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| August 2, 2007 |
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Cashed-Out Participant Has Standing in Employer Stock Case
Excerpt: "The 3rd U.S. Circuit Court of Appeals has decided the Employee Retirement Income Security Act (ERISA) gives a cashed-out former employee the right to sue the administrator of his former employer's 401(k) plan for allegedly mismanaging plan assets and thus reducing his share of benefits." (PLANSPONSOR.com; free registration required)
401(k) Investment Issues: The Duty to Remove Investments (PDF)
4 pages. Excerpt: "This article explores the legal responsibility to remove investments when they are no longer prudent and suitable for a participant-directed plan. In examining that duty, we first review the scope of the duty. We then briefly review the duties of fiduciaries generally, and close with an analysis of the investment issues." (Reish Luftman Reicher & Cohen)
Opinion: The Little Secret Your Insurance Agent and Stockbroker Doesn't Want You to Know
Excerpt: "Many employers don't realize their broker or agent--to which they may be paying big commissions that are typically netted out of the returns of their 401k investment funds--don't provide their workers with investment advice. Brokers or agents, unless they're willing to be co-fiduciaries, simply hand out enrollment literature and wish employees good luck at being their own chief investment officers. In the securities industry this is called investment education, not investment advice." (Terrence Morgan via 401khelpcenter.com)
As Boeing Investment Officials Pondered Adding a 401(k) Lifecycle Option, They Made Unusual Request
Excerpt: "With advice from consultant Russell, Boeing asked providers for a lifecycle option in which the underlying funds held a variety of alternative investments; the company specifically asked for REITs, emerging market equities, commodities and Treasury Inflation-Protected Security (TIPs)." (PLANSPONSOR.com; free registration required)
QDIAs - The Investment Advisor's Role, Part 2 (PDF)
4 pages. Excerpt: "This column will outline the procedures for selecting and monitoring a QDIA." (Fiduciary360)
Do Fiduciaries Have Obligation, or Legal Duty, to Educate Employees on Participation in DC Plans?
Excerpt: "Yes, but the full extent of that obligation is not clear. ERISA requires that fiduciaries provide employees with information about eligibility and participation in their plans. For example, employees must be provided with summary plan descriptions (SPDs) on a timely basis. Further, if employees are not timely informed of the opportunity to participate, the plan may have a disqualifying defect . . . ." (PLANSPONSOR.com; free registration required)
Issues in Selecting the Discount Rate for GASB 45 Valuations
Excerpt: "On what do actuaries base interest assumption? It is this author's hope that most will encourage public sector employers to determine the GASB 45 expense using a discount rate based on the funding policy for that fiscal year." (Society of Actuaries)
Assets in Qualified Retirement Plans, 1985-2005: Updated (PDF)
Pages 7-9 of 12 pages. Excerpt: "As of year-end 2005, total assets in tax-qualified U.S. retirement income plans (both defined benefit and defined contribution) amounted to $14.388 trillion. By 2005, qualified retirement plans had recovered from the losses experienced since 2002, when total assets amounted to $10.139 trillion . . . ." (Employee Benefit Research Institute)
Target-Date Funds Leave Retirees Out in the Cold
Excerpt: "A study of the funds, which are diversified asset-allocation portfolios that rebalance over a specific period of time, found several faults with the offerings being pushed by some investment companies." (Workforce Management; free registration required)
Overview: Recent Compliance Developments Affecting Qualified Retirement Plan Design and Administration
Benner & Associates, P.C. is located in Portland, Oregon. (Attorney Ray R. Benner via Durig Capital, LLC)
Trap for the Unwary: When Has a Pension Plan Participant Been 'Married for a Year'?
