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Benefits in the News

Older News | September 17, 2014

Taft-Hartley Trustees: Traveling Outside State Lines Requires Staying in Line with the IRS Travel Expense Reimbursement Rules
Belfint Lyons & Shuman, CPAs More items by Belfint Lyons & Shuman, CPAs

"Under the actual expense method, there must be records to evidence the actual cost of travel expenses.... As an alternative to the actual expense method, the IRS standard rates can be used for meals and incidentals. The only documentation required under this method is proof of time, place, and business purpose of the travel.... Expense reimbursements for the departure and return days must be prorated under the standard meal allowance method by one of two methods."
Why Not a Minimum Pension?
Third Way More items by Third Way
9/17/2014 [Opinion]

"Not enough American workers are contributing to a retirement account. To address this gap in retirement savings, we propose a minimum pension law -- a requirement that employers contribute a minimum of 50 cents per hour worked, for every worker, into a retirement plan. A minimum pension would provide all workers with the opportunity to create their own personal wealth -- providing for a more secure retirement and a reduction of the current wealth disparity in our country. With improved access to simple investment vehicles and tax breaks that aid small businesses, employers would largely benefit too."
Valuation-Based Tactical Asset Allocation in Retirement and the Impact of Market Valuation on Declining and Rising Equity Glidepaths
Michael Kitces in Nerd's Eye View More items by Michael Kitces in Nerd's Eye View

"[T]he best approach may not be to implement a rising equity glidepath or a static rebalanced portfolio at all, but instead to adjust equity exposure dynamically based on market valuation from year to year throughout retirement. While such an approach is not necessarily a very effective short-term market timing indicator, the results suggest nonetheless that it can help to minimize risk when necessary, take advantage of favorable market returns when available, and have some of the best of both worlds -- albeit with the caveat that markets can still deviate materially in the short run from what valuation alone may imply regarding long-term returns!"
States Mulling Public Retirement Plans for Private Sector Employees
Pension Risk Matters More items by Pension Risk Matters
9/17/2014 [Opinion]

"Certainly there is merit for any effort that helps to promote savings and financial independence. That said, there is a plethora of critical questions to be answered before any products are developed, let alone forced on taxpayers and employers. For one thing, who will serve as a fiduciary for each plan and what regulatory regime will prevail?"
Treasury Official Discusses Options for Improving DC Plans

"The U.S. retirement plan landscape has moved from defined benefit to defined contribution, and now to an undefined contribution system, one Treasury official contends.... Mark Iwry, senior advisor to the Secretary of the Treasury, and deputy assistant secretary of Retirement and Health Policy at the U.S. Treasury, explained that, in the age of 401(k)s and 403(b)s, rather than straight profit-sharing plans, the contribution is unknown.... 'We need to restructure the retirement system so that retirement income can be defined,' he said. 'There are things that can be done without the government passing more regulations.' "
Measuring Wellness: From Data to Insights
The Economist More items by The Economist

"[A recent survey explored] the extent to which employers use health-related employee data to guide the operation and outcomes measurement of US wellness programmes.... Key findings: [1] More matters than cost effectiveness: Wellness programmes can be part of a progressive HR strategy to make the organisation an employer of choice. [2] Better data collection is needed, but what to do with it? Employers struggle to interpret the data they have and they lack sufficient insights to assess key programme objectives. [3] Leading obstacles to participation in wellness programmes are insufficient time and privacy concerns, employees say."
A Plan for Disengaged Plan Sponsors (PDF)
CAPTRUST Financial Advisors More items by CAPTRUST Financial Advisors

"The dramatic growth of [target date funds] is evidence that safe harbors provided by Congress and the [DOL] can help plan sponsors do what they believe is right for those participants who cannot or will not engage in decision making. But how about helping the plan sponsors? While most business owners or managers want to provide employees (and themselves) with good investments and successful outcomes, few have the background, knowledge, and, perhaps most of all, the time to properly engage in that responsibility. What can be done to make it easier for these plan sponsors who are, by necessity if not also by aptitude, disengaged?"
Wellness Programs and the Challenge of Pinning Down ROI
ExtendHealth More items by ExtendHealth

"[By] 2017 as many as 76 percent of employers could have outcome-based incentives programs in place ... Today, 18 percent of respondents already have them in place, ten percent plan to implement them in 2015, and 48 percent are considering them for either 2016 or 2017.... [L]ess than half of employers surveyed describe any specific aspect of their health and productivity programs as successful. Employers report little success in achieving goals such as lower cost, fewer employee sick days, and reduced chronic disease and lifestyle-related risks in employee and dependent populations."
The Ambushed Fiduciary: Does Authority Over a Corporate Bank Account Cross the Line?
Osler, Hoskin & Harcourt LLP More items by Osler, Hoskin & Harcourt LLP

