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Employee Benefits Jobs
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Webcasts and Conferences
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[Guidance Overview]
Multiemployer Pension Reform Act of 2014: Contributions for Withdrawal Liability (PDF)
"[The authors] recommend that [multiemployer] plan administrators review their procedures and systems with regard to invoicing employers and/or retaining employer contributions in order to isolate the following contribution amounts that are excluded when calculating withdrawal liability: [1] 5% and 10% employer contribution surcharges; and [2] Contribution increases outside the benefit formula and required by a funding improvement plan or rehabilitation plan that go into effect during plan years beginning after December 31, 2014. Tracking these contributions continue[s] while the plan is in endangered or critical status. Tracking ends on the expiration date of the collective bargaining agreement in effect when the plan emerges from endangered or critical status."
(Milliman)
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How the Current Regulatory Framework Provides Effective Investor Protections
30 pages. "This white paper describes the framework of regulatory protections currently in place for all investors, including those saving through IRAs, with a particular focus on the securities laws. It also highlights key aspects of the securities laws designed to address the concerns identified in the [Council of Economic Advisors] Report, how the securities laws are calibrated to address particular advice models, and initiatives of the SEC and FINRA to address concerns specific to retirement savings."
(Morgan Lewis)
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12b-1 Fees and Revenue Sharing Add to 401(k) Plan Sponsor Fiduciary Liability Woes
"There is a growing consensus that ... no matter their original attributes, 12b-1 fees should be relegated to the 401k history museum.... [O]nly about 10% of 401k plans continue to use 12b-1 fees.... 87% of 401k plans contain funds exposed to revenue sharing.... With fee disclosure now more than two years old and in anticipation of the DOL's new conflict-of-interest rule, plan sponsors are quickly moving away from the old 12b-1/revenue sharing model."
(Fiduciary News)
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401(k) Auto Enrollment: Controlling Administrative Costs for Small Account Balances
"An experience many plan sponsors encounter following the rollout of a 401(k) auto enrollment campaign is an increase in the number of non-participating individuals with relatively small account balances.... With sufficient planning, auto enroll can be implemented without drastically altering costs -- but what can be done when it's too late and the growth of small account balances begin costing you money? ... Outlets for shedding the small accounts will vary based on whether the participant still works for the company and how the plan document is structured."
(Dufek & Company)
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2015 PBGC Premium Filings Must Include Risk Transfer Disclosures
"Although it is unclear what the PBGC intends to do with the new risk transfer disclosures, the PBGC has expressed many concerns regarding the effects of recent pension de-risking trends on the PBGC's financial situation and will likely scrutinize the reported data. In the meantime, plan sponsors that complete risk transfer activities must prepare to comply with this additional disclosure requirement."
(Proskauer's ERISA Practice Center)
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SEC Application of Fiduciary Duties to Brokers Could Face Tough Challenges
"The brokerage industry has for the most part resisted efforts to adopt the tougher standard, arguing that it will raise costs for clients and lead firms to shun smaller investors because of the increased record-keeping requirements.... Adopting a uniform fiduciary duty standard will have its greatest effect on investor claims against brokers for mismanaging their accounts by making it easier to prove a violation.... A claimed breach of fiduciary duty would be raised in arbitration proceedings, where proving a violation of the higher standard is likely to have a greater potential for recovery than having to prove investment recommendations were unsuitable."
(The New York Times; subscription may be required)
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Generations Confess Retirement Fears
"[It] is Generation X, not the boomers, who are most concerned about not being able to retire when they want.... Nearly half (48 percent) of the Gen Xers ranked this as a top financial concern right now.... As for the baby boomers, the poll found that only 19 percent of them ranked not being able to retire when desired as their greatest financial fear.... First place went to concern about having enough money in emergency savings (34 percent), similar to Gen X. The boomers even put being unable to pay off monthly expenses (31 percent) ahead of retiring when desired."
