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| June 26, 2007 |
Sponsored by: DATAIR Employee Benefit Systems, Inc.
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| Software for 401(k), Pension and Flex Administration |
| Now...through June 30, 2007, License any two DATAIR systems and we will cut one license fee by 50%. License more and get even more savings.
Pick and choose the software modules you need: DC/401(k) Proposals & Administration - DB Proposals & Administration - Retirement Plan Documents (Prototype and Volume Submitters) - Government Forms (5500s, 1099-Rs, 5300s) - Cafeteria Plan Administration & Documents - Participant Termination Calculations - FAS 132 Reporting Contact sales@datair.com or call 1-888-328-2474. |
Text of Rev. Rul. 2007-43: Partial Termination of Plan Is Presumed If Turnover Exceeds 20 Percent (PDF)
4 pages. Excerpt: "If the turnover rate is at least 20 percent, there is a presumption that a partial termination of the plan has occurred. The turnover rate is determined by dividing the number of participating employees who had an employer-initiated severance from employment during the applicable period by the sum of all of the participating employees at the start of the applicable period and the employees who became participants during the applicable period. . . . In certain situations, the employer may be able to verify that an employee's severance was not employer-initiated." (Internal Revenue Service)
Overview: IRS Guidance on Rollovers to Prototype Roth IRAs from Roth 401(k)/403(b) Arrangements
Excerpt: "The IRS has announced that sponsors of prototype Roth IRAs who wish to accept rollover contributions from designated Roth contribution programs established as part of a 401(k) plan or 403(b) plan must amend their documentation to reflect that the prototype Roth IRA permits these rollover contributions." (Wolters Kluwer Law & Business)
Declare 401(k) Freedom from the Tax Man - Find the Best Tax Treatment for Your Retirement Funds
Excerpt: "[H]ow do you practice asset location? The basic principle is fairly simple. To the extent possible, you want to devote investments that generate regular income or frequent capital gains to tax-advantaged accounts like 401(k)s or IRAs where they won't be immediately taxed." (CNN.Money)
Not All 401(k) Plans Are The Same: Five Issues Participants Should Know
Excerpt: "The retirement administrators keeps on top of all the ins-and-outs of ERISA and it is really Greek to me as it just can get so complex. Just know there are many rules how plans can be set up, and once set up many rules are nearly impossible to change -- one reason being to be fair to other employees . . . ." (SavingAdvice.com)
Defined Contribution Fee Disclosure Best Practices, Updated June 2007 (PDF)
9 pages. Excerpt: "This fee disclosure primer is intended to provide a framework for plan sponsors to use as they evaluate the ways to disclose fees to participants in defined contribution plans. This document is not intended to provide a mandated set of rules for disclosing these fees and does not necessarily describe current industry standards and practices but rather sets goals to work toward for the future." (Committee on Investment of Employee Benefit Assets)
Opinion: U.S. District Court Dismissed One of the So-Called 401(k) Revenue-Sharing Lawsuits
Excerpt: "[T]he complaint is a rambling 38 page collection long on legal argument, public policy rhetoric and repetition, but vague in its allegations of facts which might be relevant to the claims alleged." (PLANSPONSOR.com; free registration required)
Overview: Qualified Automatic Contribution Arrangements (QACA)
Excerpt: "The Pension Protection Act (PPA) provides new incentives for implementing automatic enrollment in 401(k) plans on or after January 1, 2008. Perhaps the most interesting provision is a new safe harbor automatic enrollment program known as a 'qualified automatic contribution arrangement' or QACA." (McKay Hochman Co., Inc.)
Roth 401(k) Five-year Chart, Updated June 22, 2007
Designated Roth Distribution, Taxation and Reporting: Final Regulations and Highlights of the Rollover Rules (with citations) (McKay Hochman Co., Inc.)
