An online, clickable version of this newsletter is available at: http://benefitslink.com/2007/2007_11_27_retirement.html =========================================================== BenefitsLink Retirement Plans Newsletter (Plain Text Format) November 27, 2007 Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. =========================================================== TODAY'S SPONSOR: www.ftwilliam.com Technical support is FREE at ftwilliam.com (Advert.) http://benefitslink.com/modperl/a_d_top.cgi?a_d=2007_11_27_retirement (Click on the above address or copy and paste it into your web browser.) At ftwilliam.com, we believe that we provide our customers with outstanding technical support. Our customers may contact our technical experts directly by email or phone and have their questions answered fast and free of charge. Learn more how we can make your life easier by visiting our website at www.ftwilliam.com. Contact Holly Roussel at 800.596.0714 or via email at sales@ftwilliam.com. ----------------------------------------------------------- (a) NEW GUIDANCE DOCUMENTS ---------------------------------------------------------- PBGC Disaster Relief Announcement 07-26: October 21 California Wildfires http://www.pbgc.gov/practitioners/law-regulations-informal-guidance/disaster-relief-announcements/dr16262.html Excerpt: "This Disaster Relief Announcement provides relief relating to PBGC deadlines as described below to Designated Persons. A 'Designated Person' is any person responsible for meeting a PBGC deadline (for example, a plan administrator or contributing sponsor) that . . . ." (Pension Benefit Guaranty Corporation (PBGC)) ----------------------------------------------------------- (b) NEWS ---------------------------------------------------------- New York Times Coverage: Justices Consider Claim for 401(k) Plan Losses http://www.nytimes.com/2007/11/27/business/27bizcourt.html?_r=2&oref=slogin&oref=slogin Excerpt: "[The plaintiff's attorney's] argument was bolstered by the participation of the federal government on his client's behalf. An assistant to the solicitor general, Matthew D. Roberts, representing the views of the Department of Labor, said 'the crux of the matter here is that the plan has suffered a loss' when an individual account suffers one. 'The appropriate remedy is to get the money back in the plan,' Mr. Roberts said. The money would then be allocated to the individual's account." (New York Times) ---------------------------------------------------------- Law.com Coverage: Justices Consider Claim for 401(k) Plan Losses http://www.law.com/jsp/article.jsp?id=1196071461428 Excerpt: "Justice Antonin Scalia asked [the attorney for the plaintiff] why [the plaintiff] didn't first apply for recovery against the plan instead of against the fiduciary. '[O]nly that manner of proceeding preserves the structure of ... the legislation which is that you're supposed to first apply to the plan and exhaust your remedies there before you come into court,' Scalia said." (Law.com) ---------------------------------------------------------- Link to Oral Argument Transcript, Source Documents About LaRue Fiduciary Breach Damages Case in U.S. Supreme Court http://www.scotuswiki.com/index.php?title=LaRue_v._DeWolff%2C_Boberg The link to the transcript of yesterday's (!) oral argument is listed on the target page under the heading 'Oral Argument Recap." (SCOTUSwiki (sponsored by Akin Gump Strauss Hauer and Feld LLP)) ---------------------------------------------------------- Analysis of the Oral Transcript in the LaRue ERISA Case http://lawprofessors.typepad.com/laborprof_blog/2007/11/analysis-of-the.html Excerpt: "[T]he case may shine much needed light on the scope of relief available to employees under Sections 502(a)(2) and 502(a)(3) of ERISA. Below are my initial thoughts on the oral argument today in the case based upon an analysis of the oral transcript. (Full disclosure: I was one of eleven law professors who signed an amicus brief supporting LaRue's opposition to DeWolff's motion to dismiss. I hope, however, that this fact does not cloud my analysis of the oral argument). . . . I predict a 6-3 decision for LaRue . . . ." (Prof. Paul Secunda on Workplace Prof Blog) ---------------------------------------------------------- Section 415 Violations Play Important Role in Untangling San Diego Pension Plan Problems http://www.signonsandiego.com/news/metro/20071124-9999-1m24benefits.html Excerpt: "Pension administrators have been in a voluntary program to ensure compliance with federal tax laws since their attorneys uncovered a range of violations in 2005 and reported them to the IRS in 2006. The documents [City Councilwoman Donna Frye] has received show the pension system violated Internal Revenue Code section 415 dating back to 1993." (SignOnSanDiego) ---------------------------------------------------------- Citigroup Ordered by Federal District Judge to Change Cash Balance Payment Credits