Spencer Benefits Reports NetNews – February 6, 2015


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Featured This Week


New Reports


  • Analysis: IRS Prescribes Monthly Segment Rates To Be Used In Pension Funding, Present Value Calculations, 1/29 (101.2.-9)

    (Read Intelliconnect) »

  • Analysis: 30-Year Treasury Rates For Calculating Deductible Limits Before 2006, Lump Sums Before 2008, 1/29 (101.2.-7)
    (Read Intelliconnect) »
  • Analysis: Monthly Corporate Bond Rates To Be Used For Pension Funding Calculations Before 2008, 1/29 (101.2.-1)
    (Read Intelliconnect) »
  • Analysis: Employer Payment Plans No Longer Allowed Due To The ACA, 1/22 (352.-15)
    (Read Intelliconnect) »



February 6, 2015


Supreme Court Declines To Review Oklahoma’s Challenge To Premium Tax Credit Regulations

The U.S. Supreme Court has announced it will not take up Oklahoma’s challenge to the Code Sec. 36B premium assistance tax credit regulations. Oklahoma petitioned the Supreme Court to review
State of Oklahoma v. Burwell. The Court has already granted certiorari in a similar case,
King v. Burwell . . . ..

        (Read Intelliconnect) »

Corporate Pension Funding Levels Declined In 2014

The pension funded status of the nation’s largest corporate sponsors reversed direction in 2014, dropping nine percentage points as falling interest rates (which increased liabilities), and the impact of new mortality tables, was only partially offset by strong returns on pension plan assets, according to Towers Watson. The Towers Watson analysis indicates that the aggregate pension funded status is estimated to be 80% at the end of 2014, a decline from 89% at the end of 2013.
The analysis also found that the pension deficit increased to $343 billion at the end of 2014, more than twice the deficit at the end of 2013, as overall pension plan funding weakened by $181 billion last year . . . .

        (Read Intelliconnect) »

February 5, 2015


SHRM Survey Highlights Employers’ Great Concern Over Controlling Health Care Costs

More than three-quarters (79 percent) of organizations that provide health care coverage to their employees are very concerned about controlling health care costs, according to the latest
Strategic Benefits—Health Care Survey report from the Society for Human Resource Management (SHRM). Over the past three years, the percentage of companies indicating that their health care costs went up has remained about the same, yet high, at 69 percent to 74 percent. To halt some of the increasing costs, one-half of organizations indicated that they increased employee contributions to health care costs in 2014, while about one-quarter (26 percent) of organizations said they planned to increase employees’ share in 2015. . . .

        (Read Intelliconnect) »


IRS Expands Automatic Approval Of Funding Method Changes In Takeover Plans

The IRS has expanded the conditions under which it will provide automatic approval for changes in the funding method of a single-employer plan that result from a change in the plan’s enrolled actuary or a change in the valuation software used to determine plan liabilities. The new rules governing the automatic approval of funding method changes under such “takeover plans” will apply for plan years beginning on or after January 1, 2013. . . .

        (Read Intelliconnect) »


February 4, 2015


Get Your Processes In Place Now For Sec. 6055/6056 Reporting, HighRoads Warns Employers

Now is the time to put processes in place to comply with Code Sec. 6055 and Code Sec. 6056 reporting requirements, said presenters at a recent HighRoads webinar, especially since the penalties for noncompliance or inaccuracies are steep. . . .

        (Read Intelliconnect) »


Denial Of Short-Term Disability Benefits Overturned For Lack Of Fair Review

A plan administrator’s denial of short-term disability benefits to an insured who was undergoing several surgeries while coping with the sudden loss of her husband was overturned by the Fourth Circuit U.S. Court of Appeals in
Harrison v. Wells Fargo Bank, N.A. The administrator had failed to consider readily available material evidence that could have confirmed the insured’s theory of disability. In so doing, it had failed to conform to the directives of ERISA and the plan’s own terms. . . .

        (Read Intelliconnect) »


February 3, 2015


Text: EBSA Final Regulations, Annual Funding Notice For Defined Benefit Plans

        (Read Intelliconnect) »


EBSA Issues Final Rule On New Annual Funding Notice Requirements For DB Plans

The Employee Benefits Security Administration (EBSA) has issued a final rule (Text: EBSA Final Regulations, Annual Funding Notice For Defined Benefit Plans) implementing the annual funding notice requirement of section ERISA §101(f). ERISA §101(f) requires the administrators of defined benefit plans (single employer and multiemployer) to furnish an annual funding notice to participants, beneficiaries, and the PBGC, among other entities. The rule is designed to enhance retirement security pension plan transparency by ensuring that workers receive timely and accurate notification annually of the funded status of their defined benefit pension plans. This document also contains necessary conforming amendments to other regulations under ERISA, such as the summary annual report regulation. . . .

        (Read Intelliconnect) »


ESOP Fiduciaries Remain Subject To Suit For Failure To Drop Inflated Company Stock From Investment Menu

ESOP participants will be allowed the opportunity to prove in court that plan fiduciaries acted imprudently in continuing to offer company stock as an investment option when they knew or should have known that the stock price was artificially inflated, according to the Ninth Circuit U.S. Court of Appeals in
Harris v. Amgen, Inc. The participants also will be permitted to rely on documents incorporated by reference in plan summary plan descriptions to establish a breach by the plan fiduciaries of their duty to provide the participants with material information related to the investment in company stock. . . .

        (Read Intelliconnect) »


February 2, 2015


Focus on ACA Employer Mandate in 2015, Expert Advises Employers

Employers have been grappling with implementation of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) for several years now. In 2015, the implementation challenges will continue, especially for employers with 100 or more full-time equivalent employees (FTE) who must comply with the employer mandate. In addition, it’s likely that the new Congress will attempt to tweak some of the ACA’s provisions, while the Supreme Court wrestles with the law’s statutory language. New legislation and court rulings could affect employers’ obligations or planning. To shed light on these and other ACA-related issues and how to prepare for them,
Wolters Kluwer interviewed Michael M. Maddigan, partner in the Los Angeles office of Hogan Lovells. . . .

        (Read Intelliconnect) »

Employee Participation in Wellness Programs and Flexible Work Arrangements on Rise

Wellness programs and flexible work arrangements are two of the most popular employee benefits offered by organizations, according to the results of the Strategic Benefits survey released by the Society for Human Resource Management (SHRM). About three-quarters (76 percent) of organizations offered some type of wellness program to employees in 2014, an increase from 70 percent in 2012. Also in 2014, about one-half (52 percent) of organizations provided employees with the option to use flexible work arrangements, such as teleworking. . . .

        (Read Intelliconnect) »