Court: Send Notice of Pension Transfers Related to Takeovers
"[It's] worth remembering the importance of notification during the series of benefits transfers that can occur from corporate takeovers. Not doing so, even if the accrued benefits are shifted to the new company, can leave participants unaware -- and possibly able to seek and receive double benefits. A federal district court in Utah recently ruled that a plan sponsor failed to give the statutorily required notice of plan changes, which was an abuse of its discretionary authority to determine appropriate benefits as construed by the plan." [Anderson v. CEMEX, No. 2:12-00136 (D. Utah Dec. 29, 2014)]
(Thompson SmartHR Manager)
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Professor Theresa Ghilarducci: The Woman Who Wants to Kill Your 401(k)
"The first of America's baby boom generation started turning 65 in 2011. By 2030, the entire generation will have crossed that senior citizen threshold. When it's over, America's seniors will have leaped from 13.7 percent of the population to 20.3 percent, according to a recent U.S. Census report. And we, as a society, are far from ready for that shift.... She's been saying this for more than 20 years -- in 1993, when the vehicle was in its infancy, she wrote an op-ed headlined 'Beware the 401(k).' To her labor-economist eye, the 401(k) wrongly shifts risk from the employer to the employee and offers no guaranteed payout."
(USA TODAY)
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Are Retirees Falling Short? Reconciling the Conflicting Evidence
"Federal Reserve data show that retirement preparedness has been declining over time, but studies on the level of preparedness offer conflicting assessments. The National Retirement Risk Index (NRRI) finds half of households are 'at risk,' while studies of optimal savings suggest less than one-tenth will fall short. The optimal savings results depend crucially on two assumptions: households spend less when their kids leave home (the NRRI assumes no decline); and households plan for declining consumption in retirement (the NRRI assumes steady consumption). While the issue remains unsettled, the Federal Reserve data are consistent with the NRRI finding that retirement shortfalls are a growing problem."
(Center for Retirement Research at Boston College)
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PBGC Finds Holes in Safety Net for Multiemployer Plans
"Twenty-one percent of multiemployer participants in 'current plans' -- that is, insolvent plans currently receiving financial assistance from PBGC -- have experienced or are projected to experience a reduction in benefits ... compared with 16% of participants in the agency's most recent study of single-employer plans. For 'future plans' -- that is, terminated plans that have not yet started receiving financial assistance from the PBGC, but are expected to in the future -- that number is projected to be 51%[.]"
(CFO)
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Request for Proposal: Data Cleansing and Validation for Public Pension Plan Mortality Study/Tables
"The Retirement Plans Experience Committee ... of the Society of Actuaries is seeking bids for receiving and compiling mortality experience from public pension plans. The data will be used by the Committee to develop an experience study report and mortality tables that will be used in consideration of selecting an appropriate mortality assumption for measuring public pension valuations. The Committee ... is responsible for developing comprehensive studies of retirement plan experience in the U.S."
(Society of Actuaries)
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Sen. Warren Drives White House Message on Fiduciary Regs at Senate Hearing
"According to the senator, one of the consequences of the shift from defined benefit retirement plans to defined contribution plans, is that Americans are now forced to rely on investment advisors and broker-dealers who 'can legally take kickbacks from selling Americans lousy products' and 'peddle lousy products that line their own pockets while they drain the savings of their clients.' "
(American Society of Pension Professionals & Actuaries [ASPPA])
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The In-State Equity Bias of State Pension Plans
"This paper provides evidence on the investment behavior of 27 state pension plans that manage their own equity portfolios. Even though these state plans typically hold broadly diversified portfolios, they substantially over-weight the equity of companies that are headquartered in-state.... [S]tate pension plans are more likely to hold a within-state stock if the headquarters of the firm is located in a county that gave a high fraction of its campaign contributions to the current governor. These politically-motivated holdings yield excess returns for the pension fund."
(National Bureau of Economic Research [NBER])
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Why Annuity Sales Will Be Relatively Flat Despite a Growing Need (PDF)
"Pre-retirees are increasingly interested in retirement products that can provide guaranteed lifetime income.... This growing demand should create an opportunity for the annuity market.... The fixed-rate deferred ... annuity business will continue to face a challenging market due to the low interest rates; these sales typically follow the interest rate market."
(LIMRA)
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Employee Ownership Update for March 16, 2015
"New Data from NASPP on [Employee Stock Purchase Plans (ESPPs)]: Fifty-two percent of all responding companies have ESPPs, including 67% of technology companies but just 25% of manufacturing companies. Twenty-five percent of respondents had eliminated an ESPP, mostly over three years ago, but 17% had started new plans. Eighty percent of the plans were qualified under Section 423 of the Internal Revenue Code."
(National Center for Employee Ownership [NCEO])
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Why Women Need to Save More and How to Get Started
"The first step is to take advantage of any retirement plans that might be offered through your employer. Find out what options your employer offers and what you need to do to maximize those benefits. If you are already in a plan, are you contributing at least enough to get any matching contributions from your employer? ... [If] you are staring at an empty savings account and starting from scratch, the most important thing you can do is find ways to save each day and start to build up your savings."
