| BenefitsLink Retirement Plans Newsletter |   |
March 14, 2007
Sponsored by: Benefit Software Inc.
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IRS Notice 2007-28: Guidance on PPA Changes to Sec. 404 Deduction Rules for Retirement Plans (PDF)
Excerpt: "Notice-2007-28 provides guidance on certain of the changes made by the Pension Protection Act of 2006 . . . to § 404 of the Internal Revenue Code [which] generally provides rules concerning the deduction for contributions to plans of deferred compensation. Some of the PPA '06 amendments to § 404 are effective for years beginning after December 31, 2005 (the 2006 changes) . . . . This notice provides guidance with respect to the 2006 changes and one related issue." (Internal Revenue Service)
Overview: IRS Notice Clarifies PPA Employer Deduction Limitations
Excerpt: "The Internal Revenue Service (IRS) has issued Notice 2007-28, a question-and-answer document which clarifies new rules set out by the Pension Protection Act of 2006 (PPA) regarding employer deductions for retirement plan contributions." (PLANSPONSOR.com; free registration required)
No Transitional Relief for Rollover to Nonspouse, IRS Official Says
Excerpt: "The Internal Revenue Service made the decision not to provide transitional relief under Section 829 of the Pension Protection Act for years prior to 2006 regarding nonspouse beneficiary rollovers, an Internal Revenue Service official said March 9." (The Bureau of National Affairs, Inc.)
Overview: Congressional Committee Shines Its Spotlight on 401(k) Plan Fees
Excerpt: "Two major points of agreement emerged during a March 6, 2007 hearing on 401(k) plan fees by the House Committee on Education and Labor . . . . The first is that current laws and regulations do not require financial services companies and 401(k) plans to provide plan participants with the information needed to easily compare the fees associated with a plan's different investment options. The second is that 401(k) plan fees do matter . . . ." (Deloitte via BenefitsLink.com)
Employers Test Auto 'Catch-Up' Contributions to 401(k) Plans
Excerpt: "A number of retirement plan sponsors are taking advantage of a little-known provision of the Pension Protection Act that allows them to automatically step up older employees' 401(k) contributions to take advantage of the 'catch-up' limit available to workers 50 and older." (Workforce Management; free registration required)
Overview: IRS Provides 412(i) Plan Audit Clarification (PDF)
1 page. Excerpt: "[The IRS] advises that if a plan sponsor wishes to retroactively convert an existing 412(i) plan to a standard defined benefit pension plan (a non-412(i) plan), the IRS will generally not approve an amendment to the document to change the benefit formula or other plan provisions that affect the funding." (Reish Luftman Reicher & Cohen)
Pension Funds Will Siphon $1B from Towns: Property Taxes Face 'Ticking Time Bomb'
Excerpt: "Janet Cranna, an actuary with Buck Consultants who presented the annual police and fire pension analysis to [the state Police and Firemen's Retirement System's] board yesterday, said the mounting costs are a lingering impact of stock market losses in 2001 and 2002 and a decision by state and local governments to skip billions of dollars in payments." (The Star-Ledger)
Special Report on the Defined Benefit Summit Held December 2006
Excerpt: "On December 6-8, 2006, more than 100 plan sponsors and industry experts gathered in our nation's capital for PLANSPONSOR's 2006 DB Summit. Titled 'The Point of No Return,' the conference focused on the unique challenges confronting defined benefit (DB) plans, and their prospective role in national retirement income security policies." (PLANSPONSOR.com; free registration required)
Public Plan Sponsor of the Year: The Oregon Public Employees Retirement System
Excerpt: "Thanks mostly to strong performance results and bold system reforms made by lawmakers in 2003, Oregon has wiped out the $17 billion unfunded actuarial liability it had at that point. The $60.7 billion PERS system, which covers 95% of all public employees in Oregon and has 315,000 participants, now has a $1.75 billion surplus." (PLANSPONSOR.com; free registration required)
Overview: DOL Guidance for Retirement Plan Statements; Some Changes Effective First Quarter 2007
Excerpt: "The Pension Protection Act (PPA) revised the requirements that apply to retirement plan benefit statements that plan administrators must furnish to participants and beneficiaries in defined contribution and defined benefit plans." (McDermott Will & Emery)
