Headlines about "Ret plans - policy"
Gathered from the web by the editors at BenefitsLink.com.
[Opinion] Obama Retirement Plan Places Primary Responsibility for Retirement Saving on Households (PDF)
3 pages. Excerpt: "Tucked into the blueprint for financial regulatory reform1 released last week is an outline of the president's proposals for strengthening retirement plans and encouraging retirement savings. Though some of the proposals in the Department of Treasury's white paper are welcome and overdue, they should not be mistaken for the kind of comprehensive reform that is needed to fix a system in crisis. . . . The White House plan is two-pronged. First, it would require many employers who do not offer retirement plans to set up automatic payroll deductions into Individual Retirement Accounts (IRAs), using inertia to boost participation by having workers opt out rather than opt in. Second, it would expand eligibility for the Saver's Credit and make it refundable, giving low- and moderate-income families who owe little or no income tax an incentive to save." (Economic Policy Institute)
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)
Rep. Pomeroy Shares Pension Funding Reform Thoughts
Excerpt: "North Dakota Democratic U.S. Representative Earl Pomeroy on Tuesday unveiled a wide variety of possible approaches to helping defined benefit pension plans make it through the down economy. Among the notions Pomeroy is pondering, according to the 'discussion draft' released by his office, are: A loosening of restrictions on asset smoothing by expanding the corridor which currently limits the smoothed values to stay within 10% of the fair market value (FMV) of plan assets." (PLANSPONSOR.com; free registration required)
[Opinion] ERISA in the Crisis Zone
Excerpt: "In the employee benefits sector, seemingly removed from the catastrophic bank and stock crisis, the crisis zone still has yielded proposals like: Additional restrictions on 401(k) plans. A universal thrift plan that would severely erode the traditional 401(k). A universal health care system which would impose greater health care costs on employers, crowding out retirement and other benefit expenditures. This could possibly include mandated benefits. It could ultimately involve universal Medicare coverage or a government entity for the uninsured, obviously to be accomplished by increased payroll and income taxes. A major employee benefits debate would result in another nasty clash between traditional antagonists. We still have those who would support the old paradigm of equilibrium - the same people who have tried but failed to prevent continued innovation in employee benefits, as opposed those who have developed and promoted more flexible approaches." (Employee Benefit News via Passion for Subro)
Lawmakers Plan Push to Reform 401(k) Plans
Excerpt: "Two key lawmakers are expected to introduce a bill on retirement reform later this week that could have substantial implications for investment advisors, 401(k) service providers and the majority of employer-sponsored retirement plans. Rep. George Miller, D-California, and Rep. Rob Andrews, D-New Jersey, are preparing to introduce the 401(k) Fair Disclosure and Pension Security Act on Wednesday, June 24, at a Committee on Education and Labor meeting, confirmed Aaron Albright, press secretary of the committee." (Workforce Management; free registration required)
Pension Reform in the Aftermath of Enron: Congress' Failure to Deliver the Promise of Secure Retirement 401(K) Plan Participants
Excerpt: "This article examines the historical role of company stock ownership in tax-qualified retirement plans and how Congress is distorting that role to justify its failure to enact meaningful pension reform that restricts 401(k) plan investment in company stock. Specifically, the article addresses H.R. 3762, the Republican-backed House Bill that has arisen like a phoenix out of the ashes of more than 20 pension reform bills introduced by the 107th Congress. The article examines how the House Bill fails to deliver ERISA's promise of a secure retirement by rejecting overall limitations on 401(k) plan investment in company stock, by failing to mandate the appointment of an independent plan fiduciary where company stock is offered as an investment alternative, and by failing to mandate that employers provide participants with investment advice as a condition of fiduciary liability relief." (Social Science Research Network)
The Death Knell of Traditional Defined Benefit Plans: Avoiding a Race to the 401(k) Bottom
Excerpt: "This Article looks at America's loss of retirement security stemming from the shift away from traditional defined benefit plan sponsorship and the embracement of defined contribution plan sponsorship. It also looks at the root causes underlying the shift and how the Act fails to adequately address the looming pension crisis. Finally, the Article, recommends additional legislative changes that increase the retirement security provided under employer-sponsored defined contribution plans." (Social Science Research Network)
The Economic Crisis Has Accelerated the Decline of Defined Benefit Plans in the U.S. and U.K.
