| BenefitsLink Retirement Plans Newsletter |   |
March 28, 2007
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Text of IRS Employee Plans News, Spring 2007 Edition
19 pages. Articles include EP Responds To Practitioners' Comments on Staggered Remedial Amendment Cycles, EP TDI Notices, Resolution Possibility for Plans in 412(i) Audit Program, and News for Retirement Plan Sponsors. (Internal Revenue Service)
Doing the Homework on Lifecycle Funds
Excerpt: "Employers need to look beyond the marketing hype and conduct thorough research, but the complex nature of these relatively new retirement products can make that difficult." (Workforce Management; free registration required)
An Analysis of Major Life Cycle Fund Families (PDF)
61 pages. (Turnstone Advisory Group)
TowerGroup Predicts Growing Demand for Defined Contribution Plans
Excerpt: "Firms' increased attention to the defined-contribution channel and development of new investment products will result in increased demand for related technologies, TowerGroup predicts. New financial products are expected to take the shape of income-oriented investments for retirees, and advanced and increasingly customizable asset-allocation products." (Wall Street & Technology)
Overview: DOL Guidance in PTE for Investment Advice
Excerpt: "In Field Assistance Bulletin (FAB) 2007-01, the U.S. Department of Labor provides guidance on the statutory prohibited transaction exemption (PTE) for investment advice under the Pension Protection Act of 2006 (PPA). The guidance primarily affects defined contribution plan sponsors and those who provide investment advice to defined contribution plan participants." (Watson Wyatt Worldwide)
Ruling on 401(k) Fees a Relief to Plan Sponsors
Excerpt: "Suit was one of a dozen similar class-action lawsuits filed by St. Louis-based law firm alleging companies violated pension laws by allowing 401(k) participants to be overcharged by the managers of the plans." (Workforce Management; free registration required)
A Discussion on Defined Contribution Plan Design, Education, and Default Investments (PDF)
12 pages. Excerpt: "In this issue of PIMCO DC Dialogue, we talk with Professor Zvi Bodie of Boston University, and Kelli Hueler, CEO of Hueler Companies, about the current movement toward target-date funds in defined contribution plans and their suggestions for a lower-risk investment path." (Pacific Investment Management Company LLC)
Self-Directed Brokerage Accounts Bring Breath of Fresh Air to 401(k)
Excerpt: "[A]sk your boss to add 'windows' -- better known as self-directed brokerage accounts (SDBA) -- to the company 401(k)?" (The Courier News)
Defined Benefit Plan Sponsors Seek 'Holistic' Liability Management Strategies
Excerpt: "Underfunding problems and a move to mark to market accounting continue to further push defined benefit plan sponsors to find 'more holistic' strategies for funding pension liabilities, a new Greenwich Associates research paper asserted." (PLANSPONSOR.com; free registration required)
Overview: DOL Guidance on Good Faith Compliance with the PPA's New Benefit Statement Requirements (PDF)
Excerpt: "Generally effective for plan years after December 31, 2006, plan sponsors are required to issue benefit statements containing the most recent information regarding the total benefits accrued and the nonforfeitable benefits, if any, which have accrued or the earliest date on which benefits will become nonforfeitable." (Dow Lohnes PLLC)
Discussion Paper: Social Security Spouse and Survivor Benefits for the Modern Family (PDF)
39 pages. Excerpt: "Social Security spouse and survivor benefits are somewhat controversial because they advantage single-earner families relative to dual-earner families (or single people) who pay the same amount in taxes. Our paper simulates several different ways of structuring Social Security spouse and survivor benefits." (The Urban Institute)
Overview: Interim Final Rule Relating to Time and Order of Issuance of Domestic Relations Orders (PDF)
1 page. Excerpt: "Under the Pension Protection Act of 2006, Congress instructed the Department of Labor ('DOL') to issue regulations clarifying that a DRO shall not fail to be treated as a QDRO solely because the order is issued after, or revises another QDRO, or because of the time that it is issued." (Winston & Strawn LLP)
An ESOP for the Tribune Company? Things to Know in Assessing the Transaction
NCEO Executive Director Corey Rosen analyses the proposal by Sam Zell to use an employee stock ownership plan (ESOP) to purchase the Tribune Company. (National Center for Employee Ownership)
Trial Court Allows Lawsuit to Proceed for Losses Resulting from Unreasonable Plan Fees
Excerpt: "The complaint alleges that certain conduct was a breach of fiduciary duty, including agreeing to pay unreasonable fees, not staying aware of relevant trends and practices, and 'failing to discover, disclose and stop the charging of hidden and excessive fees.'" (Employee Benefits Institute of America Inc.)
