2/9/2010: Text of Model Employer CHIP Notice to Employees About Availability of Premium Assistance Under State Medicaid Programs or Child Health Assistance Programs (Employee Benefits Security Administration)
3-page Microsoft Word document. Excerpt: "The Model Employer CHIP Notice was designed as a template to cover an array of situations where employees may be entitled to notice and may reside (or their families may reside) in States across the nation. Employers may use the model template as a national notice to fulfill their employer notice disclosure obligation under ERISA . . . and the parallel provisions of . . . the PHS Act and . . . the Internal Revenue Code. The notice is required to be provided automatically, free of charge. . . . [T]he approach of the Model Employer CHIP Notice is to provide a very brief description of premium assistance and rely on State contact information for State-specific program descriptions."
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2/9/2010: Are You Indemnified for a Fiduciary Breach Involving a Retirement or Health Plan? (PLANSPONSOR.com)
Excerpt: "The beginning of the year is a good time to examine or assess your indemnification and insurance coverage. It is especially appropriate to focus on indemnification for a couple of reasons. First, it appears that the position recently taken by the Labor Department, and adopted by certain federal courts, has put into question the ability of plans, and arguably companies, to indemnify plan fiduciaries in instances where there has been an allegation of fiduciary breach."
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2/9/2010: Even When Treated, Depression Costs Employers (Reuters via The New York Times; free registration required)
Excerpt: "Workers with depression stay home sick more often than healthy colleagues, even when their disease is treated, according to a Thomson Reuters report released on Tuesday. The report, commissioned by drug maker Sanofi Aventis, suggests that employers would benefit from better treatments of their workers for depression. Depression is the leading cause of disability among Americans aged 15 to 44, according to the National Institute of Mental Health."
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2/9/2010: West Virginia Groups Push for Health Insurance Coverage of Birth Control for Teens (The Charleston Gazette)
Excerpt: "A state law passed in 2005, called the Prescription Fairness Act, requires insurers to cover the cost of contraceptives. But it allows both private insurers and the state's Public Employees Insurance Agency to exempt dependent minors from that coverage. Last week, 10 members of the House of Delegates introduced a measure (HB4272) to remove that exemption."
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2/9/2010: North Texas Company Offers Babysitting Service to Employers (CBS Stations Group of Texas L.P.)
Excerpt: "Some North Texas companies may soon be adding something new to their benefits packages. It's not just a move to keep employees happy; it's a way to avoid lost work time. The companies are becoming a little more family friendly."
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2/9/2010: New Jersey Cost-Cutting Measures Would Reduce Pensions and Health Benefits for Government Workers and Teachers (Philly.com)
Excerpt: "The plans . . . would roll back pension benefits for government workers and teachers, and make public employees at all levels pay 1.5 percent of their salaries toward health benefits, matching what state workers contribute. Several steps would aim to crack down on perceived abuses. Most state workers would have to put in at least 35 hours a week to qualify for pension and health benefits. Those with multiple public jobs could choose just one for calculating retirement benefits."
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2/9/2010: IRS Guidance on Miscellaneous HEART Act Changes (PDF) (Transamerica Center for Retirement Studies)
4 pages. Excerpt: "Section 111 of the HEART Act adds section 45P to the IRC. IRC section 45P provides a small business employer a credit against its income tax liability if it makes differential wage payments to 'qualified employees' who are on active duty in the uniformed services for more than 30 days. The amount of the credit is 20% of the sum of the eligible differential wage payments made to qualified employees duringthe taxable year of the small business employer."
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2/9/2010: The Use and Impact of Advice among Near-Retirees (TIAA-CREF Institute)
Excerpt: "Receiving advice does not automatically translate into implementing the advice. Among higher education near-retirees who have consulted with a financial advisor within the past two years, 17% report always implementing the recommendations of their advisor(s), while 31% only implement the advice some of the time if ever. A likely reason for non-implementation among some is trust; advice received is viewed as always being independent and objective by only 25% of those who typically do not implement an advisor's recommendations."
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2/9/2010: Using the Asset-Salary Ratio As a Guide to Creating a Secure Retirement: (TIAA-CREF Institute)
Excerpt: "Similar to the full-funding ratio of a defined benefit plan, the [Asset-Salary Ratio] provides an easily understandable measure for a participant to gauge whether she is 'on-track' for accumulating sufficient retirement wealth. Applying this measure to a sample of TIAA-CREF participants, we find that, on average, participants had assets consistent with at least a 70 percent income replacement ratio; with this result holding across different ages, genders, and tenures."
