Headlines about "Ret plans - admin"
Gathered from the web by the editors at BenefitsLink.com.
DOL Releases Preliminary 2009 Versions of Pension and Health Plan Bulletins and Form 5500 Data
"Statistical summary of Form 5500 data on Direct Filing Entities (DFEs) including counts of DFEs, counts of private pension plans invested in DFEs, and asset counts." See the various links entitled "2009 - Preliminary," which appear under these headings: "Reports", "Excel Tables" and "XML Tables." (U.S. Employee Benefits Security Administration)
[Guidance Overview] DOL Makes Small Changes to Field Assistance Bulletin 2012-02 (Participant Disclosure FAQs)
"DOL revised its response to Q-19 regarding website performance information, making clear that a website in connection with a variable return DIA should be updated to show 1-, 5-, and 10-year performance information for the period ending on the most recently completed calendar quarter." (Groom Law Group)
[Guidance Overview] Common Plan Mistake: Miscalculating Matching Contributions
"If your 401(k) plan document calls for an annual matching contribution, you should consider one of the following options: Waiting until year-end to make the matching contribution; Contributing each pay period, but then making a true-up contribution at year-end (if necessary); [or] Amending the plan to provide for the calculation of matching contributions on a pay-period basis.' (Spencer Fane)
[Guidance Overview] Court of Appeals Rejects Equitable Remedies When SPD Promises More Generous Benefits Than Pension Plan Document
"In some ways, the Ninth Circuit's recent decision in Skinner v. Northrop Grumman Retirement Plan B is a garden-variety example of a classic fact pattern: the terms of a summary plan description ('SPD') promise better benefits than the plan document it summarizes, and participants sue for the difference. Skinner demands our attention, however, because it is the first decision by a federal court of appeals to interpret the Supreme Court's most recent high-profile decision on ERISA remedies: CIGNA Corp. v. Amara." (Spencer Fane)
[Guidance Overview] ERISA Preempted State Claim That Employment Contract Promised Benefit Under Pension Plan
"[The Second Circuit Court of Appeals] rejected the employee's contention that the employment agreement created a right to the [pension plan's previous benefit formula in effect at the time of separation from service] separate and independent from the plan. The employment agreement did no more than describe the benefits ... that the employee would acquire upon his return to employment. The agreement made clear that such benefits arose from, and were governed by, the terms of the plan. Thus, ERISA preempted the breach of contract claim.' (Wolters Kluwer Law & Business / CCH)
[Guidance Overview] EBSA Makes Small Clarifying Correction to FAB 2012-02 FAQs on Participant-Level Fee Disclosure
From an EBSA email distributed on May 17: "The Department of Labor's Employee Benefits Security Administration made a technical correction to recently released Field Assistance Bulletin No. 2012-02, which contains frequently asked questions and answers about the Department's participant-level fee disclosure regulation (29 CFR section 2550.404a-5). It has come to the Department's attention that, as initially released on May 7, 2012, a sentence in the answer to Question 19 concerning quarterly Web site updates to 'average annual total return' information inadvertently referred to the most recently completed calendar 'year' rather than the most recently completed calendar 'quarter.' The Department corrected this error on May 17, 2012 in order to accurately restate the requirements of the regulation. The word 'calendar' also was removed from the phrase '... 10-calendar year periods ...' in the same sentence. See Q-19, n.2." (Employee Benefits Security Administration)
American Workers Shifting Their Plans and Expectations for Retirement (PDF)
"[The] majority of workers plan to work past age 65 (56 percent) and the majority (54 percent) plan to continue working after they retire. Despite workers' demonstrated commitment to saving, just 39 percent believe they are building a sufficient nest egg[.]" (Transamerica Center for Retirement Studies)
[Guidance Overview] Another Question is Answered in the Who's the Employer Q&A Column
I heard the DOL has sought a temporary restraining order against Matthew Hutcheson in connection with the open MEP he dealt with. Does it clarify the approach the DOL is taking in dealing with open MEPs? (BenefitsLink.com)
Can Ford's Lump-Sum Buyout Technique Work for Other Pension Plan Sponsors?
