BenefitsLink |   |
| July 24, 2007 |
Sponsored by: DATAIR Employee Benefit Systems, Inc.
(Click on company name or banner to learn more.)
| Software for 401(k), Pension and Flex Administration |
| 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. |
Special Edition of IRS Employee Plans News: Highlights of New 403(b) Regulations (PDF)
2 pages. Excerpt: "On July 23, 2007, a momentous event occurred in the world of 403(b) tax-sheltered annuities, with the issuance (published July 26, 2007) of the first comprehensive regulations in 43 years. The regulations package reaches out beyond 403(b) to also provide guidance on 414(c) common control for certain tax-exempt organizations. The general effective date is for taxable years beginning after December 31, 2008, with some notable exceptions." (Internal Revenue Service)
Summary of Final 403(b) Regs: What's Changed from the Proposed Regs (PDF)
4 pages. Excerpt: "Significant changes from the proposed regulations include the following: . . . " (Sutherland Asbill & Brennan)
Summary of Final 403(b) Regs
Excerpt: "The existing regulations date from 1964. The final regulations outdate or supersede decades of rulings (see footnote 11 in the Preamble to the Treasury Decision for a complete list). Certain existing rules are retained such as the rules for determining when employees are performing services for a public school (Rev. Rul. 73-607 . . . Rev. Rul. 80-139 . . .), and rules regarding the treatment of church entities and public schools for control group purposes (Notice 89-23 . . .)." (CCH Tax Newsletter)
Final 403(b) Regulations Give Sponsors a Break on their Effective Date
Excerpt: "Many 403(b) plan sponsors will be breathing a sigh of relief with word that final Internal Revenue Service (IRS) regulations are generally not effective until the 2009 plan year." (PLANSPONSOR.com; free registration required)
American Benefits Council Comment Letter to DOL Concerning 401(k) Fee Disclosure (PDF)
Excerpt: "The American Benefits Council ('Council') appreciates the opportunity to comment in response to the Request for Information ('RFI') issued by the Department of Labor (the 'Department') regarding fee and expense disclosures to participants in individual account plans, published at 72 Fed. Reg. 20,457 (April 25, 2007)." (American Benefits Council)
Opinion: A Primer on Qualified Default Investment Alternative Consulting
Excerpt: "[A] prudent fiduciary may have to use a default other than, or in some combination with, the 'qualified' alternatives in order to act in the best interest of participants. The real problem with the proposed regulations is that a fiduciary who is guided by these regulations (should they become final) but who also wants to act in the best of interest of participants, will fear, because of the way that the regulations were drafted, the loss of the very liability protection . . . ." (Herbert A. Whitehouse via 401khelpcenter.com)
Overview (from Insurance-Oriented Site): Teachers Sue Nationwide, Security Benefit and NEA Alleging Overcharges
Excerpt: "[T]he suit charged Nationwide and Security Benefit, which took over the NEA's business from Nationwide in 2000, who were paid by investment firms for allowing their funds to appear on the menu of options offered to plan participants. That created conflicts of interest for both companies as plan administrators, the suit charged." (National Underwriter)
Research Paper: Pension Plan Characteristics and Framing Effects in Employee Savings Behavior
Excerpt: "Pensions in many post-secondary institutions are funded by a combination of an employer contribution and a mandatory employee contribution. Employees can also make tax-deferred contributions to a supplemental savings account. . . . we estimate that each additional dollar of employee contributions leads to a 70 cent reduction in supplemental savings, whereas each dollar of employer contributions generates only a 30 cent reduction." (David Card, Michael Ransom)
A Pension Actuary's Guide to Financial Economics (PDF)
53 pages. Excerpt: "The task force offers the pension actuary's guide for actuaries and others to learn what financial economics says about how pension plans are designed, invested, accounted for and funded. . . . Why do actuaries place different values on future cash flows than capital markets? And, why does it matter?" (American Academy of Actuaries, Society of Actuaries)
Lawmakers Can't Raid Hawaii Pension Fund, the Hawai'i Supreme Court Rules
Excerpt: "A law that allowed the Legislature to divert nearly $350 million from the state pension fund in the 1990s violated the state constitution, the Hawai'i Supreme Court ruled yesterday. Although the decision does not require the state to repay the Employees' Retirement System, the decision prevents any future attempt by lawmakers to divert money from the pension fund, a lawyer involved in the case said." (The Honolulu Advertiser)
Overview: Tax Court Addresses Disability Exception to 10% Excise Tax on Early Pension Distributions
Excerpt: "The Tax Court concluded an employee with hepatitis C who took a leave of absence, changed shifts, and ultimately quit his job was not 'disabled' for purposes of the exception, and thus was required to pay the 10 percent excise tax on the distribution he took upon termination of employment at age 50." (Deloitte)
Overview: The Courts Address Rights Relating to Employer Stock
Excerpt: "In April 2007, both the U.S. District Court for the District of Hawaii and the U.S. District Court for the District of New Jersey addressed issues relating to employer stock held in retirement plans other than employee stock ownership plans (ESOPs). Although neither case addressed ESOP issues specifically, the decisions in both cases affect all plans holding employer stock." (Morgan, Lewis & Bockius LLP)
Text of Rev. Rul. 2007-50 - Determination of Issue Price in the Case of Certain Debt Instruments (PDF)