Analysis of PBGC's Proposed Variable-Rate Premium Changes (PDF)
7 pages. Excerpt: "The primary purpose of the proposal is to implement provisions of the Pension Protection Act of 2006 ('PPA') that overhaul the variablerate premium ('VRP') rules for 2008 and later plan years. However, there are other changes of significance to premium payers, including in particular a proposed explanation of when certain benefits are considered 'vested' for purposes of determining unfunded vestedbenefits ('UVBs')." (Pension & Benefits Reporter via Keightley & Ashner LLP)
Overview: IRS's Proposed PPA Mortality Regulations
Excerpt: "On May 23, 2007 IRS published proposed regulations under the Pension Protection Act (PPA) on the use of mortality in determining defined benefit plan liabilities and funding requirements. This article reviews the proposal, focusing on issues of concern to non-actuaries. So we're not going detail the nuances of different calculation methodologies. Instead we'll focus on the key decision issues for sponsors." (JPMorgan Chase & Co.)
Overview: PBGC Issues Proposed Regulations on Post-PPA Variable-Rate Premium Rules
Excerpt: "The proposed rules do not address other PPA changes affecting PBGC premiums, including the variable-rate premium cap for small employer plans, the new termination premium, and the provision authorizing PBGC to pay interest on premium overpayment refunds." (Deloitte via BenefitsLink.com)
DOL Imposing Penalties for Failure to Provide Blackout Notices
Excerpt: "Those penalties are at a significantly discounted rate, but the amounts are still punitive. For example, if a plan covers 100 employees and the notice is five days late, the DOL could impose a reduced penalty of $10 per day, times the number of employees. That would amount to a $5,000 penalty." (Reish Luftman Reicher & Cohen)
What Is a Reasonable Rate of Interest for Participant Loans?
There are DOL and IRS rules for the rate of interest on a participant loan. (McKay Hochman Co., Inc.)
Overview: Regulations Allowing Governmental Units to Serve as Non-Bank Trustees of Deemed IRAs
Excerpt: "EBIA Comment: When these special rules for governmental units were originally proposed, the IRS acknowledged that governmental units may otherwise have difficulty satisfying several criteria for non-bank trustees. The final regulations give the IRS the discretion it needs to apply the non-bank trustee requirements -- which typically have been applied to private sector financial institutions -- in ways that are more appropriate to public sector employers." (Employee Benefits Institute of America Inc.)
Retirement Savings Protected from Creditors in Two Canadian Provinces
Excerpt: "Two provinces - Manitoba and Newfoundland/Labrador -- are implementing new legislation to protect retirement savings from enforcement processes. The Registered Retirement Savings Act, which was given Royal assent on December 7, 2006, will take effect retroactively to November 1, 2003, in Manitoba." (Watson Wyatt Worldwide)
Reconsidering the Roth 401(k) After the Pension Protection Act of 2006 and Federal Fiscal Realities (PDF)
9 pages. Excerpt: "The bottom line to most participants is: the Roth election is essentially a gamble based on future unknowns. It is unlikely that those unknowns--i.e. the amount by which entitlements will be reduced in the future (if any), the future income tax rates and the future tax system--will become known in the foreseeable future. . . . Thus, many employers will decide that [Roth 401(k)s] are just not worth the hassle. However, it appears that utilization of the Roth 401(k) option will grow slowly over time . . . ." (Allen Buckley, Esq. of Smith Moore LLP)
Overview: Revenue Sharing and Indirect Payments
Excerpt: "While the DOL's general description of payments is broad -- 'money or any other thing of value,' the 5500 proposal goes on to provide additional detail about the types of payments. The following examples are given: [F]inder's fees, placement fees, commissions on investment products, transaction-based commissions, subtransfer agency fees, shareholder servicing fees, 12b-1 fees, soft-dollar payments, and float income." (Reish Luftman Reicher & Cohen)
As More Near Retirement, Employees' Big Nest Eggs Can Attract Financial Hustlers
