DATAIR Employee Benefit Systems, Inc.

Retirement Specialist
Nationwide
in CA

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Administrative Appeals Process for Risk Adjustment Payments/Charge and Reinsurance Payments
May 27, 2015 WEBCAST
(Centers for Medicare & Medicaid Services [CMS])

Strategies for Executive Compensation in Today’s “Pay for Performance”
June 2, 2015 in MA
(Directors Roundtable)

Pay-for-Performance Disclosure
June 4, 2015 WEBCAST
(Towers Watson)

Voluntary Fiduciary Correction Program Workshop
June 5, 2015 in UT
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Overpayments, Underpayments, Fiduciary Duty and IRS Qualification
June 11, 2015 WEBCAST
(American Bar Association [ABA])

7th Annual Employee Benefits Symposium
June 25, 2015 in DC
(AFS 401[k] Retirement Services)

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First Church Plan Case Settles
"[T]his settlement appears to be a significant victory for Ascension Health. The plaintiffs have agreed that they will no longer claim that the plan is subject to ERISA unless there is a major change in the law from either the Supreme Court, Congress, or the IRS. In exchange, Ascension Health has agreed to contribute $8 million to the plan, although we have no idea how much, if anything, they were already planning on contributing this year or how that amount compares to previous years.... Notably missing from the settlement is, what we believe was the point of the lawsuits in the first place, any funding standard that closely resembles that found in ERISA." [Overall v. Ascension Health, No. 13-cv-11396-AC-LJM (E.D. Mich. May 11, 2015)] (Fiduciary Matters Blog)  

[Advert.]

P&I Alternatives in DC Conference | May 19 | New York

Register for this FREE, one-day event to hear top industry experts and peers discuss the growing trend of incorporating alternatives into DC plans and its potential for helping you improve retirement outcomes.

Seventh Circuit: Disputed Benefit Calculation Without Explanation Is Arbitrary and Capricious
"The district court found Continental's 2012 decision to be arbitrary and capricious because it is not based on the Plan's definition of 'compensation' -- at least is not demonstrably based on that definition.... No matter how many times Continental rattles off the phrase 'benefit salary' -- which it has done an awful lot -- this is not an explanation of the 2012 decision because it leaves everyone in the dark about how Reilly's qualifying compensation was calculated. An explanation-free decision is arbitrary and capricious.... The court needed to determine (or allow the administrator to determine) the right number, not just to assume that whatever had been estimated in 1999 is Reilly's entitlement.... The district court's decision cannot stand, because Reilly has not tried to show that $5,400 is the only possible outcome of a proper calculation process." [Reilly v. Continental Casualty Co., No. 14-2888 (7th Cir. May 6, 2015)] (U.S. Court of Appeals for the Seventh Circuit)  

ERISA Litigation and Enforcement: The Role of the Independent Fiduciary and Best Practices for Financial Advisors
"The outsourced fiduciary market is growing in the United States and elsewhere. When an outside party is hired by a plan sponsor, it is critical to specify responsibilities and contract accordingly. When an 'expectations gap' exists, some critical tasks may be left wanting or not addressed at all. When multiple fiduciaries are in place, a plan sponsor must ensure that a central person or team is adequately coordinating the efforts of all fiduciaries. The newly proposed Conflict of Interest rule is predicted to materially change the landscape of fiduciary relationships between plan participants and retirement advisers." (Pension Risk Matters)  

Nine Questions Employers Have About Fiduciary Responsibility
"[1] Am I a fiduciary? ... [2] My boss appointed me to our plan's Investment Committee even though I don't have time to serve in this role. Am I a fiduciary?... [3] Is our investment advisor a fiduciary? How would I know? ... [4] I know my investment advisor is a fiduciary. That means that I don't have to be one, right?... [5] Our plan's recordkeeper has to be a fiduciary, right? Our plan attorney should be one as well since he is always telling us what to do with the plan.... [6] If an investment fund that the Investment Committee chose to offer loses money, are the fiduciaries liable for the loss?... [7] Some of the prior fiduciaries to our 401(k) plan don't seem to have done a good job choosing investment funds. Could we be liable, even though we weren't involved in selecting those funds?... [8] We just always do what our investment advisor tells us to do. As a result, there is no way we could be liable for any fiduciary breach, right?... [9] Is there any way to manage fiduciary risk and the associated liability?" (Lawton Retirement Plan Consultants)  