Tax-Sheltered Annuity Regulations Expected by Mid-2007
Excerpt: "The IRS and Treasury are expected to issue final regulations on tax-sheltered annuities by June 30, 2007, according to IRS Tax Law Specialist Bob Architect." (Wolters Kluwer Law & Business)
Overview: DOL Issues Interim Final Rules on QDROs
Excerpt: "The interim final rule, which is effective on April 6, 2007, specifically addresses issues relating to whether domestic relations orders can be QDROs if they are issued after another QDRO, or after certain events such as the divorce, the participant's annuity starting date, or the participant's death." (Deloitte via BenefitsLink.com)
Pension Governance, LLC Sponsors Research Sites on the Social Science Research Network
Excerpt: "Pension Governance, LLC (our sister company) is pleased to announce the sponsorship of two sections of the Social Science Research Network. Check them out [http://www.ssrn.com/update/lsn/lsnann/annA026.html] and see for yourself. You'll find interesting research papers and announcements about forthcoming events in the areas of employee benefits law and corporate governance, respectively." (Pension Risk Matters)
Kentucky Bill Would Alter Pensions: House Blocking Proposed Hybrid Benefit Plan
Excerpt: "As the partisan showdown over reforming Kentucky's pension plan plays out in Frankfort, the proposal causing the battle wouldn't change the benefits for current state workers or retirees. The bill, which passed the Republican-controlled Senate but has been blocked by House leaders, would change the benefits only to those hired after July 2008. It does not include county or municipal employees or those from special districts, such as water districts." (The Cincinnati Enquirer)
Irish Regulator Calls on Employers to Offer Pensions
Excerpt: "Irish regulators are warning employers that it is illegal not to offer pensions after finding that more than half the workers in a survey did not have the retirement plans." (Business Insurance)
Hedge Fund Risk Hits Pensions
Excerpt: "Pension investments in hedge funds deserve Congressional scrutiny -- and perhaps new laws -- to protect ordinary investors from the risks that the funds represent, House members and hedge-fund managers agreed [yesterday]." (CFO.com)
Strategies for Married Couples: How to Coordinate Your Plan Investments
Excerpt: "The first step is to develop an asset allocation strategy for your combined savings, taking into consideration all the risks you will face, including long-term risks such as purchasing power loss, and the significant risks of being too heavily concentrated in one sector, industry or stock." (AAII Journal)
Proxy Disclosure of Performance-Based Equity Awards - A Closer Look
Excerpt: "In this article, we continue our exploration into some of the nuances that can cloud the comparison of equity compensation disclosures from company to company by taking a closer look at equity incentive plan awards (from here forward we'll refer to them as performance-based equity awards)." (CCA Strategies, LLC)
Making the Case for Liability-Directed Investing
Excerpt: "About five years ago, investment consultants and managers brought to market a product that pension plans desperately needed: liability-directed investing, which ties the return on pension plan assets to the rise and fall of benefit obligations, and reduces the exposure of a plan's surplus to market forces." (PLANSPONSOR.com; free registration required)
The Supreme Court Lets a Significant Cash Balance Ruling Stand
Excerpt: "The nation's highest court may have recently declined to hand down its own cash balance plan pronouncement . . ., but some retirement industry observers say that should not stop plan sponsors from setting up their own cash balance programs." (PLANSPONSOR.com; free registration required)
Sponsored by: ASPPA
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| Advanced Actuarial Conference -- Boston, MA, June 5-6, 2007 |
| Designed by practicing pension actuaries specifically to address their unique and specialized needs, this conference covers a wide variety of current and timely issues. Workshops and general sessions will be dedicated to topics including PPA, Future DB Policy Initiatives, Yield Curve, RP 2000 Mortality Tables and Hybrid Plans. Join your fellow pension actuary colleagues at this one of a kind event. |
| (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
