Headlines about "Communication and disclosure to participants"
Gathered from the web by the editors at BenefitsLink.com.
Bill with Retirement Plan Fee Disclosure, Investment Advice Rules Advances
Excerpt: "Specifically, the bill would require the following: Fees would have to be disclosed by 401(k) plans as a single figure in a worker's quarterly statement. Service providers and plan administrators would have to disclose fees to plan sponsors, broken into four categories: 1) administrative fees; 2) investment management fees; 3) transaction fees; and 4) other fees. Plan administrators would be obliged to provide investment information to participants, including information about risks, returns and investment goals." (Thompson Publishing Group)
[Guidance Overview] Waiver of Joint and Survivor Annuity Benefit Invalid If Plan Representative Breached Fiduciary Duty
Excerpt: "It's true that generally speaking a properly executed waiver cannot be challenged later by protestations from an aggrieved party regarding what her actual intent might have been. However, the court explained, plan representatives participating in the execution of such waivers have a fiduciary duty to disclose to the beneficiary material facts which the beneficiary should know for her own protection. If that duty is breached, then the waiver is invalid." (Wolters Kluwer)
[Guidance Overview] Smith Barney Fails to Get Florida Pension Case Moved Out of Court
Excerpt: "The U.S. District Court for the Southern District of Florida has declined to enforce arbitration clauses contained in account agreements between the City of Delray Beach Police and Firefighters Retirement System and Smith Barney. According to the court's decision, chairman of the retirement system's board William Adams signed Pension Consulting Agreements and other documents for Smith Barney. The agreements have an arbitration clause that says contract disputes must be resolved by arbitration. Smith Barney moved to remove the case from court and have the court direct the board to proceed through arbitration. However, the board argued that Adams lacked authority to execute the account agreements, and the court agreed." (PLANSPONSOR.com; free registration required)
Employers Are Increasingly Using Principles of Behavioral Economics to Craft Health Benefits
Excerpt: "Employees at [some] firms must now choose to opt out of the mail-order pharmacy if they want to get their drugs at a retail pharmacy instead. Since the program started, the number of Lowe's employees enrolled in mail order has doubled, the company said. Lowe's embrace of this opt-out strategy is one of the latest examples of how employers are taking into account the way people actually behave -- rather than how employers wished people acted -- when designing benefit programs. These lessons from the field of behavioral economics, which looks at the psychological side of economic decisions, are helping to shape health benefits." (Workforce Management; free registration required)
House Committee Approves Bill That Restricts 401(k) Advice to Independent Advisers
Excerpt: "Today's bill merged two proposals that were introduced this year: one made by Rep. Rob Andrews, D-N.J., focused on conflicted investment advice, the other sponsored by the committee's chairman, Rep. George Miller, D-Calif., would have required increased disclosure of fees and expenses in 401(k) plans. The new bill incorporates a proposal to provide corporate plan sponsors with temporary relief from making required contributions to their traditional defined benefit pension plans." (Investment News; free registration required)
Legislation Calls for More Transparent Disclosures of 401(k) Fees
Excerpt: "Representatives George Miller (D-Calif.) and Rob Andrews (D-N.J.) reintroduced the 401(k) Fair Disclosure for Retirement Security Act (H.R. 1984). Senators Herb Kohl (D-Wis.) and Tom Harkin (D-Iowa) reintroduced the Defined Contribution Fee Disclosure Act (S. 401). And on June 10, Representative Richard Neal (D-Mass.) introduced a modified version of the Defined Contribution Plan Fee Transparency Act (H.R. 2779). . . . All three bills would impose new reporting and disclosure requirements for individual account balance plans, including new disclosures from service providers to plan sponsors and from sponsors to plan participants and beneficiaries. [The chart in the target document] summarizes some key provisions with significant implications for employers." (Watson Wyatt Worldwide)