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2/9/2010: IRS Correction Program for 409A Plan Documents (Nixon Peabody LLP)
Excerpt: "This new 409A guidance will be helpful to employers who may have overlooked certain deferred compensation arrangements that were not updated to comply with Section 409A by the December 31, 2008 deadline. But even if your plans have been previously reviewed for 409A compliance, you should not disregard this new guidance. The Notice provides clarifications regarding some common plan provisions that will be considered compliant with Section 409A requirements."
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2/9/2010: IRS Requirement of Reporting and Excise Taxes for Health Plan Non-Compliance (McGuireWoods LLP)
Excerpt: "This new reporting obligation makes compliance with group health plan requirements more important than ever. To avoid excise taxes under this new self-reporting regime, employers and administrators of group health plans should have procedures and processes in place that are reasonably designed to ensure compliance. If plan failures nonetheless occur, the employer and other responsible parties must promptly take action to correct the violation within 30 days, or face expensive excise tax penalties."
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2/9/2010: Investigation of Fireman's Fund Termination of Retiree Medical Benefits (Lewis, Feinberg, Lee, Renaker and Jackson PC)
Excerpt: "At the end of September, Fireman's Fund Insurance Company ('FFIC') notified most of its retirees that it intends to discontinue providing medical benefits for the overwhelming majority of its retirees effective January 1, 2010. Cohen Milstein is currently investigating whether FFIC is permitted to make those changes."
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2/9/2010: Impact of FY 2011 Proposed Budget on HR and Employee Benefits (Hewitt Associates)
Excerpt: "The budget includes several proposals that affect human resources and employee benefits from an employer perspective, such as: 1) a proposed extension of the federal subsidy for COBRA benefits through December 31, 2010; 2) a legislative proposal that would introduce automatic individual retirement accounts (IRAs) for employers to offer employees; 3) retirement plan regulatory initiatives . . . ."
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2/9/2010: Interim Final Regulations Under Mental Health Parity and Addiction Equity Act (PDF) (Alston & Bird)
Excerpt: "Practice Pointer: Although several commenters requested clarification on how to determine whether a plan is maintained 'pursuant to' a [collective bargaining agreement] if the plan covers both union and non-union employees, the Agencies declared such a determination to be outside the scope of these Interim Regs."
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2/8/2010: Most 403(b) Sponsors Kept Match During the Downturn (PLANSPONSOR.com)
Excerpt: "Nearly three-fourths (73.4%) of 403(b) plan sponsors said in a recent poll that they did not change their employer match during the 2008-2009 plan year -- and that seems to have shored up participation as well. A news release said the poll, from the Profit Sharing/401k Council of America (PSCA), also found that 43% of plan sponsors surveyed say they increased employee education because of the economic conditions. Another 17% added investment advice for employees."
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2/8/2010: CBO's Assessment of Policy Option to Reduce Employers' Payroll Taxes for Firms that Increase Their Payroll (PDF) (U.S. Congressional Budget Office)
7 pages. Excerpt: "This letter [to the Honorable Robert P. Casey Jr.] responds to questions you posed about policy options to increase employment by reducing employers' payroll taxes for firms that increase their payroll. Last month, the Congressional Budget Office (CBO) released a report that addressed such options, as well as other possible approaches to achieving that goal. This letter reviews the analysis in that report and discusses how key design elements of such a policy would affect the resulting gains in employment."
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2/8/2010: Value of Golden Parachutes at America's 20 Largest Publicly-Traded Companies Decreased by Approximately 40% in Past Two Years (PLANSPONSOR.com)
Excerpt: "A new study conducted by New York management consultant Alvarez & Marsal found the average value of change in control benefits provided to CEOs decreased to $22,987,661 in 2009 from $38,355,523 in 2007. Similarly, the average value provided to other non-executive officers fell to $7,975,671 in 2009 from $13,191,635 in 2007, according to a press release."
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2/8/2010: New Edition of ESOPs and Corporate Governance (National Center for Employee Ownership)
The NCEO has just released the third edition of its book ESOPs and Corporate Governance, which was written to help ESOP companies think through their governance issues. An important chapter details a survey on ESOP company governance practices. Other chapters address how to select trustees, legal obligations of trustees, best practices for boards (with an eye to concepts established by Sarbanes-Oxley), issues when employees are fiduciaries, and special legal considerations for ESOP companies.
