| BenefitsLink Retirement Plans Newsletter |   |
January 10, 2007
Sponsored by: RELIUS® Education – Seminars and Conferences for Retirement Plan Professionals
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| 2007 Orlando Advanced Pension Conference |
| Orlando, FL - February 12-14. Attend this timely conference to learn about the impacts and opportunities resulting from the Pension Protection Act of 2006 (PPA). Our faculty of leading ERISA experts will discuss PPA Amendments, Participant Communication, Investment Advice and Education, Rollovers and Cashouts, and much more. The program also features a Washington Update with Brian Graff, a two-hour "Ask the Experts" forum, twelve concurrent sessions, and over 900 minutes of continuing education credits. Don't wait, register by January 15 and save $100.
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Highest Court to Discuss IBM Cash Balance Plan Review
Excerpt: "The U.S. Supreme Court is scheduled to discuss Friday whether or not it will review a federal appeals court ruling that IBM Corp.'s cash balance pension plan does not discriminate against older employees." (Business Insurance)
Webcast: Pension Protection Act of 2006 -- Focus on Default Investment Guidance
Excerpt: "In this 13-minute webcast, Claire McCusker from Vanguard's Plan Consulting Group discusses where the regulations on [qualified default investment alternatives] stand and offers advice on what plan sponsors should do in the interim." (The Vanguard Group, Inc.)
Opinion: Pensions Are All About the Future; Today's Pension Accounting Is All About the Past (PDF)
6 pages. Excerpt: "We are witnessing a remarkable development. A valuable part of the financial security system is rapidly disintegrating. Numerous authors have proposed new 'economically proper' ways to evaluate DB plans. Yet these proposals have failed to impress current and potential plan sponsors, who either leave the system or decline to enter it. The disconnect between the proposed solutions and the required steps to make the DB system attractive to plan sponsors is simply extraordinary." (Contingencies)
Analysis: The New Single-Employer Defined Benefit Plan Funding Rules (PDF)
31 pages. Excerpt: "This article will explain the newly enacted single-employer defined benefit plan funding rules under the Act, focusing exclusively on the minimum required contribution rules, the 'at-risk' rules, the treatment and effect of credit balances, and the rules relating to restrictions on benefits, and it will highlight some of the reasons why the current defined benefit plan funding rules were changed." (Groom Law Group)
Overview: IRS Requests Comments on PPA Provision Allowing In-Service Pension Distributions at Age 62
Excerpt: " In [Notice 2007-8], the IRS requests comments on issues presented by Sec. 401(a)(36) with respect to defined benefit plans." (Wolters Kluwer Law & Business)
A 'Private Letter Ruling' from the IRS Can Provide a Way Out of Taxable Mistakes
Excerpt: "A PLR can be a godsend to desperate taxpayers who are searching for a creative way out of a tax jam. . . . In recent years, the IRS has weighed in on some unusual requests. For instance, a widow persuaded the tax collectors to let her late husband open up an IRA." (BusinessWeek Online)
Defined Benefit Plan Sponsors Say Pension Staff Time Not Optimized
Excerpt: "Even though most defined benefit plan sponsors in a recent poll acknowledged their pension staff members should be focusing on risk management, too often those employees are tied up with other tasks. A SEI Investments Co. news release about its latest Quick Poll said almost half of the participating plan sponsors feel that new pension rules demand attention in areas where internal resources are not currently focused." (PLANSPONSOR.com; free registration required)
Overview: DOL Update of the Securities Lending Class Exemption (PDF)
4 pages. Excerpt: "The Department of Labor recently finalized Prohibited Transaction Class Exemption ('PTE') 2006-16, which consolidates and restates PTEs 81-6 and 82-63, and applies to securities lending transactions entered into on or after January 2, 2007." (Groom Law Group)
New Initiatives Regarding Pension Plan Freezes
Excerpt: "Recent press and other reports have indicated that a number of large Wall Street and other financial institutions have an interest in 'acquiring' frozen plans at a lower cost to sponsors than insured annuities. The plans would continue to be maintained by the acquiring institution which would assume all funding and other legal obligations for the plan." (Pension & Benefits Blog)
Overview: Determination Letters for Cash Balance Plans and Guidance on Fixing 'Whipsaw' Issues (PDF)