"[T]his officer had nothing to do with running the plan, and ERISA contemplates that a fiduciary (other than an investment adviser) is someone with discretion or control over plan administration or plan assets. This officer had neither in the common understanding of those terms simply because he was a signer on a corporate account, though the court accepted the [DOL's] argument that the unpaid employee contributions were plan assets. In fact, since it required two signatures to act for the account, this officer was unable to unilaterally even direct the contributions." [Perez v. Geopharma, No. 8:14-cv-66-T-33T (M.D. Fla. July 25, 2014)]
Five ACA Issues Employers Should Be Following (PDF)
Epstein Becker Green More items by Epstein Becker Green
9/17/2014 [Guidance Overview]

"Employers have about three months to finalize their employer mandate compliance plans under the [ACA].... While most employers are in the final stages of planning, ... [other] issues that employers should be aware of as they move forward into 2015 and beyond [include]: [1] ACA-related litigation [2] Employer mandate reporting [3] Section 510 liability [4] Alternatives to traditional plan offerings [5] The looming Cadillac tax."
New California Paid Sick Leave Law is Nothing to Sneeze At; No Exception for Smaller Employers or Part-Timers
Greenberg Traurig More items by Greenberg Traurig
9/17/2014 [Guidance Overview]

"In addition to accounting for and providing the accrued leave, employers are required to display posters telling employees of their right to paid sick days and informing them that retaliation for requesting or using paid sick days is illegal. Employers are also required to include the amount of paid sick leave accrued on employees' itemized wage statements. Employers could face fines of up to $4,000 per day for withholding paid sick leave or violating the bill's requirements."
Are Wearables a Good Fit for Your Wellness Program?
HealthFitness More items by HealthFitness

"Wearables are more expensive than the typical pedometer by $10 to $15 per participant. As a result, while some companies distribute a device to every employee, others require employees to complete an activity to earn one. For example, a large financial services firm rewarded employees with a Fitbit for completing a health assessment. And for those employees who wanted to upgrade to a more expensive version, the company subsidized the cost."
Optimizing Enrollment in Employer Health Plans: A Comparison of Enrollment Strategies in the Diabetes Health Plan
American Journal of Managed Care More items by American Journal of Managed Care

"The subjects were 5014 eligible employees from 11 self-insured employers who had purchased the Diabetes Health Plan, which offers free or discounted copayments for diabetes related medications, testing supplies, and physician visits.... Overall, the proportion of eligible members who were enrolled within the automatic enrollment strategy was 91%, compared with 35% for voluntary enrollment. Income was a significant predictor for voluntary enrollment but not for automatic enrollment. Within automatic enrollment, covered dependents, Hispanics, and persons with nondiabetes comorbidity were more likely to enroll than other subgroups."
What's Causing Healthcare Premiums to Rise?
National Center for Policy Analysis More items by National Center for Policy Analysis

"[1] New premiums may be an attempt to correct for errors in the previous year. If insurers set premiums higher than necessary in 2014, they may not have needed to raise them as much for 2015. [2] [HHS] has warned insurers against raising premiums by more than 10 percent, threatening to analyze any such increases. As a result, insurers have an incentive to raise premiums by smaller amounts from year to year, to avoid attracting attention from HHS. [3] Some Americans are still allowed to be in noncompliant (and therefore cheaper) plans. In 25 states, non-ACA-compliant plans are allowed to run through at least 2015."
CalPERS Is Done with Hedge Funds; Paid $135 Million in Fees Last Year for 7.1% Return
Bloomberg More items by Bloomberg

"The pension fund paid $135 million in fees in the fiscal year that ended June 30 for hedge fund investments that earned 7.1 percent, contributing 0.4 percent to its total return, according to Calpers figures.... Calpers earned 18.4 percent in the fiscal year as global stock indexes rose to records. The fund's market value reached $300 billion for the first time July 3, making it bigger than all but two companies on the Dow Jones Industrial Average."
ACLI Statement to Senate Finance Committee: Retirement Savings and Tax Reform (PDF)
American Council of Life Insurers [ACLI] More items by American Council of Life Insurers [ACLI]

"According to a 2013 survey, 84 percent of households said that the tax-deferred treatment of contributions was 'a big incentive to contribute.' More than half (51 percent) said they probably would not have saved for retirement without the plan.... It is often noted that retirement savings provisions are among the largest items in the ranking of federal tax expenditures.... [It] is important to recognize that taxes will be paid on the contributions and investment returns when funds are withdrawn by retirees."
Congressional Gridlock and the Future of Pensions
Association for Financial Professionals [AFP] More items by Association for Financial Professionals [AFP]

"With a continuing focus on deficit reduction and tax reform, Congress is always looking for revenue raisers. And, over the last several years, Congress has set a clear pattern of using the retirement system to help finance unrelated legislation. What do these ongoing fiscal battles mean for the retirement system?"
Text of ERIC Statement to Senate Finance Committee for Retirement Savings Hearing on September 16, 2014
The ERISA Industry Committee [ERIC] More items by The ERISA Industry Committee [ERIC]
9/17/2014 [Opinion]