Worker Preferences for 401(k) Fee Disclosure Highlight of New Study (PDF)
19 pages. Excerpt: "The topic of fee disclosures in 401(k) plans has recently garnered much attention in the government, media, and retirement industry. Findings from the 10th Annual Retirement Survey help to illustrate current levels of awareness of 401(k) fees, employer and worker preferences for receiving information about fees, and opportunities for increasing awareness." (Transamerica Center for Retirement Studies)
[Guidance Overview] Plans Failing to Follow Own Procedures Must Pay Spouse Amounts Already Paid to Children
Excerpt: "EBIA Comment: Although the trial court in this case agreed with the plans that it was reasonable to make payment even in the face of a potentially conflicting claim, the reversal on appeal shows that the safer course was to wait and allow the conflict to be resolved before proceeding. This case is another lesson to plan administrators of how important it is to know, understand, and follow their plans' own procedures. But even in the absence of specific procedures, controlling law in many jurisdictions would require plans to investigate conflicting claims or risk the double-payment liability now facing the plans in this case." (Employee Benefits Institute of America)
[Guidance Overview] Court Denies Penalties for Document-Request Failure When Participant Not Harmed
Excerpt: "EBIA Comment: It should be noted that courts disagree on whether a participant or beneficiary must show harm from a failure to provide documents in order to be awarded ERISA penalties. Most courts appear to consider the presence of prejudice or bad faith as only one factor in determining whether penalties should be imposed for a failure to produce documents. Although this court emphasized the employee's failure to take follow-up efforts to obtain the requested documents, other courts have reached the opposite conclusion, reasoning that the purpose of these penalties is to punish plan administrators who do not comply with requests for documents." (Employee Benefits Institute of America)
Amendment to Conflicted Advice Bill Regarding Retirement Education (PDF)
3 pages. Excerpt: "Page 27, add at the end the following: SEC. 4. EXPANSION OF OUTREACH TO PROMOTE RETIREMENT INCOME SAVINGS TO INCLUDE PROMOTION OF EDUCATION ON FINANCIAL LITERACY WITH RESPECT TO INVESTMENT FOR RETIREMENT." (U.S. House of Representatives via The Spark Institute)
Amendment in the Nature of a Substitute for the '401(k) Fair Disclosure for Retirement Security Act of 2009' (PDF)
32 pages. (U.S. House of Representatives via The Spark Institute)
Fun, Easy and Automatic: Not a Sure Path to Sufficient Retirement Income (PDF)
Excerpt: "[G]ood communication and education must attract employees' attention. And attention-gaining techniques often include fun and games?snappy brochures, fun YouTube videos, intriguing Facebook pages for the plan, and maybe even scratch and sniff enrollment forms. But every education and communication effort must be aimed at enlightening employees about the things successful users of 401k plans do. Getting employees' attention is the start -- not the end." (Ackley Associates)
ABC Suggests Improvements to Fee, Advice Bills
Excerpt: "The House Subcommittee on Health, Employment, Pensions and Labor has approved The 401(k) Fair Disclosure for Retirement Security Act (H.R. 1984), which requires simple-to-understand fee disclosure on the investment options contained in employers' 401(k) plans, as well as the Conflicted Investment Advice Prohibition Act (H.R. 1988). . . . However, before the committee's vote, American Benefits Council President James A. Klein commended the subcommittee for preserving the broad-based provision of investment advice to employees while still protecting the many non-conflicted advice arrangements approved by IRS before the enactment of the Pension Protection Act of 2006 (PPA), but identified several liability issues raised under the bills." (PLANSPONSOR.com; free registration required)
IRS Trends, Tips, Internal Control Questionnaire and Plan Documentation Guide Online
Excerpt: "The Internal Revenue Service (IRS) has recently added important guidance to its Employee Plan Team Audit (EPTA) website that is very helpful to retirement plan sponsors and retirement plan administrators. This article summarizes the important features of these IRS materials." (Littler Mendelson P.C.)