Overview: Sixth Circuit Says ERISA Preempts Breach of Contract Claim Against Employer in Merger (PDF)
5 pages. Excerpt: "The Sixth Circuit Court of Appeals (Sixth Circuit) recently affirmed a lower court's ruling that a state law breach of contract claim against a party that is not, at the time of the contract, an ERISA fiduciary nonetheless still relates to an ERISA covered plan and therefore is preempted under ERISA. Hutchison, et al. v. Fifth Third Bancorp, 469 F.3d 583 (6th Cir. 2006)." (Morgan, Lewis & Bockius LLP)
Executive Pay Controversy Just Getting Started, According to Institutional Shareholder Services
Excerpt: "Corporate governance and proxy voting service provider Institutional Shareholder Services (ISS) has a word of advice for those who think the excessive executive pay issue has run its course: Think again." (PLANSPONSOR.com; free registration required)
National Employee Benefits Day - April 2, 2007 - Theme: Financial Literacy
Excerpt: "Use this day as an occasion to help your participants make the most of their benefits. Participants need to make informed decisions in order to prepare for their future. Through financial literacy efforts, your participants can make educated and appropriate decisions about their health care choices and retirement future." (International Foundation of Employee Benefit Plans)
New Edition of Model Equity Compensation Plans Book
The NCEO presents excerpts from the new edition of Model Equity Compensation Plans. Authored by attorney David R. Johanson, the book presents a complete set of model plan documents for incentive stock options (ISOs), nonqualified stock options (NSOs), and an employee stock purchase plan (ESPP). A CD is included with the plan documents in word-processing format. (National Center for Employee Ownership)
Overview: Treasury, IRS Add to Guidance Priorities Various Rules and Notices Implementing PPA
Excerpt: "In a March 12 update to the 2006-2007 Priority Guidance Plan, the Treasury Department and Internal Revenue Service included what officials described as 'substantial guidance implementing the Pension Protection Act of 2006.'" (The Bureau of National Affairs, Inc.)
Newly Posted Events
Form 5500 Update eSeminar
Nationwide on April 5, 2007
presented by McKay Hochman Co., Inc.
Newly Posted Press Releases
Major Employers Urge House to Reject Senate Deferred Compensation Provisions
ERIC (ERISA Industry Committee)
Council Urges Rejection of Deferred Compensation Provision in Minimum Wage Legislation
American Benefits Council
The Standard Ranks High in 401kExchange Provider Ratings for 2006
Standard Insurance Company
NCQA Recognizes Leadership, Innovation in Health Care Quality
National Committee for Quality Assurance (NCQA)
HR Survey Shows Need to Fix Medical Leave Law
National Coalition to Protect Family Leave
AAPPO Survey Finds 95 Percent of Health Savings Account (HSA) Enrollees Receive Health Care Through Preferred Provider Organizations (PPOs)
American Association of Preferred Provider Organizations
Newly Posted or Renewed Job Openings
Employee Benefits Administration
for Primary Consulting, Inc.
in ANY STATE
External Wholesaler
for John Mulligan & Associates, Inc.
in AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, IA, ID, IL, IN, KS, LA, MD, MI, MO, MS, MT, NC, NE, NJ, NM, NV, NY, OK, OR, PA, RI, TN, TX, UT, VA, WA, WI, WY
Enrolled Actuary
for Summit Benefit & Actuarial Services, Inc.
in OR, WI
Account Manager
for Northwestern Benefit Corporation of Georgia
in GA
Operations Manager (Insurance/TPA)
for Zenith Administrators
in NV
Employee Benefits Attorney With at Least 5 Years Experience
for Chang, Ruthenberg & Long PC
in CA
Employee Benefits Attorney With ESOP Experience
for Chang, Ruthenberg & Long PC
in CA
Senior Benefits Specialist
for CIT Group
in NJ
Defined Contribution Analyst Assistant
for TPA Firm
in OH
Manager - Welfare Benefits
for Ameriprise Financial
in MN
Pension Administrator
for Pension Administrator
in NJ
Senior Plan Administrator
for Transamerica Retirement Services
in CA
401(k) Administrators
for CEP Consultants, Inc.
in NY
Senior Health & Benefits Planner
for King County Human Resources
in WA
Pension Administrator / Temporary Assignment
for Aker Kvaerner Business Partners
in TX
Manager - HR Service Center (Workforce Absence Team)
for Kaiser Permanente
in CA
Actuary- Sr Consulting
for The Standard
in OH
Benefits Consultant
for Northwestern Benefit Corporation of Georgia
in GA
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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