March 1, 2007 Sponsored by: DATAIR Employee Benefit Systems, Inc. (Click on company name or banner to learn more.)
Advisory Opinion 2007-02A on Certain Pooled Investment Funds That Are Deemed to Hold Plan Assets Excerpt: "[The DOL was asked w]hether the 10% test applicable to pooled investment vehicles under the QPAM class exemption (84-14) does not require consideration of any underlying plan investors in a pooled fund investing in another pooled fund." (U.S. Employee Benefits Security Administration) Making Employer Stock Safe for Your 401(k) Plan: Managing the Risk Excerpt: "Just as disappointed public shareholders bring federal securities-fraud lawsuits when they suffer investment losses, ERISA plan participants litigate when they think plan fiduciaries have done bad things. Litigating cases involving a drop in the price of employer stock held by employee benefit plans is different from securities-fraud lawsuits. There are different types of stock plans, different legal standards, different procedural considerations, and different types of discovery." (Jones Day) Economic Analysis in ERISA Class Actions Involving Employee Investments in Company Stock (PDF) 6 pages. Excerpt: "In this article, the author discusses the similarities and differences between such ERISA class actions and federal securities class actions alleging securities fraud. This article also covers economic methodologies that can be employed to analyze ERISA class action allegations." (International Foundation of Employee Benefit Plans) Overview: PBGC Guidance on Effect of IRS Mortality Tables on Premium Calculations Excerpt: "The PBGC has issued a technical update providing guidance on how recently issued IRS mortality tables . . . will impact premium calculations and PBGC reporting requirements for defined benefit plans under ERISA §4010 and ERISA §4043." (Wolters Kluwer Law & Business) Analysis: Two Cash Balance Decisions Announced at the End of January, Both in the 3rd Circuit (PDF) 7 pages. Excerpt: "Neither was apparently written with the benefit of having seen the other's opinion, but the cases arrived at remarkably similar conclusions, both dismissing age discrimination (and other) claims against cash balance plans launched by plan participants . . . ." (A.D. Lurie via Workplace Prof Blog) Overview: Correcting Defined Benefit Plan Excess Payments Resulting from PPA Interest Rate Change (PDF) Excerpt: "Effective for distributions made in plan years beginning after December 31, 2005, the Pension Protection Act of 2006 (PPA) requires plans to use an interest rate assumption for purposes of determining the maximum benefit payable in a lump sum payment that is the greatest of: 5.5%; The rate that produces a benefit of not more than 105% of the benefit calculated using the minimum value lump sum interest rate; or The interest rate specified in the plan." (Prudential Retirement) Overview on Notice to Defer Distribution: January 1, 2007 Effective Date for Calendar Year Plans Excerpt: "For fiscal year plans, the requirement is effective on the first day of the fiscal year beginning after January 1, 2007." (Dorsey & Whitney LLP) Widening Gap Between Public and Private Pensions Excerpt: "The recent headline in USA Today said what an increasing number of taxpayers are thinking: 'More and more retirees are finding that it pays to have worked for the government instead of the private sector.'" (The Salem News) Retirement Coverage in the Association of Southeast Asian Nations Excerpt: "In this article, Mercer explores the retirement systems, legislative updates and market trends of Southeast Asian countries." (Mercer Human Resource Consulting LLC and Mercer Investment Consulting, Inc.; free registration required) Fund Firms Take New Approach to Retirement Plans Excerpt: "'We're seeing a lot of companies that used to focus almost solely on mutual funds start to make more moves into the institutional side of the market,' said Karen Remmele, . . . Cerulli Associates, which tracks asset managers. The result is that investors in coming years can expect to find more alternative types of funds in their retirement plans. These include different types of hard assets such as commodities and real estate, as well as greater use of hedge-like strategies." (MarketWatch.com via Human Resource Executive Online; free registration required) Call for Authors for Lurie's New Treatise on the Federal Income Taxation of Pensions Excerpt: "Alvin Lurie writes to tell us that he will be the general editor of a forthcoming publication of a new treatise on the federal income taxation of pensions and other 'qualified' or nonqualified retirement arrangements, by a major legal publisher, shooting for publication in late 2007." (Workplace Prof Blog) Hewitt Federal Legislation Quick Guide Updated as of February 27, 2007, for Retirement Plans (PDF) 3 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding retirement plans. (Hewitt Associates) ETF Frenzy Echoes Era of Dot-Coms Excerpt: "The market for exchange-traded funds looks suspiciously like the 'let's take it public' days of the dot-com mania at the end of the 1990s. Exchange-traded funds are index-based products that allow you to buy shares in a portfolio of securities. Like index mutual funds, they can own large pieces of markets or a small slice." (Bloomberg News via Twincities.com) Global Retirement Perspective - Pension Protection Act of 2006: The Dust Is Settling Excerpt: "The first step in absorbing these changes is to understand their impact on plan provisions, plan sponsors, employees and other interested parties. The most visible effect of the new funding rules will be on the sponsor's cash contribution requirements, but the legislation will also affect how benefits may be provided to participants in poorly funded plans and to certain executives of organizations sponsoring those plans." (Mercer Human Resource Consulting LLC and Mercer Investment Consulting, Inc.; free registration required) Calibrating Your Retirement Account Funding Needs Excerpt: "A recent New York Times article raised the possibility that some workers were unnecessarily constraining their youth so they could throw all of their money at their 401(k) accounts. There might be a grain of truth in that." (Reuters via The New York Times; free registration required) Sponsored by: Mid-Sized Pension Management Conference (Click on company name or banner to learn more.)