The SEC's and DOL's Cross Agency Retirement Plan 'Compliance Waltz'
Excerpt: "It is striking . . . how separate the securities compliance world is from the ERISA compliance world-though it is a 'separation' which will eventually die a natural death. Security practitioners and ERISA practitioners will be getting to know each other well, and probably sooner than later. So this is my contribution to that effort. The link below brings you an article which describes ERISA compliance for the security law compliance officer. To many of you, this will be very basic, and pretty boring stuff. The securities folks, however, have expressed amazement of some of the basic things I have written about, things which we take for granted. ['SEC's and DOL's Cross Agency Waltz: The ERISA Connection to Disclosure, Advice, Compensation and Conflict of Interest' at http://www.businessofbenefits.com/uploads/file/Toth_PCRM_03-09(2).pdf]" (Giller & Calhoun, LLC)
[Guidance Overview] Section 403(b) Plan Participants Need to Correct Defective Contract Exchanges by June 30
Excerpt: "Plan sponsors whose plans permitted exchanges with non-approved vendors after September 24, 2007, and who did not enter into ISAs with such vendors by January 1, 2009, might wish to remind plan participants of the upcoming deadline and the need to re-exchange any such contracts back into the plan in order to avoid the potential income tax consequences." (The Segal Group, Inc.)
Text of Defined Contribution Plan Fee Transparency Act of 2009, H.R. 2779 (PDF)
26 pages. Excerpt: "To amend the Internal Revenue Code of 1986 to provide transparency with respect to fees and expenses charged to participant-directed defined contribution plans, and to improve participant communication." (U.S. House of Representatives via American Benefits Council)
Official Summary of Defined Contribution Plan Fee Transparency Act, H.R. 2779 (PDF)
2 pages. Excerpt: "Adds new Section 4980H to the Internal Revenue Code requiring notice to plan participants and taxes for failure to comply." (Rep. Richard Neal via American Benefits Council)
Key Revisions to Prior Version of Defined Contribution Plan Fee Transparency Act (PDF)
1 page. (Rep. Richard Neal via American Benefits Council)
[Opinion] American Benefits Council Proposed Modifications to 401(k) Fair Disclosure for Retirement Security Act (PDF)
6 pages. Excerpt: "Chairman Miller previously introduced H.R. 3185, a bill that addressed both the disclosure of plan fees by a service provider to a plan administrator and the disclosure of plan fees by a plan administrator to participants. We very much appreciate the open and constructive approach that the Committee used in amending H.R. 3185 prior to its approval by the Committee last year. The revised bill, which has been reintroduced as H.R. 1984, included many very significant improvements to the proposed legislation." (American Benefits Council)
[Guidance Overview] Employee's COBRA Notice Claim Dismissed: Employer Offered Sufficient Evidence That Notice Was Properly Sent
Excerpt: "EBIA Comment: This case has only a short discussion of the COBRA claim, but it gives us the chance to reiterate a few important points about providing election notices. First of all, the plan administrator has the burden of proving that an election notice was provided (and remember that the plan administrator is the plan sponsor unless another person or entity is designated)." (Employee Benefits Institute of America)
Bolster Employee Retirement Benefits By Making Statements Comprehensible
Excerpt: "More evidence of how clueless the average American investor may be is that one-third of 401(k) participants admit they do not know what percentage of their account is invested in U.S. stocks, foreign stocks, or fixed-income products . . . ." (Employee Benefit Adviser; free registration required)
[Opinion] American Benefits Council Comment Letter to FTC Regarding Protected HITECH Health Information Guidance (PDF)
5 pages. Excerpt: "The American Benefits Council . . . appreciates the opportunity to comment on the Federal Trade Commission's . . . Notice of Proposed Rulemaking and Request for Public Comment . . . , which provide rules for personal health record (PHR) related entities with respect to the security breach notification requirements under the Health Information Technology for Economic and Clinical Health . . . ." (American Benefits Council)
[Guidance Overview] Optional IRS Withholding Calculations Address ARRA Provisions Affecting Pensioners (PDF)
2 pages. Excerpt: "Employers may want to proactively communicate with pensioners regarding their withholding directions as well as advise them of the one-time $250 economic recovery payment under ARRA." (Buck Consultants)