http://www.plansponsor.com/pi_type10/?RECORD_ID=39523 Excerpt: "The latest ruling from U.S. District Judge Shira A. Scheindlin of the U.S. District Court for the Southern District of New York followed her order a year ago that the Citigroup cash balance program violated the Employee Retirement Income Security Act's (ERISA) anti-backloading rules . . . ." (PLANSPONSOR.com; free registration required) ----------------------------------------------------------- (c) SUMMARIES OF GUIDANCE; FILED COMMENTS ---------------------------------------------------------- Overview: Proposed IRS Regs on 401(k) Plan Automatic Contribution Arrangements http://hr.cch.com/news/pension/112707a.asp Quite detailed. (CCH Pension and Benefits) ---------------------------------------------------------- End of an Era: The 2007 Schedule B http://www.watsonwyatt.com/us/pubs/insider/showarticle.asp?ArticleID=18351 Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) has released new 5500 forms for 2007 plan years. The new (and last) Schedule B has been updated for certain Pension Protection Act of 2006 (PPA) changes that became effective in 2007. . . . [A]ny plan that has a short plan year that begins in 2008 must wait until after the 2008 forms are released to file Form 5500 for that short plan year. However, the filing deadline, which normally ends on the last day of the seventh month after the end of the short year, is automatically extended to 90 days after the new form is released." (Watson Wyatt) ---------------------------------------------------------- Overview: Electronic Filing of Form 5500 Again Postponed, Plus Changes to Form, Schedules, Instructions, and Regulations Finalized http://www.ebia.com/weeklyguest/19210/200712177ca15391d1fb362d88191f72a0fd3ef8/BNL071121 Excerpt: "Most importantly, the effective date for mandatory electronic filing of Form 5500 has been postponed again and will now be applicable for plan years beginning on or after January 1, 2009. Under this effective date, the vast majority of plan filers will have until at least July 2010 to make the changes necessary to allow electronic filing (since Form 5500 is generally due by the end of the seventh month following the end of the plan year)." (Employee Benefits Institute of America) ----------------------------------------------------------- (d) TRENDS, SURVEYS, RESEARCH ----------------------------------------------------------- Most Employers Easing Company Stock Sale Restrictions http://www.workforce.com/section/00/article/25/23/02.html Excerpt: "The Hewitt Associates survey of 300 employers finds that among companies that match salary deferrals exclusively with company stock, 67 percent allow participants to diversify immediately. That's a big change from 2005 . . . ." (Workforce Management) ---------------------------------------------------------- Rethinking the Company Match for a 401(k) Plan http://www.workforce.com/archive/feature/25/21/87/index.php Excerpt: "New research from Harvard and Yale universities provides defined-contribution plan sponsors with more food for thought. A paper titled 'The Impact of Employer Matching on Savings Plan Participation Under Automatic Enrollment' contends that the success of automatic enrollment in increasing employee participation in defined-contribution plans is only marginally dependent upon whether the company makes a matching contribution." (Workforce Management (members area; free registration required)) ----------------------------------------------------------- (e) POLICY, OPINION, ADVOCACY ----------------------------------------------------------- Opinion: PBGC Missed Out by Eschewing Stocks in Favor of Liability-Driven Investing http://www.pionline.com/apps/pbcs.dll/article?AID=/20071126/PRINTSUB/71121060 Excerpt: "[T]he PBGC, which backstops private defined benefit plans, has a 72% allocation to fixed income, and only 28% of assets in equities. For the year ended Sept. 30, the agency said its fixed-income portfolio generated a 3.4% return, while its equity portfolio returned 16.5%. The irony is that many corporate pension executives now are considering adopting similar long-duration bond portfolios to reduce volatility in their funding levels." (Pensions & Investments) ---------------------------------------------------------- CORRECTED LINK: Social Security as a Retirement Resource for Near-Retirees, by Race and Ethnicity, Nativity, Benefit Type, and Disability Status http://www.ssa.gov/policy/docs/workingpapers/wp109.html Excerpt: "We find that substantial differences in earnings levels and/or mortality levels among these subgroups interact with Social Security program provisions to produce sizable differences in the values of our benefit measures." (Office of Policy, Social Security Administration) =========================================================== Sponsored by: 401khelpcenter.com, LLC Do you think auto-enrollment in your 401(k) plan is enough to get your employees on track for