Technical Competence

This station houses posts and commentary about the challenges facing state and municipal DB pension plans — funding, municipal bankruptcies, litigation, etc.

Technical Competence

Technical Competence

By NAPA Net Staff1/24/2013 • 0 Comments

A federal appellate court has dismissed claims by a few BoA DB participants that bank-affiliated funds were used improperly. Upholding a lower court's ruling, the appeals court dismissed the suit on procedural grounds without determining the validity of the claims. Citing potential harm to the plan caused by the cost of litigation brought by just a few participants, the court noted that, unlike with DC plans, DB participants have an interest in future benefits, not assets in plans. READ MORE

By NAPA Net Staff1/17/2013 • 0 Comments

In the latest of a series of posts by speakers at the 2013 NAPA/ASPPA Summit, March 3-5, 2013 in Las Vegas, Doug Fisher of Fidelity Investments — who will team up with EBRI’s Nevin Adams to present the General Session at 8:15 on Tuesday, March 5 — describes Fidelity’s effort to gauge how employees divvy up pre-tax deferrals between HSAs for future health care expenses and 401(k)s for retirement saving. READ MORE

By Jim Farley1/17/2013 • 0 Comments

When all is said and done, if participants are not saving enough to retire comfortably and plan sponsors are not receiving the quality of service they need, it matters little that the Department of Labor required volumes of disclosure designed to increase fee and investment transparency. Let’s take a closer look at the DOL rule’s impact on both of these groups. READ MORE

By NAPA Net Staff1/16/2013 • 0 Comments

While about 87% of full-time state and local government employees participate in DB plans, this leaves a significant number who are in DC plans. A lot of those DC participants are higher education faculty and staff, many of whom were given a choice between a DB plan and a DC plan. Also, a number of states provide a DC plan for selected, usually narrow, employee groups, such as elected and appointed officials and unclassified or exempt staff. READ MORE

By NAPA Net Staff1/11/2013 • 3 Comments

Who are America's fastest-growing class of millionaires? Police officers, firefighters and teachers, Forbes publisher Rich Karlgaard noted recently. Unless things change drastically, our new millionaire class of police officers, firefighters, and teachers will be paid something near their full salaries every year — until death — after retiring in their mid-50s. That’s equivalent to a retirement sum worth millions of dollars. READ MORE

By NAPA Net Staff1/7/2013 • 0 Comments

This may be news only to the president and Congress, but not only do American workers think the government should take steps to enhance tax incentives for retirement plans like 401(k)s, but most don’t expect to rely on Social Security — which younger workers don’t even think will be around when they retire. READ MORE

By NAPA Net Staff1/3/2013 • 0 Comments

If your clients’ New Year’s resolutions include being a better plan fiduciary, they are certainly part of a small and heady group. Here’s a list of 10 resolutions they might consider, provided by the Bryan Cave law firm. READ MORE

By NAPA Net Staff12/26/2012 • 1 Comments

The death of DB plans is not greatly exaggerated, according to a Vanguard survey of DB plans. Though most do not anticipate any major changes in design or status going forward, based on surveys with 169 plans encompassing $167 billion in plan assets, 57% of plans closed or froze their plans. In fact, the number of frozen plans was more than twice the 2010 total. And 59% of plans were open and active in 2010, compared with only 43% in 2012. READ MORE

By Fred Barstein12/21/2012 • 2 Comments

The consensus is that education efforts within participant-directed plans have mostly failed, especially when compared with the effects of automatic enrollment, auto deferral, QDIAs and auto escalation. So is there a real alternative to helping individuals within participant directed plans save enough money to retire comfortably? There are no simple answers or silver bullets, but based on many surveys and anecdotal evidence, maybe there are different directions we can take. READ MORE

By NAPA Net Staff12/19/2012 • 2 Comments

Many advisors who are members of the National Tax Sheltered Accounts Association (NTSAA) identify themselves as either K-14 or ERISA advisors. However, there are no absolutes; many K-14 advisors have at least a small percentage of their practice consisting of ERISA clients, or vice versa. However, many concepts that are sound in the K-14 world may be unsound when applied to an ERISA plan. NTSAA's Michael Webb identifies the issues unique to ERISA 403(b) plans that can get practitioners into trouble. READ MORE

