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| July 6, 2007 |
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The Top Ten Advantages of Maintaining Defined Benefit Pensions (PDF)
15 pages. Excerpt: "While recognizing that DC plans are useful in providing supplemental retirement benefits, this paper discusses the advantages of maintaining state and local DB plans and argues against replacing them with DC plans. Eliminating the DB plan and switching to a DC plan is likely to be a lose-lose situation for governments, their employees, and taxpayers for many reasons. [T]his paper will discuss the . . . 10 advantages of retaining DB plans . . . ." (National Conference on Public Employee Retirement Systems (NCPERS))
Opinion: The Truth About Defined Benefit Plans (PDF)
Excerpt: "In essence, the PPA has no meaningful provisions that encourage the creation of new traditional defined benefit plans. There are provisions for the creation of 'defined benefit/401(k) plans' and additional stipulations that help clarify the legitimacy of cash balance plans. But the proposed defined benefit/401(k) plans will be available only to smaller employers and are actually two separate plans packaged together." (Contingencies)
Teachers Collecting Pension Payments, Then Returning to Work at the City Education Department
Excerpt: "Retired city workers under age 65 who decide to seek employment with other city agencies must get a waiver. If they retire due to some kind of injury or disability, they must also get a waiver before they return to the city payroll. Thompson found that in 2005, 75 teachers got $846,925 in pension payments, then went back to work at the city Education Department." (The New York Post)
Evolving Fiduciary Standards for Defined Contribution Plan Sponsors (PDF)
17 pages. Excerpt: "This white paper attempts to answer the question, do the recent changes in the defined contribution landscape mean that fiduciary duty standards have evolved to the point where plan sponsors may be required to make significant changes in the designs of their DC plans?" (AllianceBernstein)
Dell Delays Filing 401(k) Statement
Excerpt: "Dell told government regulators . . . that it cannot file a financial statement for its 401(k) plan, as the company continues to struggle with an investigation of its accounting practices." (InfoWorld)
The Security of a 401(k) Retirement Income Guarantee (PDF)
7 pages. Excerpt: "Many 401(k) plan participants, particularly those within 10 to 15 years of retirement, are nervous that a severe market downturn could devastate their plans. But new developments in risk management, together with powerful advances in information technology, have converged to harness hedging at the retail level -- and thus is born the 401(k) guarantee." (Benefits Quarterly via Milliman)
Issue in Brief: Why Are Widows So Poor? (PDF)
6 pages. Excerpt: "This brief investigates why this group of the population is particularly vulnerable. One reason is that widowhood creates economic hardship, as Social Security benefits and pensions from employer-sponsored plans drop." (Center for Retirement Research at Boston College)
New Pension Crisis Seen In Credit Markets Crash
Excerpt: "Credit conditions are now rapidly changing for the worse . . ., and pension funds -- with between 3% and 5% of their investments in hedge funds (including hedge 'funds of funds') alone, depending on the report -- are directly in the path of disaster." (Executive Intelligence Review)
Retirement Analysts-Designed National Public Policy Initiative Called 'Conversation on Coverage'
Excerpt: "A project six years in the making, Conversation on Coverage solicited the opinions and views of more than 45 retirement experts from think tanks, private and public sector organizations and academia." (Employee Benefit News; free registration required)
Hewitt's Global Retirement Update, June 2007 (PDF)
2 pages. Excerpt: "Our Global Retirement Update summarizes recent legislative developments and trends related to retirement and financial management and highlights recently passed and pending legislation that may require employers to take action to comply with new rules or review existing plans." (Hewitt Associates)
Tax-Managed Funds Outperform Non-Deductible IRAs
Excerpt: "Careful use of tax-managed funds can produce up to 9% better long-term returns for retirement than tradition tax-deferred investing, a new study shows. The report by fund giant T. Rowe Price Group Inc. . . . compared returns of so-called tax-managed strategies to advantages of investing in non-deductible IRA accounts. Researchers analyzed potential gains over 10-, 20- and 30-year rolling periods. In each case, they assumed a 10% annual average return." (MarketWatch.com)