"The current employer-based retirement system benefits workers by providing workers with protections, while facilitating retirement savings. The voluntary employer-based retirement plan system allows companies to attract and retain quality workers, while giving companies the flexibility they need. Congress should protect the tax incentives that help workers to save for retirement."
Seventh Circuit Judges Skewer Doctor Group's Case Against Obamacare
Courthouse News Service More items by Courthouse News Service

"After a morning spent skewering a hapless anti-Obamacare lawyer, the 7th Circuit appears poised to throw out a politically conservative medical association's challenge to the law to avoid a 'breathtaking expansion of jurisdiction.' ... This latest challenge to the law was filed by the Association of American Physicians and Surgeons [AAPS] ... which sued the IRS to block the law's enforcement and 'fight the government takeover of medicine.' " [AAPS v. Koskonen, No. 14-2123 (D. Wis. Mar. 18, 2014; on appeal to 7th Cir.)]
Text of GAO Report on Actions Needed to Address Weaknesses in Information Security and Privacy Controls
U.S. Government Accountability Office [GAO] More items by U.S. Government Accountability Office [GAO]

"While CMS has taken steps to protect the security and privacy of data processed and maintained by the complex set of systems and interconnections that support, weaknesses remain both in the processes used for managing information security and privacy as well as the technical implementation of IT security controls.... GAO is making six recommendations to implement security and privacy management controls to help ensure that the systems and information related to are protected. HHS concurred but disagreed in part with GAO's assessment of the facts for three recommendations."
New ACA Tools and Payment Models Deliver $372 Million in Savings, Improve Care
U.S. Department of Health and Human Services [HHS] More items by U.S. Department of Health and Human Services [HHS]

"[Accountable Care Organizations (ACOs)] ... generated over $372 million in total program savings for Medicare ACOs. The encouraging news comes from preliminary quality and financial results from the second year of performance for 23 Pioneer ACOs, and final results from the first year of performance for 220 Shared Savings Program ACOs."
New Data Show Early Progress in Expanding Health Care Coverage, with More Gains to Come
The White House Blog More items by The White House Blog

"[T]he share of Americans without health insurance averaged 13.1 percent over the first quarter of 2014, down from an average of 14.4 percent during 2013, a reduction corresponding to approximately 4 million people. The 13.1 percent uninsurance rate recorded for the first quarter of 2014 is lower than any annual uninsurance rate recorded by the NHIS since it began using its current design in 1997."
Signature Authority Triggered ERISA Fiduciary Responsibility
Thompson SmartHR Manager More items by Thompson SmartHR Manager

"[T]he court held that Taneja's signature authority made him a plan fiduciary because, among other things, ERISA provides that a person can become a plan fiduciary by exercising any authority or control over the management or disposition of plan assets, even without discretion. The court declined to decide whether discretion was an ERISA fiduciary requirement at this stage, but noted that at least one Circuit (the 11th) has suggested that discretion is a necessary prerequisite for ERISA fiduciary status." [Perez v. Geopharma, No. 8:14-cv-66-T-33T (M.D. Fla. July 25, 2014)]
Reducing Pension Risk: Myths Holding Back Plan Sponsors (PDF)
Prudential More items by Prudential

"Partial LDI strategies have significantly reduced DB risk ... Companies are better off delaying the implementation of DB risk management solutions to benefit from further improvements in the financial markets ... Risk transfer solutions can only be executed once a company reaches or exceeds full funding ... Transferring DB risk to an insurer is too expensive and will become more expensive with new mortality tables ... Reducing DB risk, though prudent, reduces shareholder value."
Text of ICI Statement for Hearing on 'Retirement Savings 2.0: Updating Savings Policy for the Modern Economy' (PDF)
Investment Company Institute [ICI] More items by Investment Company Institute [ICI]
9/16/2014 [Opinion]

"For most households, .... employer-sponsored retirement plans are crucial: about 8 in 10 near-retiree households have retirement assets (DC plans or IRAs), DB benefits, or both. Thanks to this multi-faceted system, successive generations of American retirees have been better off than previous generations. Even with its many successes, the U.S. retirement system can be strengthened further to help even more Americans achieve a secure retirement."
Text of GAO Report: Preliminary Information on IRA Balances Accumulated as of 2011
U.S. Government Accountability Office [GAO] More items by U.S. Government Accountability Office [GAO]

"For tax year 2011 (the most recent year available), an estimated 43 million taxpayers had individual retirement accounts (IRA) with total reported fair market value of $5.2 trillion. About 99 percent of those taxpayers had aggregate IRA balances (including inherited IRAs) of $1 million or less.... [F]ew taxpayers had aggregated balances exceeding $5 million as of 2011."
Here's What the Senate Finance Committee Should Address to Help Small Business Retirement Plans
Employee Fiduciary More items by Employee Fiduciary
9/16/2014 [Opinion]