(InsuranceNewsNet.com)
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The Growing Divide Between the Retirement Elite and Everyone Else
"[M]ost workers end up retiring well before age 65, and few have enough saved by that point. The least prepared workers, some 32% of those surveyed, were on track to receive just 38% of their income in retirement, which would be largely Social Security benefits. By contrast, an elite group of workers, some 20%, are on track to replace 143% of their current income ... And it's not just those pulling down high salaries. 'The key success factors were access to a 401(k) and consistently saving 10% of pay, not income,' [Empower president Ed Murphy] says."
(TIME)
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Eight Questions to Ask Before Accepting a Pension Lump Sum Distribution Offer
"What benefit options are available? ... How was the lump sum calculated? ... What is the relative value of the lump sum versus the monthly annuity? ... What are potential positive and negative ramifications of accepting the lump sum? ... What are the tax implications of accepting a lump sum? ... What is the role of the [PBGC] and what level of protection does PBGC provide on each benefit option? ... What are the instructions for either accepting or rejecting the lump sum offer? ... Who can be contacted for more information or assistance?"
(Forbes)
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Rhode Island Retirees Reportedly Approve Pension Settlement
"While Monday's voting results were not officially disclosed due to a judicial gag order, multiple retirees leaving the closed-door meeting said the final tally on the settlement was 1,168 in favor, 332 against; only a small percentage of the state's retirees actually cast a ballot.... [C]urrent workers are still voting on the settlement and will continue to do so until the deadline on Friday. And even if all of them agree to settle -- which is no sure thing -- the deal would then have to be approved first by a judge and then by the General Assembly to avoid a trial."
(WPRI.com)
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[Opinion]
Retirement Crisis: The Great 401(k) Experiment Has Failed for Many Americans
"[T]ax-advantaged 401(k) plans have provided a means for millions of retirement savers to build a nest egg. More than three-quarters of employers use such defined contribution plans as the main retirement income plan option for employees, and the vast majority of them offer matching contribution programs ... But shifting the responsibility for growing retirement income from employers to individuals has proved problematic for many American workers, particularly in the face of wage stagnation and a lack of investment expertise. For them, the grand 401(k) experiment has been a failure."
(NBCNews.com)
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Benefits in General; Executive Compensation
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2014 in Review: ERISA Civil and Criminal Enforcement Activity by DOL Is Trending Upward
"In FY 2014, 365 criminal investigations were closed, representing a nearly 30% increase since FY 2010. This step-up in criminal investigations goes back even farther than 2009 -- the number of criminal investigations has been trending upward since FY 2001, increasing 155% over that period -- but has accelerated in recent years.... The total number of ERISA civil investigations closed has been trending upward since FY 2010. In FY 2014, DOL closed 3,928 civil investigations, which represents a 26% increase over civil investigations closed in FY 2010 -- fairly comparable to the percentage increase over this period in criminal investigations closed. DOL closed more civil investigations in FY 2014 than it has since FY 2004, when it closed 4,399."
(Sutherland Asbill & Brennan LLP)
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Davidson v. Henkel: A Rather 'Taxing' Decision for Deferred Comp Plans
"Nonqualified deferred compensation plans commonly include language to the effect that they are intended to comply with Section 409A (or to be exempt from its requirements).... IRS guidance suggests that these statements of intent may prove helpful in demonstrating compliance. But could those same statements -- which are generally intended to shield executives from Section 409A penalties -- come back to haunt employers? ... [U]nder the [Davidson v. Henkel Corp.] court's reasoning, even an inadvertent failure to comply with Section 409A would be inconsistent with the 'purpose' of the arrangement -- thereby conceivably supporting a claim for damages by an affected participant."
(Spencer Fane)
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2015 Proxy Season Preview: Looking Back at the 2014 Mini-Season and Into 2015 (PDF)
8 pages. "During the 2014 mini-season, the average level of support for pay plans fell to 80% -- from 83% last mini-season. On the other hand, micro-cap companies saw an increase in support for their pay plans -- from 71% in the 2013 mini-season to 80% in 2014. Declines in support levels were pronounced at large-cap companies.... Almost half of all companies whose pay plans failed to garner 70% shareholder support in the 2013 mini-season, also failed to receive 70% support in the 2014 mini-season."
(Broadridge and pwc)
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Press Releases
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