September 15, 2006 Today's sponsor: www.ftwilliam.com (Click on company name or banner to learn more.)
A 401(k) Fees Litigation Wave Has Hit! Excerpt: "These lawsuits all target large 401(k) plans sponsored by large employers. The lawsuits name the employer as defendant, and in some cases, plan fiduciary committees and their various individual members. In the 'cookie-cutter' complaints, the plaintiffs allege a variety of breaches of fiduciary duties and prohibited transactions relating to fees paid by 401(k) plans." (Seyfarth Shaw LLP) FAQs Regarding Loans from Retirement Plans Excerpt: "Loans are not permitted from IRAs or from IRA-based plans such as SEPs, SARSEPs and SIMPLE IRA plans. Loans are only possible from qualified plans that satisfy the requirements of §401(a), from annuity plans that satisfy the requirements of §403(a) or 403(b), and from governmental plans. (Code §72(p)(4); Reg. § 1.72(p)-1, Q&A-2) [The target page has frequently asked questions and answers regarding loans.]" (Internal Revenue Service) FAQs Regarding Hardship Withdrawals Excerpt: "Many plans that provide for elective deferrals provide for hardship distributions. Thus, 401(k) plans, 403(b) plans, and 457(b) plans may permit hardship distributions. [The target page contains frequently asked questions and answers on hardship withdrawals.]" (Internal Revenue Service) The ABCs of Understanding a Plan's SAS 70 Report (PDF) 2 pages. Excerpt: "In order to help our readers understand the accountant's role in reporting on internal controls, this article will address a type of internal control examination frequently associated with 401(k) plans: A SAS 70 report (SAS is short for Statement on Auditing Standards). [The authors] explain when a SAS 70 engagement is appropriate, what is included and how it is beneficial." (401k Advisor via Grant Thornton LLP) White Paper: 401(k) Fiduciary Risks in a Rising Interest Rate Environment (PDF) 3 pages. Excerpt: "For defined contribution plan sponsors, a much less understood consequence of rising rates can have significant implications to one of the most popular investment options. . . The Stable Value Option (SVO)." (National Retirement Partners) Overview: PPA Changes Affecting 403(b) and 457 Excerpt: "The most important thing the Pension Protection Act did was to make permanent the changes in the law passed by EGTRRA." (403(b)-457 Plans Blog) Text of IRS Announcement 2006-70: Election of Alternative Funding Schedule for Airline Businesses (PDF) 2 pages. Excerpt: "This announcement sets forth the procedures for electing an alternative funding schedule for contributions as described in section 402(a)(1) of the Pension Protection Act of 2006 (PPA), Pub. L. No. 109-280." (Internal Revenue Service) Public Employee Pensions Could Cripple Government Budgets in Alaska Excerpt: "Starting next year, Alaska school districts and municipalities will see huge spikes in what they have to pay into the state's retirement systems. The Alaska Retirement Management Board approved the increases in employer contributions to the Public Employees Retirement System, or PERS, and the Teachers Retirement System, or TRS, this week. The increases are meant to whittle away at the systems' $6.9 billion shortfall over the next 25 years." (AP via Anchorage Daily News) Social Security Reform: Implications of Different Indexing Choices (PDF) 74 pages. Excerpt: "Given the recent attention focused on indexing, this report examines (1) the current use of indexing in the Social Security program and how reform proposals might modify that use, (2) the experiences of other developed nations that have modified indexing, (3) the effects of modifying the indexing on the distribution of benefits, and (4) the key considerations associated with modifying the indexing." (U.S. Government Accountability Office) Overview: IRS Final Regs Disallow Deduction of Payments Used to Reacquire Corporate Stock from ESOPs Excerpt: "The regs address issues that have arisen under the application of stock reacquisition expenses under Code Sec. 162(k) and deductions for dividends paid on employer securities under Code Sec. 404(k)." (CCH Pension and Benefits) Proposal Would Make Retirement Benefits a Factor in Bidding for Federal Contracts Excerpt: "The proposal would prevent contractors from obtaining an advantage if they provided less generous retirement benefits than the government does to its employees. Contractors said that would drive up the cost of bids by 24 percent." (The Washington Post; one-time registration required) CalPERS to Devote $5 Billion to Governance Investing Excerpt: "The fund, whose full name is the California Public Employees' Retirement System, said the increase follows reports that the 10 corporate governance firms it has been using posted annual returns of 17.7 percent from 1999 through March 31, 2006, nearly three times the industry benchmark." (Reuters via The New York Times; one-time registration required) Hewitt's Global Retirement Update -- September 2006 (PDF) 2 pages. Excerpt: "[Hewitt's] Global Retirement Update summarizes recent legislative developments and trends related to retirement and financial management and highlights recently passed and pending legislation that may require employers to take action to comply with new rules or review existing plans." (Hewitt Associates) Sweden Could Crack Down on Pension Investing in Activist Funds Excerpt: "If ruling Social Democrats are returned to office in Swedish elections this weekend, pension officials in that country will be prohibited from supporting activist investment funds targeting leading Swedish companies." (PLANSPONSOR.com; one-time registration required) National Save for Retirement Week, October 22-28, 2006 Excerpt: "[S]enator Gordon Smith (R-OR) and Senator