November 2014 Archive

Harris v. Amgen decided by Ninth Circuit

November 10, 2014

On October 30, 2014, a three-judge panel of the Ninth Circuit handed down its decision in Harris v. Amgen, a ‘stock drop’ case. The decision came after the Ninth Circuit's earlier (2013) decision in favor of participant-plaintiffs had been vacated and remanded by the Supreme Court for reconsideration in light of Fifth Third Bancorp et al. v. Dudenhoeffer. In this article we review the Ninth Circuit's (new) Harris v. Amgen decision, focusing on how that court applied the principles articulated by the Supreme Court in Fifth Third. Read More

Society of Actuaries releases updated mortality tables

November 07, 2014

On October 27, 2014, the Society of Actuaries published its (new) RP-2014 Mortality Tables and Mortality Improvement Scale MP-2014, related reports, and two documents responding to comments on its exposure draft from earlier this year. Defined benefit plan sponsors will want to consult their actuary as to the application of the new tables to their plan. In this article we briefly review the SOA RP-2014 report, focusing on its consequences for regulatory purposes. Read More

Tibble appeal to be heard by Supreme Court

November 06, 2014

The Supreme Court has agreed to hear an appeal from the plaintiffs in Tibble v. Edison International, a 401(k) fee case. In this article we briefly review the Ninth Circuit's Tibble decision, focusing on: (1) the retail vs. institutional share class issue; and (2) the application of ERISA's statute of limitations to fund menu decisions. Read More

Deferred annuities in target date funds approved by IRS, DOL

November 04, 2014

On October 24, 2014, IRS released Notice 2014-66, providing guidance with respect to a program under which deferred annuities are included as "fixed income" investments in a target date fund (TDF). In connection with the Notice, the Department of Labor released a letter addressing certain fiduciary issues with respect to the program. In this article we first review the TDF annuity program and then discuss the IRS and DOL guidance. Read More

October 2014 Pension Finance Update

November 03, 2014

In keeping with the spirit of Halloween, October was a scary month for pensions, but, in the end, everything turned out all right. A ‘flight to quality’ (lower stock prices, lower interest rates) took hold during the first half of the month, before largely reversing itself. By month-end, stocks had reached all-time highs, but the gain was neutralized by lower interest rates, producing a wash for pension finances on the month. Through October, plans remain modestly underwater for the year – our traditional ‘Plan A’ has seen its funded ratio decline by more than 5%, while the more conservative ‘Plan B’ is down 2%. Download

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