"Congress should consider greater tax incentives for employers to offer a match to employees.... Congress also should address incenting workers to save at a higher rate.... Congress should consider making withdrawals from retirement plans more difficult.... Congress should consider legislation directing the DOL to establish index investment standards related to underlying index, acceptable tracking error and transparent pricing.... And we need target date fund standards."
Quality of Health Care After Adopting a Full-Replacement, High-Deductible Health Plan with a Health Savings Account: A Five-Year Study (PDF)
Employee Benefit Research Institute [EBRI] More items by Employee Benefit Research Institute [EBRI]

"This study reports use of health care services related to health care quality over five years ... [at] a single large employer ... that adopted an HSA-eligible health plan for all employees. It represents one of the longest observation periods reported with a full-replacement CDHP, and it is one of the few studies with a matched control group. The introduction of the HSA-eligible health plan had a negative impact on office visits for annual physicals, well-child visits, and preventive visits in the year that the plan was adopted. In the second year, office visits increased for HSA-eligible health plan enrollees, but were mostly unchanged for the comparison group. By the fourth year in the HSA-eligible health plan, office visits for annual physicals, well-child visits, and preventive visits were down slightly relative to the comparison group."
Income, Poverty and Health Insurance Coverage in the United States: 2013
U.S. Census Bureau More items by U.S. Census Bureau

"The percentage of people without health insurance coverage for the entire 2013 calendar year was 13.4 percent; this amounted to 42.0 million people."
Tips to Help Employees Prepare for the Upcoming Open Enrollment Season
Aon Hewitt More items by Aon Hewitt

"Take an active role ... Assess your and your dependents' health care needs ... Evaluate your plan's provider network ... Evaluate whether a CDHP is right for you ... Determine the best source of coverage for your dependents ... Take advantage of health and wellness programs ... Understand how your employer coverage works in comparison to ACA Marketplaces ... Take a holistic view of health and financial wellness."
IRS Rules Verbal Request a Timely IRA or ESA Contribution
Ascensus More items by Ascensus

"The IRS has issued a private letter ruling (PLR) to a nonbank trustee that would permit the trustee' s clients to satisfy IRA and Coverdell education savings account (ESA) contribution deadline requirements by making timely written or oral requests to transfer funds from general accounts to IRAs or ESAs. PLR 201437023 was issued to a nonbank trustee whose clients commonly have IRAs or ESAs as well as general investment accounts with the organization. IRA and ESA contributions are often executed by the trustee transferring the appropriate amount from a client' s general account to his IRA or ESA."
What Do the Ice Bucket Challenge and FMLA-Related Lawsuits Have in Common?
Mintz Levin More items by Mintz Levin

"Some employers continue to struggle with the FMLA's tricky and sometimes convoluted compliance obligations, including how and when to complete and distribute paperwork and communicate with the requesting employee, and how to otherwise treat someone on leave. They also struggle with how to navigate between the FMLA, the ADA and short term disability laws and related state and local leave and disability laws. The harder it is to comply means a greater risk of a violation. Updated FMLA regulations went into effect about four years ago and we are starting to see claims arise from non-compliance with those newer regulations."
Unions Confronting Employer Spinoff and Joint Venture Transactions Need to Understand Pension Funding Ramifications (PDF)
Blitman & King LLP, via Bloomberg BNA Pension & Benefits Daily More items by Blitman & King LLP, via Bloomberg BNA Pension & Benefits Daily

"[A] spinoff is sometimes followed by a joint venture transaction which adds an additional layer of separation and more discomfort concerning pension funding. To address this vulnerability, the union should exercise its rights either under a successorship clause or effects bargaining to secure a Memorandum of Agreement addressing, among other things, pension funding."
DHL Pension Transfer Option Elimination Doesn't Violate ERISA Anti-Cutback Rules
Bloomberg BNA More items by Bloomberg BNA

"Shipping company DHL didn't illegally take away its employees' pension benefits when it eliminated their ability to transfer an account balance from the company's defined contribution plan to its defined benefit plan, the U.S. Court of Appeals for the Ninth Circuit ruled....Although the court affirmed a ruling in favor of DHL, it expressed its concern for the reduction in actual benefit payments that plan participants experienced as a result of the amendment. However, the court said, this reduction was less a function of the removal of an accrued benefit and more the work of the different actuarial assumptions used by the two plans." [Anderson v. DHL Retirement Pension Plan, No. 1236051 (9th Cir. Sept. 15, 2014)]
Shining a Light on ERISA Budget Accounts
Vanguard More items by Vanguard

