| BenefitsLink Retirement Plans Newsletter |   |
January 17, 2007
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| Join your colleagues January 25-26, 2007 at the Hilton Los Angeles/Universal City for the perfect opportunity to discuss employee benefits issues with top IRS and DOL government agency representatives. Co-Sponsored by the IRS, ASPPA, NIPA and WP&BC, this conference offers a specialized agenda highlighting the latest on pension issues. don't let this opportunity pass you by. Register NOW! |
U.S. Supreme Court Turns Away IBM Cash Balance Appeal
Excerpt: "Despite a desire by many in the retirement services community for legal clarity in the continuing hot button issue of cash balance plans, the US Supreme Court has refused to hear a high profile cash balance appeal involving IBM." (PLANSPONSOR.com; free registration required)
Cash Balance Pension Plans Not Discriminatory: Supreme Court Denies Appeal
Excerpt: "The Supreme Court just denied leave to appeal in a case filed by IBM employees who alleged that the company committed age discrimination when it altered its pension plan." (PointofLaw.com)
Many Issues Left Unresolved on Cash Balance Plan Design and Discrimination
Excerpt: "The Supreme Court's decision yesterday not to hear arguments that I.B.M. illegally discriminated on the basis of age when it changed its traditional pension plan in the 1990s saves I.B.M. a significant amount of money. But it resolves almost nothing for the many other companies that made similar changes to their own pension plans." (The New York Times; free registration required)
Green Light for Cash Balance Plans Presents an Opportunity to Reconsider Retirement Benefit Offering (PDF)
3 pages. Excerpt: "This Spotlight discusses why cash balance plans warrant reconsideration for replacement of traditional DB arrangements . . . ." (The Segal Company, Inc.)
Determination Letter Request Deadline Approaching; Possible Trap for Adopters of Prototype Documents
Excerpt: "The new cyclical remedial amendment period applies to sponsors of individually designed plans. Plan sponsors who adopt prototype documents do not fall into the five-year cycle for individually designed plans, but are instead subject to a different, six-year cycle for amending their plans to comply with recent law changes." (Delotte via BenefitsLink.com)
Thrift Savings Plan Could Use More Options, Workers Say
Excerpt: "TIPS. Bonds. Roth 401(k) accounts. These are among the investment options that government employees would support adding to the Thrift Savings Plan, according to a survey released yesterday." (The Washington Post; free registration required)
Chronological Overview of Principal Agencies' Regulatory Activities Affecting Retirement Plans
Excerpt: "[The listing, with links to the source documents, provides] information on activities of the Department of Treasury, Internal Revenue Service, Department of Labor's Employee Benefits Security Administration, Pension Benefit Guaranty Corporation, and Securities and Exchange Commission." (ASPPA)
Saver's Credit Income Thresholds for 2007
The chart shows the tax credit for low- and moderate-income 401(k) savers. (The Profit Sharing/401(k) Council of America)
Are Your Employees Receiving Correct 401(k) Matching Contributions?
Excerpt: "Fortunately, to the extent employers find that matching contributions are not calculated correctly or in accordance with the terms of a plan document, the IRS Employee Plans Compliance Resolution System Program allows employers to correct insignificant matching contribution errors at any time." (Employee Benefit News)
Opinion: Taking on 401(k) Plan Fees that Take Away from Your Retirement Savings
Excerpt: "The bottom line is that if your 401(k) plan invested in the stock market last year, you were lucky if you made 13 percent, after fees." (The Journal Record via The University of Oklahoma College of Law)
Text of Xerox Corporation's Petition for S. Ct. Review of Adverse Decision on Floor Offset Plan (PDF)
123 pages. The petition (17 pages plus attachments) concerns the decision of the 9th Circuit Court of Appeals in Miller v. Xerox (May 8, 2006), in which a three-judge panel held that the Xerox's floor offset defined benefit plan used an illegal method of calculating pension benefits at final retirement to account for earlier benefit distributions to participants who had left and subsequently returned to covered employment. (Xerox Corporation)
IRS Begins to Open the Gates of 'Cash Balance Jail'
Excerpt: "Generally, the IRS will review moratorium plans to determine whether accruals relating to post-conversion service violate IRC § 411(b)(1)(H). Also, the IRS will not treat a moratorium plan as failing to meet the age discrimination rules merely because it provides that interest credits through normal retirement age are accrued in the year of the related hypothetical allocation. However, certain special rules will apply when processing these applications and cases." (Deloitte via BenefitsLink.com)
Supreme Court Turns Down 2 IBM Cases