Kent Conrad (D-ND) have introduced a Resolution to declare a National Save for Retirement Week, which will be held the last week of October (October 22-28, 2006). The Resolution, S. RES. 550 was introduced on August 3, 2006 and passed by unanimous consent on September 13, 2006. [The 3-page resolution is at http://www.nagdca.org/retirementweek/SenateRes550.pdf.]" (National Association of Government Defined Contribution Administrators, Inc.) NASD Investor Alert Warns Workers About Early Retirement Investment Pitches Excerpt: "NASD issued an Investor Alert [September 14] warning workers about investment pitches that guarantee comfortable early retirements. These pitches -- often made at free seminars -- promise high annual returns but make little or no mention of the risks associated with the aggressive investment scenarios the early retirement packages involve." (blackenterprise.com) Links to Items on Executive Comp, Benefits in General New York Comptroller Sued for Recognizing Same-Sex Marriages Excerpt: "New York State Comptroller Alan Hevesi is being challenged over his recognition of Canadian same-sex marriages for public retirement system benefits." (PLANSPONSOR.com; one-time registration required) Making It Real -- Moving Beyond Corporate Policy in the Day-to-Day Lives of LGBT Employees (PDF) 16 pages. Excerpt: "[This] is a new report from Ernst & Young designed to help companies implement corporate policies that impact the everyday work experiences of les.bian, g.ay, bise.xual, and transgender (LGBT) employees. The report is the result of a roundtable in which select global companies that scored 100% on the Human Rights Campaign's index of LGBT inclusiveness shared their best practices." (Ernst & Young) Slide Presentation on the Final SEC Executive Compensation Disclosure Requirements (PDF) 44 pages. Detailed coverage of the issue. (Morgan Lewis) Federal Income Taxation of Nonqualified Deferred Compensation and Its Plans (PDF) 120 pages. Excerpt: "CAVEAT: This article is intended to address only the general principles governing nonqualified deferred compensation plans after the enactment of the American Jobs Creation Act of 2004." (NYU Review of Employee Benefits and Executive Compensation via Haynes and Boone, LLP and T. David Cowart) Practical Guidance for Planning for the New Proxy Disclosure Rules (PDF) 13 pages. Excerpt: "The purpose of this letter is to begin identifying the issues to be addressed and the data sources that will likely be needed when preparing executive compensation disclosure under the new rules. Following are illustrative action lists for those who will be responsible for drafting the Compensation Discussion & Analysis and preparing the Summary Compensation Table, supporting tables and narratives." (Frederic W. Cook & Co., Inc.) Analysis Needed on ROI of Benefits for Expats Excerpt: "Many companies aren't looking at the return on investment on expatriate employees and the money that's seeping out of cracks in their benefit programs. Thirty-eight percent of firms say their overseas assignment programs are 'more generous than they need to be,' and 48% believe their international assignees take 'too much time and effort to administer,' up 12% from last year, according to a new report from KPMG, which provides audit, tax and advisory services." (BenefitNews Connect) The Timing of Stock Options Issue: A Legal Challenge for Companies and Much More Excerpt: "Winston & Strawn partner Gail Standish discusses current issues in corporate compliance with regard to stock option backdating, with a focus on current government investigations, possible consequences for companies found liable, and what the role of both inside and outside counsel may play in remedying violations. [The one-page PDF is at http://www.winston.com/siteFiles/publications/Standish_MCCA_Sept06.PDF.]" (Winston & Strawn LLP) Ford Offering 75,000 Employees Buyout Packages Excerpt: "The Ford Motor Company agreed Thursday to offer buyouts and other incentives worth as much as $140,000 each to its 75,000 hourly workers in the United States to persuade them to leave their jobs." (The New York Times; one-time registration required) We thank and invite your attention to our additional sponsor: Mid-Sized Pension Management Conference (Click on company name or banner to learn more.)
Newly Posted Events 2nd Annual Pension Funds in Crisis in District of Columbia on October 18, 2006 presented by Strategic Research Institute HSA 2006 in Arizona on December 7, 2006 presented by Business Capital Edge Risky Business: Mitigating Broker-Vendor-Advisor Fiduciary Exposure in California on September 21, 2006 presented by Western Pension & Benefits Conference - Orange County Chapter The Pension Protection Act of 2006 - Changes Affecting 401(k) Plans in California on October 19, 2006 presented by Western Pension & Benefits Conference - Orange County Chapter Newly Posted Press Releases NASD Investor Alert Warns Workers About Early Retirement Investment Pitches (NASD (National Association of Securities Dealers)) Newly Posted or Renewed Job Openings Marketing Director for BISYS Retirement Services in PA Retirement Services Compliance Manager for Regions Financial Corporation in AL Systems Business Analyst II for Regions Financial Corporation in AL Operations Manager (CA) for Zenith Administrators in CA New: Exclusive In-House Employee Benefits Counsel Opportunity - Heathrow, Florida for McCormack Schreiber Legal Search Inc. in FL Senior Defined Contribution Plan Administrator for Strategic Pension Services, Inc. (“SPS”) in CA Senior Underwriter - Stop Loss for Great-West Corporate in CO Internal Service Representative for Northwestern Benefit Corporation of Georgia in GA Handy Links:
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