"This commentary discusses the historical practice of paying plan expenses from revenue sharing and the fiduciary and administrative considerations of using an ERISA budget account for managing recordkeeping revenue."
401(k)/IRA Holdings in 2013: An Update from the Federal Reserve
Center for Retirement Research at Boston College More items by Center for Retirement Research at Boston College

"The Federal Reserve's 2013 Survey of Consumer Finances provides an opportunity to examine trends in retirement savings over the past few years. The good news is increased use of target date funds; the bad news is no improvement in participation rates, significant leakages, and high fees. Surprisingly, for working households nearing retirement, median combined 401(k)/IRA balances actually fell from $120,000 in 2010 to $111,000 in 2013. Younger households did see rising balances but retirement savings levels are clearly inadequate, and about half of all households have no 401(k) assets at all."
ACA Tempers New State Coverage Mandates
Kaiser Health News More items by Kaiser Health News

"To discourage states from passing mandates that go beyond essential health benefits requirements, the law requires states, not insurers, to cover the cost of mandates passed after 2011 that apply to individual and small group plans sold on or off the state health insurance marketplaces. If a mandate increases a plan's premium, states will be on the hook for the additional premium cost that's attributable to the mandate."
Text of GAO Report: Coverage of Non-excepted Abortion Services by Qualified Health Plans
U.S. Government Accountability Office [GAO] More items by U.S. Government Accountability Office [GAO]

"GAO was asked to provide a list of QHPs that do and that do not cover abortion services and for additional information on issues related to that coverage. This report describes whether non-excepted abortion services are covered by QHPs within the 28 states with no laws restricting such coverage for the 2014 benefit year and provides additional information -- such as the scope and the cost of non-excepted abortion services coverage -- for selected QHPs that cover such services."
Text of Comments by American Benefits Council to IRS on Suspension or Reduction of Safe Harbor Nonelective Contributions (PDF)
American Benefits Council More items by American Benefits Council
9/16/2014 [Opinion]

"The suggestions include [1] permitting changes that do not affect safe harbor features or any information contained in the notice, [2] allowing certain corrective and other amendments designed to maintain plan qualification, and [3] allowing certain amendments but only in connection with mergers and acquisition."
SSA Resumes Mailing Social Security Statements, Encourages People to Create a Secure My Social Security Account to View Their Statements Online
U.S. Social Security Administration [SSA] More items by U.S. Social Security Administration [SSA]

"'We have listened to our customers, advocates, and Congress; and renewing the mailing of the Statement reinforces our commitment to provide the public with an easy, efficient way to obtain an estimate of their future Social Security benefits,' Acting Commissioner Colvin said. 'I encourage everyone to create their own secure my Social Security account to obtain immediate access to their Statement online, anytime.'"
Why Any Plan Sponsor Fiduciary Needs to Give HSAs Another Look
Fiduciary News More items by Fiduciary News

"Banks, insurance companies, and investment firms with active IRA programs may be interested in making their programs friendly for employers that want to make the HSAs widely available to employees with education as to the advantages of keeping the HSA accounts invested.... It will be critical for anyone marketing or offering these programs to be very sensitive to the conditions for exemption from ERISA. Some employers may be willing to offer HSAs as a fully ERISA-covered benefit, but most will want to stay ERISA-exempt, and for the latter category it will be necessary to keep the program simple and be very careful with the handling of investment options."
Oregon Retirement Security Task Force Recommends State-Sponsored DC Plan for Private-Sector Employees
Oregon State Treasury More items by Oregon State Treasury

"The Task Force recommends developing and making available a retirement savings plan to all Oregonians lacking access to a plan at their workplace. The recommendations envision a plan with a minimum employer role, automatic enrollment for the employee (with an option to opt-out), payroll deduction, and annual automatic escalation (with opt-out) of monthly contribution, among other factors.... The plan will be part of an overall retirement security program directed by a state board aimed at increasing enrollment in retirement security accounts. " [Full 3-page text of the recommendations is available online.
Looking Ahead to the ACA's 'Cadillac Tax' on High-Cost Health Coverage (PDF)
Groom Law Group More items by Groom Law Group

"Given the potentially dramatic financial effect of the Section 4980I excise tax, some employers have determined that radical modifications to benefits may be required to avoid liability. Employers are developing strategies for limiting its negative impact, including plotting out a 'glide path,' whereby the value of employer-sponsored coverage will be reduced gradually between 2014 and 2018 to bring the cost of coverage under the Section 4980I thresholds (and employees will not see their benefits dramatically reduced between 2017 and 2018). Complicating the development of any long-term strategy, however, is the paucity of guidance related to Code Section 4980I."
Race to the Middle? Middle and Skinny Plans Under Healthcare Reform
Hill, Chesson & Woody More items by Hill, Chesson & Woody

