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| May 8, 2007 |
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401(k) Sponsors Become Targets for Suits (PDF)
3 pages. Excerpt: "At least a dozen class action complaints have been filed against companies sponsoring 401(k)-type retirement plans and the fiduciaries that administer those plans. This article examines the allegations of those suits and provides insight into the arguments that the companies and fiduciaries may use to defend. [Published January 2007] (The National Law Journal via Kilpatrick Stockton LLP)
Overview: Roth 401(k) Accounts Offer Retirement Saving Flexibility
Excerpt: "Plan sponsors can now offer employees additional retirement saving flexibility. Learn the details behind the IRS regulations permitting companies to allow employees to make Roth contributions to their 401(k) plans on an after-tax basis." (Hewitt Associates)
Workers' Suit Highlights Secrecy Over 401(k) Fees
Excerpt: "Workers are entitled to know the fees they pay. And for those investing in mutual funds, the biggest expense will be related to the fund's money management. This is spelled out in the prospectus. Administrative costs - often borne by workers - are harder to pin down." (The Baltimore Sun; free registration required)
Overview; School District 403(b) Plans Subject to IRS Scrutiny (PDF)
4 pages. Excerpt: "In the last few months, the IRS has targeted the 403(b) plans of public school districts to determine their level of compliance with Internal Revenue Code requirements. . . . We are providing for your review, initially without analysis, copies of the first contact letter, the questionnaire that accompanies it and a follow up letter the IRS is sending out if the response from a school district indicates a problem." (Reish Luftman Reicher & Cohen)
House Panel Considers PPA Revisions
Excerpt: "On May 3, 2007, representatives from the plan sponsor and service provider communities urged a House subcommittee to consider technical correction legislation to revise portions of the Pension Protection Act of 2006. . . . Among other proposed fixes, the witnesses recommended that Congress clarify the application of the PPA's funding rules to multiemployer plans, and provide greater protection to retired pilots whose defined benefit plans are being administered by the [PBGC]." (Thelen Reid Brown Rayman & Steiner LLP)
Archdiocese of Chicago to Freeze Workers' Pensions: Profit-Sharing Pool Gets Future Money
Excerpt: "The move by one of the country's biggest religious employers breaks from a 40-year commitment to a pension that guarantees payments for life and follows a trend of big employers toward shifting more of the risk for retirement onto workers. Officials of the archdiocese said the goal is not to save money -- contribution levels to the new plan will be the same as they were to the pension pool -- but to offer a better benefit." (Chicago Tribune; free registration required)
House Passes Bill to Protect IRAs from Wrongful Levy
Excerpt: "On April 17, 2007, the House overwhelmingly passed the Taxpayer Protection Bill of 2007 (H.R 1677), legislation designed to enhance taxpayer protections and outreach. Included in the bill is a provision allowing IRA funds that are withdrawn pursuant to an improper IRS levy and returned by the IRS to be recontributed to the IRA." (Wolters Kluwer Law & Business)
Final Regs on Distribution, Taxation, Rollover, and Recordkeeping of Designated Roth Contributions
Excerpt: "EBIA Comment: Calculating the five-year participation period for distributions or rollovers of designated Roth contributions -- and communicating those rules to employees -- can be complicated. Plan sponsors and administrators will need to carefully review these final regulations." (Employee Benefits Institute of America Inc.)
