| BenefitsLink Retirement Plans Newsletter |   |
February 8, 2007
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PBGC Variable Premium Interest Rate for January 2007 Jumps from 4.89 to 5.75
Excerpt: "On January 12, 2007 (at 72 FR 1564), the Pension Benefit Guaranty Corporation (PBGC) published a notice informing the public of the interest rate assumption to be used for determining variable-rate premiums for premium payment years beginning in January 2007. In light of IRS's publication of the [final version of] updated mortality tables, that required interest rate assumption has changed." (Pension Benefit Guaranty Corporation)
Overview: IRS Updates Mortality Table for Calculating Current Liability for 2007 Plan Years
Excerpt: "The final regulations apply to plan years beginning on or after January 1, 2007. However, the final regulations will be relevant to most single-employer plans only for the 2007 plan year because the Pension Protection Act's (PPA) new minimum funding requirements will begin taking effect in 2008." (Deloitte)
Overview: DOL Interprets Pension Protection Act Participant Investment Advice Rules (PDF)
4 pages. Excerpt: "With the enactment of the PPA, we now have three types of fiduciary investment advisers at the participant level, one that does not rely on the new exemption and two that do . . . ." (Reish Luftman Reicher & Cohen)
401(k) Investment Alternatives Face Test As Mutual Funds Retain Majority of Sponsored Plans' Assets
Excerpt: "The problem is, for the most part, mutual funds remain the only product that can get on to 401(k) platforms, because they're the only type of product most recordkeeping systems support." (Financial-Planning.com)
Overview: Fifth Circuit Panel Reverses Class Certification in 401(k) Stock Drop Litigation (PDF)
4 pages. Excerpt: "The Fifth Circuit is one of the first appellate courts on record to discuss the impact of participants' releases, the § 404(c) defense, and other intraclass conflicts on the ability to bring ERISA fiduciary breach claims in the 401(k) employer stock context as a class action." (Alston & Bird LLP)
409A Rules May Override 457 Deferral Requirements, Practitioners Told
Excerpt: "Amounts that may be nontaxable under Code Sec. 457(f) because of a substantial risk of forfeiture may be taxable under Code Sec. 409A because the term has a much stricter meaning." (Wolters Kluwer Law & Business)
Overview: DOL Guidance on Pension Benefit Statements
Excerpt: "The PPA specifically directs DOL to issue, by August 18, 2007, one or more model Statements plan administrators can use . . . . Additionally, DOL plans to issue regulations pursuant to the revised ERISA § 105 in the future. In the interim, plan administrators must make a good faith attempt to comply with these new requirements. The purpose of FAB 2006-03 is to express the DOL's views on what constitutes good faith compliance with certain aspects of the revised ERISA § 105." (Deloitte)
Overview: DOL Mandate of Electronic Filing for the 2008 Form 5500 and Proposal of New Disclosures
Excerpt: " If adopted, the changes would be effective with all plan years beginning on or after January 1, 2008. In this article, we discuss some of the most significant changes and possible implications to plan administrators." (CCA Strategies, LLC)
Massachusetts Lawmakers Push Plans to Curb High Public Pension Payouts
Excerpt: "Lawmakers backing a pension overhaul say that recent high-profile controversies underline the need to keep officials from 'gaming' the system. . . . The legislative proposals include capping annual pension payments, preventing employees from earning generous benefits after just three years of full-time employment, and eliminating perks such as free parking or a housing allowance from the benefit calculation." (The Boston Globe)
An Overview of Major Sports Leagues' Pension Plans
Excerpt: "The [National Basketball Association] pension plan was established in 1965 and is a defined benefit program. Based on a retirement age of 62, current players would receive $12,400 annually for each year of service with a maximum amount of $124,000 (10 years of service). Players must play three seasons to become vested. Those who played before 1965 still receive $200 per month for each season they played." (Kane County Chronicle)
San Diego Wants to End Special Retiree Accounts Known as the Deferred Retirement Option Plan
Excerpt: "Mayor Jerry Sanders and City Attorney Michael Aguirre will press to close a San Diego program that allows workers to begin collecting their retirement pay in special accounts while they are still on the city payroll." (The San Diego Union-Tribune)
The Number: How You Save and Invest Is Just As Important As How Much You Save
Excerpt: "One of the more dangerous ideas is the concept that as you approach retirement age your portfolio should become more conservative and fixed-income oriented. It is not a question of when you will retire. Tell me when you are going to die and how long your money has to last?" (Free-Market News Network)
