Retirement Plans Newsletter |
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| December 3, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
Common ERISA Issues for 403(b) Plans
Excerpt: "[O]nly the plans of certain [private, not public] tax-exempts fall outside the DOL's 'safe harbor' rules and become subject to ERISA - e.g., where the employer makes contributions or exercises control over the plan, e.g., by selecting a single investment provider or approving loans, hardship distributions or QDROs. So what are some of the common issues for ERISA-governed 403(b) plans? . . . ." (Reish & Reicher)
[Guidance Overview]
Target Date Funds Under Scrutiny
Excerpt: "[P]lan sponsors need to focus on the needs of their participants. For example, a law firm might use aggressive target date funds because, by and large, the employees of a law firm have flexibility to retire earlier, or retire later, depending on the investment performance and size of their 401(k) accounts. However, an employer with a workforce where the employees lack that kind of flexibility (or where there may be large layoffs in a recession) may decide that large investment losses pose a greater threat to its employees than any benefit that would be gained from large investment gains. In other words, those plan sponsors might select a conservative target date line-up." (Reish & Reicher)
[Guidance Overview]
The Plan Sponsor's Ability to Evaluate Conflicts of Interest
Excerpt: "What should you do if a service provider refuses to give you a written description of his material conflicts? The first alternative is to refuse to work with the service provider. Viewed from a legal perspective, the provider is refusing to support you in the fulfillment of your fiduciary responsibilities. You have to ask, is the benefit of working with this particular provider so great that you are willing to take on additional responsibility, and potential risk, in fulfilling your fiduciary duties?" (Reish & Reicher)
[Guidance Overview]
Some Legal Aspects of Valuing ERISA Plan Investments In Private Equity Funds
Excerpt: "Many ERISA retirement or pension plan managers have plan money invested in limited partnership positions in private equity forms. The plan manager has a fiduciary duty to the employees whose funds are included in the plan to ensure that the plan's money is prudently invested." (Vedder Price)
Second Circuit Affirms Dismissal of 401(k) Investment Fees Lawsuit
Excerpt: "Senior U.S. District Court Judge Warren W. Eginton of the U.S. District Court for the District of Connecticut had rebuffed arguments by three 401(k) participants that, among other things, UTC should have thought twice about picking actively managed funds because of the 'near certainty' an active fund will not best its index counterpart . . . ." (PLANSPONSOR)
Verizon Charged with Involuntary Transfer of Retiree Pension Accounts
Excerpt: "Verizon retirees have filed a complaint for violations of the Employee Retirement Income Security Act (ERISA) charging that they and over two thousand others were involuntarily switched post-retirement from the Verizon Communication Inc. pension plans to pension plans sponsored by a newly spun-off company, Idearc Inc." (PLANSPONSOR)
Study: Investment Behavior of Target-Date Fund Users Having Other Funds in 401(k) Plan Accounts
Excerpt: "This study shows that some mixed TDF investors apparently fail to understand either the purpose or the benefit of a TDF designed as an 'all-in-one' portfolio solution. However, holding TDFs with other funds could lead to an unexpected result of ending up with a potentially inferior portfolio in terms of risk/return tradeoff from more assets allocated to some sectors than the designers of the target date funds had planned." (Employee Benefit Research Institute (EBRI))
Attorney Janell Grenier's Blog on Employee Benefits Will Cease Publication; Ms. Grenier is Gravely Ill
Ms. Grenier's contact information is online at http://www.benefitscounsel.com/contact.htm -- Excerpt: "As some of you may have heard, I have been diagnosed with a very rare and aggressive form of cancer which started in my kidney and spread to my lymph nodes. Because of that, it is with sadness that I am announcing I will no longer be writing here . . . or any of the other blogs that I have written." (BenefitsBlog)
Account Balances of 60 Percent of 401(k) Participants Back to Pre-Recession Levels
Vanguard is reporting that 60 percent of 401(k) participants have had their account balances return to levels they enjoyed before the stock market began tumbling in September 2007. (AP via New York Times; free registration required)
Some States Moving to Restrict 'Double Dipping' from Pension Plans for Retired-Then-Rehired Employees
Excerpt: "States pummeled by the recession and heavy job losses are moving to bar government employees from 'double dipping' -- the practice of collecting a pension and a paycheck at the same time. The new rules are meant to curb employees from retiring only to return to their old jobs. They come at a time when unemployment has climbed to its highest level in 25 years." (USA TODAY)
New York State Legislators Overwhelmingly Vote to Scale Back Pension Benefits for State Employees
Excerpt: "New York state legislators voted Dec. 2 to scale back pension benefits for the first time in 25 years. Near-unanimous votes in the Assembly and Senate created a new tier of pension benefits for anyone hired after Jan. 1, 2010. The plan will save the state close to $50 billion over the next three decades. The new tier has restricted benefits than other, preexisting pension levels." (Albany [NY] Business Journal)
Requests for Proposals to Recordkeepers: Sponsors Should Ask About Results, Not Just Processes
Excerpt: "[A]n RFP should, at the least, ask for the following information: 1. Based on reasonable assumptions, what is the benefit adequacy ratio (including social security benefits) of the plans that you recordkeep? . . . 2. What is the average participation rate of the plans that you recordkeep? . . . 3. What is the average deferral rate of the participants who are deferring into plans that you recordkeep? . . . These questions focus on results and not on features." (Reish & Reicher)
DATAIR Employee Benefit Systems, Inc. (Advert.)
