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January 25, 2007
Sponsored by: ASPPA
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Plans that Have Yet to Be Amended for the Final 401(k) & 401(m) Regulations Need to Be Amended Soon
Excerpt: "Employers should note that compliance with this amendment deadline may not be delayed merely because a 401(k) and/or 401(m) plan may happen to have a later required amendment date for general plan qualification amendments under the remedial amendment cycles." (Bond, Schoeneck & King, PLLC)
United Airlines Retired Pilots Ask U.S. Supreme Court to Review Pension Decision
Excerpt: "The United Retired Pilots Benefit Protection Association has filed a petition asking the U.S. Supreme Court to review a decision that allowed the Pension Benefit Guaranty Corp. to terminate the United Airlines pilots pension plan." (The Denver Post)
Opinion: The 401(k) Business Has Been Very Rewarding for Investment Product and Service Providers
Excerpt: "On the whole, the more rewarding the 401(k) business is for asset managers and service providers, the more exposure plan fiduciaries will have." (Fiduciary Investor)
Transition Management of Portfolio Change -- 7 Questions Plan Sponsors Should Ask
Excerpt: "The focus brought to defined benefit plan funding by the Pension Protection Act of 2006 and new accounting requirements by the Financial Accounting Standards Board is leading DB plan sponsors to consider changes to asset allocation." (PLANSPONSOR.com; free registration required)
Overview: Current Automatic Enrollment Rules (PDF)
Pages 2-3 of 4 pages. Excerpt: "Automatic enrollment plans have existed since 1998. The automatic enrollment rules that apply today will continue to be available in future years. The PPA rules that have been receiving so much attention, however, are not effective until the 2008 plan year." (NPI and McKay Hochman via July Business Services)
Overview: PBGC Revision of Mortality Assumptions in Regulations
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) has issued a 'direct' final rule making changes to the mortality assumptions under parts 4050 (Missing Participants) and 4281 (Duties of Plan Sponsor Following Mass Withdrawal) of its regulations." (Wolters Kluwer Law & Business)
A Discussion on the Use of a Substitute Mortality Table, Prepared by the AAA Pension Committee (PDF)
9 pages. Excerpt: "We propose that sponsors have the option to use a generational table -- for example, RP2000 with Scale AA applied on a generational basis -- whether the plan uses the standard table or a substitute table." (American Academy of Actuaries)
Key Facts Regarding State and Local Government Defined Benefit Retirement Plans (PDF)
1 page. Excerpt: "As a group, state and local pension systems have nearly 90 cents for each dollar they owe in liabilities. These assets are professionally managed and invested on a long-term basis using sound investment policies." (National Association of State Retirement Administrators)
Overview: Pension Legislation Includes New, Extended, and Expanded IRA Contribution Opportunities
Excerpt: "The Pension Protection Act (PPA) of 2006 makes some significant changes to IRAs. This article [reviews] those provisions related specifically to IRA contributions." (Wolters Kluwer Financial Services)
So-Called Liability-Driven Strategy by Pension Fund Managers May Curtail Gains in Favorable Markets
Excerpt: "Thanks to the Pension Protection Act (PPA), retirees may soon have to worry about returns, not underfunding. The new law, coupled with FAS 87's restrictions on smoothing pension earnings over time, encourages fund managers to be more risk averse and to match the duration of a portfolio's assets with its liabilities." (CFO Magazine via CFO.com)
Pension Risk Management: A Buyer and Seller Perspective (PDF)
12 pages. Excerpt: "At the September 2006 Enterprise Risk Management Conference sponsored by Towers Perrin and The Conference Board, the [target page] panel discussion on legacy pension issues examined the potential markets, opportunities and risks that both buyers and sellers could face." (Towers Perrin)
EBSA Moves To Let Dominion Rate Plan Assets
Excerpt: "The Employee Benefits Security Administration has started the process of classifying Dominion Bond Rating Service Ltd. as a firm that can rate the assets held in benefit plan portfolios." (National Underwriter Life & Health; free registration or paid subscription required)
A Study on Pension and Mutual Fund Performance (PDF)
46 pages. Excerpt: "This paper provides empirical evidence on the comparative performance of three important players in the US Financial services industry: defined benefit (DB) pension funds, defined contribution (DC) pension funds, and mutual funds." (Rotman International Center for Pension Management)
Buy Into Them, and Forget Them: Less Involved Investors Find Target-Date Funds Appealing
Excerpt: "Target-date funds, which are referred to by a variety of names, including target maturity date funds, are becoming more popular because they allow investors to put money into a fund and get back to planning that vacation almost without a second thought. The funds gradually shift investments to become more conservative as their maturity dates near." (AP via The Washington Post; free registration required)
Think Before Freezing Defined Benefit Plan