'Top-Down' and 'Bottom-Up' Views of the DOL Fiduciary Proposal
"From a 'top-down' perspective of the large retirement plan providers -- the Principals, Prudentials and MetLifes of the world -- fiduciary rules will give an advantage to the 'recognized leaders' in the 401(k) and individual retirement account (IRA) rollover space.... Small advisors, however, see the fiduciary rule through a very different lens.... There seems little doubt that a fiduciary standard will entail higher costs and that means lower profit margins." (InsuranceNewsNet.com)  

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Retirement Education – Principles of Defined Contribution Plans Series

The retirement plan knowledge necessary for every new practitioner. Improve plan administration and reduce compliance problems with the latest regulatory and law changes. Seventeen 60-minute live and prerecorded modules. Call (973) 492-1880.

The Big 401(k) Fiduciary Question: Target Date or Target Risk?
"Age may be a proxy for one's return needs, but it is hardly the only one. Unfortunately, Target Date Funds assume age is the only important factor when determining the investment needs of the retirement saver.... No two investors risk appetites are exactly alike and Target Risk Funds can be advantageous in that they ensure that risk is based on an investor's specific tolerance and not solely on the length of time until a future date.... Target Risk Funds ... lack the 'set-it-and-forget-it' desirability of Target Date Funds.... For the average 401k investor Target Risk Funds are easier to understand." (Fiduciary News)  

Missing Out: How Much Employer 401(k) Matching Contributions Do Employees Leave on the Table? (PDF)
"One in four employees missed out and did not save enough to receive their full employer match. In 2014, the average amount of employer match not received was $1,336 per employee, which equates to an extra 2.4 percent of annual income missed. Over 20 years, this annual loss adds up to $42,855 per plan participant. In total, over 1 million employees in [the] study sample left more employer matching contributions unclaimed ($1.4 billion) than claimed ($1 billion).... [N]ationwide American employees are passing up approximately $24 billion annually in employer matching contributions by not saving enough to receive their full employer 401(k) match. Lower-income and younger employees were much more likely than others to miss out on at least part of their employer matching contribution." (Financial Engines)  

401(k) Wellness Scorecard for Quarter Ending December 31, 2014 (PDF)
"In 2014, more than 1.5 million participants contributed to their 401(k) accounts, an increase of 18% compared to 2013.... Simplified plan design drives employee engagement ... Adoption of automatic features continues to gain momentum ... Advice Access helps drive financial wellness ... Coordination with health enrollment can drive positive action ... Mobile education reaches employees where they are." (Bank of America Merrill Lynch)  

Preparing Your Employees for a Timely Retirement
"A retirement-readiness communications strategy needs to embrace the following key components: [1] Know your plan's goals and objectives.... [2] Know your audience.... [3] Determine whether your communications support your plan's goals and objectives.... [4] Customize and brand all your communications.... [5] Communicate frequently." (Sibson Consulting)  

The Merger of Two Mega 401(k)s
"For the two companies' 401(k) plans, [Verizon's purchase of AOL] is a great development.... Verizon has one of the biggest savings plan for retirement. Its 401(k) has 74,000 participants and over $13 billion in assets as of 2013 ... AOL, with 9,400 participants and $609 million in assets, is on the bigger side of 401(k) plans as well, although most certainly not as big as Verizon's -- despite being in a sector not known for its strong 401(k) offerings. AOL's employees have not been too happy with their plan, however." (Money Management Intelligence)  

Small Companies Now Have No Excuse for a Lousy Retirement Plan
"Small plans often charge savers fees that are five or six times as great as those that workers at large companies pay. But it's no longer necessary for workers to be stuck in these high-cost 401(k) plans. Cheaper plans are rapidly signing up new employers, and 401(k) fees for even the smallest businesses are plunging." (Bloomberg)  

A Guide to Changing Your Plan's TPA
"Changing a Third-Party-Administrator (TPA) for your defined contribution plan can be a significant undertaking. It involves not merely the transfer of records but the transfer of services and processes, many of which may be highly customized to your plan's unique design. The focus of this publication is to provide you with guidance and helpful hints if you're considering a TPA transition." (National Association of Government Defined Contribution Administrators [NAGDCA])  

Longevity Plans: An Answer to the Decline of the Defined Benefit Plan (PDF)
"Consider a supplementary defined benefit plan with the following features: [1] Unit accrual pattern: No cost leveraging from final average salary designs. [2] Later benefit accruals: Plan participation would not begin before age 45. [3] Later benefit commencement: No earlier than age 75. [4] Life annuity options only: Single life option for single participants and 75 percent joint and survivor option for married participants. [This] plan structure ... forms the basis for a longevity plan. The first two features address employer cost and volatility concerns. The [last two] features ... address longevity risk." (William Most and Zorast Wadia, in Benefits Law Journal)  