[Guidance Overview] Proposed Cafeteria Plan Regulations Require Employer Action
Excerpt: "The Internal Revenue Service (IRS) issued Proposed Regulations on Internal Revenue Code Section 125 plans, commonly referred to as 'cafeteria plans,' in 2007. Final regulations are still pending. However, the Proposed Regulations forecast that major changes will be required for cafeteria plans when the IRS issues the Final Regulations. Plan sponsors must incorporate these changes in documents and in plan operations. Failure to do so may disqualify the plan under the 'no tolerance rule.' Unlike qualified retirement plans, cafeteria plans that fail to meet the Code Section 125 regulations as a result of plan document or operational failures will have no recourse through an IRS voluntary correction program ? such plans will simply be stripped of their tax-preferred status. In other words, there will be no tolerance for such failures." (McGuireWoods LLP)
[Guidance Overview] Adjusting to the Brave New World of 403(b) for Plan Sponsors (PDF)
55 slides. Regulatory Compliance, Fiduciary Due Diligence, and Trends in the 403(b) Industry. (Morgan, Lewis & Bockius LLP)
[Opinion] American Benefits Council Comments on The Conflicted Investment Advice Prohibition Act of 2009 (PDF)
3 pages. Excerpt: "The Conflicted Investment Advice Prohibition Act of 2009 (H.R. 1988) repeals the investment advice provision enacted in the Pension Protection Act of 2006 ('PPA'). The bill also prohibits several investment advice practices that existed prior to PPA and that do not involve conflicted advice. This document examines the non-PPA effect of H.R. 1988." (American Benefits Council)
[Official Guidance] DOL Defers Effective Date of Investment Advice Rule; May 22 Date Moved to November 18 (PDF)
5 pages. Excerpt: "This document delays the effective and applicability dates of final rules under [ERISA] and parallel provisions of the Internal Revenue Code . . . relating to the provision of investment advice to participants and beneficiaries in individual account plans, such as 401(k) plans, and beneficiaries of individual retirement accounts (and certain similar plans). These rules were published in the Federal Register on January 21, 2009, and were to have become effective and applicable on March 23, 2009, but were delayed until May 22, 2009 . . . . This document further delays the effective and applicability dates of these final rules from May 22, 2009, until November 18, 2009, to allow additional time for the Department to evaluate questions of law and policy conerning the rules." (Employee Benefits Security Administration, U.S. Department of Labor)
[Opinion] Thoughts on Costs and Fees in 401(k) Plans
Excerpt: "I am thinking in particular today of the court's treatment of the amount and lack of transparency of the fees and costs in the plan before it as essentially not important, for all intents and purposes, either to participants, or, seemingly, to the court's analysis of the plan's obligations. A deeper look at the role of costs and fees, along with their impact, I suspect, might suggest an entirely different outcome to excessive fee cases such as Hecker, and it would not surprise me if at least some other courts in the future engage in such a closer examination and come to a different conclusion as a result." (Stephen Rosenberg of The McCormack Firm, LLC)
The Case for Employer-Sponsored Retirement Plans: Fees and Expenses (PDF)
Excerpt: "This [paper] examines two groups of concerns regarding plan fees and expenses. The first group relates to claims that employer-sponsored retirement plans and their investments are expensive and may erode American workers' retirement savings. The second addresses concerns that employer-sponsored retirement plans and their investment fees and expenses are not adequately understood and disclosed." (The Spark Institute)
Q&A with Rep. George Miller on 401(k) Legislation
Excerpt: "Rep. George Miller, D-Martinez, chairman of the House Education and Labor Committee, wants to reform 401(k) plans. His efforts have taken on increased urgency as many investors have taken hits of 30 percent or more on their 401(k) account balances over the last year. A key concern is that 401(k) providers do not clearly spell out the fees they charged to manage the investments and administer the accounts. . . . In a recent interview, Miller explained his view on fee disclosure and the prospects of getting legislation passed this year." (San Francisco Chronicle)
Annual Pension Funding Notice Causes Widespread Participant Confusion, Termination Fears