Excerpt: "U.K. policymakers spent some six years investigating second-pillar (employment-related pensions) plans around the world to develop a new U.K. second-pillar institution: the Personal Accounts Delivery Authority. Under the U.K. Pensions Act of 2008, employers will be required to enroll eligible employees into a high-quality workplace pension. . . . U.S. policymakers have not matched U.K. policymakers' initiative; they appear stuck in a DB mindset. Indeed, Congress seems more interested in saving the DB institution for those who have DB benefits than embarking on reforms to create a new second-pillar institution for all, which would minimize the burden on the firm while ensuring retirement security for individuals." (Oxford Analytica via Forbes.com)
Pension Provision: Government Failure Around the World
Excerpt: "This monograph surveys the results of government intervention in the market for retirement income provision throughout the world. The authors begin by looking at high-income democracies in which governments have, to a large degree, taken over the function of providing pensions. They find that state provision crowds out private provision and places a considerable fiscal burden on developed country governments." (Social Science Research Network)
[Opinion] Abolish Retirement Schemes, or Not: A Debate published in The Economist
Excerpt: "The Economist online today called for abolishing current retirement schemes and starting over. In support, George Magnus argued that current schemes are unsustainable. Opposing, Christian Weller contended that the current system can be put right if we have the will to do it." (Mind Over Market)
[Opinion] What's Wrong with the Current 401(k) System - and How It Can Be Salvaged
Excerpt: "Unfortunately a one-two punch thrown by well-meaning consumer advocates and desperate corporations has worsened an already bad situation. First, as a way to save too-cautious investors from themselves, in 2007 and 2008 some plans changed the default investment from a money market fund to an age-appropriate mix of stocks and bonds. Which then proceeded to tank. Second, a growing number of companies (see the list above and to the right [on the target page]) are eliminating or curtailing the employer match entirely. Doing so when stock prices are low is particularly harmful because it makes it that much harder for investors to recoup losses." (CNNMoney.com)
International Pension Issues in a Global Economy: A Survey and Assessment of IRS' Role in Breaking Down the Barriers (PDF)
Excerpt: "The focus of the Employee Plans subcommittee of the ACT for the year 2008-2009 was to survey and assess the most important federal tax issues affecting retirement plans of employers involved in cross-border transactions and the Internal Revenue Service ('IRS') Employee Plans Division's role in addressing those issues and providing education and outreach. . . . It is the ACT's hope that this report will spur the IRS to begin to address these international pension issues as 'one' IRS, while keeping in mind the goal... '... to break down the barriers and impediments to U.S. employers desiring to provide pensions to nonresident aliens working in the United States and to U.S. citizens and resident aliens transferred to affiliates of U.S. employers outside the United States.'" (IRS Advisory Committee on Tax Exempt And Government Entities via American Benefits Council)
The Future of Retirment, 2009 (PDF)
64 pages. Excerpt: "This report is inspired by the rapid improvements in longevity witnessed in the last half century. With these trends set to continue, the way in which we fund retirement will become one of the most profound challenges facing the world. The presence of a demographic mega-trend will affect every aspect of our economic and social life. This will include changing working patterns, family life, as well as the need to reassess funding healthcare and what will, in all likelihood, be an extended retirement." (HSBC Insurance Holdings Limited)
Understanding the Proposed House Democrats' Health Care Bill
Excerpt: "[Provided is a link to] a three-page outline of Key Features of the Tri-Committee Health Reform Draft Proposal in the House of Representatives . . . ." (Attorney B. Janell Grenier via Benefitsblog.com)
Official Summary of Retirement Security Needs Lifetime Pay Act, H.R. 2748 (PDF)