3 pages. Excerpt: "On December 21, 2006, the IRS issued Notice 2007-6 (the Notice), which provides interim guidance to plan sponsors of so-called 'hybrid' plans (e.g., cash balance and pension equity plans). The interim guidance addresses the processing of determination letter applications for hybrid plans, the correction of any 'whipsaw' issues, and the applicability of certain provisions under the recently enacted Pension Protection Act of 2006 (PPA)." (Seyfarth Shaw LLP)
New Pension Law in the Netherlands Includes Solvency and Funding Requirements
Excerpt: "Regulations governing retirement funds changed dramatically on Jan. 1, 2007, as the new pension act took effect. Among the most significant changes are new minimum funding and solvency rules for pension funds, new requirements for pension agreements between employers and employees and new communication obligations for plan sponsors. [The Dutch Pension Act 2007 is at http://www.watsonwyatt.com/europe/netherlands/news/pensioenwet/brochure/pdf/Dutch_Pension_Act.pdf.]" (Watson Wyatt Worldwide)
Links to Items on Executive Comp, Benefits in General
Pentagon Limits Executives' Pay Raises
Excerpt: "Pentagon officials are reducing the pool of money available for performance-based awards for senior executives, in a move that has disheartened the advocacy group that represents the executives." (GovExec.com)
Opinion: CEO Pay and Faltering Company Performance
Excerpt: "The worst possible solution would be for Congress to step in to try and correct this problem. It was lawmakers' meddling with CEO pay the last time that led to the phenomenon of gorging on stock options, which is only just coming home to roost. Call it yet another example of the law of unintended consequences." (The Motley Fool via MSNBC.com)
Few Companies Willing to Slash the Severance Pay That They Had Promised
Excerpt: "Sharper Image found itself in a distinguished spot recently when the board of the troubled retailer did what most of its counterparts in corporate America have failed to do: It cut its former CEO's severance package." (The Washington Post; free registration required)
Overview of New Executive Pay Disclosures
Excerpt: "Investors will soon have a new scorecard designed to lay out in plain English just how much pay and perks are being lavished on top executives at public companies. If the goals of federal regulators are met, you won't need an MBA to decipher the numbers." (The Washington Post; free registration required)
Overview: SEC's Further Executive Compensation Disclosure Changes
Excerpt: "The interim final rules, contained in SEC Release No. 33-8765 . . ., amend the disclosure contemplated by Item 402 of Regulations S-K and S-B with respect to executive compensation in the form of equity and options awards." (Thelen Reid Brown Raysman & Steiner LLP)
Report on Legislative & Oversight Activities of Committee on Ways and Means During 109th Congress (PDF)
193 pages. The report includes a legislative review of tax, trust fund, and pension issues; health issues; social security issues; and, human resources issues. (U.S. House of Representatives, Committee on Ways And Means)
Gradient Study Finds 532 Companies at Risk of Exercise Backdating
Excerpt: "The clients of equity research firm Gradient Analytics, Inc. will now have access to its Backdating Risk Assessment List, which includes 532 companies where it found instances of potential exercise backdating." (PLANSPONSOR.com; free registration required)
Opinion: The Social and Economic Costs of the Baby Boomer Retirement
Excerpt: "As Congress reconvenes, pledges of 'fiscal responsibility' abound. Let me boldly predict: On retirement spending, this Congress will do nothing, just as previous Congresses have done nothing." (Robert J. Samuelson via The Washington Post; free registration required)
Newly Posted Events
409A Taxation - What Happens When the Hammer Falls
Nationwide on January 23, 2007
presented by SunGard Corbel
Newly Posted Press Releases
CPI Opens Seattle Consulting Office
CPI Qualified Plan Consultants, Inc.
Newly Posted or Renewed Job Openings
Actuarial Analyst V
for Stanley, Hunt, Dupree, & Rhine, Inc.
in NC
Communications Consultant, Midmarket Segment
for Fidelity Investments
in KY, MA, OH, TX
ERISA Associate
for Eckert Seamans Cherin & Mellott, LLC
in PA
Client Service Representative
for The Online 401(k) (Decimal, Inc.)
in CA
Defined Benefits Analyst
for Constantin Control Associates
in NJ
Benefits Coordinator
for Southern HealthCare Management
in FL
Institutional and Participant Relationship Consultant - Pittsburgh
for Gallagher Retirement Services
in PA
Benefits & Wellness Coordinator
for Schiff Hardin LLP
in IL
Pension Administrator (DB or DC)
for Benetech, Inc.
in CA, GA
Junior Contract Officer
for JPMorgan Retirement Plan Services
in MO
Global Benefits Supervisor
for Panduit Corp
in IL
Pension Administrator Assistant
for Scott, Tellier & Co., Inc.
in AZ
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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