Excerpt: "The easy answer is to read [this particular pension plan's] definition, and declare that the participant is permitted to behave as if he is not married because he has not been married for one year. The Treasury regulations provide a different answer." (Pension Protection Act Blog)
Working Paper: Optimal Management and Inflation Protection for Defined Contribution Pension Plans
Excerpt: "In this article we study how to optimally manage a pension fund taking positions in a money market account, a stock and an inflation linked bond, while financing investments through a continuous stochastic income stream such as the plan member's contributions. We use the martingale method in order to compute an analytic expression for the optimal strategy and express it in terms of observable market variables." (Social Science Research Network)
Audio Recording: Can Social Security Reform Wait?
Excerpt: "The Social Security solvency debate has now lingered for years, despite continual calls for reform by the Social Security trustees. Some observers argue the contrary, that there's no reason to engage in reform now; let's wait and see what economic news brings. . . . In this session of Versus, Gene Steuerle takes the pro and Dean Baker the con on pushing for immediate Social Security reform." (Urban Institute)
Employee Ownership Update for August 1, 2007
NCEO Executive Director Corey Rosen discusses new concerns about the use of Employee Stock Option Appreciation Rights Securities (ESOARS) as a means to value employee stock options for company accounting purposes, and possible problems with the proposed buyout of the Tribune Company by an employee stock ownership plan (ESOP) and Sam Zell if certain credit covenants are not met. (National Center for Employee Ownership)
Italian Workers Choose Pension Funds; Accounting Implications of Pension and TFR Reform Clarified
Excerpt: "With the deadline for employees to select an authorized pension fund in which to invest their TFR (Trattamento a Fine Rapporto) indemnity future allocations now passed, employers are awaiting the results." (Watson Wyatt Worldwide)
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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
IASB Web Site on the Post-Employment Benefits, Including Pensions, Project
Excerpt: "In July 2006, the IASB added a project on post-employment benefits to its agenda. The project is to be conducted in two phases, which would involve a fundamental review of all aspects of post-employment benefit accounting." (International Accounting Standards Board)
Employment Status of Workers Ages 55 or Older (PDF)
Pages 2-7 of 12. Excerpt: "More older workers in the labor force: An increasing percentage of older Americans are in the labor force: Those ages 55 or older in the labor force increased from about 38 percent in 1993 to 45 percent in 2006. For those ages 65-69, the percentage increased from about 18 percent in 1985 to 29 percent in 2006." (Employee Benefit Research Institute)
An Impending Collision at the Intersection of Code Section 457 and Code Section 409A (PDF)
4 pages. Excerpt: "[The IRS] issued Notice 2007-62 announcing that new guidance will be issued under Code Section 457, a provision that is applicable to nonqualified deferred compensation plans of state and local governments and tax-exempt entities. If the anticipated guidance described in the Notice is actually issued, it will dramatically affect the design of Code Section 457(f) plans and eliminate or greatly restrict certain practices that are commonly used in many such plans." (Jones Day)
Annual Global Pay Study: Key Differences between U.S. and European Pay Practices
Excerpt: "According to Hay Group's 2006 Top Executive Compensation study, 63% of U.S. companies surveyed are providing time-vested restricted share plans to eligible employees. In contrast, less than 5% of European companies reported granting restricted shares as part of their equity plans." (Hay Group)
Nonqualified Plan Findings: 2006 Executive Benefits and Perquisites Survey
Excerpt: "Hay Group's 2006 executive benefits and perquisites survey examines the prevalence and characteristics of various programs, with a particular focus on nonqualified plans. . . . Overall, 63% of the participating organizations currently maintain some form of nonqualified retirement plan--whether defined benefit (DB), defined contribution (DC), or employee deferred compensation plan." (Hay Group)
Is Private Equity in Your Company's Future?