Excerpt: "Media reports show a trend of plan sponsors freezing their defined benefit plans and moving to or enhancing their defined contribution offerings, but a panel of speakers at PLANSPONSOR's 2006 DB Summit said there are a number of things to consider before jumping on the bandwagon." (PLANSPONSOR.com; free registration required)
Defined Benefit Plan Sponsors Weighing Their Options in Post-PPA Environment
Excerpt: "Recent surveys show employers have diverse attitudes regarding whether to alter plan designs or eliminate their pension plans altogether in the post-PPA world. Says Mark Warshawsky, director of retirement research for Watson Wyatt: 'It's a natural time to reexamine the plans because they will be in a stable environment for a while.'" (Employee Benefit News)
Overview: Litigation Has Erupted Over Allegedly Excessive and Hidden Fees in 401(k) Plan Administration
Excerpt: "The fees in question--including soft-dollar arrangements, 12(b)-1 fees and variable annuity wrap fees--have been cited to have a direct impact on investment returns and, subsequently, the retirement income of employees." (On Wall Street)
In Australia, Superannuation Guarantee Contributions May Be Adequate
Excerpt: "Despite the ongoing debate about increasing the level of employer contributions to workers' superannuation funds, a new analysis by Watson Wyatt Worldwide shows that the current 9 percent level likely will be sufficient for most workers, particularly if they work longer." (Watson Wyatt Worldwide)
Court: Britain Failed to Protect Workers
Excerpt: "Britain has failed to meet European Union standards for protecting workers from losing their pensions when their employer goes bankrupt, the EU's highest court ruled [today]." (AP via The Houston Chronicle)
Sponsored by: Investment Company Institute
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| February 7: The Latest Word from Washington on Retirement Plan Issues ... |
| Get up-to-the-minute insights from Labor Department and IRS officials on the Pension Protection Act of 2006, the most comprehensive revision of pension law since ERISA in 1974, at the Investment Company Institute’s Pension Protection Act Developments Conference in Washington, DC on February 7. The conference also features an address by Vanguard Group Chairman and CEO John Brennan.
ICI is the national association of U.S. mutual funds, which manage more than half of 401(k) assets. |
| (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) |
Links to Items on Executive Comp, Benefits in General
Groups Rally Opponents of Deferred Compensation Provisions
Excerpt: "The insurance industry has secured broad business trade group support for its effort to modify or kill provisions in Senate legislation that could devastate deferred compensation plans. " (National Underwriter Life & Health; free registration or paid subscription required)
Entitlement Spending: Population Aging, Entitlement Growth, and the Economy
Excerpt: "This AARP Public Policy Institute Issue Paper shows that an aging population is not the primary cause of our projected fiscal problems, and it points to hopeful trends that may portend a more sustainable economic future. A future 'train wreck' can be averted if we are able to maintain the same level of spending restraint in our health programs that we have already achieved in the past decade, we allow revenues to rise automatically without legislating additional tax cuts . . . ." (AARP)
1st Circuit Adopts Employee-Friendly Standard of Proof for USERRA Military Discrimination Claims
Excerpt: "In a case of first impression, the United States First Circuit Court of Appeals held that in cases brought under the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. § 4301 et seq., the burden is on the employer to show that the adverse employment action would have been taken regardless of the employee's military service." (Mintz Levin Cohn Ferris Glovsky and Popeo P.C.)
Overview of New Tax Reporting for Employee Stock Options and Purchase Plans
Excerpt: "Congress added the reporting requirement under Code section 6039 in order to reinforce compliance. Previously, there was no incentive for employees to report ISO and ESPP transactions aside from honesty. Employees will be more likely to report stock exercises on their personal income tax returns when their employers report the exercises to the IRS." (Dorsey & Whitney LLP)
Newly Posted Events
State of the Union Address
Nationwide on January 25, 2007
presented by KaiserNetwork.org
Newly Posted Press Releases
U.S. Labor Department Sues New Britain, Conn. Company and its President to Recover Misused Assets of Employee Benefit Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Social(k) Retirement Platform Embraced By Socially Conscious Companies in 2006 - Its First Year
Social(k)
Could Home Telehealth Make Nursing Homes Obsolete for Baby Boomers?
Lifetime Healthcare Companies
Newly Posted or Renewed Job Openings
401(k) Internal Wholesaler/Specialist
for AIG SunAmerica
in CA
Employee Benefits Senior Associate
for Clifton Gunderson Financial Services
in IL
Pension Administrator
for Benefit Systems, Inc.
in TX
System Design Analyst
for SunGard Relius
in FL
Retirement Plan Administrative Assistant
for Winona National Bank
in MN
401k Defined Contributions Analyst
for Mercer HR Services
in MA
Manager of Retirement Plans
for Illinois Tool Works Inc.
in IL
Conversion Analyst
for Administaff
in TX
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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