Do Americans Save Enough? It Depends on What Calculator You Use
Excerpt: "Every week, one financial services firm or another releases findings of its latest retirement study: Americans aren't saving enough. The savings rate is abysmal. . . . But is the situation as dire as most people think? A New York Times story on January 27 cited a handful of academics who think Americans are saving plenty -- too much, in many cases. So who is right?" (Knowledge@Wharton)
ICI President's Remarks at the Pension Protection Act Developments Conference
'The Promise of a Better Retirement: Implementing the Pension Protection Act,' Keynote Address by Paul Schott Stevens, President, Investment Company Institute, February 7, 2007, Washington, DC. (Investment Company Institute)
Retirement Plan Participation and Asset Allocation in 2004 (PDF)
Pages 1-9 of 12 pages. Excerpt: "[T]he results reported in this article help refine predictions of behavior within retirement plans that can be used both for policy decisions and in models such as RSPM to predict retirees' future income." (Employee Benefit Research Institute)
From the Third Circuit, Another Major Victory for Plan Sponsors in Cash Balance Litigation Saga
Excerpt: "The Third Circuit Court of Appeals has joined the Seventh Circuit Court of Appeals in holding that cash balance and other hybrid defined benefit plans are not inherently age discriminatory. . . . However, a recent series of rulings from district courts within the Second Circuit continue to be cause for concern among plan sponsors." (Deloitte)
Italy -- Termination Indemnity Allocations and Second-Pillar Pension Plans (PDF)
5 pages. Excerpt: "Employees in Italy have until June 30, 2007, to select an authorized pension fund vehicle for the investment of their future termination indemnity (TFR) allocations." (Hewitt Associates)
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Links to Items on Executive Comp, Benefits in General
Working Paper Abstract: A Unifying Model of How the Tax System & GAAP Affect Corporate Behavior
Excerpt: "This paper models the impact of the tax system and GAAP on the real and financial reporting decisions of corporations. It provides a first step toward joint evaluation of taxation and financial reporting in the standard economic analyses of corporate behavior. The key finding is that value arises from real decisions that provide firms with discretion in their tax and financial reporting." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve full-text)
Forces Shaping the Future U.S. Workforce and Workplace: Implications for 21st Century Work (PDF)
15 pages. Testimony presented before the House Education and Labor Committee on February 7, 2007 (RAND)
Sibson's 2006 Rewards of Work Study: Insights into Employee Engagement (PDF)
4 pages. Excerpt: "The following are among the issues that employers should consider that are related to the ROW concept: Aligning leadership around the desired state for each element of the Rewards of Work, Conducting an inventory of all elements of rewards, the current investment, and how it compares to the market, Customizing the ROW Study to measure engagement and other outcomes and what drives them . . . ." (The Segal Group, Inc.)
Newly Posted Events
Form 5500 -- What You Need to Know for 2006 Plan Years
Nationwide on February 20, 2007
presented by CCH Incorporated
Health Savings Accounts (HSAs) 2007 - Monthly Webinar
Nationwide on February 14, 2007
presented by Collin W. Fritz & Associates, Ltd.
Individual Retirement Account Required Minimum Distributions - Monthly Webinar
in California on February 16, 2007
presented by Collin W. Fritz & Associates, Ltd.
IRA Law Changes - 2007 - Monthly Webinar
Nationwide on February 15, 2007
presented by Collin W. Fritz & Associates, Ltd.
IRA Reporting - Monthly Webinar
Nationwide on February 13, 2007
presented by Collin W. Fritz & Associates, Ltd.
Newly Posted Press Releases
The Online 401(k) Launches Public Crusade to Spotlight Hidden 401(k) Fees
401(k) Link Association
Benefit Software Inc. Names Kim Rajala-Blood Vice President of Online Services
Benefit Software Inc.
U. S. Labor Department Sues Miami Company and President to Recover $1.5 Million in Retirement Plan Assets
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Section 125 Plans E-Learning Course Now Available
International Foundation of Employee Benefit Plans
Creative Benefits Completes Integration with First Data and UMB
First Data
Newly Posted or Renewed Job Openings
Defined Contribution Testing & Reporting Consultant
for Fidelity Investments
in KY, TX
Sr. Benefits Specialist
for The First American Corporation
in CA
Enroller - Worksite Markets
for ING Americas
in RI
Participant Service Center Representative
for Ingham Group, a premier full service Tier One firm in FL and SC
in FL, SC
Group Insurance Marketing & Account Management Associate
for Winged Keel Group
in NY
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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