1 page. Excerpt: "The Retirement Security Needs Lifetime Pay Act contains three provisions to encourage retirees to receive some of their retirement savings in the form of guaranteed lifetime income payments. The bill (1) excludes from income a portion of lifetime income payments received from IRAs, qualified retirement plans (other than defined benefit plans), and non-qualified annuities; (2) excludes the value of longevity insurance from amounts subject to required minimum distributions (RMDs); and (3) clarifies the taxation of payments from deferred annuity contracts that are partially annuitized." (U.S. House of Representatives via American Benefits Council)
Text of Retirement Security Needs Lifetime Pay Act, H.R. 2748 (PDF)
Excerpt: "To amend the Internal Revenue Code of 1986 to encourage guaranteed lifetime income payments by excluding from income a portion of such payments." (U.S. House of Representatives via American Benefits Council)
Legislation Provides Incentives for Annuitizing Retirement Plan Distributions
Excerpt: "Bipartisan legislation has been introduced to give workers a new incentive to annuitize, rather than spend, their retirement savings. U.S. Representatives Earl Pomeroy (D-North Dakota) and Ginny Brown-Waite (R-Florida) today introduced The Retirement Security Needs Lifetime Pay Act, which provides tax incentives for workers to annuitize part of their retirement savings. The Retirement Security Needs Lifetime Pay Act, H.R. 2748, would encourage workers to annuitize some of their retirement savings by providing a 50% tax exclusion for up $10,000 of lifetime annuity payments annually." (PLANSPONSOR.com; free registration required)
State Pensions and Retirement Legislation, January to June, 2009
Excerpt: "This report summarizes major pensions and retirement enactments in the state legislatures as of June 3, 2009. At that time, a number of the 50 state legislatures and the Legislature of Puerto Rico remained in session. This report is therefore an incomplete review of what will have been enacted by the end of legislative sessions later in 2009. Because of the huge bulk of introduced legislation on pensions and retirement, this report includes only bills that have been enacted into law and resolutions a legislative body has adopted." (National Conference of State Legislatures)
State Pensions and Retirement Legislation, January to June, 2009
Excerpt: "This report summarizes major pensions and retirement enactments in the state legislatures as of June 3, 2009. At that time, a number of the 50 state legislatures and the Legislature of Puerto Rico remained in session. This report is therefore an incomplete review of what will have been enacted by the end of legislative sessions later in 2009. Because of the huge bulk of introduced legislation on pensions and retirement, this report includes only bills that have been enacted into law and resolutions a legislative body has adopted." (National Conference of State Legislatures)
The 401(k): Employers Look to Cut Costs, Workers Crave Stability Following Market Crash
Excerpt: "Retirement plan consultants foresee financial firms and employers embracing hybrid plans with features of both 401(k)s and pensions. Fred Cox, director of compensation and benefits at Evansville-based Vectren Corp., talked with a vendor in late May about adding an annuity option to the gas and electric utility's 401(k) plan. The option would help participants invest in stable choices that guarantee a certain yearly payment upon retirement -- like a pension does. 'What you've created is sort of a floor out of what's going to come out of that annuity,' Cox said. Such tweaks are not enough for Monique Morrissey, an economist at the liberal Economic Policy Institute in Washington, D.C. She wants to see individual retirement accounts mandated, controlled and guaranteed by the government -- because 401(k)s have failed to provide Americans what they need in retirement." (Indianapolis Business Journal)
[Guidance Overview] Towers Perrin Monthly Retirement Regulatory Round-Up, May 2009 (PDF)
Towers Perrin Monthly Retirement Regulatory Round-Up, May 20094 pages. Excerpt: "The Monthly Regulatory Round-Up is a high-level summary of legal and regulatory developments that occurred during May 2009 that may be relevant to large employers. Developments are sorted according to federal legislative developments, federal regulatory guidance, other developments (e.g., significant litigation, studies, select state law developments)." (Towers Perrin)
[Opinion] Paying for Universal Health Coverage
Excerpt: "For Congress and the administration to keep the promise of comprehensive health care reform, they will have to find the political will to pay for universal coverage and other investments that are needed right away but will not produce quick savings. The cost could reach $1.5 trillion over the next decade. President Obama, who had already proposed some $634 billion in new taxes and spending cuts, endorsed additional ideas last week. But Congressional Democrats will almost certainly need to come up with a lot more money -- and that is likely to mean new taxes." (The New York Times; free registration required)
State Coverage Model No Help for Uneasy Insurance Industry
Excerpt: "In reasserting his support last week for a new government health plan for the uninsured, President Obama stoked the fears of private insurers that they would not be able to compete with a Medicare-like option and might gradually be priced out of existence. The Obama administration has sought to reassure the industry, with its substantial lobbying might, by pointing to the three dozen states that offer their employees a choice between government-backed insurance options and a menu of commercial policies." (The New York Times; free registration required)
Administration Explores 'R Bond' As Option for Retirement Accounts
Excerpt: "Officials in the Obama administration are moving quickly to develop the investment infrastructure behind the president's proposal for mandatory automatic enrollment in individual retirement accounts, which could be supported by the creation of Treasury-issued retirement bonds. J. Mark Iwry, deputy assistant secretary for retirement and health policy at the Department of the Treasury, said that administration officials are exploring some 'conservative' options for investing the assets of 78 million Americans that he estimates could be automatically enrolled in this 'universal' workplace retirement system." (Investment News; free registration required)
GM Retirees Face An Uncertain Future
Excerpt: "As a last resort, pensions are somewhat guaranteed by the Pension Benefit Guaranty Corp., a federal outfit. Pensions for retirees 65 and older are guaranteed for up to $54,000 a year. Coverage is lower for younger retirees." (BusinessWeek)
Retirement When Union Pension Collapses
Excerpt: "Gregg Trunell, 43, began planning for an early retirement even before he began his career. Over the years, he and his wife put the maximum amount into their 401(k) plans, thousands more into IRAs and set 2011 as a target date for retiring. But now all bets are off. Trunell's union pension fund took a hit when the stock market plunged." (National Public Radio)
Major Auto Parts Supplier Intends to End Salaried Employees' Pension Plan
Excerpt: "Financially troubled auto parts manufacturer Delphi Corp. said it intends to shed its underfunded pension plan for salaried employees and retirees as part of a plan to emerge from bankruptcy reorganization." (Business Insurance)
Jobs That Still Offer Traditional Pensions
Excerpt: "Traditional pensions that pay out guaranteed benefits for life aren't easy to come by these days, as most employers have long since abandoned their traditional pension plans in favor of 401(k)'s. Still, there are some holdout industries that continue to reward lifelong employees with gold-plated retirement benefits. Here are a few places to look for jobs that may offer the coveted traditional pension." (U.S. News & World Report)
Get Used to a Working Retirement
Excerpt: "There is a major social and cultural message in the current economic collapse to the future retirees of the U.S.: Forget retirement." (BusinessWeek)
[Opinion] The Staying Power of Pensions in the Public Sector (PDF)
Excerpt: "This article explores why DB plans have 'staying power' in the public sector, from the perspective of employers, employees, and taxpayers. It concludes that pensions are an effective way to meet the objectives of all three stakeholder groups, suggesting that the public sector ought not to mimic the private sector trend away from DB pensions." (National Institute on Retirement Security)
Indiana State Treasurer Appeals Chrysler Deal; Says Priority for Unsecured Creditors is Unacceptable
Excerpt: "Under the bankruptcy plan, money was mostly set aside for secured creditors, but not enough to cover the millions that will be lost by retired State Police officers and teachers in Indiana. . . . Chrysler wants to pay them 29 cents on the dollar. Indiana State Treasurer Richard Mourdock says that's unacceptable. 'This is the first time in American history when secured creditors, Indiana retirees got less than non-secured creditors. That is fundamentally wrong. It is a violation of the law,' he said hours after filing an immediate appeal to the plan." (WTHR.com)
Retirement Plan Trade Association Opposes Mandatory Index Funds in 401(k) Plans
Excerpt: "Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee, wants to reform 401(k) plans by [requiring] plan providers to offer investors at least one low-cost index fund. . . . [In a white paper, the SPARK Institute said it] 'does not believe that the wholesale use of passively managed funds by legal mandate will reduce plan fees and expenses or that policy makers should unilaterally determine which approach to investing is better for American workers saving for retirement . . . .' " (Financial Planning)
[Opinion] GM Pension and Healthcare Promises Sucked It Down the Drain; Here Comes California
Excerpt: "[A]mong the obligations that caused GM to file for bankruptcy, two are directly related to worker entitlements. In 2003, GM sold $13.5 billion in bonds -- one of the biggest debt offerings ever -- and plowed the money into its pension fund. Then, in 2007, after the UAW went on strike, GM agreed to funnel more than $30 billion into a special trust for retiree health care. Both the pension bond and the retiree-trust obligation helped topple GM into Chapter 11 bankruptcy. Of course, they weren't the only causes." (Roger Lowenstein on Bloomberg.com)
[Opinion] American Benefits Council Comments on H.R. 1988, 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 [particularly 'SunAmerica' arrangements]." (American Benefits Council)
[Opinion] Dumping of Defined-Benefit Plans By Governmental Employers Has a Cost, Too
Excerpt: "Accounting rules can require pension costs to accelerate in the wake of a freeze, and maintaining two plans is more costly than operating one. . . . Our research shows that pensions are the most fiscally responsible way to fund retirement. The economic efficiencies embedded in pensions enable them to deliver the same retirement benefit at half the cost of individual accounts." (National Institute on Retirement Security)
Database Online of California State Pensioners Receiving More than $100,000 Annually
Excerpt: "The information below was obtained under the Freedom of Information Act from the California Public Employees Retirement System (CalPERS)." (California Foundation for Fiscal Responsibility)
Nevada Legislature Approves Bill Cutting Benefits to Public Employees
Excerpt: "A bill that saves the state millions of dollars by cutting public employee retirement and health care benefits won approval Thursday night on votes of 19-2 in the Senate and 41-0 in the Assembly. . . . During hearings on SB427, both Republican and Democrats said benefit reductions were necessary to guarantee the continued solvency of the Public Employees Retirement System and the Public Employees Benefits Program." (Las Vegas Review-Journal)
[Guidance Overview] Towers Perrin U.S. Legislative Tracking Charts -- Retirement and Executive Compensation -- Updated May 28, 2009 (PDF)
8 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
[Opinion] A Change to Retirement Savings That We Need
Excerpt: "Raquel Pichardo-Allison talks to David C. John, co-author of President Barack Obama's proposal to offer automatic savings plan enrolment, about America's changing attitude towards retirement security[.]" (Global Pensions)
EBSA Semiannual Regulatory Agenda Addresses Mental Health Parity
Excerpt: "The Employee Benefits Security Administration (EBSA) has released its semiannual regulatory agenda, which outlines regulations that have been selected for review or development during the next year, as well as any regulations that have been finalized during the last six months. . . . [Among t]he prerule and proposed rule EBSA agenda items are . . . The review of the plan assets-participant contributions regulation in accordance with section 610 of the Regulatory Flexibility Act; The development of regulatory guidance pursuant to ERISA ?712, as amended by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (P.L. 110-343) . . . ." (Wolters Kluwer)
Have an Idea of What a Universal, Secure, and Adequate Retirement System Should Look Like?
