| BenefitsLink Retirement Plans Newsletter |   |
February 28, 2007
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Roth 401(k) Gaining Traction, PSCA Survey Finds
Excerpt: "The Profit Sharing/401k Council of America's (PSCA) Roth 401(k) Survey 2007 found just over 22 percent of 401(k) plan sponsors currently offer Roth 401(k) features, and 61 percent are either planning to add or are considering adding such features in the future." (Deloitte)
Court Tosses 401(k) Participants' Request for Investment Losses Relief
Excerpt: "The U.S. District Court for the Northern District of Illinois dismissed a request for repayment of investment losses by two 401(k) plan participants, who alleged their company allowed investment managers and other service providers to charge unreasonable plan fees and failed to disclose those fees to the participants." (PLANSPONSOR.com; free registration required)
FedEx Modifies Retirement Plans in Response to New Laws
Excerpt: "Under the new program, employees who participate in a pension plan will begin accruing future benefits under a cash balance formula, effective June 1, 2008. Any benefits already accrued under the old formula will be capped May 31, 2008, and will be paid monthly at retirement. These changes will not affect the benefits of current retirees." (Memphis Business Journal via bizjournals.com; free registration required)
PPA and Accounting Regulations Prompt FedEx Retirement Plan Changes
Excerpt: "FedEx Corporation said [yesterday] it was making some changes to its retirement offerings, which includes bumping up company contributions to its 401(k) plan, automatically enrolling participants and enhancing its cash balance plan." (PLANSPONSOR.com; free registration required)
Goodyear to Freeze U.S. Salaried Worker Pensions
Excerpt: "Goodyear Tire & Rubber Co. said on Wednesday it would freeze pensions and require salaried retirees in the United States to contribute more for health coverage to cut costs." (Reuters via The Washington Post; free registration required)
Employers Raising Defined Contribution Plan Matches to Compensate Employees for Other Cutbacks
Excerpt: "The gold standard for employer matches to employee 401(k) contributions has moved steadily upward toward the 100 percent mark over the last five years, according to a recent study by Mercer Human Resource Consulting." (CFO.com)
Employee Ownership Update for February 27, 2007
NCEO Executive Director Corey Rosen reports on a new study finding that ESOPs generally improve performance; the first in a series of reports from the CEPI on equity plan guidance (for stock options, etc.); an equity expensing evaluator from ISS; and new data showing that 33 million Americans hold options or own company stock (including ownership through plans such as an ESOP or 401(k) plan). (National Center for Employee Ownership)
Overview: PBGC Proposed Guidance on Recent Changes to Premium Rates and Rules
Excerpt: "The [PBGC] has issued proposed updates to its premium regulations to implement certain changes to the flat- and variable-rate premiums made by the Deficit Reduction Act (DRA) of 2005 . . . and the Pension Protection Act (PPA) of 2006 . . . , and to add provisions for the new termination premium established by the DRA and modified by the PPA." (Deloitte)
Latest Cash Balance Ruling Backs Plan Design
Excerpt: "Case law supporting the legality of cash balance plans continues to grow with the most recent addition of a ruling by a federal judge in St. Louis rejecting claims that such plans are age discriminatory." (PLANSPONSOR.com; free registration required)
Survey: Majority of Adults Expect Retirement Income to Include Social Security (PDF)
8 pages. (WSJ.com/Harris Interactive Inc.)
New Idea for the New Jersey Turnpike: Let the Pension Fund Run It
Excerpt: "With legislators lining up against the possibility of leasing the New Jersey Turnpike to a private company, New Jersey lawmakers are now considering another option: having the state pension fund run the Turnpike Authority's operation." (The New York Times; free registration required)
Opinion: Social Security Is a Safety Net We Need
Excerpt: "A new paper by Jeffrey Brown and Scott Weisbenner of the University of Illinois, Who Chooses Defined Contribution Plans? (National Bureau of Economic Research, January 2007) offers important new evidence on how people behave when they are offered the choice of a guaranteed pension or a self-directed mandatory saving plan." (The Century Foundation)
Overview: PBGC Proposal on Its Premium Regulations to Implement DRA '05 and PPA '06 Changes
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) has issued proposed amendments to its regulations on premium rates and the payment of premiums to implement certain provisions of the Deficit Reduction Act of 2005 (DRA; P.L. 109-171) and the Pension Protection Act of 2006 (PPA; P.L. 109-280) that are effective beginning in 2006 or 2007." (Wolters Kluwer Law & Business)
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Links to Items on Executive Comp, Benefits in General
Overview: IRS Clarification of Certain Deduction Rules for Payroll Taxes (PDF)