Excerpt: "The Supreme Court [yesterday] refused to consider an appeal brought by a group of IBM Corp. employees who accused the company of age discrimination when it altered its pension plan. The lawsuit could have cost the company $1.4 billion." (BusinessWeek Online)
Overview: New Requirement for Individual Benefit Statements
Excerpt: "Benefit statements must disclose the total benefits earned, the vested accrued benefit or earliest date the benefit will become vested, and an explanation if Social Security or other payments will be subtracted when the benefits are calculated. The new law on individual benefit statements takes effect for the 2007 plan year." (Pension Rights Center)
Study Shows Public Pension Bill Growing
Excerpt: "California taxpayers forked out $10.2 billion for public employee pensions in 2003-04 and are likely to face even greater liability in future years, according to a study released Monday. The study prepared for the Howard Jarvis Taxpayers Association by the Center for Government Analysis at Newport Beach analyzed 130 public pension systems statewide and found taxpayer outlays doubled from 1997-98 to 2003-04." (Pasadena Star-News)
Overview: IRS Seeking Comments on Phased Retirement
Excerpt: "The IRS is seeking general comments on what guidance it should issue with respect to IRC § 401(a)(36), as well as on whether it should also issue the 2004 proposals in final form. Additionally, Notice 2007-8 identifies the . . . specific issues on which the IRS is seeking comments . . . ." (Deloitte via BenefitsLink.com)
NASRA Backs DC Auto-Enrollment
Excerpt: "While the National Association of State Retirement Administrators remained in staunch opposition to DC plans serving as the primary retirement benefit, auto enrolment to a supplemental plan would certainly benefit members, said research director Keith Brainard." (Global Pensions)
Old story: Women Need More but Have Less
Excerpt: "'The bottom line is that women are subject to a double whammy: They need more but have less,' said Alicia H. Munnell, director of the Center for Retirement Research at Boston College and a former member of the White House Council of Economic Advisors. 'This problem is widespread -- even many baby boom women with college degrees face the same issues.'" (Los Angeles Times; free registration required)
American Benefits Council Amicus Brief in re Citigroup Pension Plan ERISA Litigation (PDF)
Excerpt: "The Council bases its decision to file an amicus brief on criteria that limit participation to significant cases in which the Council believes its discussion of the issues will advance arguments that will not be presented by the parties or by other amici. This case has been identified as one raising an issue of critical importance because of its potential impact on the employer-provided defined benefit pension system." (American Benefits Council)
Opinion: Providers and Advisers Who've Been 'Less Than Forthcoming' Should Ponder Fee Lawsuits
Excerpt: "What surprises us most, IMHO, is not that these lawsuits have emerged, but that it has taken so long for some of these 'less than forthcoming' practices to draw this level of attention. However, providers and advisers who have, up till now, been 'less than forthcoming' would be well-advised to reconsider that approach." (planadvisor ponderings; posted by Nevin E. Adams)
Tips for Moving from a Defined Benefit Plan to Defined Contribution
Excerpt: "For some companies, the decision to switch from a defined benefit retirement plan to a defined contribution plan might be easy, but the actual transition is easier said than done." (Employee Benefit News)
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Links to Items on Executive Comp, Benefits in General
Senators To Target Executive Benefit -- Deferred Pay May Be Capped
Excerpt: "The Senate Finance Committee is considering a proposal to sharply limit the earnings corporate executives and other highly paid employees can place tax-free into deferred compensation plans, one of the most popular executive benefits in corporate America." (The Washington Post; free registration required)
Opinion: Public-Sector Unions a Major Obstacle to Fighting Waste and Abuse
Excerpt: "Including pay, perks, and pensions, total compensation for public employees is vastly superior to that in the private sector. In Los Angeles, public-sector employees have hit the jackpot. Intense labor negotiations have led to a quadrupling of bonus payments over the past five years." (The Heartland Institute)
New Litigation Rules Will Affect Claims Processing
Excerpt: "Changes to the federal rules governing civil litigation will affect the way that benefit claims and appeals are processed. While third-party claims administrators will be most directly affected, plan sponsors and their human resources staff should also be aware of the new rules. Failure to abide by them could make it more difficult to succeed if claim decisions are challenged in court." (Spencer Fane Britt & Browne LLP)
ERISA Plan Information Requests: 'Who Is Entitled to Request Plan Information?'