Excerpt: "Submit your proposal to the Retirement USA initiative using the form [on the target page]. Please use the space below each principle to tell us how your proposal incorporates the Retirement USA principles." (Retirement USA)
ERISA Advisory Council Announces Upcoming Meeting
Excerpt: "The U.S. Advisory Council on Employee Welfare and Pension Benefit Plans (also known as the ERISA Advisory Council) has announced their upcoming meeting on June 11, 2009. The agenda includes an update on the activities of the Labor Department's Employee Benefits Security Administration (EBSA) and determination of topics to be addressed by the 2009 Advisory Council. The advisory council meeting is open to the public. Anyone wishing to submit a written statement should do so by June 4, 2009[.]" (International Foundation of Employee Benefit Plans)
House Bill Proposes Delay of Mandatory Pension Distributions
Excerpt: "U.S. House Representative F. James Sensenbrenner Jr. has introduced legislation (HR 2637) that, if passed, would delay the mandatory withdrawal of retirement savings through 2010 and raise the mandatory withdrawal age to 75. . . . Given the current market, late last year, Congress passed, and the President signed into law, the Worker, Retiree, and Employer Recovery Act into law, which suspended all RMDs from IRAs, 401(k)s and 403(b)s for 2009. However, the RMD rules will return next year in full force. This proposed bill would extend the suspension of RMDs through 2010. The legislation also permanently raises the mandatory withdrawal age to 75." (International Foundation of Employee Benefit Plans)
PBGC Deficit Sparks Fears of Bailout
Excerpt: "The financial position of the Pension Benefit Guaranty Corp. again is rapidly deteriorating, triggering fears that a taxpayer-funded bailout may be needed to shore up the government's pension plan insurer. The PBGC disclosed last week that its deficit hit a record $33.5 billion at the end of its 2009 fiscal first half on March 31, compared with $11.2 billion at the close of fiscal 2008." (Pensions & Investments)
Retirement Plan Policy Adviser Aims to Bolster Savings
Excerpt: "In a signal that retirement issues have become a higher priority at the Treasury Department, J. Mark Iwry was named on April 27, 2009, to the newly created position of senior adviser to Treasury Secretary Timothy Geithner and deputy assistant secretary for retirement and health-care policy. . . . In his new role, Iwry will be focusing more on policy than day-to-day development of specific regulations implementing policy. Policy issues Iwry will be working on include a possible overhaul of rules for private defined contribution plans, funding relief for defined benefit plans, a direct-deposit IRA program for employers that don't offer retirement plans, and expansion of the saver's tax credit." (Wolters Kluwer)
PBGC May Need Aid as Deficit Soars
Excerpt: "The federal agency that guarantees corporate pensions was $33.5 billion in the red at the end of March, triple its deficit six months earlier, the agency's head told a Senate committee yesterday. The recession threatens to add to the strain on the Pension Benefit Guaranty Corp. by pushing more companies into bankruptcy and leaving the struggling agency responsible for their pensions. . . . If the PBGC's condition continues to deteriorate, the government could come under pressure to shore it up with taxpayer funds, the GAO said in testimony to the Senate's Special Committee on Aging." (The Washington Post; free registration required)
[Opinion] Specific Defined Benefit Plan Funding Relief Proposals (PDF)
5 pages. Excerpt: "First Relief Proposal: Amortization of 2008 Losses. In general. Under the Pension Protection Act of 2006 ('PPA'), 2008 asset losses must be amortized over seven years. The problem is that these losses are so large that seven-year amortization creates unmanageable funding obligations. Employers need time to recover before they can begin making up for these losses. On the other hand, if no contributions are made, the funding shortfall will only grow larger. Accordingly, we propose that for two years, employers shall be required to pay interest on their plans' 2008 losses to prevent the plans' shortfall from growing, but seven-year amortization of those losses would not commence until the expiration of those two years. So, all 2008 losses would be fully funded, but only two years later than would otherwise be the case." (American Benefits Council)
Obama's Vast Agenda Sparks Concern: Are Proposals too Much for Congress to Handle?