"Ford is offering to make a one-time, voluntary lump-sum payment to nearly all of its salaried retirees by the end of 2013. It appears to be the first such program to specifically target retirees without being part of a broader plan termination, experts say. According to those same experts, the impact on HR departments could be substantial, especially in areas of due diligence, communications and education, if this becomes a trend." (Human Resource Executive Online)
DOL FAQs Address Participant Fee Disclosure Rules as Applied to Brokerage Windows, Calculation of Total Annual Operating Expense Ratio
"While brokerage windows, self-directed brokerage accounts and other similar plan arrangements (for simplicity, referred to here after as 'brokerage windows') are not considered designated investment alternatives and are therefore excluded from the annual investment disclosures, brokerage windows must still make certain annual plan-related disclosures to each participant eligible to use the window, whether or not he or she chooses to use the window. A plan administrator offering a brokerage window must furnish a general description of the brokerage window and any fees or expenses that may be charged against an individual participant's account. The quarterly disclosure must reflect the dollar amount of fees and expenses that were charged against that individual participant's account over the preceding quarter[.]" (SunGard Relius)
[Official Guidance] June 12 IRS Phone Forum to Address 403(b) Written Plan Requirement and Frequent Issues
Begins at 2 PM; see the linked web page for registration information. The IRS is inviting requests for coverage of a specific issue; let them know via e-mail at ep.phoneforum@irs.gov on or before June 1, 2012. (Internal Revenue Service)
[Guidance Overview] 9th Circuit Case Addresses Equitable Remedies Post-Amara and Says Mere Violations of Law Do Not Establish 'Harm' Creating Equitable Remedies
"Plaintiffs [in Skinner v. Northrop Grumman Retirement Plan B] argued the plan documents should be reformed to match the terms of the 2003 SPD. The Court held that reformation is appropriate only in cases of fraud or mistake. The Court found there was no evidence that: (a) the Plan participants were intentionally and materially misled, or that (b) plaintiffs actually relied on purportedly misleading information." (Lane Powell)
Spring 2012 Report of Results from the Segal Survey of Calendar Year Multiemployer Pension Plans' 2012 Zone Status
"[T]he proportion of calendar-year multiemployer pension plans in the green zone declined by four percentage points between January 1, 2011 and January 1, 2012: from 66 percent to 62 percent. In addition, the survey found that the average [PPA '06] funded percentage for those plans decreased by three percentage points over that period: from 89 percent to 86 percent. Prior to the market downturn that began in late 2008, more than three-quarters of calendar-year plans (83 percent) were in the green zone and the average PPA'06 funded percentage was 97 percent." (Segal)
Ex-Government Officials Refuse to Cooperate with Delphi Pension Probe
"The special inspector general overseeing the $700 billion Troubled Asset Relief Program [SIGTARP] -- the fund used to bail out banks, insurance companies and automakers -- told Congress that former auto czar Ron Bloom will not answer questions about the Obama administration's role in the treatment of hourly and salaried pensions. Two other key auto task force advisers -- Harry Wilson and Matthew Feldman -- also won't cooperate.... The three 'have refused to meet with SIGTARP and provide information and answers to questions concerning the role they played. ... SIGTARP believes the Auto Task Force played a role in the pension decision and these individuals' failure to speak to SIGTARP on this issue poses a significant obstacle to SIGTARP's ability to complete its audit[.]'" (The Detroit News)
Some Ford Retirees Facing Major Pension Decision: Take or Reject Buy-Out Offer
"Ford Motor Company is making tens of thousands of white-collar retirees decide whether they want to keep getting their pension in monthly installments, or get a lump sum payout. Ford sees the unprecedented move as a way to reduce the company's liabilities." (NPR)
DOL Alleges Idaho Plan Administrator Misused Retirement Funds