4 pages. Excerpt: "This revenue ruling provides various prescribed rates for federal income tax purposes for August 2007 (the current month). . . . Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520." (Internal Revenue Service)
Fed Retirement Thrift Investment Bd: Many Responsibilities & Investment Policies Set by Congress
32 pages. Excerpt: "In light of questions about TSP oversight, we examined (1) the current structure for overseeing FRTIB, (2) how the statutorily defined fiduciary responsibilities of FRTIB compare to the responsibilities of private plan sponsors and how FRTIB fulfills its responsibilities, (3) how FRTIB's investment policies differ from those of private plan sponsors, and (4) FRTIB's statutory responsibilities to educate plan participants about TSP and other retirement issues and . . . ." (U.S. Government Accountability Office)
Overview: IRS Warns of Consequences of Tardy Submission of Opinion or Advisory Letter Requests
Excerpt: "The IRS has issued a revenue procedure setting forth the consequences of late filings of pre-approved plans for review." (Wolters Kluwer Law & Business)
Montana Public Pension Systems Betting on Hedge Funds
Excerpt: "Determined to keep its promise to the state's public employees, teachers, police officers and firefighters, the Montana pension system may venture into a high-stakes corner of the investment world: hedge funds." (The Washington Post; free registration required)
Defined Benefit Plan Freezes Slowing Down, According to Study
Excerpt: "The rate of pension plan freezes among FORTUNE 1000 firms has slowed, and the majority of companies with defined benefit plans are committed to keeping them, new Watson Wyatt research has found." (PLANSPONSOR.com; free registration required)
Oregon PERS Approves Pension Hike for Oregon Public Retirees
Excerpt: "Retired Oregon public employees whose pension have been frozen without cost-of-living adjustments in four years will see a 2% increase in their payouts, the Associated Press reported." (PLANSPONSOR.com; free registration required)
Tax Collection Bill Could Mean a Bigger Tax Bite from Some Pension Payments
Excerpt: "A bill passed [July 18] by the House Ways and Means Committee has the potential to cut into companies' pension payments to former employees who retire to other countries." (Financial Week; free registration required)
Opinion: For New York Comptroller, It's Investing 'Other People's $150 Billion'
Excerpt: "The biggest pot of public money in the state, by far, is the state and local government employees' pension fund; at more than $150 billion, it is the second largest in the nation, behind California's. It is also one of the very few state pension funds that puts ultimate control in the hands of just one elected official, the state comptroller . . . " (New York Times; free registration required)
Links to Items on Executive Comp, Benefits in General
IRS Notice 2007-62: Regs Coming for 457 Plans; 'Severance Pay Plan', 'Substantial Risk of Forfeiture' Definitions to be Addressed (PDF)
9 pages. Excerpt: "The Treasury and the Service anticipate issuing guidance providing that an arrangement is a bona fide severance pay plan under § 457(e)(11), and thus is not subject to the requirements of § 457, if: (1) the benefit is payable only upon involuntary severance from employment, (2) the amount payable does not exceed two times the employee's annual rate of pay (taking into account only pay that does not exceed the maximum amount that may be taken into account under a qualified plan pursuant to § 401(a)(17) for the year in which the employee has a severance from employment), and (3) the plan provides that the payments must be completed by the end of the employee's second taxable year following the year in which the employee separates from service." (Internal Revenue Service)
Newly Posted Events
Fourth Quarter 2007 Update
Nationwide on November 15, 2007
presented by McKay Hochman Co., Inc.
Ninth Annual "Best Practices Conference," Crowne Plaza Hotel, Natick, MA
in Massachusetts on December 12, 2007
presented by New England Employee Benefits Council
Proven Strategies For Increasing HSA Enrollment
Nationwide on July 25, 2007
presented by HRTrainingCenter.com
Tax Strategies for Helping Business Owners Sell to Top Employees - for Atlanta-area CPAs
in Georgia on August 22, 2007
presented by White Horse Advisors, LLC
Third Quarter 2007 Update
Nationwide on August 13, 2007
presented by McKay Hochman Co., Inc.
Newly Posted Press Releases
Council Responds To DOL Request For Information On 401(k) Plan Fees
American Benefits Council
Treasury, IRS Finalize Section 403(b) Plan Rules
U.S. Treasury Department and Internal Revenue Service
NCOA and HealthSpring Expand Ability to Connect Seniors With Benefits
National Council on Aging (NCOA)
Partnership for Prevention Launches New Media Campaign to Promote Worksite Health
Partnership for Prevention
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs)
Actuarial Testing Director - Defined Benefits
for Fidelity Investments
in NY
Defined Benefit Client Account Manager
for New York Life Retirement Plan Services
in MA
Deputy Regional Director
for U.S. Department of Labor, Employee Benefits Security Administration
in NY
Sales Assistant
for GPS Investment Advisors, LLC
in RI
Retirement Services Call Center Representatives
for Fortune 500 Company in Mercer County Area
in NJ
Vice President Compliance
for Fidelity Investments
in NH
Director, International Benefits
for 20th Century Fox
in CA
Senior Investment Advisor
for Standard Insurance Company
in PA
Conversion Specialist
for The Newport Group
in NC
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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:
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151
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: