| BenefitsLink Retirement Plans Newsletter |   |
August 9, 2006
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Text of Final IRS Reg on 411(d)(6) Protected Benefits, Including Optional Forms of Benefit (PDF)
8 pages. Excerpt: "This document contains final regulations providing guidance on certain issues under section 411(d)(6) of the Internal Revenue Code (Code), including the interaction between the anti-cutback rules of section 411(d)(6) and the nonforfeitability requirements of section 411(a) [and] a utilization test under which certain plan amendments are permitted to eliminate or reduce certain early retirement benefits, retirement-type subsidies, or optional forms of benefit." (Internal Revenue Service)
Bill Prohibiting States from Taxing Nonresidents' Retirement Income Cleared for President
Excerpt: "Both the House and Senate have passed H.R. 4019, legislation that would clarify that state taxation of retirement income is limited to the state where the retiree resides." (CCH Pension and Benefits)
Overview: Seventh Circuit Harmonizes Cash Balance Plan Conversion Law
Excerpt: "After the Eastern District of Pennsylvania found in Register v. PNC Financial Services Group, Inc., No. 04-CV-6097 (11/21/05), that the conversion of PNC's traditional defined benefit plan to a cash balance plan did not violate the age discrimination provisions of ERISA Section 204(b)(1)(H), it appeared that there was a developing conflict between various courts about whether such conversions were in fact age discriminatory." (Workplace Prof Blog)
Overview: Seventh Circuit Decision in Cash Balance Case in Favor of IBM (PDF)
1 page. Excerpt: "In a decision that is highly favorable to cash balance plan sponsors, the Seventh Circuit Court of Appeals yesterday ruled that the IBM cash balance formula is not age discriminatory. The Seventh Circuit is the first appeals court to deal with this important issue and as such the decision is likely to influence decisions in similar cases in other circuits." (Buck Consultants)
Tax Management Analysis of the Pension Provisions of H.R. 4, the Pension Protection Act of 2006
Excerpt: "The Pension Protection Act of 2006, H.R. 4, will have a far-reaching impact on the operations of private pension plans, in particular, by requiring pension plans to meet a 100% funding target in seven years. The Bill makes extensive amendments to the benefit provisions of the tax Code and to the Employee Retirement Income Security Act of 1974 (ERISA)." (BNA Tax Management)
DOL's Pension Reform Web Site
Excerpt: "[T]his Web site hosted by the Department of Labor is the official location for all Administration documents pertaining to the President's single employer defined benefit pension reform proposal. It will be regularly updated to include new documents from other Federal Agencies as well as the Department of Labor." (U.S. Department of Labor, Employee Benefits Security Administration)
Fidelity and Vanguard to Benefit from Passage of Pension Overhaul
Excerpt: "'For the financial-services industry, it's a big victory,' said Brian Graff, executive director of the American Society of Pension Professionals and Actuaries, based in Arlington, Virginia. 'More retirement savings helps the entire financial- services community; it's the investment banks, brokerage firms, insurance, it's everybody.'" (Bloomberg News)
Pension Protection Act Opens Doors for ERISA Plan Investments (PDF)
2 pages, Excerpt: "The PPA redefines the regulatory definition of 'Benefit Plan Investor' to exclude governmental plans, foreign plans and church plans. As a result, this large pool of state pension funds and foreign plans will no longer count against the 25% limit, thus freeing up more room for ERISA pension plan funds that would otherwise vie with these investors for investment opportunity in issuers seeking to avoid the application of ERISA." (LeBoeuf, Lamb, Greene & MacRae LLP)
Overview: Amendments to the Definition of Plan Assets
Excerpt: "Fiduciaries of a Plan should note that when the Pension Act is enacted, the number of investment funds that the Plan may invest in should increase and the investment funds that a Plan is currently invested in may change their mix of investors. [They] should also note that . . . fewer investment funds will be deemed to hold 'plan assets' subject to certain fiduciary duties and other obligations." (White & Case LLP)
IRA Rollover for Charitable Giving Close to Final Approval
Excerpt: "After years of work, all that remains for the IRA rollover provision to become a reality is the president's signature. Last Thursday, Aug. 3, the Senate passed a pension reform bill (H.R. 4) containing the IRA rollover provision and other charitable giving incentives, as well as a series of charitable reforms. The House had already approved the bill on July 28, 2006." (Association of Fundraising Professionals)
Overview: The Maximum Exclusion Allowance Has Gone Away
Excerpt: "This comprehensive pension bill includes the permanent implementation of the Economic Growth and Tax Relief Reconciliation Act of 2001 or EGTRRA which eliminated the Maximum Exclusion Allowance (MEA) as part of the Maximum Allowable Contribution (MAC) limitation calculation. EGTRRA also increased contribution limits, added the Age 50 Catch-up, and expanded such options such as 457(b) plans." (403(b) "Gatekeeper" ServicesSM, Citizens Bank & Trust)
Overview: Pension Reform Changed Some Distribution Rules
Excerpt: "The Pension Protection Act of 2006 made some subtle, but meaningful changes related to distributions from qualified plans. Here [CCA Strategies discusses] the primary changes." (CCA Strategies LLC)
Multiemployer Review: Congress Enacts Major Multiemployer Pension Reforms (PDF)
4 pages. (Milliman)
Overview: U.S. Congress Approval of the Pension Protection Act of 2006 (PDF)
5 pages. (Dechert LLP)
Highlights of the Pension Protection Act of 2006
Excerpt: "The Pension Protection Act addresses - and changes the rules in - a number of key areas of federal pension regulation. Here [CCA Strategies highlights] key provisions of the bill affecting single employer plans." (CCA Strategies LLC)
Corrected Fact Sheet on Retirement Savings Tax Credit to be Made Permanent If Pension Bill Signed (PDF)
2 pages. From the author: H.R. 4, the Pension Protection Act, does in fact index the income brackets eligible for the retirement savings tax credit. The permanent extension of the credit is in section 812 of the bill and the indexing is in section 833. The report has been corrected to indicate this change. (Congressional Research Service of the U.S. Library of Congress)
Pension Protection Act of 2006: Overview of Impact on Your Retirement Programs (PDF)
12 pages. Excerpt: "This Alert addresses the major elements of the . . . measure that relate to: Single-employer defined benefit plan funding; Multiemployer defined benefit plan funding; Plan design changes affecting defined benefit and 401(k) plans; New disclosure requirements . . . . Separate sections of this Alert deal with several related topics including auto-enrollment provisions for 401(k) plans, investment advice and other fiduciary issues, corporate-owned life insurance . . . ." (Aon Consulting)
The Hewitt 401(k) Index (tm) Observations: July 2006 Index -- Activity Over Time
Excerpt: "401(k) participants continued to transfer their balances from equity to fixed-income funds in July, according to the results of the Hewitt 401(k) Index." (Hewitt Associates)
San Diego Broke Laws in Pension Crisis, Panel Headed by Arthur Levitt Jr. Says
Excerpt: "Independent experts brought in to help San Diego dig its way out of a deepening financial hole said yesterday that city officials broke federal securities laws and other statutes as they tried to conceal their failure to put enough money into the city's pension fund for police, firefighters and other public employees." (The New York Times; one-time registration required)
Text of the Report of the Public Pension Plan Audit Committee of the City of San Diego
The Kroll Report is available by links to its sections from the table of contents to the conclusion and appendices. (SignOnSanDiego.com)
Survival Strategy: Repairing a Broken Pension
Excerpt: "A struggling company with a severely under-funded pension plan might appear headed for bankrup.tcy and government takeover of the plan. Closer inspection, however, reveals many options short of unloading on the Pension Benefit Guarantee Corporation." (Employee Benefit News)
Job Changers and Retirees Seek Advice for Plan Distributions
Excerpt: "Most job changers and retirees consulted at least one individual when making decisions regarding retirement plan distributions, according to findings of a study from LIMRA International." (PLANSPONSOR.com; one-time registration required)
Advocacy: Reforming Tax Incentives to Promote Private Saving for Retirement (PDF)
16 pages. Excerpt: "A few straightforward reforms -- simplifying the complex array of retirement accounts, replacing tax deductions with tax credits, making the credits refundable, and focusing the incentives on basic saving -- would better target incentives to the families who are not saving enough while at the same time raising more revenue." (The Century Foundation)
Watson Wyatt Insider -- Trends in Pensions 2005 (PDF)
54 pages. This edition covers: Pension Fund Finances for 2005; Recent Funding and Sponsorship Trends Among the Fortune 1000; Pension Fund Finances and Business Risk; How Do Retirement Plans Affect Employee Behavior?; Increasing Employees' Appreciation of Their Retirement Programs; Defined Benefit Plans Become Significantly More Valuable; Do Aggressive Funding Policies Lead to Higher Credit Ratings?; and, Lessons for DB Pensions and the Retirement Ecosystem. (Watson Wyatt Worldwide)
Spending and Investing in Retirement--Is There a Strategy?
Excerpt: "The SOA's Committee on Post Retirement Needs and Risks, and Pension Section Research Team . . . make available material from a new research study that examines how retirees approach key financial decisions about managing their money in retirement. The objective of the research . . . was to collect first hand accounts from six focus groups comprised of retirees in several locations nationwide." (Society of Actuaries)
Issue in Brief: An Update on Private Pensions -- August 2006 (PDF)
12 pages. Excerpt: "The key finding is that total pension coverage has remained stagnant while the nature of coverage has continued to shift to 401(k) plans. These developments, coupled with declining levels of earnings replacement under Social Security, mean that future retirees will have to work longer if they want to maintain their pre-retirement standard of living in retirement." (Center for Retirement Research at Boston College)
Links to Items on Executive Comp, Benefits in General
Resolving the Judicial Paradox of 'Equitable' Relief Under ERISA Section 502(a)(3)
The target page provides several links to the full text of this 135-page article, published in 2006. Abstract: 'This Article reviews the state of federal law concerning equitable remedies under Section 502(a)(3) of ERISA and developes a statutory and policy-based theory to address what is appropriate equitable relief for the six categories of defendants and related claims that are possible under Section 502(a)(3)." (Prof. Colleen Medill in the John Marshall Law Review via SSRN.com)
Overview: FASB Issues Proposed FASB Staff Position on Share-Based Payments (PDF)
5 pages. The newsletter also covers the FASB meeting of July 26, 2006, and the discussion on postretirement benefit obligations, including pensions. (Grant Thornton)
Overview: FASB to Implement Postretirement Benefit Accounting Reform in 2006
Excerpt: "The Financial Accounting Standards Board (FASB) is moving ahead with the first phase of its proposed changes to postretirement benefit accounting, which involves recording a plan's underfunding or overfunding on the corporate balance sheet." (Watson Wyatt Worldwide)
Despite Claims Procedure Violations, Limitations Began When Employee Had Reason to Know of Denial
Excerpt: "A suit for benefits under ERISA must be filed within a certain period of time, called the statute of limitations. This case addresses the issue of whether flawed claims procedures prevent the statute of limitations from starting." (Employee Benefits Institute of America Inc.)