"[DOL] has filed a complaint in the U.S. District Court for the District of Idaho against Matthew D. Hutcheson alleging that he violated [ERISA]. The complaint alleges that, toward the end of 2010, Hutcheson used more than $3.2 million representing the retirement plan savings of workers from multiple employers for his own personal expenses and in an attempt to purchase an interest in the Tamarack Resort -- a failed ski and golf resort in Idaho. [The DOL alleges that the resulting] prohibited transaction has left affected retirement plans without sufficient funds to pay participants all the benefits owed to them." (Employee Benefits Security Administration)
[Opinion] Text of Comments to IRS by Pension Action Center Urging IRS to Retain Strict Requirement of Providing Notices to Separated Plan Participants
"The Pension Action Center is writing to comment on the letter sent to your office by [ASPPA], dated December 20, 2011. ASPPA requested clarification of the Internal Revenue Code's notice requirement for separated plan participants who are listed on IRS Form 8955-SSA. ASPPA argued that plans should not have to provide separate notices of deferred vested pensions to plan participants because plans already satisfy this notice requirement with 'benefit statements and other documents.' The Pension Action Center strongly disagrees with ASPPA's interpretation[.]" (Pension Action Center, Gerontology Institute of the University of Massachusetts Boston)
PBGC to Request Comments on Information Collection for Locating and Paying Participants
"The collection consists of information participants and beneficiaries are asked to provide in connection with an application for benefits. In addition, in some instances, as part of an effort to identify participants and beneficiaries who may be entitled to benefits, the PBGC requests individuals to provide identifying information that the individual would provide as part of an initial contact with the PBGC. All requested information is needed to enable the PBGC to determine benefit entitlements and to make appropriate payments." (Wolters Kluwer Law & Business / CCH)
Employer Agrees to Restore $1.3 Million to Employee Retirement Plan
"In a consent judgment entered this month in the U.S. District Court's Central District in Los Angeles, officers of ... Western Mixers Inc. agreed to restore $802,901 to participants' accounts within 10 days. During the course of the investigation leading up to the lawsuit, the company repaid to the plan $485,000 of the total funds identified as missing. The consent judgment fully recovers unpaid contributions and unauthorized withdrawals, plus interest." (Employee Benefits Security Administration)
Reinhart Employee Benefits Update, May 2012 (PDF)
Items include: Summary of Description of Material Modifications for Calendar-Year Plans; HHS Announces Proposed Regulations to Establish Health Plan Identifiers for Health Plans; IRS Publishes Proposed Regulations Imposing Fees to Fund Patient-Centered Outcomes Research; CMS Releases Guidance on Medical Loss Ratio Regulations; Ninth Circuit Rejects Claim for Equitable Relief Following SPD and Plan Document Discrepancies. (Reinhart)
Current Challenges and Best Practices Concerning Beneficiary Designations in Retirement and Life Insurance Plans (PDF)
"The complexity of the rules under ERISA may, in some cases, lead to beneficiary designations that do not accurately reflect the participant's intent, and can frequently result in disputes over who is entitled to ERISA plan benefits following the death of the participant.... [E]ven when the beneficiary designation correctly indicates the participant's intent, beneficiaries may be unaware of what to do to obtain the benefit or to determine the benefit to which they are entitled.... The Council is examining this topic and intends to draft recommendations to the Secretary of Labor for consideration." (2012 ERISA Advisory Council)
[Official Guidance] Text of Final PBGC Regs on Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Paying Benefits (PDF)
"The interest assumptions are intended to reflect current conditions in the financial and annuity markets. Assumptions under the benefit payments regulation are updated monthly. This final rule updates the benefit payments interest assumptions for June 2012." (Pension Benefit Guaranty Corporation)
[Official Guidance] Text of IRS Notice 2012-36: April 2012 Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
IRS-updated figures for pension plan administration as prescribed by Code sections 412, 417, 430 and 431. (Internal Revenue Service)
[Guidance Overview] Despite Husband's Beneficiary Designation, Second Wife Not Entitled to Annuity When Husband Never Divorced First Wife
"If the participant never divorced his first wife, then she would be his surviving spouse under the plan. As such, her status as the participant's surviving spouse would take precedence over the participant's express election of the second wife as his spouse and beneficiary. This is because the first wife never waived her rights to receive spousal benefits as required by ERISA Section 205." (Wolters Kluwer Law & Business / CCH)
[Guidance Overview] Foreign Parent Company Was Properly Joined in PBGC Suit Against U.S. Subsidiary's Pension Plan
"The [U.S. District Court for the District of Columbia found that] PBGC's claims against Asahi were not based on the pension plan's termination or underfunding, but were predicated solely on Asahi's status as a member of the controlled group through its acquisition of Metaldyne. The court [ruled] that, notwithstanding the absence of any affirmative conduct by Asahi with respect to the U.S. subsidiary's pension plan, personal jurisdiction for the purpose of determining liability under ERISA attached once Asahi became a member of the Metaldyne controlled group." (Haynes and Boone)
Reviewing Your 401(k) Plan's Hardship Distribution Procedures
"Once the plan document sufficiently provides for hardship distributions, the main traps for the unwary administrator are the failure to follow the terms of the plan and the failure to adequately document the decision to grant (or deny) the request for a distribution. Your documentation of each decision should include: The participant's application with the participant's written representations as to the hardship involved and whether other resources have been exhausted; and Your determinations regarding (i) whether the participant has an immediate and heavy financial need, (ii) whether the need can be met by other resources reasonably available to the participant, (iii) whether the amount to be distributed is not in excess of the amount needed, and (iv) the source of the distribution." (Chang, Ruthenberg & Long PC)
[Opinion] Text of Comments by ASPPA on Use of 401(k) Plan Forfeitures as Safe Harbor Contributions
"ASPPA respectfully requests that the IRS consider issuing additional guidance clarifying that forfeitures can be used to fund ADP safe harbor contributions. Furthermore, ASPPA requests that the IRS consider issuing additional guidance clarifying that forfeitures may be used to fund ADP safe harbor contributions that are qualified automatic contribution arrangements." (American Society of Pension Professionals & Actuaries)
[Official Guidance] Text of Official Notice to Pension Plan Participants; PBGC Takes Over Responsibility for Payments at Large Law Firm of Dewey & LeBoeuf (PDF)
"PBGC is taking this action because your plan meets the criteria for termination under federal pension law. In general, this means that your employer is unable to keep up the plan and the plan may not have enough money to pay all the promised benefits. PBGC has determined that the plan should terminate as of May 11, 2012. As of that date, you will not earn any further benefits from the plan." (Pension Benefit Guaranty Corporation)
PBGC Working to Help Employers Maintain Pensions In Addition to Role as Pension Payment Insurer
"To help counter the growing retirement crisis for today's workers, the [PBGC] has recently begun to spotlight its often-unnoticed mission 'to encourage and preserve retirement plans of U.S. companies.' ... That's what it did recently by working with AMR Corp. ..., the parent of American Airlines, to convince the airline to freeze, instead of terminate, its traditional pension plans covering 130,000 workers and retirees, as part of its bankruptcy proceedings." (Human Resource Executive Online)
Factors to Use When Considering a Defined Pension Benefit Buyout Offer from Your Employer (PDF)
The information sheet provides a basic understanding of a buyout offer and the things that an individual needs to consider when making the decision on whether or not to accept the lump sum buyout. It is not exhaustive but provides important considerations to think about before accepting a lump sum offer. (National Retiree Legislative Network)
IRS Page on Correcting Plan Errors: VCP Submission Kits for Pre-Approved Plans
"[The page provides links to [1] Pre-approved defined benefit plans -- sponsors who missed the April 30, 2012, EGTRRA plan adoption deadline; [2] Pre-approved 401(k) profit sharing and other defined contribution plans -- sponsors who missed the April 30, 2010 EGTRRA plan adoption deadline[.]" (Internal Revenue Service)
Benefits Administration: To Outsource or Manage In-House?