DATAIR’s DB Valuation System DB Administration, Discrimination Testing and Proposal software with Multiple Plan and Cash Balance Plan handling. PPA’06 Pension Funding. * Funding Target and Target Normal Cost with 3-rate segments * 404(o) Cushion; 430 minimum and 404(o) maximum contributions * Funding Target Attainment Percentages (FTAPs) Schedule SB reports and links to our 5500/PBGC System, and our FAS 158 and Termination Calculation reporting systems. sales@datair.com or call 1-888-328-2474 |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Buck Consultants Summary of Pension and Retirement Legislation in the 111th Congress (PDF)
27 pages; chart format. Updated November 8, 2009. (Buck Consultants)
[Guidance Overview]
10 ERISA Litigation Insights for Employers
Excerpt: "A recent ERISA litigation conference that featured in-house counsel, ERISA litigators and federal judges yielded important insights on how employers can protect themselves in this technical -- and potentially costly -- area of employment law. Here are the top 10 insights from one of the conference's organizers. . . . Make the most of the administrative claims appeal process . . . . Coordinate and communicate with your third-party vendors . . . . Create facts lessening the 'conflict of interest' identified in the U.S. Supreme Court case Glenn v. MetLife . . . . Prepare for the 'employer stock-drop case' . . . . Know whether you have the attorney-client privilege . . . ." (Workforce Management)
[Guidance Overview]
IRS Issues Final Regulations on ESPPs and Reporting Requirements for Statutory Stock Options (PDF)
Excerpt: "In view of the updated ESPP regulations, employers should review their existing plans to ensure that they will continue to qualify as ESPPs, and are designed to maximize opportunities for participation and tax benefits for all eligible employees. To preserve their favorable tax treatment for employees, some plans may have to be amended prior to January 1, 2010. Although employers have another year to prepare for the new reporting requirements, the release of the final regulations suggests that there may not be any further extensions." (Buck Consultants)
Links to Testimony Presented at House Hearing on 'Examining the Delphi Bankrup.tcy's Impact on Workers and Retirees'
Target page includes a recorded webcast of the hearing. Excerpt: "The Health, Employment, Labor and Pensions Subcommittee of the House Education and Labor Committee held a hearing on Wednesday, December 2 to examine how the 2005 bankrup.tcy of the automotive parts manufacturer Delphi has impacted workers and retirees." (Subcommittee on Health, Employment, Labor, and Pensions; Committee on Education and Labor; U.S. House of Representatives)
Press Releases
U.S. Labor Department Recovers Misused Funds for Profit Sharing Plan of Brockton, Massachusetts, Plumbing and Heating CompanyU.S. Department of Labor, Employee Benefits Security Administration (EBSA)
IRS Announces 2010 Standard Mileage Rates
Internal Revenue Service (IRS)
Target-Date Fund Users Holding Other Funds May Have Unintended Allocations and Risks
Employee Benefit Research Institute (EBRI)
Great-West Retirement Services Continues To Build Momentum In The Government Sector With The Addition Of The State Of New Hampshire
Great-West Retirement Services
White Horse Advisors Selected by Cbeyond to Provide 401k Advisory Services
White Horse Advisors, LLC
John Hancock Retirement Plan Services Enhances Financial Representative Website
John Hancock Retirement Plan Services
First Mercantile Adds to National Sales Team
First Mercantile
OppenheimerFunds Retirement Services Announces New Retirement Planning Resources
OppenheimerFunds, Inc.
Announcing RiversEdge Advanced Retirement Solutions
RiversEdge Advanced Retirement Solutions
(Click to post your press release)
Employee Benefits Jobs
Senior Plan Consultantfor BPAS
in NY, PA
DB/DC Pension Analyst
for Boyce & Associates, Inc.
in AZ
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Handy Links:
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