| BenefitsLink Retirement Plans Newsletter |   |
March 26, 2007
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. |
Defined Benefit Funding -- Preparing for 2008
Excerpt: "The majority of the new Pension Protection Act of 2006 (PPA) defined benefit funding rules apply (or begin to be phased in) in 2008. In many cases, how these rules will apply to your plan will depend on your funded status in 2007 -- that is, many of the new PPA rules 'look back' to the plan's funded status in the prior year (with respect to 2008, you look back to 2007). So, many sponsors will find it useful to begin thinking about PPA funding compliance strategies now." (CCA Strategies)
Overview: Final Rules on Automatic Enrollment Will Address Commenters' Questions
Excerpt: "Final regulations on automatic enrollment and default investment alternatives are expected to be released in April, Labor Department official Erin M. Sweeney said March 21 at a BNA sponsored conference." (The Bureau of National Affairs, Inc.)
Retirement Plan Intermediaries Nearly Geared Up for 22c-2
Excerpt: "Ninety percent of retirement plan intermediaries said they will have signed Information Sharing Agreements with their largest mutual fund trading partners in time to meet the Securities and Exchange Commission's (SEC) Rule 22c-2 deadline of April 16, according to the SPARK Institute." (PLANSPONSOR.com; free registration required)
Overview on Diversification Guidance (PDF)
2 pages. Excerpt: "The Internal Revenue Service (IRS) and the Department of Labor (DOL) have released interim diversification guidance pending regulations. According to the guidance, plans must eliminate many diversification restrictions as early as March 31, 2007." (The Segal Group, Inc.)
Roth IRA Over-contributing May Cause Problems
Excerpt: "The first thing you need to realize is that no one knows you make a Roth IRA contribution unless you tell them. And your broker doesn't know how much income you have, so it can't alert you of the contribution limits. Besides, do-it-yourself brokerages don't offer advice. They provide it if you ask for it." (Human Resource Executive Online; free registration required)
Not Ready for Retirement? Join the Crowd
Excerpt: "One study shows that many workers are not contributing to 401(k) plans while, not surprisingly, another survey indicates some companies do a 'poor' or 'terrible' job providing benefits information. Such findings should be no small matter to companies and their executives." (Human Resource Executive Online; free registration required)
Overview: Bank Regulators Provide Relief to Banks with Defined Benefit Plans (PDF)
Page 1 of 2 pages. Excerpt: "On December 15, 2006, the FDIC, OCC, FRB and OTS issued a joint statement, FDIC PR-116-2006, allowing financial institutions to temporarily disregard the effects of FAS 158 on bank regulatory capital." (Executive Benefit Solutions)
Pension Funding to Hit City of Baltimore Hard in '08
Excerpt: "Tucked away in the pie charts and spreadsheets in Baltimore City's proposed $2.6 billion budget this week is a ticking time bomb that will cost the city millions. That explosion is called the pension fund payments." (The Examiner)
Pension Plans Freeze ABC Contract Talks with Union
Excerpt: "Contract talks between ABC Television and one of its unions broke off on concerns over ABC's plans to freeze their pension plan." (PLANSPONSOR.com; free registration required)
PBGC Wants Northwest to Come Clean on Reorganization Plan
Excerpt: "[On Friday March 23] the Pension Benefit Guaranty Corporation (PBGC) said that Northwest hasn't been clear about the implications of its pension liabilities in the Chapter 11 disclosure statement it plans to send to creditors." (PLANSPONSOR.com; free registration required)
Overview: IRS Issues Guidance on PPA Changes to Code Section 404 Deduction Limits
Excerpt: "The Pension Protection Act of 2006 changed the Code section 404 deduction limits for defined benefit (DB) pension plans and the combined limit on deductions for contributions to DB and defined contribution plans." (Hewitt Associates)
Reminder Regarding Benefit Notice and Benefit Statement Requirements Set Forth in the PPA (PDF)
2 pages. Excerpt: "The law provides that a participant must consent to a distribution prior to the later of normal retirement age under the plan or age 62. Benefit notices must apprise a participant of the right to defer distribution in accordance with the law and the terms of the plan. The PPA requires that notices in plan years beginning after 2006 must also inform a participant of the consequences of failing to defer payment." (Drinker Biddle & Reath LLP)
Variable Annuities Sales Climb 17%, Driven by Baby Boomer Retirement
Excerpt: "Annuity sales in the U.S. reached $236.2 billion in 2006, mainly due to retiring baby boomers seeking guaranteed income." (PLANSPONSOR.com; free registration required)
Current Law Opponents Say Public Servants Deserve Same Social Security Benefits As Other Workers
Excerpt: "Legislators need to take a serious look at Government Pension Offset and Windfall Elimination Provision, which many educators call a penalty for public service." (The Paris News)
Corrupt Official Pension Forfeiture Bill Enacted in New Jersey
Excerpt: "New Jersey governor Jon Corzine signed into law last week a bill imposing mandatory imprisonment and forfeiture of pensions and retirement benefits for public officials or employees convicted of certain crimes." (PLANSPONSOR.com; free registration required)
Opinion: Pension Deficit Disorder