"The goal of the survey was to gain insight into what employers views are on the topic of benefits administration to include: What employers are thinking about the various trade-offs inherent to insourcing and outsourcing benefits administration? What employers are actually doing -- what functions are they outsourcing and which are insourced? What employers are planning on doing -- in light of the changing technological and legal landscape, are employers planning on insourcing or outsourcing more functionality?" (ADP; free registration required)
PBGC and American Airlines Strike Deal on Frozen Underfunded Pension Plans
"The agreement removes PBGC's threat of litigation as long as the pension plan freezes do not unravel as the airline addresses other parts of its collective bargaining agreements. According to the [PBGC], [American]'s four defined benefit plans have assets of $8.3 billion and liabilities of $18.5 billion, and officials at the agency, which sits on the airline's creditors committee, have pressed American to avoid terminating the plans." (Pensions & Investments)
[Guidance Overview] Employer No Longer Contributing to Multiemployer Plan Cannot Use Sale of Assets Exemption Under MPPAA
"In HOP Energy, L.L.C. v. Local 553 Pension Fund, the key issue decided by the US Court of Appeals for the Second Circuit was whether an employer that stopped contributing to a multiemployer pension plan ... after it sold the assets of one of its divisions to another company can use the sale of assets exemption under the Multiemployer Pension Plan Amendment Act ... to avoid the obligation to pay withdrawal liability." (Practical Law Company)
Reinhart Employee Benefits Update, April 2012 (PDF)
Articles include: Clarification on Reasonable Interest Rate for Participant Loans; Final Interim Rule on Health Insurance Exchanges; Adoption of Preapproved Defined Benefit Plans; and Departments Issue New FAQs on SBC Requirements. (Reinhart)
[Official Guidance] Text of DOL Field Assistance Bulletin 2012-02: FAQs on Participant-Level Fee Disclosures and Service Provider Fee Disclosures
38 Questions and Answers, supplementing the final regulations. Example: "Paragraph (c)(2)(i)(A) of the [final participant-level fee disclosure] regulation requires an explanation of any fees and expenses for general plan administrative services which may be charged against participants' and beneficiaries' accounts and the basis on which such charges will be allocated. How specific does this explanation have to be in order to comply with this requirement?" (Employee Benefits Security Administration)
[Official Guidance] Text of IRS Rev. Rul. 2012-13 for Federal Rates; Adjusted Federal Rates; Adjusted Federal Long-Term Rate and the Long-Term Exempt Rate
"This revenue ruling provides various prescribed rates for federal income tax purposes for May 2012 (the current month). [Table] 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520." (Internal Revenue Service)
[Opinion] A Policy Argument for Treating Individual 403(b)(7) Custodial Accounts As Distributable Assets Upon Plan Termination
"The IRS�s ongoing position is that an individual 403(b)(7) custodial account cannot be distributed from a 403(b) plan upon its termination, while a �fully paid� annuity contract is permitted to be distributed [because] it will not deem the custodial account to be an annuity for these purposes. This has the practical effect of preventing termination of any 403(b) plan which is funded with individual custodial accounts. As time wears on, and this position begins to get long in the tooth, its 'unworkableness' becomes more and more apparent as it causes difficulties beyond the actual plan itself." (Business of Benefits)
[Guidance Overview] 'Unrelated Business Taxable Income' Did Not Spoil Tax-Exempt Organization's Exemption from Excise Tax on Plan Asset Reversion
"[A 20%] excise tax is imposed on employer reversions [of assets] from a 'qualified plan,' defined ... as a plan that is qualified under Code Sec. 401(a) or Code Sec. 403(a), 'other than ... a plan maintained by an employer if such employer has, at all times, been exempt from tax under subtitle A[.]' ... The IRS maintained that the plan was a 'qualified plan' [and hence subject to the excise tax despite the aforesaid exemption for tax-exempt employers] because the taxpayer had paid unrelated business income tax, which is a tax under Subtitle A, for certain years.... The court held that the employer was an organization that had, at all times, been exempt from tax under Subtitle A. Thus, the employer�s pension plan was not ... liable for the Code Sec. 4980 excise tax." (Wolters Kluwer Law & Business / CCH)
'Co-Sourcing' Trends of DC Plan Management
"Under the co-sourcing model, the adviser plays an inside role, side by side with the plan sponsor, often acting as an extension of the sponsor�s staff. As insiders, advisers have access to details and background information that allow them to proactively identify problems and risks." (Mercer)
[Guidance Overview] Former Trustee Liable for over $4 Million for Breach of Fiduciary Duty
"The [Court of Appeals for the Third Circuit] said that [the retirement plan's trustee] breached his ERISA-imposed duty and caused a loss to the Plan. He fraudulently reported an inaccurate account balance ..., improperly distributed the Plan's assets to himself, and otherwise used the assets for his personal benefit. These fraudulent actions resulted in a loss when the Plan participants received an amount smaller than their proportionate shares in the [trust fund]." (ERISA Lawyer Blog)
[Opinion] Text of Comments by American Benefits Council to IRS on Proposed Regs on Longevity Annuity Contracts (PDF)
"The Council respectfully suggests that Treasury and the Service could provide clarification and additional guidance on a few related issues that the Council believes would encourage more plan sponsors to consider adding longevity insurance to their plans. These related issues include (1) the need for a correction program, (2) clarification of potential forfeiture or cutback issues, (3) clarification that these rules also apply to IRA annuity rollovers and (4) interaction of the Qualified Longevity Annuity Contract (QLAC) rules with the qualified joint and survivor annuity (QJSA) rules." (American Benefits Council)
PBGC Statement on the Bankruptcy of Hawker Beechcraft, Inc.
