Sponsored by: www.ftwilliam.com (Click on company name or banner to learn more.)
Complicated 401(k) Fees Prompt Lawsuits, Regulation Excerpt: "'It's not just the lawsuits anymore,' said Gregory Ash, a corporate lawyer with Spencer Fane Britt & Browne LLP in Overland Park. 'There's a very vigorous movement in Washington to address, on a regulatory level, these perceived abuses.'" (The Business Journal of Kansas City via MSNBC.com) Opinion: 401(k), 403(b) and 457 Plans All Under Attack Excerpt: "The only hope that defined contribution plans will provide retirement security for participants who increasingly rely almost exclusively upon them, is if these plans are massively improved. Litigation has a way of bringing about rapid change." (Benchmark Financial Services) SEC Demurs, Yet Again, on 12b-1 Fees: Vows to Propose 'Something,' But Offers Little Consensus Excerpt: "The fees, named for the section of securities law that provided for them 27 years ago, have swelled in total size and in function. Today, 12b-1 fees are applied to everything from getting space on a platform, to compensating brokers for providing advice, to mailing annual prospectuses, to maintaining fund companies' websites." (Financial Planning) Value Funds versus Growth Stocks in the Stock Mutual Funds in Your 401(k) Plan Excerpt: "For years, the nearly unanimous recommendation from academia was to invest all of the equity allocation in value funds and nothing in growth funds. But the best approach, according to a powerful strand of recent research, is to divide a long-term portfolio just about equally between the two types." (The New York Times; free registration required) Former Enron Workers' First Settlement Payments Miscalculated Excerpt: "Thousands of former Enron Corp. employees may have to pay back a portion of the first payment they received as part of a settlement over lost employee stock ownership and 401(k) plan savings after the company's collapse." (PLANSPONSOR.com; free registration required) Reasons for the Lack of Direct Access to No-Load, Low-Expense 403(b) Plans in Many School Districts (PDF) 13 pages. Excerpt: "Even though the tax laws changed many years ago to allow teachers to purchase mutual funds within 403(b) plans, school districts have been slow to change. As a result, many school district continue to only give teachers the option to invest in high cost variable annuities sold by insurance companies." (403bwise.com) 2007 Report on Corporate Pension Funding Levels (PDF) 13 pages. Excerpt: "The distribution of pension liabilities and assets of S&P 500 companies is relatively concentrated among the largest plans. As of the end of fiscal year 2006, over half of the total pension assets and liabilities were held by the 21 and 24 largest plans when ranked by asset and liability size, respectively." (Wilshire Consulting) Actuaries Blamed for UK Pension Scheme Deficits Excerpt: "Research published by the Financial Reporting Council (FRC) indicates U.K. pension scheme trustees believe actuaries have contributed to the huge deficits faced by many pension schemes by failing to take account of improved life expectancy in their advice." (PLANSPONSOR.com; free registration required) Retirement Plan Disclosure: Ethical Principles and Legal Obligations Excerpt: "It will take time, but in the author's opinion, there is an excellent prospect of resolving the fundamental issues of inadequate disclosure of all relevant information to plan decision makers and thus avoid potentially unfavorable long-term consequences which participants and beneficiaries would otherwise bear." (Social Science Research Network) China May Possess Key to Americans' Retirement Security Excerpt: "It may come as a surprise to many Americans, but their retirement security may depend in large measure on China's development of capital markets and the willingness of Chinese savers to buy the stocks and bonds that baby boomers will unload in coming years." (Victoria Advocate) Overview: DOL Imposes Penalty in ERISA Case Excerpt: "The Labor Department's 2006 lawsuit alleged that Hagemeyer North America Inc., GreatBanc Trust Co., and members of the plan administrative and advisory committees violated the Employee Retirement Income Security Act (ERISA) by mismanaging two ESOPs sponsored by the Cameron & Barkley Co. (C&B) and CSI." (Health Plan Law blog by Attorney Roy F. Harmon III) Risk Shifting versus Risk Management: Investment Policy in Corporate Pension Plans Excerpt: "The asset allocation of defined benefit pension plans is a setting where both risk shifting and risk management incentives are likely be present. Empirically, firms with poorly funded pension plans and weak credit ratings allocate a greater share of pension fund assets to safer securities such as government debt and cash, whereas firms with well-funded pension plans and strong credit ratings invest more heavily in equity." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext) Overview: IRS Cure for Failure to Timely Adopt Interim Amendments Excerpt: "The IRS has provided the cure for failure to timely adopt interim amendments of law changes through the Voluntary Correction Program (VCP). At the time of correction, the plan may not be the subject of an Employee Plans Examination and must meet other requirements." (Wolters Kluwer Law & Business) Links to Items on Executive Comp, Benefits in General IRS Clarifies Rules on Transfers of Substantially Vested Stock Excerpt: "In its latest revenue ruling the Internal Revenue Service (IRS) clarifies the tax consequences under Section 83 of the Internal Revenue Code when restrictions are imposed on substantially vested stock causing that stock to become substantially nonvested." (PLANSPONSOR.com; free registration required) Private Companies May Win Exemption from SEC Registration of Option Grants Excerpt: "Private companies would not have to register securities used in employee stock option plans, under a proposed rule from the Securities and Exchange Commission." (Financial Week; free registration required) Court Refuses to Enforce Alleged Oral Modification of ERISA Plan Excerpt: "EBIA Comment: This case caught our eye because it illustrates the perils of an employee's reliance on oral statements to enforce alleged rights under an ERISA plan. Oral communications cannot change the terms of a plan. And a claim for estoppel based on oral misrepresentations will be ineffective when there are clearly written plan terms to the contrary." (Employee Benefits Institute of America Inc.) Stock Taxable When Options Exercised Excerpt: "The 7th U.S. Circuit Court of Appeals has ruled that a taxpayer was incorrect when she claimed income for stock shares obtained when options were exercised based on the price at which she later sold the shares and not at the price of the shares at the time the stock options were exercised." (PLANSPONSOR.com; free registration required) Newly Posted Press Releases Many Workers Struggle With Basic Health Benefit Terms, Watson Wyatt Survey Finds Watson Wyatt Judge OKs Delay in Exelon 401(k) Case Pensions & Investments Dell Delays Filing 401(k) Statement Dell Newly Posted or Renewed Job Openings (Post a Job | View All Jobs) Actuarial Benefit Consultant for Fidelity Investments in IL, NC, NY, TX 401(k) Consultant III for Qualified Benefits, a BenefitStreet, Inc. Co. in CA Assistant Administrator for Qualified Benefits, a BenefitStreet, Inc. Co. in CA Client Relationship Manager - San Mateo, CA for Transamerica Retirement Services in CA Pension Administrator for AKT Retirement Plan Services in CA Client Relationship Manager for Fidelity Investments in KY, TX TRS - Client Relations Manager - Los Angeles and San Mateo, CA for Transamerica Retirement Services in CA Sales Executive for BenefitStreet, Inc. in IL Investment Consultant for The Newport Group in FL Implementation Manager for USI Insurance Services in NY Pension Administrator for Benefit Systems, Inc. in ANY STATE, TX Assistant to the Deputy Administrator for Pompano Beach Police & Firefighters' Retirement System in FL Legal & Document Spec for Standard Insurance Company in OR Senior Consultant - Health & Welfare - AON for AON in FL Pension Manager for USI Insurance Services in NY Vice President - Health & Welfare - AON for AON in FL Handy Links:
Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too! Sign-up form is at https://benefitslink.com/newsletter (free). This newsletter is sent to you each workday except federal holidays. This email has been published by:
David Rhett Baker, J.D., Editor Copyright 2007 BenefitsLink.com, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission. Anyone can receive these emails; just have them sign up at this web page: https://benefitslink.com/newsletter/ Other useful links: |