"A number of innovative strategies for avoiding or minimizing the impact of tax penalties under Code 4980H(a) and Code 4980H(b) exist in the marketplace. However, these strategies are not one size fits all. Even when the strategy seems to fit, the questionable compliance of these strategies with the many requirements for health plans under PPACA make for numerous cracks in the elusive glass slipper that is the cost-effective, compliant, and penalty-eliminating group health plan. [The authors review] compliance concerns with so-called 'Middle Plans' currently emerging, and highlight employer risks in implementing a Skinny Plan."
Sixth Circuit Grants Enhanced Benefits After Corporate Takeover, Even Though Employment Continued with Successor Employer
Thompson SmartHR Manager More items by Thompson SmartHR Manager

"A recent court decision reminds plan sponsors that mergers and acquisitions can trigger unexpected or complex changes to participant benefits that rely on careful plan language interpretation. In the case, some former employees of an Anheuser-Busch subsidiary were granted enhanced pension benefits as a result of the controlling company's purchase by InBev because their employment with a controlled group was involuntarily terminated in the takeover -- even though they secured jobs with the successor corporation." [Adams v. Anheuser Busch, No. 13-3149 (6th Cir. July 11, 2014)]
IRS Issues HATFA Guidance for Pension Funding and Benefit Restrictions (PDF)
Buck Consultants at Xerox More items by Buck Consultants at Xerox
9/16/2014 [Guidance Overview]

"Because the pension provisions in the law have retroactive effect, the guidance provides procedures for how elections that were specifically included in the legislation may be made and how elections made under prior law may be reversed. For many plans, action will be needed by the end of 2014 to take advantage of the special options under the notice."
CalPERS to Exit Hedge Funds, Divest $4 Billion Stake
Bloomberg More items by Bloomberg

"The decision to eliminate 24 hedge funds and six hedge fund-of-funds, isn't related to the performance of the program, said Ted Eliopoulos, the interim chief investment officer.... 'We concluded that we would eliminate the hedge fund program in order to reduce the complexity, reduce the costs in the program, particularly in relation to our view that given the scale of CalPERS, we would not be able to scale a hedge fund program to a size that would really move the needle,' Eliopoulos said[.]"
Early Observations Show Safety-Net ACOs Hold Promise to Achieve the Triple Aim and Promote Health Equity
Health Affairs More items by Health Affairs

"This post will outline five key observations regarding emerging safety-net ACOs and suggest broad policy implications. We are defining safety-net ACOs as collaborative entities of providers and sometimes payers that are [1] accountable for managing the health of their population, [2] assuming upside and/or downside financial risk, and [3] serving predominantly Medicaid (including dual eligibles) and uninsured patients."
IRS Releases Guidance on Employee 'Parking'
Wolters Kluwer Law & Business More items by Wolters Kluwer Law & Business
9/16/2014 [Guidance Overview]

"Qualified parking is parking provided by an employer on or near the business premises of the employer. Parking is treated as provided by an employer if it is provided on property the employer owns or leases, the employer pays for parking at another location, or the employer reimburses the employee for parking. The exclusion [from employee taxable income] for qualified parking is not unlimited." [IRS Information Letter 2014-0017 (June 27, 2014).]
Executive Compensation Practices in ESOP Companies
National Center for Employee Ownership [NCEO] More items by National Center for Employee Ownership [NCEO]

"[T]he median total pay for CEOs among responding companies was $307,875, with a breakdown of $240,000 among companies with 100 or fewer employees and $378,863 at larger companies (more than 100 employees).... Stock-based compensation is much more prevalent among larger responding companies[.]"
ESOP Companies Report Economic Growth in 2013
The ESOP Association More items by The ESOP Association

"The survey asked companies to indicate their performance in 2013 relative to 2012: 65% indicated a better performance ... 70% indicated revenue increased ... 64% of companies have created an ESOP education program or ESOP advisory committee since establishing the ESOP."
No Shift to Part-Time Work Seen (Yet) Under ACA
Association of Health Care Journalists More items by Association of Health Care Journalists
9/16/2014 [Opinion]

"It is still possible that businesses will initiate a shift to more under-30 hour work weeks as the mandate nears. (And the mandate requirement and penalties include a 'look back' -- what the workforce looks like before the start date of the mandate.) But the mandate has been delayed twice, and it' s being phased in much more slowly. And it's not at all certain it will ever happen at all[.]"
Text of PBGC 'Open Government Plan 3.0' (PDF)
Pension Benefit Guaranty Corporation [PBGC] More items by Pension Benefit Guaranty Corporation [PBGC]

14 pages. "PBGC's Open Government Plan serves as a public roadmap detailing [the agency's] progress in integrating this administration' s open government principles of transparency, participation, and collaboration into PBGC' s core mission of protecting retirement security ... The [Pension Insurance Data Book was previously] available on PBGC's Open Government website ... but only as a PDF. The goal of the flagship initiative was to bring that very valuable data sets online, and provide it in a machine-readable format. [PBGC[ achieved that goal in 2010 and the data has been available and updated annually ever since. It has been downloaded over 700 times.... PBGC will continue to identify, vet, and add additional data to data listing."
CalPERS Eliminates Hedge Fund Program in Effort to Reduce Complexity and Costs in Investment Portfolio
CalPERS More items by CalPERS