3 pages. Excerpt: "The Internal Revenue Service (IRS) has ruled that under certain circumstances an accrual basis taxpayer may accelerate the tax deduction for its payroll tax liability attributable to deferred compensation to a taxable year preceding the taxable year in which the taxpayer is allowed to deduct the deferred compensation to which the payroll tax liability relates." (Miller & Chevalier Chartered)
Overview: IRC Section 409A Penalties for Discounted Stock Options and SARs Exercised During 2006 (PDF)
1 page. Excerpt: "In Announcement 2007-18, the IRS has set forth a procedure by which an employer may pay the Section 409A taxes (both the 20% penalty tax and the interest tax) on behalf of certain employees who exercised their discounted options/SARs in 2006." (Dow Lohnes PLLC)
As Deferred Comp Amendment Deadline Nears, Educational Institutions Should Self-Audit Arrangements
Excerpt: "In order to ensure that they are prepared for this amendment deadline, universities and colleges should do a self-audit of their Deferred Compensation Arrangements. A self-audit will not only help identify which Deferred Compensation Arrangements may need to be amended to comply with those regulations, but also whether the university or college is in compliance . . . ." (Bond, Schoeneck & King, PLLC)
Employers Continue to Spend More on Benefits
Excerpt: "Even as group benefit costs continue to rise, employers continue to cover their workforce, a recent U.S. Chamber of Commerce study of nearly 400 companies shows. Employee benefit costs constituted more than 44% of payroll expenses in 2005, a 4% increase from the previous year." (BenefitNews Connect)
Retention Now the Top Benefits Objective
Excerpt: "For the first time in five years, employee retention has trumped cost control as employers' No. 1 benefits objective. A new MetLife study shows that 55% of employers rank retention as their top benefits goal." (BenefitNews Connect)
Chrysler to Offer Workers Up to $100K
Excerpt: "Chrysler Group will offer some of its 49,600 hourly U.S. workers at select plants up to $100,000 to leave the company as part of a recovery plan announced earlier this month." (AP via The Washington Post; free registration required)
Stock Options Paid Off for CEOs, But New Rules May Curb Use
Excerpt: "Chief executives at high-performing companies watched the value of their stock options shoot through the roof last year, according to a new study. Indeed, the median value of unexercised options for CEOs at companies with total returns to shareholders (TRS) averaging 25 percent more than tripled last year, to $42.6 million, from $13.8 million in 2005, according to consulting firm Watson Wyatt, which conducted the study." (Workforce Management; free registration required)
Newly Posted Events
401(k) Plan Fees and Class Action Lawsuits - Webcast
Nationwide on February 28, 2007
presented by West LegalEdcenter
403(b) Update, Including Final Regulations - Webcast
Nationwide on February 28, 2007
presented by West LegalEdcenter
Church Plans Update - Webcast
Nationwide on February 28, 2007
presented by West LegalEdcenter
Current Issues for Defined Benefit Plans, Including New Legislation and Regulations - Webcast
Nationwide on February 28, 2007
presented by West LegalEdcenter
DOL Update and Update on the Employee Plans Compliance Resolution System (EPCRS) - Webcast
Nationwide on February 28, 2007
presented by West LegalEdcenter
Eligible 457 Plans; Other Deferred Compensation and Severance Arrangements - Webcast
Nationwide on February 28, 2007
presented by West LegalEdcenter
Governmental Plans Update - Webcast
Nationwide on February 28, 2007
presented by West LegalEdcenter
How Will the President's Tax Deduction for Health Insurance Work? - Webcast
Nationwide on February 28, 2007
presented by KaiserNetwork.org
IRS Update, Employee Plans; Treasury Update, Benefits Tax Counsel - Webcast
Nationwide on February 28, 2007
presented by West LegalEdcenter
Leaves of Absence and Health Plans -- What’s Required by the FMLA, USERRA, and Other Laws?
Nationwide on February 22, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
Legislation Update, IRS Benefits Litigation, and DOL Benefits Litigation - Webcast
Nationwide on February 28, 2007
presented by West LegalEdcenter
Rollovers From Health FSAs and HRAs to HSAs -- The Transition Relief
Nationwide on February 21, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
Roth Accounts in 401(k) and 403(b) Plans; Current Issues for 401(k) and Other Defined Contribution Plans - Webcast
Nationwide on February 28, 2007
presented by West LegalEdcenter
Newly Posted Press Releases
Stock Option Values Climb for CEOs, Especially at Higher-Performing Companies, Watson Wyatt Finds
Watson Wyatt
New Website Provides Employers Much-Needed Resources to Recognize and Respond to the Impact of Domestic Violence on the Workplace
Corporate Alliance to End Partner Violence (CAEPV)
FedEx to Modernize Retirement Plans
FedEx Corporation
Bank of America, MedImpact Launch Unique Credit Card and Consumer Directed Health-Care Offering
Bank of America
Newly Posted or Renewed Job Openings
Benefits Review Specialist
for Standard Insurance Company
in OR
Retirement & Institutional Trust Services Trust Associate
for Bank of Texas
in TX
WRS Relationship Manager 1
for Wachovia
in PA
Pension Specialist
for Diversified Investment Advisors
in AZ
ERISA Attorney
for Growing two-attorney law firm in Dallas, TX
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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