retirement? (Advert.) http://benefitslink.com/modperl/a_d_center.cgi?a_d=2007_11_27_retirement (Click on the address above or copy and paste it into your web browser.) Pension actuaries say employees need to save at least 10% of their income to be on target. Click above to find out how to help your employees "find the money" to save. ========================================================== Links To Items on Executive Comp, Benefits In General ---------------------------------------------------------- Suit Dismissed Against Apple over Backdated Stock Options; Statute of Limitations Applied http://www.nytimes.com/2007/11/20/technology/20apple.html?n=Top/Reference/Times%20Topics/Subjects/S/Stock%20Options%20and%20Purchase%20Plans Excerpt: "Judge Jeremy D. Fogel of Federal District Court in San Jose, Calif., said in his ruling that he dismissed the suit because it was based on statements made more than three years before the case was filed. Apple, maker of the iPod and iPhone music and video players, said last year that it backdated 6,428 stock-option grants issued from 1997 to 2002, according to the order. Changing the date on a grant can provide added gains." (Bloomberg News via New York Times) ---------------------------------------------------------- 'Yes, We Have Good Benefits, But ...' -- How Some Companies Screen for Jerks http://www.heraldnet.com/article/20071111/BIZ/711110039/0/FRONTPAGE Excerpt: "Businesses in fields where jobs are highly coveted -- or just sound like fun -- are stepping up efforts to weed out people who might have the right credentials but the wrong personality. . . . In the mating dance of job interviews, employers traditionally put their best feet forward, too, trumpeting their wonderful benefits packages while leaving out the bit about working late, eating cold pizza. Not [Lindblad, an adventure cruise company]. It sends job applicants a DVD showing not one, but two shots of a crew member cleaning toilets." (HeraldNet) ---------------------------------------------------------- Corporate Governance Watchdog to Focus on Exec Compensation, Disclosure in 2008 http://www.workforce.com/section/00/article/25/23/51.html Excerpt: "Investor research firm RiskMetrics plans to increase its scrutiny of poor executive compensation practices among corporations next year and for the first time focus specifically on weak disclosure of compensation." (Workforce Management) ---------------------------------------------------------- Summary of 409A Compliance Deadline Extensions http://www.watsonwyatt.com/us/pubs/insider/showarticle.asp?ArticleID=18352 Very nice; includes a detailed table. Excerpt: "During the past few months, the IRS has issued three notices extending the deadlines for complying with various rules under section 409A. Because the guidance has been issued piecemeal and the effective date for the final regulations has been delayed, it is difficult to reconcile all the implications. . . ." (Watson Wyatt) ---------------------------------------------------------- Overview: SEC Issues Executive Compensation Report http://www.troutmansanders.com/firm/media/mediadetail.aspx?media=640 Excerpt: "The SEC's official report highlights the two principal themes that emerged from the staff's review of the executive compensation disclosures. First, the SEC stated that the Compensation Discussion and Analysis often lacked sufficient analysis regarding 'how' and 'why' a company arrived at its executive compensation policies and decisions. Second, the SEC stated that companies must focus on presenting the disclosures in a way that is clear, concise and understandable to the reader." (Troutman Sanders) ---------------------------------------------------------- Link to Application Form for Membership on IRS Committee on Tax Exempt and Government Entities (ACT) http://www.irs.gov/charities/article/0,,id=175136,00.html Excerpt: "The ACT is an organized public forum for the IRS and representatives who deal with employee plans, exempt organizations, tax-exempt bonds, and federal, state, local and Indian tribal governments. The ACT allows IRS to receive regular input on administrative policy and procedures of the Tax Exempt and Government Entities Division. Applications will be accepted through December 3, 2007." (Internal Revenue Service) ---------------------------------------------------------- List of Decisions/Actions Now Required for Deferred Compensation Plans by December 31, 2008 (PDF) http://www.drinkerbiddle.com/files/Publication/5ff31020-604d-4222-b772-0deee9b484d8/Presentation/PublicationAttachment/f2ecf4f3-727c-43bc-bb6e-10227eb295ab/DomTax2.pdf 4 pages. Excerpt: "Under the new extension, employers now have until the end of 2008 to make the following major decisions about how their DCPs will operate and to reduce those decisions to writing . . . ." (Drinker Biddle & Reath LLP) ---------------------------------------------------------- GAO Report (Full Report): Social Security Reform: Issues for