"'[PBGC is] committed to working with Hawker Beechcraft and its creditors so that the company can reorganize successfully, while also maintaining the retirement security of its nearly 20,000 workers and retirees.' Collectively, Hawker Beechcraft's three pension plans are 56 percent funded, with $769 million in assets to cover $1.4 billion in benefits. If Hawker Beechcraft ended the plans, PBGC would pay $533 million of the $611 million shortfall." (Pension Benefit Guaranty Corporation)
As a Plan Sponsor, Are You Prepared to Provide Fee Disclosures to Participants?
This 39-minute video includes a description of the format of Vanguard"s reporting of its fees as a service provider to its plan sponsor customers, and what Vanguard will be doing to assist its customers with the participant-level fee disclosures. (Vanguard)
[Opinion] Ford's Retiree Cashout: A Trap for the Unwary
"If enough retirees accept the cashout offer, Ford will reap significant financial benefits. First, it would reduce the volatility on the company's financial statements that results from its pension obligations. Second, Ford wouldn't need to pay premiums to [PBGC], ... on behalf of any retirees who accepted the lump-sum deal. Ford also would likely be able to extinguish its pension liability at below-market rates for retirees who accept the offer." (CBS money watch)
[Guidance Overview] Another Question is Answered in the Who's the Employer Q&A Column
My wife (age 70, born September 1, 1931) and I both work for a small company (C corp) that had an SEP IRA but has recently switched to a calendar year 401(k) plan. My wife would like to roll over funds from the SEP IRA into the 401(k) plan. She would also like to roll other 'regular' IRA funds into the plan, as well as some 403(b) funds saved while working for a former employer. The goal is to avoid required minimum distributions. Can we? She is the President of the C corp and owns 4.96%. I am the CEO and own 4.5%. (BenefitsLink.com)
Ford Aims to Trim Pension Risk by Buying Out Salaried Retirees and Former Employees
"'This involves retirees in a plan that's not terminating,' [and Towers Watson is] unaware of any other large plan that has done this.' Other organizations have offered lump sums to former employees who are vested in the pension plan but not yet retired[.]" (Treasury & Risk)
[Official Guidance] Did Your DB Plan Miss the April 30, 2012 EGTRRA Amendment Deadline? IRS Web Site Describes Correction Needed
"Generally, if you have a pre-approved defined benefit pension plan document and you did not sign an EGTRRA plan document by April 30, 2012, your plan does not comply with the tax laws and may be ineligible for tax benefits.... When completing Schedule 2, Part 1 [in the IRS Voluntary Correction Program Submission Kit], go to the �Other� box at the end of the list of law names. Check this box and type in the following failure description: The changes required by the 2006 Cumulative List (Notice 2007-3, 2007-1 C.B. 255) for an employer using a pre-approved defined benefit plan who failed to adopt the pre-approved plan by 4/30/2012, as required by Announcement 2010-20[.]" (Internal Revenue Service)
PBGC and Bendix Reach Settlement and End Litigation on Pension Debt
"Under the settlement, PBGC won't require Bendix to put up collateral for the remaining $8.4 million in pension liability, provided the company remains financially strong until the end of the year. If the company's financial position significantly weakens during that time, Bendix will provide a letter of credit for $8.4 million." (Pension Benefit Guaranty Corporation)
A Labor Lawyer's Guide to Avoiding Multiemployer Pension Plan Withdrawal Liability
"As traditional bargaining units throughout the country continue to shrink and evolve, and as underfunded multiemployer pension plans continue to feel the crippling effects of the capital markets collapse of 2008, the specter of substantial withdrawal liability assessments against employers which contribute to multiemployer pension plans ... grows." (Bryan Cave)
Too Much Reliance on Limited-Scope Audits Is Harming Benefit Plan Participants, EBSA Chief Says
"'The limited-scope audit is practically useless,' said [Phyllis Borzi], assistant secretary of [DOL's EBSA]. Speaking April 30 at the American Institute of CPA's conference on employee benefit plans, Borzi said limited-scope audits do not protect participants, and yet about 65 percent of employee benefit plan audits are limited-scope audits." (Bloomberg BNA)
Text of U.S. Census Bureau Summary Report on State and Locally Administered Pensions, 2010 (PDF)