Excerpt: "A recent PBGC website posting reassures pension plan participants that receiving an annual funding notice (AFN) 'does not mean that your plan is terminating or that it has been trusteed by the PBGC.' The PBGC has been flooded with calls from participants misinterpreting their first AFNs -- distributed by April 30 for calendar-year plans -- as a sign their plans were terminating. The confusion may have resulted from sponsors' use of a DOL model notice prominently stating that the AFN summarizes federal plan termination rules but never mentioning that the plan is not actually terminating." (Mercer LLC)
DOL Will Seek Public Comment on Draft Request Form for COBRA Subsidy Denial Reviews
Excerpt: "The Department of Labor (DOL) and CMS have prepared draft application forms for individuals to request federal review of COBRA premium subsidy denials. Certain people electing COBRA due to a recent involuntary job loss are eligible for the premium subsidy and can seek federal review if denied the subsidy. The DOL must finish its review within 15 days of receiving a completed form. Official publication of the draft forms is expected in late May and will include a public comment period." (Mercer LLC)
[Official Guidance] Text of IRS Employee Plans News: May 2009 Special Edition: Overview of Prop. Regs. on Suspension or Reduction of Safe Harbor Nonelective Contributions (PDF)
2 pages. Excerpt: "The proposed regulations allow an employer that suffers a substantial business hardship to amend its plan to reduce or suspend the plan's safe harbor nonelective contributions if all the following requirements are satisfied: [1] the plan is amended prior to the end of the plan year to reduce or suspend the safe harbor nonelective contributions; [2] the plan as amended, provides that the ADP test (and ACP test if applicable to the plan) will be satisfied for the entire plan year in which the safe harbor nonelective contributions are reduced or suspended; [3] all eligible employees must be given a 'supplemental notice' that explains the reduction or suspension of future safe harbor nonelective contributions and its consequences, the procedures for changing employee elections and the effective date of the amendment . . . . [three more conditions not shown here -- ed.]" (Internal Revenue Service)
[Guidance Overview] COBRA Notice Was Sufficient Despite Employee's Claim That He Never Received It
Excerpt: "EBIA Comment: As this court points out, COBRA does not require actual receipt of notification by the qualified beneficiary. In this regard, the decision follows the majority of courts, which have held that to demonstrate compliance with COBRA's notice requirements, a plan administrator need only prove that the election notice was sent to the qualified beneficiary by a method that is reasonably calculated to reach the qualified beneficiary. This standard is consistent with the DOL's general disclosure regulations." (Employee Benefits Institute of America)
[Official Guidance] Text of IRS Proposed Regs: Suspension or Reduction of Safe Harbor Nonelective Contributions (PDF)
6 pages. Excerpt: "The proposed regulations would . . . permit an employer sponsoring a safe harbor plan . . . that incurs a substantial business hardship (comparable to a substantial business hardship described in section 412(c)) to reduce or suspend safe harbor nonelective contributions during a plan year. These proposed regulations would provide an employer an alternative to the option of terminating the employer's safe harbor plan in such a situation. The proposed regulations would allow for the reduction or suspension of safe harbor nonelective contributions under rules generally comparable to the provisions relating to the reduction or suspension of safe harbor matching contributions." (Internal Revenue Service)
Retirement Group to Propose Changes to 401(k) Disclosure Bill
Excerpt: "An industry association that represents the interests of retirement plan service providers this week will suggest modifications to proposed legislation that would require the industry to break out 401(k) fees on investors' statements. The Spark Institute will push for a less detailed version of a bill introduced last month by House Education and Labor Committee Chairman George Miller, D-Calif. For example, his bill calls for showing in actual dollars the cost to plan participants for their specific investments. The Spark Institute, however, will suggest providing investors with a list of the total expense ratios of the various investment options available in the plan, along with the dollar cost based on a hypothetical $1,000 investment." (Investment News; free registration required)
The Art and Science of Delivering Bad News on Layoffs/Benefit Cuts in the Workplace (PDF)
Pages 1-3 of 12 pages. (Milliman)
[Guidance Overview] HHS Guidance on Safe Harbor from Data Breach Notification Requirements
