Diversions May 2, 2013

Serving Up Revenge Seasoned With Personal Data

The Internet may be raising the bar for bad post-breakup behavior.
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Nearly 60% of threatened ex-lovers have been exposed by their exes, according to a study by McAfee, the computer security company. Among the top drivers for exposing personal data are “cheating” and “being lied to.” More than half of ex-lovers surveyed also admitted to cyber-stalking former partners.

The “2013 Love, Relationships and Technology” survey found that a majority of Americans (94%) believe their data and revealing photos are safe in the hands of their partners. Thirteen percent of adults have had their personal content leaked to others without their permission.

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One in 10 ex-partners has threatened to expose risqué photos of an ex online. According to the study, these threats have been carried out nearly 60% of the time.

After lying (45%) and cheating (41%), the most common reasons for exposing personal data are breaking up (27%), canceling a wedding (14%) and posting a picture taken with someone else (13%).

About a quarter of those surveyed regretted sending such intimate content after a break-up, and nearly a third have even asked an ex-partner to delete all personal content. Men are more often threatened with having photos exposed online than women (12% vs. 8%).

More than 56% admitted to checking their significant others’ social media pages and bank accounts, and nearly half log in to scan their partners’ emails. The survey also revealed that slightly more people (48%) track their ex-partner on Facebook more than they do their current partner (44%).

Males snoop on their partners more frequently than females. Almost half the men surveyed (46%) admitted to tracking a partner, ex-partner or partner’s ex on Facebook or Twitter, compared with 37% of women. On average, 57% of men admitted to checking their partner’s email, social media pages or bank accounts, compared with 52% of females.

McAfee, based in Santa Clara, California, conducted interviews online in December with 1,182 American adults ages 18 to 54. Respondents were split evenly by age and gender. 

Compliance May 1, 2013

Regulations: What’s Happened and What’s Coming

Retirement plan sponsors have been dealing with several regulatory initiatives in the past year and more are coming.
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Stephen M. Saxon, partner at Groom Law Group, started his session at the 42nd Annual Retirement & Benefits Management Seminar by reminding attendees that in October 2010, the Department of Labor (DOL) proposed to amend regulations defining who is an Employee Retirement Income Security Act (ERISA) fiduciary by reason of providing investment advice. The proposal would have significantly broadened the number of individuals who could be deemed ERISA fiduciaries by eliminating the requirements that advice must be provided on a “regular basis” and with a “mutual understanding” that the advice would be the primary basis for plan investment decisions.  

The DOL retracted its proposal, but is expected to issue a new proposal in 2013. Saxon said Groom expects the proposal will include numerous exemptions in an attempt to harmonize the re-proposal with longstanding DOL exemptions.  

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In connection with its re-proposal, the agency requested comment about whether advice given to participants exiting plans should be treated as investment advice.In addition, Saxon noted, a recent Government Accountability Office (GAO) report raised concerns about participants being “steered” toward certain products when making distribution decisions, and the GAO recommended the DOL and Internal Revenue Service (IRS) draft new rules to make plan-to-plan rollovers easier for participants (see “Plan-to-Plan Rollovers Should Be Easier, GAO Says”). Saxon speculated whether this means new guidance will be coming.

Last February, the DOL published its final rule under ERISA Section 408(b)(2) regarding service provider fee disclosures to ERISA plan sponsors. According to Saxon, the agency said it would prefer not to issue any immediate guidance about the rule’s interpretation, but suggested “best practice” tips may be issued in the future.  

The DOL has indicated it will propose guidance relating to providing “lifetime income illustrations” to participants in individual account plans, wanting participants to understand how their account balances would translate into a lifetime annuity that could be purchased upon retirement. The lifetime income illustrations would be provided as part of the annual “pension benefit statement” required by ERISA Section 105.  

Saxon also noted that the agency issued Advisory Opinion 2013-01A last February, which provides some clarification as to the fiduciary status of certain parties involved in the swap-clearing process required by the Dodd-Frank Act. The DOL concluded that a clearing member, but not a central clearing party, is a “party in interest” to plans engaging in swaps, on the basis that the clearing member acts as a plan service provider. (See “DOL Guidance About Swap Clearing and ERISA Plans”.)  

Finally, Saxon said there are outstanding questions to the DOL regarding ERISA accounts. ERISA accounts are set up using excess revenue sharing payments received by the recordkeeper and can be used to pay plan expenses. According to Saxon, questions remain about the plan assets status of ERISA accounts—reporting and accounting issues and a duty to invest—and about how to allocate ERISA account assets. Does the money have to be allocated to participants proportionally first, and then the expense allocated proportionately to participants, or can expenses be paid directly from the accounts?

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