"This survey covers the following retirement system activities: revenues by state (earnings on investments, employee contributions, government contributions); expenditures by state (benefits, withdrawals, other payments); cash and investment holdings by state (governmental securities, corporate stocks and bonds, foreign and international securities, etc.); and membership information by state (number of retirement systems, total members, beneficiaries receiving periodic payments)." (U.S. Census Bureau)
PBGC Softening Its Stance on 4062(e) Liability (PDF)
"PBGC has changed its stance on enforcement by applying criteria that distinguish among companies based on their level of financial strength when pursing Section 4062(e) liabilities, Harold Ashner, a partner with Keightley & Ashner, Washington, said April 26 during a session of the program Pension, Profit-Sharing, Welfare, and Other Compensation Plans, sponsored by the American Law Institute-American Bar Association." (Bloomberg BNA)
Ten Things Plan Fiduciaries Should Avoid (PDF)
"In recent court case, Tussey v. ABB, Inc., ... the judge found that the plan fiduciaries breached their fiduciary duties and were jointly and severally liable for $13.4 million lost by the Plan due to failure to monitor recordkeeping fees and negotiate rebates and $21.8 million lost by Plan due to mapping one investment fund to another. In addition, the service provider was held jointly and severally liable for $1.7 million for lost float income. Lessons learned from this case are at least 10 things Plan fiduciaries should avoid[.]" (ERISAdiagnostics, Inc.)
[Opinion] American Benefits Council Comment Letter to IRS on Priority Guidance Plan (PDF)
"The Council is writing to recommend items relating to employee benefit matters that should be included on the [IRS] 2012-2013 Guidance Priority List. The Council is submitting a letter separately recommending a project to modify the current nondiscrimination and minimum participation regulations to protect older, long-service participants. This letter focuses on other recommendations for the Guidance Priority List." (American Benefits Council)
Ford's Lump-Sum Buy-Out Offer Is a First for a U.S. Pension Plan
"The Ford executives didn't explain the timing, but observers said they believe Ford is making the offer now because it will cost less than in the past. Under a provision of the Pension Protection Act, new corporate bond rates were recently phased in, replacing 30-year Treasuries.... 'I'm not aware of anyone who has done this without terminating or annuitizing their plan,' said Jeremy Gold, president of Jeremy Gold Pensions, New York, an actuarial consulting firm. 'All your lump summing for employees is part of that (kind of) event, but ... I'm not aware of this being done on an optional basis[.]'" (Pensions & Investments)
Can a Public Pension Plan File Bankruptcy? Historic Northern Mariana Islands Chapter 11 Case Might Tell
"[A motion was filed recently] on the behalf of two anonymous retirement plan participants, arguing that the plan cannot file for Chapter 11 restructuring because it's not a person under the bankruptcy code and because it's a governmental unit.... [An attorney said] that by filing for bankruptcy, the fund was permitting the local government to avoid its obligation to its retirees." (Investment News)
Employee Benefits Developments, April 2012
The newsletter covers recent rulings, opinions, and cases; the two cases both involve Retained Asset Accounts. (Hodgson Russ LLP)
[Guidance Overview] 2011 Tax Year FATCA Reporting by U.S. Persons of Participation in Foreign Retirement Plans and Deferred Compensation (PDF)
"[One] major part of FATCA requires reporting of foreign accounts by individual US persons, generally beginning with the 2011 tax year. Such reporting involves a requirement to file new IRS Form 8938, which accompanies the individual's US tax return, usually one of the 1040 series, and which is due at the same time.... For purposes of the Form 8938, non-US. pensions and deferred compensation, whether funded or not, and including equity-based compensation and stock options, may be treated as a foreign account subject to reporting." (Groom Law Group)
Multiple Employer Plans: An ERISA Enigma (PDF)
"Although the basic concept has been with us for many years, multiple employer plans (MEPs) have been growing in public awareness. Formerly the domain of Professional Employer Organizations ... and shared employee situations, several plan administration and investment firms are promoting multiple employer retirement plans of otherwise unrelated employers (sometimes called 'open MEPs') as a mechanism to reduce costs and fiduciary exposure while providing various benefits to employees." (Journal of Pension Benefits)
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