Many DB Plan Sponsors Still Considering Risk Transfer
"A survey of North American defined benefit pension plan professionals ... found 23% are still considering transferring plan liabilities to a third-party insurer in 2015. Two percent said it is very likely they will do so in 2015, and 4% indicated such a transfer was already implemented or in progress. Thirty-seven percent... are considering utilizing or increasing the usage of liability-driven investing (LDI) strategies in 2015. Eighteen percent said they were very likely to do so, and 32% reported they have implemented an LDI strategy." (planadviser)  

HATFA Will Cause Largest DB Plans to Cut 2015 Contributions
"The renewed decline of funded status for defined benefit retirement plans this year has not led the largest U.S. DB plan sponsors to contribute from their coffers to compensate, a phenomenon that one investment advisory firm attributes to temporary interest rate stabilization.... 15 of the 19 largest pension sponsors that the firm tracks have disclosed that they won't be required to contribute any significant amount to their U.S. plans in 2015, although 18 have underfunded global pension liabilities." (Thompson SmartHR Manager)  

Trends in Claims for Social Security Benefits
"Over the past 25 years, the average retirement age for U.S. workers has been rising, a trend that should align with when people first claim Social Security. But the percentage of all initial claimants who are age 62 shows little change until recently. A better metric to capture claiming behavior over time -- when the population is aging -- is the percentage of workers turning age 62 who claim at 62. This measure, based on unpublished Social Security data, shows a steep decline in claiming at 62 since the mid-1990s: from 56 percent to 36 percent for men. In short, while more than a third of workers still claim right away, a growing number are waiting until their mid-60s or later." (Center for Retirement Research at Boston College)  

San Bernardino Judge Rejects Bond Suit Over Pension Debt
"Pension bondholders can't force the bankrupt California city of San Bernardino to pay them as much as the state's powerful retirement system ... U.S. Bankruptcy Judge Meredith Jury acknowledged that her decision ... is likely to be seen as unfair to the municipal-bond market and may even discourage investors from buying pension-obligation bonds in the future." (Bloomberg)  

[Guidance Overview]

162(m) Deduction Limitation and Post-IPO or S-1 Grants of RSUs and Phantom Stock
"A company needs to take particular care in granting RSUs and phantom stock in the transition period after becoming public. For any grant made on or after April 1, 2015, pursuant to a plan or agreement in effect while the company was private, unless the RSU or phantom stock vests and is distributed or paid during the transition period, the transition relief will not apply. Instead, the company will need to avail itself of another exemption, most likely the exemption for qualified performance-based compensation." (Chiesa Shahinian & Giantomasi PC)  

The Future of ERISA Litigation
"On April 20, 2015 ... the Supreme Court agreed to decide ... whether Article III of the Constitution allows Congress to permit lawsuits over a statutory violation where the violation does not necessarily result in a plausible claim of concrete injury.... [This case] arises under the Fair Credit Reporting Act, not ERISA. But the Constitutional question presented to the Supreme Court has equal applicability to ERISA claims." (Seyfarth Shaw LLP)  

How to Win a Say-On-Pay Proxy Fight Despite a 'No' Recommendation from ISS or Glass Lewis
"[If] you received a 'no' recommendation from either ISS or Glass Lewis, it is critical that you take a proactive approach and promptly put in place a shareholder outreach plan to directly engage your larger institutional shareholders to discuss your pay decisions ... If the Company wants to win the Say on Pay proposal, it has two options. Depending on what the Company hears from shareholders, the Company can: [1] Not change anything but issue a supplemental proxy explaining how the pay decisions are in the shareholders' best interests and continue the dialogue with the undecided or negative shareholders; or [2] Reduce compensation and/or add performance conditions and file an 8-K regarding these changes to try to get ISS to change its 'no' recommendation and the large institutions to vote 'yes.' " (Orrick)  

Towers Watson Acquires Acclaris to Expand Benefits Administration to Consumer-Driven Account-Based Benefits
Towers Watson

MassMutual RetireSmart App Introduced for Smartphones
MassMutual

Pro-ESOP Bill, S. 1212, Introduced in Senate
ESOP Association

Securities and Exchange Commission Sues Retirement Planners for Making False Claims to Investors
U.S. Securities and Exchange Commission

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