Excerpt: "Mexican President Felipe Calderón may be about to pocket a major legislative victory by transforming the pension system covering federal workers, says Mary Anastasia O'Grady (Wall Street Journal). The catalyst for this reform is the grim outlook for Mexico's Institute of Social Security for Government Employees (ISSSTE), which has become a ticking time bomb . . . ." (National Center for Policy Analysis)
Americans Generally Don't Save for Their Golden Years; Down Under, the Government Requires It
Excerpt: "In 1992, after a long political struggle led by the Australian labor movement, a compulsory retirement savings plan was established. In its simple outline, employers are required to contribute 9% of a worker's wages into a retirement plan. Employees can also voluntarily add to those contributions." (Los Angeles Times; free registration required)
The Plan Participant Who Was 'Active' but Not Eligible
Excerpt: "[A] U.S. Tax Court case ruling last November will change what you thought you knew about the active-participation rules. The case highlights a situation where an employee was not eligible to make a contribution to the company plan for 15 years but still was considered an active participant and thus was denied a tax deduction for the IRA contribution." (Investment News; free registration required)
Financial Advisers Should Swear Off Jargon; Rely on Straight Talk to Gain Trust of Pre-Retirees
Excerpt: "The 40-page report, 'As the Mass Affluent Approach Retirement: Opinions of Retirement and Retirement Income Planning,' is based on the responses of 16 women and 20 men ages 55 to 65 in Chicago, Dallas, Los Angeles and Philadelphia with investible assets of at least $250,000 or household assets of at least $500,000. " (Investment News; free registration required)
Choosing Between DB and DC -- Decision Points
Excerpt: "The [target page presents] a summary of key decision points to be addressed in considering which pension design -- defined benefit or defined contribution -- is right for your company. It may be especially useful for companies considering a DB plan freeze." (CCA Strategies)
Projecting Behavioral Responses to the Next Generation of Retirement Policies
Excerpt: "This [71-page] paper examines retirement and related behavioral responses to policies that on average are actuarially neutral. Many conventional models predict that actuarially neutral policies will not affect retirement behavior. In contrast, our model allows those with high time preference rates to find that the promise of an actuarially fair increase in future rewards does not balance the loss from foregone current benefits." (Michigan Retirement Research Center)
Investing Social Security Assets in the Securities Markets (PDF)
8 pages. Excerpt: "The American Academy of Actuaries' Social Insurance Committee has developed this issue brief to outline a number of issues policymakers will need to address before sanctioning the investment of assets in the securities markets, either under the individual account approach or the trust fund investment approach." (American Academy of Actuaries)
Alternative Measures of Personal Saving (PDF)
7 pages. Excerpt: "The alternative measures of personal saving discussed in this article differ from the NIPA measure in the way that they measure consumption or disposable personal income. However, they are still calculated as the residual that remains after consumption and related outlays are subtracted from disposable personal income." (U.S. Bureau of Economic Analysis)
Proposals to Make Retirement Saving Easier
Excerpt: "Two little-noticed proposals in a report issued earlier this month by the U.S. Chamber of Commerce in Washington are aimed at making it easier for more people to save for retirement." (Investment News; free registration required)
Links to Items on Executive Comp, Benefits in General
Supreme Court to Rule on Accounting Suits Against Outside Vendors
Excerpt: "The U.S. Supreme Court [today] said it will clarify whether outside vendors can be sued under federal securities laws for participating in transactions that were part of another company's accounting fraud." (MarketWatch.com)
Employer Groups Reject Deferred Compensation Provisions in Senate-Passed Wage Bill
Excerpt: "Two major employer groups have issued statements urging the House Ways and Means Committee to reject provisions of the Senate-passed minimum wage bill that would impose dollar caps on nonqualified deferred compensation . . . ." (Wolters Kluwer Law & Business)
SEC's Cox Knocks Unreadable Proxies
Excerpt: "Securities and Exchange Commission chairman Christopher Cox today blasted the 'readability' of disclosures made in recent proxy filings." (Investment News; free registration required)
A Review of Benefits Legislation Introduced in the Senate
Excerpt: "from Spencer's Benefits Reports: Between February 13 and March 8, [several] benefits-related bills were introduced in the Senate." (Wolters Kluwer Law & Business)
Newly Posted Events
Update on HIPAA Privacy and Security Teleweb
Nationwide on April 5, 2007
presented by International Foundation of Employee Benefit Plans
Newly Posted or Renewed Job Openings
Experienced Relius Benefit Administrator
for Employers Administrative Services, Inc.
in IA
Account Executive Assistant
for The Paragon Alliance Group
in PA
Compliance Specialist for Retirement Plans
for The Paragon Alliance Group
in PA
Appeals Administrator
for 1199SEIU Benefit and Pension Funds
in NY
401(k) / DC Administrator
for Columbia Benefits Consultants, Inc.
in MD
Pension Administrator
for Benefit Strategies, Inc.
in CA
Enrolled Actuary
for Preferred Pension Planning Corporation
in NJ
TOC Design Consultant Executive Compensation
for Hewitt Associates
in IL
Sales Underwriter
for Standard Insurance Company
in NJ
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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