Excerpt: "For companies targeted by private equity firms, we have developed [this] primer on compensation and benefits considerations. In general, these deals are very complex and involve their own terminology, which can be confusing to the uninitiated." (Hay Group)
Listing of IRS Published Guidance for January-July 2007
The target page links to guidance published by the Service relating to retirement plans: Treasury Regulations; Revenue Rulings; Revenue Procedures; Notices; and, Announcements. (Internal Revenue Service)
What to Do When Employees Return from Active Military Duty (PDF)
Excerpt: "This article will provide an overview of the act protecting service members with special emphasis on reemployment rights and provide guidance to employers regarding their obligations as military personnel return to reclaim the lives they left behind." (New Jersey Lawyer via Drinker Biddle & Reath LLP)
Overview: IRS Guidance on Tax Treatment of Transfers of Stock Subject to Code Sec. 83 Restrictions
Excerpt: "The IRS has issued a revenue ruling providing guidance on the tax consequences under Code Sec. 83 when restrictions are imposed on substantially vested stock, causing that stock to become substantially nonvested." (Wolters Kluwer Law & Business)
Chart: Employment Costs in Private Industry, June 2007
Excerpt: "Benefit costs for private industry rose sharply by 1.1 percent, compared to a decline of 0.3 percent the previous quarter." (U.S. Bureau of Labor Statistics)
Fortune Learns It's Great to Work at Google
Excerpt: "Now that Google has been around long enough to be eligible for Fortune Magazine's 'The 100 Best Companies to Work For' list, it promptly debuted at number one." (webpronews.com)
Complying with Final Section 409A Regulations: The Clock is Ticking
Excerpt: "Many employers have a great deal of work to do -- before January 1, 2008 -- to ensure that every nonqualified deferred compensation arrangement they maintain complies with both the written and the operational requirements of the final Treasury regulations under Section 409A of the Internal Revenue Code." (Hay Group)
Newly Posted Events
Free Webinars -- COBRA, 2006 and 2007 Legal Update with Craig J. Davidson, CEBS
Nationwide on August 21, 2007
presented by Davidson Marketing Group -- FutureOffice Network
The Final 403(b) Regulations: What you need to know!
Nationwide on August 29, 2007
presented by McKay Hochman Co., Inc.
The Final 403(b) Regulations: What you need to know!
Nationwide on September 10, 2007
presented by McKay Hochman Co., Inc.
Newly Posted Press Releases
AARP Survey Finds More Than 80 Percent of 401(k) Participants Are Unaware of Fees Associated With Their Plans
AARP
Committee Explores Barriers to Prompt Payments by Health Insurance Companies
U.S. House Small Business Committee
More Americans Age 55 and Older Are Working Full Time
Employee Benefit Research Institute (EBRI)
The SPARK Institute Raises Concerns Over "401(k) Fair Disclosure Retirement Security Act"
SPARK Institute
Judge Orders Continental Tire to Fulfill Contract, Pay Health Care Costs for Retired Workers
United Steelworkers
Working After Retirement
U.S. Railroad Retirement Board
The Paradox of Asset Allocation for Retirement Plan Participants: A Blessing or a Curse?
Compass Institute, LLC
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs)
Employee Benefits & Executive Compensation Associate
for Morgan, Lewis & Bockius LLP
in PA
Senior Sales Rep
for ING, US Financial Services
in IN, KY, OH, PA, TN, WV
RVP/External Wholesaler - Western Upstate New York
for Transamerica Retirement Services
in NY
Business Development Consultant
for ING, US Financial Services
in CT
401(k) & DC Administrator
for Flynn, Shojinaga & Associates, Inc.
in CA
Calculation Configuration Analyst
for SBC Systems
in GA
Proposal Writer
for New York Life Retirement Plan Services
in MA
Administrative Assistant/Trust Accountant
for The Nolan Company
in KS
Benefits Administrator
for Eisner Retirement Solutions
in NY
Senior Associate Health & Welfare
for Buck Consultants
in CA
WRS Relationship Manager I
for Wachovia
in NC
Senior Manager, Benefits - Retirement Plans
for Sodexho USA
in MD
Director Health & Welfare Dallas
for Buck Consultants
in TX
Human Resources Service Center Rep.
for TJX Companies
in MA
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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