Excerpt: "Mr. Obama came into office pledging to enact an ambitious agenda to bolster the ailling financial sector, jump-start the economy, provide health care for the uninsured, address global warming, overhaul the nation's energy policies, save Social Security and Medicare and pour billions more into education. And that's just for starters. Now analysts have begun asking whether the president's lengthy shopping list is more than Congress can handle, or whether a debt-ridden, weakened economy can bankroll all his plans without falling deeper into a financial hole." (The Washington Times)
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)
Congress Considers Tough Rules to Oversee PBGC
Excerpt: "The rapidly deteriorating financial health of the federal agency that guarantees 44 million Americans' pensions is raising alarms in Congress, where key lawmakers are demanding tougher rules to insure vigilant oversight of its multibillion-dollar investment portfolio. The recession is forcing into bankruptcy an increasing number of companies with underfunded pension plans, leaving the Pension Benefit Guaranty Corp. with billions of dollars more to pay out in pension checks to retirees in the future. Its long-term deficit tripled in the past six months to a startling $33.5 billion." (AP via The New York Times; free registration required)
[Opinion] PBGC 'Scandal' Is Failure to Fix What's Broken in a Timely Fashion
Excerpt: "Retribution has its allure but is no substitute for reform. The real scandal here surrounds the company executives, from those at LTV Corp. in the 1980s to those at Chrysler today, who fail to acknowledge the need for pension reform. Larger still is the scandal of lawmakers and presidents -- from Lyndon Johnson to George W. Bush -- who failed to promulgate that reform in a timely way." (Bloomberg L.P.)
[Guidance Overview] Tax Information for Sponsors of Retirement Plans: Retirement News for Employers, Spring 2009 (PDF)
14 pages. This edition includes: Do You Have a Safe Harbor 401(k) Plan?; New Federal Income Tax Withholding for Pensions; Information Reporting Program Advisory Committee Is Looking for New Members; EPCRS Phone Forum ? July 27, 2009; e-News for Small Businesses: A Time-Saver for You; Desk Side Chat With Monika Templeman ? Automatic Enrollment; Employee Plans Published Guidance; New on the Web; DOL News; Notice of Approval to Extend Form 5500 Filing; Mark Your Calendar; Timing Is Everything Flyer. (Internal Revenue Service)
[Guidance Overview] Obama Administration FY2010 Budget Proposals on Retirement Savings and Insurance Products (PDF)
4 pages. Excerpt: "On May 11, 2009, the Treasury Department released its General Explanations of the Administration's Fiscal Year 2010 Revenue Proposals (the so-called 'Green Book') and the Office of Management and Budget published its Analytical Perspectives on the FY2010 budget, which together provide additional elaboration of the Administration's tax proposals for the next federal fiscal year. Important proposals relating to retirement savings and insurance products are summarized [in the target document]." (Sutherland)
[Guidance Overview] Retirement Governance and Compliance Advisory Update and Insights: May 2009
Excerpt: "In April, significant legislation focused on participants' rights in defined contribution plans. These bills include: the Savings Recovery Act of 2009, which, among other things, increases 401(k) contribution limits; the Conflicted Investment Advice Prohibition Act of 2009, which revises Pension Protection Act (PPA) rules for providing investment advice to participants; the 401(k) Fair Disclosure for Retirement Security Act of 2009, which requires specific fee disclosure to plan participants. In addition, the IRS released a proposed IRC Section 403(b) opinion letter program and sample language for drafting a 403(b) prototype plan; the Federal Trade Commission delayed enforcement of its new 'red flags' rules (which are conceivably applicable to 401(k) plans that allow loans), and Vermont, Iowa and Maine legalized same-sex marriage." (Towers Perrin)
[Guidance Overview] PBGC Developing Proposed Regulation on Downsizing Liability Section of ERISA