Excerpt: "The Guidance describes what is essentially a 'safe harbor' from within which covered entities and business associates need not comply with ARRA's data breach notification requirements. At its center, the Guidance establishes an encryption and destruction standard for health information, and explains that covered entities and business associates will not be subject to ARRA's data breach notification requirements for breaches of data that is encrypted or destroyed in accordance with this standard. Although the Guidance raises more questions than answers, it does offer a process-oriented approach. Entities and business associates covered by the Guidance should take careful note of its provisions, and, if needed, provide input to HHS. The Guidance solicits comments, which must be made before May 21, 2009." (Davis Wright Tremaine LLP)
PBGC Offers Calming Words About the New Funding Notice
Excerpt: "This notice is intended to provide information about the plan's funding status, and several other matters, and must be provided even if the plan is not experiencing any funding difficulties. Nevertheless, it has occurred to some, including the Pension Benefit Guaranty Corporation (the 'PBGC'), that a participant will automatically assume the worst about the plan upon receiving the notice. Therefore, on its website, the PBGC has offered a few words intended to calm down participants." (ERISA Lawyer Blog)
[Guidance Overview] Claimant Not Entitled to Review and Rebut Documents Generated in Administrative Appeal Until After Decision on Appeal
Excerpt: "EBIA Comment: In a case decided under the old claims procedure regulations, the Eighth Circuit previously held that full and fair review under ERISA required that plan decisionmakers make appeal-level expert reports available to claimants before the final decision on appeal is issued. As the court acknowledges in this case, however, the rule is different under the current claims procedure regulations, which state that claimants are entitled to documents generated on appeal only after the decision on appeal is issued. According to the DOL, the purpose of this rule is to provide claimants with sufficient access to the information necessary to determine whether to pursue further appeal." (Employee Benefits Institute of America)
[Guidance Overview] Eighth Circuit's Ruling Illustrates How Boilerplate Type Plan Language Can Vest Welfare Benefits (PDF)
Pages 1-2 of 6 pages. Excerpt: "On the issue of vesting, the plan contained a reservation of rights clause that permitted the company to amend the plan at any time and manner it deemed advisable. However, this right was qualified by a proviso stating that 'no such modification shall divest a participant of benefits under the plan to which he had become entitled prior to the effective date of the amendment.' The Eighth Circuit held that this proviso could be read reasonably to preserve some form of contractually vested benefits, and thus was ambiguous." (Proskauer Rose LLP)
Creative Communications for 403(b) Plans
Excerpt: "Plan sponsors can leverage the Web and their providers to create useful communication strategies for 403(b) participants, according to panelists at PLANSPONSOR's 403(b) Summit. . . . There are two types of communication strategies 403(b) sponsors utilize: required and non-required." (PLANSPONSOR.com; free registration required)
Rep. Rob Andrews' Investment Advice Bill
Excerpt: "Pension and financial industry lobbyists say that the legislation, if enacted, would result in fewer DC plan participants receiving advice about their investment options." (Workforce Management; free registration required)
[Guidance Overview] ARRA Required Changes in HIPAA Compliance
Excerpt: "The American Recovery and Reinvestment Act passed at the end of February contains a number of changes to HIPAA privacy and security rules. Among the most important changes are new notification obligations in cases of breaches of protected health information (PHI). Upon discovering a breach of unsecured PHI, health plans will now be required to notify affected individuals and -- if more than 500 individuals are affected -- the Department of Health and Human Services (HHS) and prominent media outlets serving the area. Health plans will also be required to maintain and submit annually to HHS a log of all breaches." (Faegre & Benson)
[Official Guidance] Annual Funding Notice for Defined Benefit Pension Plans
Excerpt: "You may have recently received an Annual Funding Notice (AFN) from the administrator of your ongoing defined benefit pension plan. The Pension Protection Act of 2006 requires that employers send an AFN each year to all participants and beneficiaries in defined benefit pension plans. Your receipt of the AFN does not mean that your plan is terminating or that it has been trusteed by the PBGC." (Pension Benefit Guaranty Corporation)