Excerpt: "Citigroup's $15 million-plus settlement of charges that a few of its brokers induced some BellSouth workers to take early retirement and then invested their money unsuitably highlights a growing problem more and more finance chiefs -- and their benefits managers -- should be paying attention to." (Financial Week)
Overview: IRS Issues Updated Guidance on Staggered Remedial Amendment Periods
Excerpt: "The new revenue procedure supersedes Rev. Proc. 2005-66, 2005-37 I.R.B. 509, which established the five- and six-year remedial amendment period cycles. The updated revenue procedure is effective as of June 13, 2007." (Deloitte via BenefitsLink.com)
Sponsored by: AllianceBernstein Institutional Investments
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| June 27th Conference Call; 401k Class Action Litigation Update |
| AllianceBernstein invites you to a conference call discussing developments in the ongoing 401k fee class action lawsuits, as well as the likely impact of evolving fiduciary duty standards on defined contribution plan sponsors. The call will be hosted by General Counsel Laurence Cranch, Senior ERISA Counsel Daniel Notto, and Sean Murphy, a partner in the Securities Litigation Group at Milbank Tweed Hadley & McCloy LLP. Click on the banner above to view detailed dial-in information. |
| (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
Complaints About NFL Retirement and Disability Benefits Go to Congressional Hearing
Excerpt: "'The retirement plan has been contorted into a way for the players association to aid the active players,' said Bernie Parrish, a former Cleveland Browns defensive back who successfully lobbied for the hearing." (The Denver Post)
Newly Posted Events
ERISA Audits: What We All Knew But Forgot
Nationwide on July 12, 2008
presented by HRTrainingCenter.com
Global Compensation and Benefits: A Controls Approach to Reducing Risk - Webcast
Nationwide on July 11, 2007
presented by Deloitte
HIPAA and Health Laws Compliance Assistance Seminar
in Texas on June 29, 2007
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Substance Abuse's Escalating Cost: How HR Can Spot, React, And Control It
Nationwide on July 18, 2007
presented by HRTrainingCenter.com
Newly Posted Press Releases
Council Commends 'Save for Retirement' Resolution
American Benefits Council
Updated Primer on Defined Contribution Fee Disclosure Released
Association for Financial Professionals
Employee Benefits See Little Change From 2006; 2007 Benefit Survey Shows Slight Decrease in Percentage of Organizations Offering Some Financial & Compensation Benefits
Society for Human Resource Management (SHRM)
Blue Care Network's Healthy Blue Living(SM) Wellness Product Sees Surge in Enrollment
Blue Care Network of Michigan
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs)
Pension Manager - Retirement Consulting Group
for Fidelity Investments
in MA
Retirement Plan Coordinator
for The Capital Group Companies
in CA
Retirement Plan Coordinator
for The Capital Group Companies
in VA
Business Systems Analyst
for Transamerica Retirement Services
in CA
Account Management - Benefits Insurance
for The CIP Group
in MA
Business Insurance Professional (Job #P-505BL)
for The California Teacher's Association (CTA)
in CA
Defined Benefits - Benefits Service Manager
for Hewitt Associates
in NJ
Project Manager (BIG)
for Hewitt Associates
in IL
Lead Systems Analyst-HW - BIG
for Hewitt Associates
in IL
Setup Configuration Analyst
for Hewitt Associates
in NJ
Client Acceptance Analyst- Woodlands, TX
for Hewitt Associates
in TX
ERISA - Regulatory Controls Manager
for TIAA-CREF
in NC
Client Acceptance Analyst
for Hewitt Associates
in IL
Benefits Implementation Req'ments Analyst (HW)-BIG
for Hewitt Associates
in IL
Client Acceptance Analyst- Orlando, FL
for Hewitt Associates
in FL
Setup Configuration Analyst
for Hewitt Associates
in IL
Systems Analyst -HW - BIG
for Hewitt Associates
in IL
Programmer Analyst (BIG)
for Hewitt Associates
in TX
Calc Engine Analyst - BIG
for Hewitt Associates
in IL
Pension Consultant/Administrator
for Wender & Company
in OH
Director - Global Pensions
for GE Industrial, Plastics
in MA
ERISA Consultant
for BISYS Retirement Services
in MN
Pension Administration Specialist
for Miami Valley Pension, LLC, a Brady Ware Company
in OH
Sr. Specialist, Retirement & Executive Compensation
for Assurant, Inc.
in NY
AVP, Health and Welfare Benefits
for Countrywide Financial
in CA
Qualified Plan Financial Consultant (QPFC) Technical Education Consultant (TEC)
for ASPPA
in ANY STATE
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