"The staff recommendation, supported by the Investment Committee, will exit 24 hedge funds and six hedge fund-of-funds valued at approximately $4 billion.... CalPERS will spend approximately the next year strategically exiting current investments in a manner that best serves the interests of the portfolio."
Text of JCT Summary of Present Law and Background Relating to Qualified Defined Benefit Plans (PDF)
Joint Committee on Taxation [JCT] More items by Joint Committee on Taxation [JCT]
9/16/2014 [Guidance Overview]

83 pages. "The Subcommittee on Select Revenue Measures of the Committee on Ways and Means of the House of Representatives has scheduled a public hearing on September 17, 2014, on defined benefit plans offered by private-sector employers, including both multiemployer plans and single-employer plans. This document, prepared by the staff of the Joint Committee on Taxation, provides a description of present law and data relating to retirement plans generally and to defined benefit plans in particular."
Text of JCT Summary of Present Law and Background Relating to Tax-Favored Retirement Savings (PDF)
Joint Committee on Taxation [JCT] More items by Joint Committee on Taxation [JCT]
9/16/2014 [Guidance Overview]

87 pages. "The [Senate] Committee on Finance has scheduled a public hearing on September 16, 2014, entitled 'Retirement Savings 2.0: Updating Savings Policy for the Modern Economy.' This document, prepared by the staff of the Joint Committee on Taxation, provides a summary of the present law tax rules applicable to tax-favored retirement savings arrangements, a discussion of economic issues, and data on tax-favored retirement savings."
How Safe Is Your Retirement Nest Egg from Creditors?
The Retirement Plan Blog More items by The Retirement Plan Blog

"IRA funds dwarf the amount of retirement assets held in employer sponsored retirement plans. Those IRAs will offer tempting targets to creditors when they pass on death to beneficiaries other than a surviving spouse. Consider leaving retirement assets in your employer sponsored plans, where protection from creditors is assured, as long as possible. Alternatively, for assets currently held in an IRA, consider retaining the spouse as the primary beneficiary (that appears to be safe for now) and naming only a spendthrift trust as the alternative beneficiary[.]"
The Federal Courts' Role in Implementing the ACA
Henry J. Kaiser Family Foundation More items by Henry J. Kaiser Family Foundation

"All of this litigation has altered, or has the potential to alter, the way in which the ACA is implemented and consequently could affect the achievement of the law's policy goals, such as the number of people who obtain affordable health insurance, and what is required to be included in a health plan. This issue brief examines the federal courts' role to date in interpreting and affecting implementation of the ACA, with a focus on the provisions that seek to expand access to affordable coverage."
Why Do Large Employers Want to Control Their Employees' Health Benefits?
National Center for Policy Analysis Health Policy Blog More items by National Center for Policy Analysis Health Policy Blog
9/15/2014 [Opinion]

"Large companies believe it is the best bulwark against government-monopoly, single-payer health care. They simply do not see a third option, individually owned health insurance, because it is not widely discussed in the public space.... Larger firms have human resource (HR) bureaucracies within them to manage health benefits. ... Forcing workers to get health benefits through their employers gives large businesses a competitive advantage over smaller rivals, which do not have the same HR capacity."
Employers Interested in Offering Voluntary Benefits
LIMRA More items by LIMRA

"7 in 10 employers offer voluntary benefits to improve morale for their existing employees and to attract and retain new talent.... [E]mployers are generally happy with their voluntary benefits advisors. Six in ten employers feel that agents/brokers/consultants usually or always deliver on their voluntary benefit promises. Only eight percent feel that advisors rarely or never live up to their promises. Advisor satisfaction ranks highest at companies with 20 to 99 employees."
Legislative Actions to Repeal, Defund, or Delay the ACA, Updated September 12, 2014
Congressional Research Service [CRS] More items by Congressional Research Service [CRS]

"This report summarizes legislative actions taken to repeal, defund, delay, or otherwise amend the ACA since the law's enactment.... To help provide context for the information presented in the appendices, the report continues with some background on the core provisions of the ACA. That is followed by an overview of the law's impact on federal spending. This report is updated periodically to reflect legislative and other developments. A companion CRS report summarizes administrative actions taken by CMS and the IRS to delay, extend, or otherwise modify implementation of certain ACA provisions."
A Plan Sponsor's 401(k) Plan Self-Audit (PDF)
Kushner & Company More items by Kushner & Company

"[T]he IRS has provided a list of questions that you, as a Plan Sponsor, must be able to answer to ensure compliance with IRS regulations. These questions are designed to help you document and evaluate your plan's policies, procedures and internal controls.... Plan service providers ... Employee eligibility ... Contributions ... Plan distributions ... Plan testing and administration."
Limiting Choice to Control Health Spending: A Caution
Austin Frakt, in The New York Times; subscription may be required More items by Austin Frakt, in The New York Times; subscription may be required
9/15/2014 [Opinion]