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2/8/2010: Former Alaskan State Workers Get Last Chance for Retirement Plan (The Anchorage Daily News)
Excerpt: "Attention ex-government workers: You've got one last chance to get back into the state's old -- and much more generous -- retirement system. A deadline of June 30 is approaching for tens of thousands of former state, municipal and school district workers who cashed out their retirement accounts under the famed Tier 1 system, as well as the two retirement plans that followed."
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2/8/2010: Lengthening Life Spans Affect Retirees' Savings Plans (The Dallas Morning News)
Excerpt: "U.S. life expectancy reached nearly 78 years in 2007 . . . and has been increasing each year, according to the Centers for Disease Control and Prevention. 'More than half of babies born in rich nations today will live to 100 years if current life expectancy trends continue,' . . . . 'And we are not only living longer than before, but those extra years are spent with less disability and fewer limitations on daily life than in the past.' That means we'll need more money to enjoy those years. The challenge is getting people to understand the importance of planning for longevity, say experts."
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2/8/2010: Plan to Create Longevity-Risk Market May Succeed, Moody's Says (BusinessWeek)
Excerpt: "The Life & Longevity Markets Association, comprising a group of insurers and banks, may succeed in creating a market for products that pass on the risk of people living into old age, Moody's Investors Service said. The group, founded last week by Axa SA, Deutsche Bank AG, JPMorgan Chase & Co., Legal & General Group Plc, Pension Corp., Prudential Plc, Royal Bank of Scotland Group Plc and Swiss Reinsurance Co., aims to create a secondary market in so-called longevity swaps and other derivatives whose values are tied to life expectancy."
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2/8/2010: IRS Issues 2009 Version of Publication 970: Tax Benefits for Education (Employee Benefits Institute of America)
Excerpt: "EBIA Comment: Qualified educational assistance programs allow employers to provide assistance to employees for a broad range of educational expenses, including expenses for graduate-level courses and for courses that are not job-related (subject to certain limitations). Under Code Section 127, amounts paid or incurred by an employer under such programs are deductible by the employer and are excludable from the employees' taxable income."
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2/8/2010: DOL FAQs on How Pharmacy Benefit Manager Compensation Is Reported for Form 5500 Schedule C Purposes (Employee Benefits Institute of America)
Excerpt: "EBIA Comment: It is interesting to see the DOL provide such specific guidance for PBMs. Those entities, and the plans they provide services to, will want to take note. But it is important to remember that Schedule C will not be required for an ERISA welfare plan unless it has a trust (or should have had a trust because Technical Release 92-01 does not apply). And in light of a growing number of cases addressing whether PBMs are ERISA fiduciaries, we find noteworthy the DOL's caveat that the guidance on rebates and discounts is for Schedule C purposes only and does not indicate the agency's view on other ERISA Title I provisions."
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2/8/2010: States Look to Forestall Hypothetical Health Insurance Mandate (The New York Times; free registration required)
Excerpt: "Health care legislation in Washington may be stalled, but that has not stopped legislatures in more than two-thirds of the states from objecting to one of its central planks: a requirement that everyone buy health insurance. The objections, many of them driven by the Tea Party movement, may turn out to be largely symbolic. But they nonetheless serve notice to President Obama and the Democrats of real anger over their health care plans and signal the potential for political upheaval down the road."
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2/8/2010: The Odds of a Disability Are Themselves Odd (The New York Times; free registration required)
Excerpt: "Welcome to the disability insurance funhouse, where the odds of an injury or illness that would keep you out of work for more than three months range wildly, depending on where you look for guidance. . . . So what are the actual odds? They're not clear-cut, as you may have guessed. But let's start with what they aren't."
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2/8/2010: Report Compares Universal Health Care in Maryland to Massachusetts Model (WBALTV.com via msnbc.com)
Excerpt: "The report compared Maryland resources with the Massachusetts model of universal health care. It proclaims the private sector has resources in place to expand health care and urges to build on what's in place before creating a new state agency."
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2/8/2010: Four Creative, Low-Cost Ways to Educate Employees About Benefits (Workforce Management; free registration required)
Excerpt: "One of the biggest challenges employers face when adding new benefits or conducting open enrollment is finding the time to educate employees about the changes or options. Here are some year-round tips for implementing effective benefits-education initiatives without breaking the bank."