Overview: IRS Issues Final Regulations on Distributions from Roth 401(k)s
Excerpt: "The final regulations fill the gap left by the more comprehensive final Roth 401(k) regulations IRS published early in 2006. The final regulations are effective April 30, 2007, but generally apply to taxable years beginning on or after January 1, 2007." (Deloitte)
American Benefits Council Comments on Interim Final QDRO Rule (PDF)
2 pages. Excerpt: "The Council recommends a series of additional examples in the final rule that would clarify situations other than two different alternate payees vying for the same benefits where earlier distributions could result in liability for double payments from the plan. Specifically, the regulations and examples should make it clear that the plan will not be liable if benefits have already been paid out under an initial QDRO." (American Benefits Council)
Report of 2006 ERISA Advisory Council Working Group on Prudent Investment Process
Excerpt: "This working group made inquiry into current issues regarding prudent investment procedure and process. Specifically, this Working Group studied selected prudent fiduciary procedures by sponsors of the following U.S. tax-qualified pension plans: Defined benefit pension plans [and] Defined contribution savings plans utilizing the protection of ERISA §404(c)" (U.S. Employee Benefits Security Administration)
New York's Cuomo Announces Inquiry into Pension Fund Management Conflicts Under Hevesi
Excerpt: "Attorney General Andrew M. Cuomo said on Monday that his office was investigating 'very troubling, serious, systemic conflicts of interest' in the way the comptroller's office has managed the state's $145 billion pension fund." (The New York Times; free registration required)
Illinois DB to DC Switch Would Not Be a Money Saver, According to Research Group's Report
Excerpt: "The Center for Tax and Budget Accountability, a think tank, said that switching from a defined benefit to a defined contribution system would cost $275 million to $610 million a year in extra administrative expenses while doing nothing to eliminate the $40.7 billion in unfunded liability in the existing pension systems, according to a Crain's Chicago Business news report." (PLANSPONSOR.com; free registration required)
Deloitte Overview: Updated 415 Regulations -- Part 2 of 2
Excerpt: "This article will primarily examine the rules under IRC § 415(b), which apply to defined benefit (DB) plans, as well as other portions of the regulations that apply to DB plans." (Deloitte)
Opinion: U.S. Savers Discover They Can't Do Anything Right
Excerpt: "The intriguing thing to me in this whole debate, and indeed in most of the talk I encounter about saving, is what seldom gets mentioned: the virtue of saving money for its own sake." (Bloomberg News)
Report of the 2006 ERISA Working Group on Plan Asset Rules, Exemptions and Cross-Trading
Excerpt: "The 2006 ERISA Advisory Council formed a Working Group to study the plan asset regulation (DOL Reg. Sec. 2510.3-101), which became effective March 13, 1987, and cross-trading." (U.S. Employee Benefits Security Administration)
Opinion: Don't Overlook Problems with Lifecycle Funds
Excerpt: "[A big] problem is that even when used correctly, target-date/lifecycle funds don't recommend a boost in contributions to help employees ensure they achieve their target nest egg." (Employee Benefit News)
Sponsored by: Mid-Sized Pension Management Conference
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| Safe Passage for Your Retirement Plan |
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| (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
Simple is Better in Terms of Plan Communication
Excerpt: "For plan sponsors not going the automatic enrollment route, an earnest effort at communicating plan features to participants simply can propel an increase in participation, a recent CitiStreet study suggests. According to a press release, CitiStreet's review of its own plan communications over the last 12 years showed that comprehensive plan information is valuable, but can be too overwhelming to participants at the outset and can lead to inaction and confusion." (PLANSPONSOR.com; free registration required)
Deloitte Overview: IRS Issues Final 409A Regulations -- Part III
Excerpt: "This is the third in a series of articles summarizing the final regulations under section 409A of the Internal Revenue Code. Previous installments discussed the types of nonqualified deferred compensation to which IRC § 409A applies and the restrictions on distributions that it imposes. We now take up the rules governing the initial deferral of compensation." (Deloitte)
Newly Posted Events
Handling FMLA Notice & Medical Certification Requirements
Nationwide on May 17, 2007
presented by HRTrainingCenter.com
The Challenging New World of Executive Compensation
in Pennsylvania on May 17, 2007
presented by Ballard Spahr Andrews & Ingersoll, LLP
Newly Posted Press Releases
2007 HealthQuest Directories from MCOL
MCOL
CitiStreet Study Indicates Simplicity Key to Maximizing Plan Participation
CitiStreet
Wolters Kluwer Financial Services Adds Subrogation Content to AuthenticWeb for Claims
Wolters Kluwer Financial Services
Fidelity Study Finds Nurses Saving More for Retirement Than Other Working Americans
Fidelity Investments
Not a Hedge Fund, Not a Mutual Fund, But . . . .
Scalar Funds Management
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs)
Pension Administrator
for Block Consulting Actuaries, Inc.
in CA
Full or Part-time Senior Plan Consultant
for July Business Services
in IL
401(k) Consultant III
for Qualified Benefits, a BenefitStreet, Inc. Co.
in CA
Assistant Administrator
for Qualified Benefits, a BenefitStreet, Inc. Co.
in CA
Principal
for IQ Business Group
in GA
Employer Products & Sales Director
for Sutter Health
in CA
Retirement Plan Coordinator
for The Capital Group Companies
in IN
Flexible Spending Account Processor
for Flex Corp
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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