Excerpt: "[H]ere we take up the issue of who is an 'administrator' for purposes of the request. Since ERISA provides a definition of the term 'administrator' the issue would appear rather straightforward. . . . As it turns out, however, the determination of who is the administrator can be one of the most tedious of all on this topic. Moreover, the consequences of an error here can make the difference in winning and losing a statutory penalty case." (Health Plan Law blog by Attorney Roy F. Harmon III)
Audio: Unlikely Group Forms Health, Retirement Alliance
Excerpt: "An unusual partnership of business, labor and consumer interests has been formed to promote health care and retirement security. The Business Roundtable, Service Workers Union and AARP joined forces to push for new policies." (Morning Edition via National Public Radio)
Google Helps Us See How Much Options Are Worth
Excerpt: "Google's approach will offer employees some distinct advantages, including 'making the value of an option more transparent,' and as a result 'revealing its value to the employee,' according to Dave Rolefson, Google's equity and executive compensation manager." (Bloomberg)
Investigating Potential Allegations of Backdating Option Grants (PDF)
6 pages. Excerpt: "There is nothing illegal with granting options with exercise prices below fair market value at the date of grant. There are reasons for such a compensation strategy and there is nothing under the tax and securities laws or under the accounting rules that makes below market value option grants illegal or impermissible. However, pursuing that compensation strategy has certain financial reporting and tax ramifications, which backdating attempts to circumvent." (The Bureau of National Affairs, Inc. via Groom Law Group)
Study Links Options Backdating to Corporate Governance Weaknesses
Excerpt: "Harvard Professor Lucian Bebchuk and colleagues use a new method of identifying CEO and outside director manipulation of stock option timing and assert correlations to governance problems." (SRI World Group, Inc.)
Newly Posted Events
401(k) Testing Techniques Workshop
in Illinois on February 7, 2007
presented by SunGard Relius
401(k) Testing Techniques Workshop
in Minnesota on February 7, 2007
presented by SunGard Relius
401(k) Testing Techniques Workshop
in Michigan on February 8, 2007
presented by SunGard Relius
401(k) Testing Techniques Workshop
in Colorado on February 9, 2007
presented by SunGard Relius
Communicating Your ESOP
Nationwide on March 29, 2007
presented by National Center for Employee Ownership
Effective ESOP Committees
Nationwide on April 12, 2007
presented by National Center for Employee Ownership
ESOPs as a Business Transition Tool
Nationwide on April 10, 2007
presented by National Center for Employee Ownership
Minimizing Cynicism in Employee-Owned Companies
Nationwide on March 6, 2007
presented by National Center for Employee Ownership
Participant Forms and Notices
in Illinois on February 7, 2007
presented by SunGard Relius
Participant Forms and Notices
in Minnesota on February 7, 2007
presented by SunGard Relius
Participant Forms and Notices
in Michigan on February 8, 2007
presented by SunGard Relius
Participant Forms and Notices
in Colorado on February 9, 2007
presented by SunGard Relius
Using ESOPs as an Acquisition Strategy
Nationwide on April 17, 2007
presented by National Center for Employee Ownership
Newly Posted Press Releases
PSCA Releases Eligibility Mini-Survey
Profit Sharing/401(k) Council of America (PSCA)
PBGC Assumes Pension Plans Of Venture Holdings Corp.
Pension Benefit Guaranty Corporation (PBGC)
401(k) Answer Book, 2007 Edition - Includes Coverage of the Pension Protection Act of 2006
Great-West Retirement Services
Survey Finds Education Assistance and Wellness Programs Prevalent in the Public Sector
International Foundation of Employee Benefit Plans
The NCOA Makes Public Service Announcements (PSAs) Available For Local Agencies To Promote BenefitsCheckUp
National Council on Aging (NCOA)
UnumProvident to Change Name to Unum
Unum
61% of Executives Surveyed Believe Telecommuters Are Less Likely to Advance in Comparison to Employees Working in Traditional Office Settings
Futurestep
Independence Blue Cross Waives Copayments for Generic Drugs Through March 31, 2007
Independence Blue Cross
Newly Posted or Renewed Job Openings
Employee Benefits Administration
for Primary Consulting, Inc.
in ANY STATE
Tax/Employee Benefits Attorney
for Harter Secrest & Emery LLP
in NY
401(k)/Defined Contribution Valuation Processor
for National Retirement Services, Inc.
in CA, NC
Retirement Plan Coordinator
for American Funds, a part of The Capital Group Companies, Inc
in TX
Employee Benefits Attorney
for Hershner Hunter, LLP
in OR
Technical Research Consultant
for Diversified Investment Advisors
in NY
Plan Consultant Opportunity
for Weaver Partners, Inc.
in ANY STATE
Disbursement/Distribution Specialist
for Pension Specialists, Inc.
in CA
Bilingual Communication Specialist
for 401(k) Advisors
in CA
Health & Welfare Administrator
for ABG-MA, a BenefitStreet co.
in MD
401(k) Administrator-Compliance Specialist
for MBM Advisors, Inc.
in TX
401 (k) Plan Administrator / Account Executive
for Reed-Ramsey, Inc.
in IL
401(k) Conversion Coordinator
for Houston, TX Pension and Investment Firm
in TX
Retirement Services Consultant
for McGovern Myles, LLC
in ANY STATE
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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