New Montana Public Employee Retirement Plan Legislation Dropped
Excerpt: "A House panel [yesterday] killed a bill to create a new, 401(k)-like retirement plan for new government employees and teachers in Montana, but committee members said they may want to study the issue further in the next 20 months." (The Billings Gazette)
Learning the Alphabet -- of Retirement Savings
Excerpt: "[F]iguring out which type of plan fits your income and circumstances is straightforward once you understand the basic criteria." (Forbes.com)
There Are No Retirement Loans
Excerpt: "Americans lead the world in buying on credit and financing our purchases. But, while it's easy to finance a home or a car or even an education, you can't take out a retirement loan. There is no 'retirement equity line of credit' or zero-interest retirement credit card. Try as you might, you simply can't finance your retirement." (Forbes.com)
Social Security -- The Fate of the 1983 Long-Term Solution and the Lessons for Future Reform
Excerpt: "The federal government last tried to restore long-term financial solvency to Social Security 24 years ago. The Social Security Amendments of 1983 were supposed to make Social Security fiscally sound for the next 75 years. . . . This article discusses why the 1983 amendments did not deliver the long-term solution policymakers were hoping for and how future reforms can avoid the same fate." (Watson Wyatt Worldwide)
Opinion: The Sorry State of Retirement Savings
Excerpt: "For the very most part, those of us in the business of retirement plans look at the landscape and fret about things like the dismal rate of participation, tepid deferral rates, and inert asset allocations . . . ." (PLANSPONSOR.com; free registration required)
Court Case May Impact Shareholder Suits
Excerpt: "Echoes of the 2002 business scandals reverberate through a case before the Supreme Court that could make it tougher for shareholders to win lawsuits against public companies." (AP via The New York Times; free registration required)
Workers under 35 Not Confident about Retirement Future
Excerpt: "Retirement plan participants under 35 are less confident they will have enough money to live comfortably in retirement than their older counterparts and are slightly less likely to have a well-defined strategy for saving for retirement, a recent survey shows." (PLANSPONSOR.com; free registration required)
Links to Items on Executive Comp, Benefits in General
At the Energy Department, Benefits Are a Growing Liability
Excerpt: "Costs and liabilities for pension and health-care benefits for contract employees are projected to grow at a rate 'that significantly exceeds likely increases in the department's budget,' the Energy Department reported in a Federal Register notice." (The Washington Post; free registration required)
IRS Expected to Publish Final Regulations Under New Code Section 409A Soon (PDF)
1 page. Excerpt: "This will be a significant event for every employer in America, because: (a) these regulations can apply to employment and change in control agreements, severance plans and even equity compensation plans, in addition to deferred compensation plans, which were the original target of Congress, and (b) Employers will have until the December 31, 2007 deadline to take a series of required steps." (Winston & Strawn LLP)
A Preview of the Final Section 409A Regulations
Excerpt: "As 'A-Day' approaches (i.e., the release day for final section 409A regulations), this Legal Alert sets the stage for final regulations with -- (1) a list of what to look for in the final regulations, and (2) a brief review of interim guidance issued since the proposed regulations." (Kilpatrick Stockton LLP)
IRS Study of Exempt Organization Executive Compensation Reveals Significant Reporting Issues
Excerpt: "A three-year study of executive compensation compliance by the IRS Tax Exempt and Government Entities (TE/GE) Division revealed that significant reporting issues exist despite the good intentions displayed by exempt organizations to properly report executive compensation . . . ." (Wolters Kluwer Law & Business)
Idaho Governor Vetoes Bill on State Worker Benefits
Excerpt: "Gov. C.L. 'Butch' Otter announced another veto Tuesday, his fifth of the 2007 Legislature, saying a bill to boost state employee benefits violated Idaho's policy of concentrating on boosting wages." (The Times-News)
Newly Posted Events
Annual Spring Employee Benefits Law and Practice Update
Nationwide on April 10, 2007
presented by ALI-ABA (American Law Institute-American Bar Association)
Compliance University: Cafeteria Plan Administration Interactive Training calls 4/18/07 & 4/25/07 @ 2 p.m. EST
Nationwide on April 18, 2007
presented by HRTrainingCenter.com
Long-term Incentive Compensation: Are you a Trend-Follower or Trend-Setter? - Webcast
Nationwide on April 10, 2007
presented by Human Capital Institute
Washington Legislative Update
in Ohio on April 17, 2007
presented by ASPPA Benefits Council of Cleveland
Newly Posted Press Releases
U.S. Labor Department Sues Trustee of Southfield, Mich., 401(k) and Pension Plans for Mismanagement
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
AHIP Partners with Health Literacy Innovations
America’s Health Insurance Plans (AHIP)
Pay for Performance 2007 Web Summit
Healthcare Web Summit
BenefitsCheckUp Can Help Battle Senior Hunger
National Council on Aging (NCOA)
Buck Consultants Marks 90th Anniversary with Focus on Clients and the Evolution of HR
Buck Consultants, an ACS Company
Consumers Deserve More Choice, Protection When It Comes to Health Care
National Community Pharmacists Association (NCPA)
Many U.S. Adults Are Satisfied With Use of Their Personal Health Information; Substantial Minority Still Withholds Information from Health Providers Due to Worries About Security of Medical Data
Harris Interactive
Newly Posted or Renewed Job Openings
Retirement Plan Specialist
for SYNERGY
in IL
TPA Relationship Manager - Central Region
for Transamerica Retirement Services
in IL
Senior Retirement Plan Consultant
for Standard Insurance Company
in OR
Sales Consultant
for Diversified Investment Advisors
in NC
401(k) Administrator
for Beacon Benefits, Inc.
in MA, ME, NH
Sales Professional
for Standard Insurance Company
in OH
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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