Excerpt: "Attorney Harold J. Ashner, former PBGC assistant general counsel for legislation and regulations, has been warning for some time that PBGC has been stepping up its enforcement of Section 4062(e) and that employers should be considering that as a possible cost when considering a cessation of a facility and the reduction of its workforce . . . . [Click on the title under 'Items of Interest' on the target page.]" (The Bureau of National Affairs, Inc. via Keightley & Ashner LLP)
Golden Years for Most Americans Appear Increasingly Threatened by the Global Financial Crisis
Excerpt: "Employees -- and employers -- are feeling the pinch from shortfalls in retirement funding. Defined-contribution plans place too much burden on the individual; private-sector defined-benefit plans place too much burden on the employer; and public-sector pensions shift the burden to the taxpayers, threatening to bankrupt local economies. The time may be ripe for new retirement-system designs." (The Wharton School via Human Resource Executive Online)
[Guidance Overview] Frequently Asked Questions about the Treasury's Temporary Guarantee Plan for Money Market Mutual Funds
Excerpt: "On September 29, 2008, the U.S. Department of the Treasury opened its Temporary Guarantee Program for Money Market Funds (Program), a plan to protect shareholders of participating money market funds from losses if their funds are unable to maintain a $1.00 net asset value (break the dollar). The plan was first announced on September 19, 2008, and will end on September 18, 2009. Treasury has posted investor and technical FAQs on the Program. The [questions and answers on the target page] address the Program's major features . . . ." (Investment Company Institute)
Retirement 20/20: A Reference to Perfect 20/20 Vision and Our Desire to Bring an Uncertain Retirement Future into Focus
Excerpt: "Retirement 20/20 was born in an 'A?ha!' moment when we realized that we essentially live in a binary regulatory structure, as far as pension plans are concerned. Pension plans are either employer?sponsored DB or employer?sponsored DC; there are a few exceptions in the United States and Canada, but not many. The analogy that we drew was a world of two flavors of ice cream: vanilla and chocolate. For whatever reasons, many people decided that chocolate -- the DB plan -- wasn't what they wanted. If you don't want chocolate, and you only have two choices, vanilla becomes a very popular option. But it's not because you prefer vanilla over a range of other flavors -- if strawberry, butter pecan, rocky road, mocha and peppermint were offered, one of those might be more to your liking. Retirement 20/20 was born to explore the third (and fourth and fifth) way -- what else could we do to design a retirement plan that did a better job of protecting individuals from the risks of retirement without putting the risk of a long?term liability solely on the employer." (Society of Actuaries)
GAO Reports on Proposal to Allow Buyouts of Pension Plans
Excerpt: "Asked to identify a basic model for the proposed sale of frozen pension plans to third-party financial firms and to identify the risks and benefits associated with such a proposal, the GAO concluded that buyouts would provide plan sponsors who seek to shed pension liability with greater flexibility and potential costs savings when compared to the sole current alternative of plan termination. However, the GAO also said buyouts would offer participants few advantages for benefit protection beyond that already provided under ERISA, and would raise risks that are difficult to quantify." (Deloitte via BenefitsLink.com)
401(k) Auto Enrollment Not in Obama Fiscal 2010 Budget
Excerpt: "A proposal that would require automatic enrollment of participants in existing 401(k) plans was not included in President Barack Obama's fiscal 2010 budget, said Ed Ferrigno, vice president of the Profit Sharing/401(k) Council of America. . . . 'What this action does is preserve the ability of employers to design plans that work for the business and the workforce,' Ferrigno said. 'Our main concern was that any plan-design mandate would freeze plan innovation in its tracks.'" (Workforce Management; free registration required)
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