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2/8/2010: Analysis Finds Defined-Benefit Plans Outpace 401(k) Returns (Workforce Management; free registration required)
Excerpt: "A Towers Watson analysis finds that defined-contribution plans don't replicate the advantage of defined-benefit pension plans and thus are unlikely to [out-perform] DB plans."
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2/8/2010: Pension-Exchanges for IRAs and 401(k)s Would Strengthen President Obama's Initiatives (Governing)
Excerpt: "[H]ere's a federalist 'public option' for the Treasury to consider -- a way for [states to provide retirement savings options] for the citizens of their respective states. I use the term 'public option' advisedly . . . . Treasury could first allow any state treasurer or statewide pension system to exchange a citizen's 401(k), 401(a), 403(b), 457 or IRA securities portfolio for a taxable retirement pension. States would have to adopt qualifying statutes to authorize these arrangements."
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2/8/2010: Placement of the Compensation Risk Disclosure in the Proxy Statement (Michael Melbinger via Winston & Strawn LLP)
Excerpt: "'The new rules do not specify where the disclosure should be presented. However, to ease investor understanding, the staff recommends that Item 402(s) disclosure be presented together with the registrant's other Item 402 disclosure. The staff would have concerns if the Item 402(s) disclosure is difficult to locate or is presented in a fashion that obscures it.'"
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2/8/2010: IRS Employee Plans Exam Projects (McKay Hochman Co.)
Excerpt: "EP Examination Projects - Learn, Educate, Self-Correct and Enforce (LESE) Projects: These examinations are small and quick projects wherein returns selected for audit contain issues of interest in a particular segment. Form 5500 returns selected for LESE examinations are based on 'judgment sampling.' These examinations do not involve selection of returns through statistical sampling methods, but involve the random selection of approximately 50 examinations. The goal of this program is to apply the focused examination concept to LESE examinations to test and measure plans' compliance levels."
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2/8/2010: Roth Conversion Reporting (McKay Hochman Co.)
Excerpt: "With the Pension Protection Act of 2006 permitting funds in a qualified plan, 403(b) or governmental 457(b) to be directly rolled to a Roth IRA as of 2008, provided the AGI was under $100,000 and, if married, the taxpayers filed jointly; there have been many questions about reporting these transactions on Form 1099-R. Coupled with the relatively new designated Roth source and the new Roth Conversion rules for 2010, there has been even more confusion about reporting the various transactions on Form 1099-R. [The target page provides] some fact sets and examples of Form 1099-R reporting."
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2/8/2010: Top 10 Health Law Issues for 2010 (McDermott Will & Emery)
Excerpt: "The year 2010 brings heightened health care focus on compliance, reform efforts and enforcement."
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2/8/2010: Text of Brief for Secretary of Labor As Amicus Curiae Supporting Defendant-Appellant Matschiner and Requesting Reversal (U.S. Department of Labor)
Excerpt: "The question presented in this case falls within that authority: whether, in light of the decision in Kennedy v. DuPont, 129 S.Ct. 865 (2009), holding that plan administrators must distribute benefits to beneficiaries in accordance with plan documents, ERISA either permits or requires a pension plan administrator to disregard a validly-executed beneficiary designation because the plan lacks a formal procedure through which a designated beneficiary can refuse benefits."
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2/8/2010: Determining If Your 403(b) Plans Are Subject to the Audit Requirement (PDF) (ERISA diagnostics, Inc.)
2 pages. Excerpt: "Large ERISA plans will be required to file audited financial statements beginning with the 2009 Form 5500 filing. A large plan is an ERISA plan with more than 100 participants at the beginning of the plan year. Small ERISA plans are generally exempt from the audit requirements provided the requirements of the DOL's small plan audit waiver are satisfied. A small plan is an ERISA plan with less than 100 participants at the beginning of the plan year."
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2/8/2010: Los Angeles City Pensions Since Early Retirement Incentive Program: The Facts, The Figures, The List (OurLA.org)
Excerpt: "In the first six months after City Hall offered the Early Retirement Incentive Program, 625 workers have actually retired with pensions averaging more than $1,000 a week with 32 of them getting pensions in excess of $100,000 a year, according to records obtained by OurLA.org. On June 26, 2009, the Mayor and City Council approved enhanced pensions with five years extra service credit and $15,000 in cash to 2,400 employees -- more than 10 percent of the civilian work force who are enrolled in the LACERS pension fund."
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