Disability and Dependent Benefits http://www.gao.gov/cgi-bin/getrpt?GAO-08-26 71 pages. Excerpt: "We considered several reform elements that could improve Social Security Trust Fund solvency by reducing the initial benefits received or the growth of individual benefits over time. According to our simulations, these reform elements would reduce median lifetime benefits for disabled workers by up to 27 percent (see graph) and dependents by up to 30 percent of currently scheduled levels. While the size of the benefit reduction could vary across individuals, it could be substantial for the vast majority of these beneficiaries, depending upon the reform element." (U.S. Government Accountability Office) ---------------------------------------------------------- GAO Report (Highlights): Social Security Reform: Issues for Disability and Dependent Benefits (PDF) http://www.gao.gov/highlights/d0826high.pdf Excerpt: "This report examines (1) how certain elements of Social Security reform proposals could affect disability and dependent benefits, (2) options for protecting these benefits and how they might affect disabled workers and dependents, and (3) how protecting benefits could affect the Social Security program." (U.S. Government Accountability Office) ---------------------------------------------------------- Healthcare Costs Hurting Governmental Pension Systems http://www.columbusdispatch.com/live/content/local_news/stories/2007/11/26/PENSIONS.ART_ART_11-26-07_A1_8E8IAGU.html?sid=101 Excerpt: "The [Ohio] State Teachers Retirement System has seen its health-care bills soar from $259 million in 2001 to $490 million in 2006. Under current trends, the system will run out of money to cover health-care expenses of retired teachers around 2021." (Columbus Dispatch) ========================================================== Newly Posted Events Know Your Fiduciary Responsibilities - An Update on Pension Protection Act and Related Guidance for Practitioners - Free Webcast Nationwide on December 6, 2007 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA) http://benefitslink.com/events/detail.php?id=43197 Post yours! http://benefitslink.com/events/eventmaint.php ========================================================== Newly Posted Press Releases ExpertPlan Partners with AccountantsWorld to Launch Retirement Relief 401(k) Platform ExpertPlan http://benefitslink.com/pr/detail.php?id=41369 Benefit Software Inc. Helps Emanuel Medical Center Support Healthy Employee Retention Rates with Customized Benefit Statements Benefit Software Inc. http://benefitslink.com/pr/detail.php?id=41372 Automatic Features Are Driving 401(k) Plan Participation at U.S. Companies, Reveals Diversified Investment Advisors, Inc. Survey Diversified Investment Advisors http://benefitslink.com/pr/detail.php?id=41370 RBC Dain Rauscher And Fi360 Announce Partnership Fiduciary360 (fi360) http://benefitslink.com/pr/detail.php?id=41373 Software and IT Services Firms Combine to Offer Expanded, Cost-Effective Services for the Pension, Financial and Insurance Industries Arrowpoint Technologies Inc. http://benefitslink.com/pr/detail.php?id=41371 Post yours! http://benefitslink.com/pr/maint.php ========================================================== Newly Posted or Renewed Job Openings Actuarial Specialist for Kravitz - Louis Kravitz & Associates in ANY STATE, CA http://benefitslink.com/modperl/job.cgi?n=H50036 Retirement Sales Wholesaler - Inside Sales for ExpertPlan, Inc. in NJ http://benefitslink.com/modperl/job.cgi?n=H50127 Enroller - Employee Benefits Meeting Presenter for Total Benefit Communications in ANY STATE http://benefitslink.com/modperl/job.cgi?n=H50800 Compliance Testing Consultant for Diversified Investment Advisors in NY http://benefitslink.com/modperl/job.cgi?n=H52818 Sr. Plan Administrator for American National Insurance Company in TX http://benefitslink.com/modperl/job.cgi?n=H52940 Financial Services Analyst for The Newport Group in MO http://benefitslink.com/modperl/job.cgi?n=H53377 Public Policy Analyst for National Business Group on Health in DC http://benefitslink.com/modperl/job.cgi?n=H53378 Pension Specialist for Nationwide Insurance in OH http://benefitslink.com/modperl/job.cgi?n=H53379 Compliance Analyst for Leggette Actuaries, Inc. in TX http://benefitslink.com/modperl/job.cgi?n=H53381 Post yours! http://EmployeeBenefitsJobs.com/jobs/post_help_wanted.html View all jobs http://EmployeeBenefitsJobs.com/ RSS feed http://EmployeeBenefitsJobs.com/rss/jobs.rss =========================================================== Search previous newsletters: http://benefitslink.com/search =========================================================== Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too Sign-up form is at: http://benefitslink.com/newsletter/ =========================================================== This newsletter is sent to you each workday except federal holidays. 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