Companies Move to Ward Off Retirement Plan Fee Suits
Excerpt: "Defined-contribution plan executives are beefing up disclosure to participants about plan fees well ahead of regulatory guidance expected by the end of the year." (Workforce Management; free registration required)
Towers Perrin U.S. Legislative Tracking Charts -- Retirement -- Updated July 5, 2007 (PDF)
5 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
Identifying Superior Active Portfolio Management (PDF)
Excerpt: "Few topics have generated more engaging discussions between academics and investment professionals than the debate over active versus passive portfolio management." (Journal of Investment Management via Fidelity Research Institute)
Working Paper Abstract: The Age of Reason - Financial Decisions Over the Lifecycle
Excerpt: "The sophistication of financial decisions varies with age: middle-aged adults borrow at lower interest rates and pay fewer fees compared to both younger and older adults. We document this pattern in ten financial markets. The measured effects cannot be explained by observed risk characteristics." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
Links to Items on Executive Comp, Benefits in General
Assessing the Risks and Savings of Electronic Transmissions
Excerpt: "[Issuing electronic notices has difficulties]. Most disclosures are subject to specific Internal Revenue Service, Labor Department and other rules intended to comply with the Electronic Signatures in Global and National Commerce Act (E-SIGN). E-SIGN provides that information required to be in writing can be made available electronically only if the consumer consents to receive the information electronically, and the business clearly discloses specified information . . . ." (Employee Benefit News; free registration required)
Rev. Rul. 2007-49: Transfers of Section 83 Stock in Reorganizations and Taxable Stock Acquisitions (PDF)
10 pages. Excerpt: "1) There is not a transfer of substantially nonvested stock subject to § 83 where restrictions imposed on substantially vested stock cause the substantially vested stock to become substantially nonvested. 2) There is a transfer of substantially nonvested stock subject to § 83 where a service provider exchanges substantially vested stock for substantially nonvested stock in a reorganization described in § 368(a). 3) There is a transfer of substantially nonvested stock subject to § 83 where a service provider exchanges substantially vested stock for substantially nonvested stock in a taxable stock acquisition." (Internal Revenue Service)
Overview: CFOs No Longer Subject to $1 Million Compensation Deduction Limit (PDF)
Excerpt: "The Internal Revenue Service has issued new guidance (IRS Notice 2007-49) that changes the group of public company officers subject to the compensation deduction limit under Section 162(m) of the Internal Revenue Code." (Seyfarth Shaw LLP)
IRC Section 409A: Links to Law and Official Guidance
Excerpt: "NOTE: These links should help those who need to know about the law in more detail." (Rackemann, Sawyer & Brewster)
Towers Perrin U.S. Legislative Tracking Charts -- Human Resources -- Updated July 5, 2007 (PDF)
9 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
Coping with the Demographic Challenge: Fewer Children and Living Longer (PDF)
45 pages. Excerpt: "Due to demographic changes, the U.S. Social Security system will face financial challenges in the near future. Declining fertility rates and increasing life expectancies are causing the U.S. population to age." (U.S. Social Security Administration)
Newly Posted Events
3rd Annual Consumer-Centric Healthcare Congress
in Virginia on November 8, 2007
presented by World Congress
Newly Posted Press Releases
Labor Department Settlement Resolves Lawsuit Over Mismanagement of South Carolina Employee Stock Ownership Plans
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
JennisonDryden Wholesalers Earn Professional Plan Consultant™ Designation
Prudential Financial, Inc.
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs)
Pension/ERISA Attorney
for Major Lindsey & Africa
in MA
Account Manager (Insurance/TPA)
for Zenith Administrators
in NV
Vice President Northwest Region (Insurance/TPA)
for Zenith Administrators
in WA
Health and Welfare/Defined Benefits
for Apex Systems, Inc.
in FL, MA
Defined Contribution Consultant
for BPSM, A Wells Fargo Company
in TN
Accountant I
for Alerus Retirement Solutions
in MN
Benefits Administrator
for Alan T. Nahoum, Inc.
in NY
Retirement Plans New Business Processor
for Standard Insurance Company
in OR
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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