Links to Items on Executive Comp, Benefits in General Testimony: Some Best Practices and Strategies for Engaging and Retaining Older Workers 17 pages. Excerpt: "This testimony highlights issues discussed at a recent forum GAO convened on engaging and retaining older workers, as well as prior GAO work. [Highlights are at http://www.gao.gov/highlights/d07433thigh.pdf.]" (U.S. Government Accountability Office) Goodyear Ends Pensions and Raises Retirees' Health Costs Excerpt: "Goodyear Tire & Rubber Co., North America's biggest tiremaker, will scrap its pension program for current workers and raise retiree health-care payments to save as much as $90 million annually." (Bloomberg) Proxy Season Reminders: Section 162(m) and Executive Compensation (PDF) 4 pages. Excerpt: "As publicly traded companies prepare their 2007 proxy statements and set the parameters for 2007 executive compensation, several issues arise in connection with section 162(m) of the Internal Revenue Code (the Code)." (Morgan, Lewis & Bockius LLP) How Safe Are Federal Worker Benefits? Don't Answer Too Fast Excerpt: "Uncle Sam needs money. Where is it going to come from? A few billion in savings could come by reducing federal benefits according to the Congressional Budget Office (CBO)" (FedSmith Inc.) Reducing Benefits for Federal Employees and Retirees Is Being Considered to Reduce U.S. Deficit Excerpt: "Congressional number crunchers have released their most recent ideas for decreasing the country's deficit. . . . Many of the ideas from the Congressional Budget Office's February 2007 Budget Options book are recycled, and haven't made it anywhere near being enacted in the past." (GovExec.com) Chrysler Begins Round of Buyouts Excerpt: "Chrysler Group and the United Auto Workers union said Wednesday that they had reached agreement on a buyout and early-retirement plan aimed at helping the ailing automaker slash 9,000 hourly jobs from its U.S. payroll." (Los Angeles Times; free registration required) Towers Perrin U.S. Legislative Tracking Charts -- Human Resources -- Updated February 27, 2007 (PDF) 5 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin) Hewitt Federal Legislation Quick Guide for February 27, 2007, on Human Resources & Employment Law (PDF) 6 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates) Bernanke Renews Call for Action as Population Ages Excerpt: "Federal Reserve Chairman Ben Bernanke renewed a warning to the U.S. Congress on Wednesday that failure to take action soon to prepare for the retirement of aging Baby Boomers could lead to serious economic harm." (Reuters via The New York Times; free registration required) Newly Posted Events Health Care: Priorities in the 110th Congress - Webcast Nationwide on March 1, 2007 presented by KaiserNetwork.org Journey deep into the world of IRAs in Texas on March 13, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Washington on March 13, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in California on March 14, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Texas on March 14, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Texas on March 15, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in California on March 15, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Georgia on March 20, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Texas on March 20, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in South Carolina on March 20, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Florida on March 21, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Georgia on March 21, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Texas on March 21, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Texas on March 22, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Georgia on March 22, 2007 presented by Wolters Kluwer Financial Services Journey deep into the world of IRAs in Florida on March 22, 2007 presented by Wolters Kluwer Financial Services Newly Posted Press Releases National Employee Benefits Day to Feature Free Webcast on Financial Literacy International Foundation of Employee Benefit Plans Unum Expands Buyers Study, Profiles Benefit Trends in Nine Industries Unum CoAdvantage Launches New Employee Perks Program CoAdvantage Newly Posted or Renewed Job Openings Attorney - Assistant General Counsel In House for 1199SEIU Benefit and Pension Funds in NY Client Relations Manager for ING, Financial Services in IN Account Mgr-RP for The Standard Insurance Company in OR Vice President, Core Market Sales for CitiStreet in ANY STATE Pension Administration for Stephen H. Rosen & Associates, Inc. in NJ Retirement / Benefits Consultant for Weaver and Tidwell L.L.P. in TX Sr. Compliance Analyst for Principal Financial Group in IA Associate Consultant/Personalized Communications for The Segal Company in NY Handy Links:
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