"Seeking to end the rapid rise in health care costs, in the 1990s employers embraced managed care plans -- plans, like health maintenance organizations, that restricted consumers' choices with narrow networks, as well as requirements for preapproval for some forms of treatment.... These cost-saving measures became increasingly unpopular. The backlash was swift and severe. Today's new narrow network plans also restrict choices, so will they suffer the same fate as 1990s managed care?"
Closely Related Plans Cannot Be Unbundled for ERISA Safe Harbor Exception Analysis
Thomson Reuters / EBIA More items by Thomson Reuters / EBIA

"The bundling of the basic and supplemental benefits was not necessarily the sole deciding factor here -- there were other indications that the two types of coverage were closely related. And there was no suggestion that the employer intended that the supplemental coverage fall within the safe harbor. But the court's decision underscores the importance of not bundling (either intentionally or inadvertently) a voluntary program with employer-sponsored coverage if the voluntary coverage is not intended to be part of the ERISA plan." [Menkes v. Prudential Ins. Co. of America, No. 13-1408 (3d Cir. Aug. 6, 2014)]
Company Stock in Your 401(k)? An Ounce of Prevention Is Worth a Pound of Cure (PDF)
Wilkins Finston Law Group LLP More items by Wilkins Finston Law Group LLP

"Action items for plan fiduciaries ... [1] Consider retaining an independent fiduciary to serve as 'special purpose Trustee' with respect to the Company stock fund ... [2] Consider retaining independent legal counsel for the fiduciary committee to assist it in documenting its procedural prudence with respect to the company stock fund. [3] Consider whether to establish limits on the investment in company stock.... [4] Document, document, document." [Tatum v. RJR Pension Investment Committee, No. 13-1360 (4th Cir. Aug. 4, 2014)]
Many May Be Confused by Upcoming Notice of Automatic Renewal for Marketplace Plans
The New York Times; subscription may be required More items by The New York Times; subscription may be required

"Millions of consumers will soon receive notices from health insurance companies stating that their coverage is being automatically renewed for 2015, along with the financial assistance they received this year from the federal government. But consumer advocates and insurers say they see a significant potential for confusion because some of the information will be out of date and misleading on costs and other aspects of coverage.... Federal officials told insurers this month to send out standard renewal notices written by the government.... In many cases, insurers will notify consumers that they face higher premiums but will not provide them any information about higher subsidies in 2015[.]"
ACA Administrative Simplification Provisions for Health Plans: Time to Apply for an HPID and Prepare for Certification of Compliance
Alston & Bird, LLP More items by Alston & Bird, LLP
9/15/2014 [Guidance Overview]

"The level of control a plan has over its own activities determines whether it must apply for its own HPID or whether it might be able to rely on the HPID of another health plan. If the HPID requirement applies, large health plans must obtain one by November 5, 2014, and small health plans must do so by November 5, 2015. In addition, HHS has issued proposed regulations regarding the 'certification of compliance' with HIPAA's electronic transaction standards required by ACA Section 1104(h). Most health plans must file the first of two certifications with HHS by December 31, 2015. While much detail regarding this certification remains to be developed, health plans should begin planning so that they can complete the certification's required testing process when final regulations are issued."
ERISA: The Secret Weapon for Collecting Unpaid Patient Bills (PDF)
Nelson Mullins More items by Nelson Mullins

"It's a mistake to assume network provider contracts and billing code manuals are controlling for the purpose of getting paid.... It's a mistake to have patient intake forms that fail to assign the provider the patient's legal rights under ERISA.... It's a mistake not to have an ERISA-driven internal claims process.... It's a mistake not consider ERISA as a defense to audits and recoupments.... It's a mistake to rely on consultants to analyze ERISA claims instead of a lawyer."
IRS Releases Notice on Pension Funding Stabilization
Towers Watson More items by Towers Watson
9/15/2014 [Guidance Overview]

"While the IRS provided extensions of some deadlines, there was no extension of the September 15, 2014 deadline for making 2013 plan year contributions for calendar-year plans. Therefore, plan sponsors should review [Notice 2014-53] quickly, as they need to make decisions and possibly take action very soon.... Sponsors can opt out of the new law for 2013 for all purposes or just for benefit restrictions. Opting out will avoid the need to redo work, but may result in higher required contributions and/or lower funding balances. Sponsors can opt out by making an election by December 31, 2014 (or by the date the 2013 Form 5500 is due, if later, which can only apply to non-calendar-year plans). An option to elect out will be deemed made if a Schedule SB that does not reflect the HATFA rates is filed by December 31, 2014, provided no action is taken to revoke that deemed election."

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