401(k) Reform on the Horizon? Q&A with Rep. Miller
Excerpt: "Rep. George Miller, a California Democrat and chairman of the House Education and Labor Committee wants to reform 401(k) plans. His efforts have taken on increased urgency as many investors have taken hits of 20 to 30 percent on their 401(k) account balances over the last year. A key concern is that 401(k) providers do not clearly spell out the fees they charged to manage the investments and administer the accounts. The lack of clear disclosure makes it difficult for your employer to comparison shop to offer you the best plan. It also makes it more difficult for you to chose among the various mutual funds offered in your plan. Without this knowledge, you may be paying too much, costing yourself thousands of dollars." (Syracuse Online LLC)
[Guidance Overview] Required Notifications of Breaches of Unsecured PHI Under HIPAA (PDF)
4 pages. Excerpt: "Group health plan administrators and designated HIPAA Privacy and Security Officers should consult with their information technology professionals to determine if their electronic systems on which PHI is stored, used, or destroyed or over which PHI is transmitted comply with the standards set forth in the guidance. They should also review their disposal policies for destroyed hard copies of PHI to ensure the procedures comply with the standards." (Bryan Cave LLP)
[Guidance Overview] New HIPAA Breach Notification Requirements' Guidance
Excerpt: "A notice of a breach of Unsecured PHI generally is required to include, among other things, (1) a description of the breach, (2) steps that affected individuals should take to protect themselves from potential harm that could arise out of the breach, (3) a summary of what the applicable covered entity is doing to investigate the breach, to mitigate potential losses, and to prevent additional breaches from occurring, and (4) steps that can be taken to obtain additional information." (Bond, Schoeneck & King, PLLC)
[Guidance Overview] Amending Your Plan to Reduce or Eliminate Employer Contributions (PDF)
4 pages. Excerpt: "A common question from employers is whether advance notice must be given to employees when employer contributions are being reduced or discontinued. Beyond the notices . . . for safe-harbor and money purchase pension plans, the regulations do not require advance notice. Nonetheless, M&I does suggest that advance notice is advisable. While 30 days notice is generally sufficient for most employers, a shorter length of time should be long enough to allow employees to change their rate of deferrals prior to the effective date of the change. In any event, employees must be given a summary of material modifications after the change explaining the amendment." (Marshall & Ilsley Trust Company N.A.)
[Guidance Overview] The Breach Notification Provisions of the HITECH Act
Excerpt: "The HITECH Act [provides new provisions for notifying affected individuals] about breaches, which apply to business associates and covered entities that access, maintain, retain, modify, record, store, destroy or otherwise hold, use or disclose unsecured PHI. A breach is defined as an 'unauthorized acquisition, access, use, or disclosure of protected health information which compromises the security or privacy of such information, except where an unauthorized person to whom such information is disclosed would not reasonably have been able to retain such information . . ." (Pepper Hamilton LLP)
[Guidance Overview] 401(k) Fair Disclosure Bill Is Introduced
Excerpt: "As expected, George Miller (D-CA), Chairman of the House Education & Labor Committee, introduced a bill (H.R. 1984) to impose special reporting and disclosure rules ? focused primarily on investment related fees ? for individual account plans. The bill is similar to one which the Committee approved in April 2008, but has some notable additions, including the requirement that a plan must include at least one low-cost index fund to be eligible for ERISA ? 404(c) protection." (Deloitte via BenefitsLink.com)
Intranet Posting of Form 5500 Pension Information Required for 2008 Plan Year
Excerpt: "Defined benefit plan sponsors will be required to post Form 5500 actuarial information (Schedule SB or MB) on their internal website for employees starting later this year. The Pension Protection Act requirement is effective for the 2008 plan year even though Form 5500 e-filings are not required until the 2009 plan year. Pending further guidance, calendar-year plans filing the 2008 Form 5500 in July 2009 would be well-advised to post the required information on their intranet by October. Posting is not required if a plan sponsor doesn't maintain an intranet site for employee communications." (Mercer LLC)