(Women's Institute for a Secure Retirement [WISER])
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Benefits in General; Executive Compensation
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[Official Guidance]
Text of IRS Notice 2015-27: Recommendations Invited for 2015-16 Guidance Priority Plan (PDF)
"The 2015-2016 Priority Guidance Plan will identify guidance projects that the Treasury Department and the Service intend to work on actively as priorities during the period from July 1, 2015, through June 30, 2016.... Please submit recommendations by May 1, 2015, for possible inclusion on the original 2015-2016 Priority Guidance Plan."
(Internal Revenue Service [IRS])
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ERISA Advisory Council Issues Outsourcing Report (PDF)
"The council believes that the DOL should clarify the legal standards applicable to plan fiduciaries in the following areas: [1] The plan sponsor's fiduciary duties when the plan document designates a named fiduciary other than the plan sponsor. [2] A plan fiduciary's scope of liability when the fiduciary hires a service provider who is not a fiduciary. [3] Whether a plan fiduciary who hires another fiduciary has obligations beyond the duty to select and monitor the hired fiduciary. [4] More guidance on the standard of knowledge required to hold a co-fiduciary liable for the actions of another fiduciary."
(Buck Consultants at Xerox)
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Sixth Circuit Rejects Claim that Disgorgement of Profits Is Appropriate Remedy in ERISA Benefit Denial Action
"The en banc Sixth Circuit determined that unless a plaintiff could show that the remedy for denied benefits under ERISA Section 502(a)(1)(B) is inadequate to make the plaintiff whole, equitable relief under ERISA Section 502(a)(3) is unavailable. The court reasoned that Rochow's ERISA 502(a)(3) claim constituted impermissible repackaging of a benefit denial claim because the remedy thereunder is duplicative or redundant when denied benefits are granted under ERISA Section 502(a)(1)(B). Accordingly, in order to seek additional equitable relief, a plaintiff must show that a breach of fiduciary duty, or other ERISA violation, caused damages separate and distinct from a mere denial of benefits." [Rochow v. LINA, No. 12-2074
(6th Cir. Mar. 5, 2015)]
(McDermott Will & Emery)
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The Sixth Circuit Vindicates the Fourth and Eleventh
"Ever since Cigna v. Amara ... some members of the plaintiff's bar found a renewed interest in tagging on a claim for equitable relief when seeking employee benefits under ERISA Section 502(a)(1)(B).... In the district courts of the Fourth and Eleventh Circuit, defendants consistently won this battle ... However ... [they] often were required to address Rochow v. LINA (6th Cir. 2013), a Sixth Circuit outlier showing up in the claimants' opposition briefs.... Over one year later, the [en banc Sixth Circuit] vacated the panel's earlier decision, relying upon the authority that seemed clear under Varity and its progeny that the plaintiff's claim for benefits was adequate relief, making the ERISA Section 502(a)(3) claim
duplicative and inappropriate[.]" [Rochow v. LINA, No. 12-2074 (6th Cir. Mar. 5, 2015)]
(National Law Review)
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More on GE's Accrued Pension Benefits Disclosure
"GE anticipated the potential optical issues associated with the change in pension value for this year and put together a number of extra proxy disclosures to help deal with this.... [T]he relevant proxy excerpts [are included in this article]. Other companies facing this artificial increase in pension values because of the quirky change in actuarial assumptions last year should consider reviewing this useful disclosure language."
(Winston & Strawn LLP)
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How Do You Report Stock Sales on IRS Form 8949 If the Cost Basis Is Wrong on Form 1099-B?
"Find the column entitled Adjustments to gain or loss, which is column (g) in both forms. On Form 8949, enter in this column the amount of stock compensation that was not included in the cost basis (Box 1e) reported to the IRS on Form 1099-B. Part of your W-2 income, this will be a negative number (in parentheses), as the incorrectly low basis reported on Form 1099-B will have made your gain too large (or your loss too small). In addition, you insert Code B in column (f). This indicates that the basis on Form 1099-B is incorrect and should be higher than what is shown."
(myStockOptions.com)
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Improper Administration of FICA's Special Timing Rule as Applied to Deferred Comp Arrangements Could Lead to Employer Liability
"[T]he case highlights the importance of properly handling FICA payroll taxes in connection with the administration of nonqualified deferred compensation plans.... [P]articipants could try to expand the rationale of Davidson to other situations where there is a perceived improper application of tax rules to nonqualified deferred compensation plans, specifically in the context of 409A.... [E]mployers should review and consider revising, as needed, any administrative language in plan documents that could be construed as creating participant rights in this regard. Additionally, employers may want to consider including disclaimers of tax warranties in any such documents." [Davidson v. Henkel Corp., No. 12-cv-14103 (E.D. Mich. Jan. 6, 2015)]
(Nutter McClennen & Fish LLP)
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[Opinion]
Group Letter to SEC Urging Issuance of Regs for Dodd-Frank Executive Compensation Provisions (PDF)
"As the Commission drafts its proposed rule, we ask that the following be incorporated. [1] Empower shareholder oversight of claw back practices by requiring that claw backs be disclosed.... [2] Require claw back of proportional incentive compensation where it is not numerically connected to financial results.... [3] Identify 'executive officers' as those provided under the SEC's Rule 16a-1(f).... [4] Identify the date triggering the three-year look back as the date of the first accounting misstatement."
(Public Citizen and 9 other Consumer and Labor Organizations)
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Press Releases
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