Court Remedies Failure to Provide SPD by Ordering Payment of Plan Benefits
Excerpt: "Although the court concluded that the employer breached its fiduciary duty by not timely providing an SPD to the spouse, it did not frame its remedy under ERISA Section 502(a)(3) (through which participants and beneficiaries can claim 'appropriate equitable relief' for breach of fiduciary duty). Instead, it relied on Section 502(c)(1), which allows penalties where a plan administrator fails to respond to requests for information required under ERISA." (Employee Benefits Institute of America Inc.)
Statutory Penalty Liability for Failure to Furnish All Docs Relevant to Participant's Benefit Claim?
Excerpt: "EBIA Comment: Other courts have also rejected the analysis of DOL Advisory Opinion 96-14A, refusing to impose statutory penalties for claim document failures. (As this court held, the views of enforcing agencies like the DOL are entitled to considerable weight, but a DOL advisory opinion is not binding on a court and does not deserve judicial deference where, as here, it 'does violence to the statute itself.')" (Employee Benefits Institute of America Inc.)
Overview: SEC Finalizes Revised Executive Compensation Proxy Disclosure Rules
Excerpt: "The [target page describes] how the final rules affect executive compensation disclosures and the accompanying narrative." (Watson Wyatt Worldwide)
Overview: Executive Compensation Provisions Found in Pension Reform
Excerpt: "The Pension Protection Act addressed not only qualified retirement plans, but the funding of nonqualified plans as well. In this article, we address the potential consequences of some of those funding decisions, after the passage of PPA." (CCA Strategies LLC)
Newly Posted Events
2006 Fall Forum
in Illinois on September 18, 2006
presented by BISYS Retirement Services
2006 Fall Forum
in Georgia on October 2, 2006
presented by BISYS Retirement Services
2006 Fall Forum
in Maryland on October 23, 2006
presented by BISYS Retirement Services
2006 Fall Forum
in California on November 13, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Essentials
in Louisiana on September 12, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Essentials
in Minnesota on September 12, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Essentials
in Florida on September 14, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Essentials
in Ohio on September 19, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Essentials
in Ohio on September 21, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Essentials
in Texas on September 26, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Essentials
in South Dakota on September 26, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Essentials
in Texas on September 26, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Essentials
in Texas on September 28, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Essentials
in Kentucky on September 28, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Texas on February 27, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Louisiana on September 13, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Minnesota on September 13, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Florida on September 15, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Ohio on September 20, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Ohio on September 22, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Texas on September 27, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in South Dakota on September 27, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Texas on September 27, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Kentucky on September 29, 2006
presented by BISYS Retirement Services
2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Texas on September 29, 2006
presented by BISYS Retirement Services
Cash Balance Plans: What Is Left After the Litigation (and Legislation)?
Nationwide on August 30, 2006
presented by American Bar Association (ABA)
Options Backdating: Is Your Company at Risk? - Teleconference Briefing
Nationwide on August 15, 2006
presented by Seyfarth Shaw LLP
Pension Protection Act of 2006: What's in It for 401(k) Plans?-- Help for 401(k) Plan Employers, Advisors, and Administrators
Nationwide on September 14, 2006
presented by Employee Benefits Institute of America Inc. (EBIA)
Special Insights into Retirement Plan Fee Structures - Webcast
Nationwide on August 31, 2006
presented by International Foundation for Retirement Education (InFRE)
What Pension Reform Does for Pensions and Their Sponsors: Defined Benefit Plan Issues in the Pension Protection Act of 2006
Nationwide on September 14, 2006
presented by American Bar Association (ABA)
Newly Posted Press Releases
Pension Decision Increases Employer Confidence
(ERIC (ERISA Industry Committee))
Newly Posted or Renewed Job Openings
Operations Delivery Leader
for Fidelity Investments
in NC
Pension Administrator
for Retirement Alliance, Inc.
in NH
401(k) Administrator
for Creative Retirement Systems
in OH
Sr. Benefits & Compliance Consultant
for Summit Retirement Plan Services, Inc.
in OH
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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