By NAPA Net Staff12/18/2012 • 2 Comments

Though most larger companies and government entities are backing away from defined benefit plans, DBs might make sense for smaller firms where the principals are looking to put away at least $50,000 and have a 5- to 10-year time horizon. With taxes likely to go up and Congress looking at lowering the DC contribution limit, the $200,000 DB annual benefit limit (rising to $205,000 it 2013) might be appealing, especially for Boomers who are behind the eight ball when it comes to retirement. READ MORE

By NAPA Net Staff12/14/2012 • 0 Comments

Are advisors who are not parties in interest or ERISA fiduciaries liable if they knowingly participate in a prohibited transaction and receive compensation from plan assets? The 3rd U.S. Circuit Court of Appeals thinks so. In the case at issue, employers had established a trust within an ERISA-covered welfare plan and would make tax-deductible contributions which would create tax-free, annuity-like payments for the employer’s owners after their retirement. The advisor had directed his plan clients into the scheme and received compensation from the administrative company that had set up the trust, which was compensated by the insurance policies that funded the plan. READ MORE

By NAPA Net Staff12/13/2012 • 1 Comments

Advisors who work closely with their clients on sources of retirement income know that it’s important to include calculations and counsel on Social Security benefits. In an article published in NTSAA's "Market Beat" newsletter, 403(b) and 457 plan consultant Ellie Lowder addresses the 2013 changes in Social Security benefits and addresses some of the more frequently asked questions from advisors. READ MORE

By NAPA Net Staff12/6/2012 • 0 Comments

IRS auditors have been asking employers to provide evidence that they provided the safe harbor 401(k) notice to participants as required, the folks at Relius Sungard have learned. This evidence would include a copy of the notice. If a plan is unable to provide such evidence, the IRS is requiring the plan to correct the oversight and, in some circumstances, pay a closing agreement sanction as well. READ MORE

By NAPA Net Staff11/29/2012 • 0 Comments

The team of Reish and Ashton " target="_blank">tackle the fiduciary issues surrounding brokerage windows, reviewing the process plan fiduciaries need to follow, the participant disclosure requirements and the implications of participants selecting an RIA to manage their accounts using the window. READ MORE

By NAPA Net Staff11/20/2012 • 0 Comments

Emboldened by the certainty of four more years, the Obama administration in general and EBSA in particular are expected to extend and more vigorously enforce the agenda and regulations promulgated in the president’s first term. For example, legal experts predict that improper receipt of undisclosed 12b-1 fees by plan advisors will be the subject of increased enforcement. READ MORE

By NAPA Net Staff11/20/2012 • 0 Comments

While many provider and advisor groups like ASPPA and NAPA have begun to marshal their forces to protect against reductions in retirement plan incentives, as Congress begins to tackle the budget deficit it is even more important that employers step up and voice their opposition. To that end, the Society for Human Resource Management (SHRM) is chairing an industry group, the Coalition to Protect Retirement, and has launched a new website,, to ensure that members of Congress understand the importance of maintaining current levels of tax incentives for retirement and how, unlike so many other tax expenditures, they are deferrals, not deductions. READ MORE

By Fred Barstein11/16/2012 • 1 Comments

With the election results heralding four more years for EBSA head Phyllis Borzi, the long-pending fiduciary regulations are likely to be the agency’s first order of business, as we reported recently. Speaking at a CPI Broker Dealer Executive Roundtable, Brad Campbell of Drinker Biddle — who was Borzi’s predecessor — opined that not only are the fiduciary regulations alive and well, but there is a possibility that they could be fast-tracked now that the election has come and gone. READ MORE

By NAPA Net Staff11/15/2012 • 0 Comments

The end of the year brings lots of lists. Following up on yesterday’s “Case of the Week” question about notices due by Dec. 2, the law firm of Snell & Wilmer provides a comprehensive to-do list for most types of benefit plans. READ MORE

By NAPA Net Staff11/14/2012 • 0 Comments

One of the more controversial regulations proposed by the DOL under President Obama was their plan to broaden the definition of fiduciary to include more financial advisors. According to a BNA report, a proposed rule has been submitted to the Office of Management and Budget for clearance and should be issued in early 2013. At a recent International Foundation of Employee Benefit Plans conference, Borzi indicated that it was time to include financial advisors in the definition of a fiduciary. READ MORE

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