[Guidance Overview] FTC as Enforcer: Proposed Data Breach Notification Rule for Personal Health Records
Excerpt: "Notification of a breach must be made 'without unreasonable delay' but in no event later than within 60 calendar days of learning of the breach. PHR vendors and PHR-related entities must provide notice to each individual who is a citizen or resident of the United States whose unsecured PHR identifiable information was acquired by an unauthorized person as a result of such breach of security and to the FTC. Third-party service providers must provide notice of a breach of security to a senior official at the applicable PHR vendor or PHR-related entity." (Davis Wright Tremaine LLP)
403(b) Communication Takes on New Education Role
Excerpt: "Retirement plan advisers have an opportunity to help 403(b) plan sponsors reach out to participants in a variety of ways. As many 403(b) plans move to consolidate to a single-vendor platform, the role of education and, therefore, communication is shifting. In the past, education was between vendors as they tried to win over employees, and now it is more about the plan sponsor and the employees . . . . 'Now these education meetings are not a sales pitch,' . . . . The trend of consolidation has provided an opportunity to focus on new education endeavors in 403(b) plans, such as asset allocation . . . ." (planadvisor)
Financial Firms Await Retirement Advice Rules
Excerpt: "The federal government's push to expand retirement-plan advice won't necessarily pull in financial advisers. Some financial institutions are eager to help their representatives provide investment advice to workers. Others are wary of the complex and evolving regulations and are awaiting further guidance from Washington. The Department of Labor is hashing out rules meant to increase access to investment advice for individuals with retirement plans. Members of Congress are also addressing the matter. Rep. Robert Andrews (D-N.J.), for example, introduced a bill last week aimed at ensuring workers receive independent and unconflicted advice." (CNNMoney.com)
U.S. House Examines 401(k) Fees
Excerpt: "The House Education & Labor Committee last week proposed new rules for 401(k) disclosure that will give investors greater transparency into the fees they are paying, but some 401(k) advocates say the new rules are too aggressive and unnecessary. House Resolution 1984, also called the 401(k) Fair Disclosure for Retirement Security Act of 2009, aims to make it easier for employees to pick the best retirement options in their 401(k). Currently, the law does not require all fees to be disclosed, and it can be difficult for workers to find fee information that is already available." (Financial Planning)
[Guidance Overview] On the Trustee's Responsibility to Collect Employer Contributions
Excerpt: "Fiduciaries, particularly trustees, must understand that they can not rely on the plan's express language to avoid doing what the DOL considers to be a significant fiduciary duty. Note, that for plans that are self-trusteed, it is not clear exactly how the buletin's guidance would be enforced." (McKay Hochman Co.)
[Guidance Overview] Retirement Plan Loans and Reg Z
Excerpt: "Effective July 10, 2010, most plans that offer loans to participants will no longer be required to provide disclosures under the Truth in Lending Act (TILA). This change is a result of the Federal Reserve amending Regulation Z of the TILA to include an exemption for retirement plan loans. . . . In issuing this exemption, the Federal Reserve has acknowledged the difference between a commercial loan and a plan loan taken from a participant's account balance. A plan loan is secured by a participant's account balance, and both the principal and interest payments are reinvested into the participant's account. Plan loans also typically involve lower costs than a commercial loan." (McKay Hochman Co.)
[Guidance Overview] New HIPAA Privacy and Security Requirements in Stimulus Bill (PDF)
4 pages. Excerpt: "The recently enacted American Reinvestment and Recovery Act (ARRA) includes a significant expansion of the privacy and security requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) that affects both covered health plans and business associates. In particular, ARRA imposes breach notification requirements, makes business associates directly responsible for complying with HIPAA privacy and security rules, and provides for increased enforcement activity and penalties for noncompliance. Many of the changes will not take effect until next year, but some are effective now." (Buck Consultants)
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