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| August 6, 2007 |
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Pension Accounting Changes and the 'Oh Good Grief Standard'
Excerpt: "Even when we all try to do the best we can, sometimes that just makes things worse. Right now, the world's accounting commissions are trying to make standards more uniform by using the best practices available. Sir David Tweedie, chairman of the International Accounting Standards Committee (IASC), is one of the key players in trying to minimize accounting differences around the world." (The New York State Society of CPAs)
When It Comes to Rebalancing, a Little Means a Lot
Excerpt: "IT'S a question that has been on many investors' minds since the stock market hit the skids two weeks ago: Should portfolios be rejiggered in light of rising market volatility?" (The New York Times; free registration required)
Industry Sources Say DOL Has Rejected Proposal to Include Stable-Value Funds As QDIA
Excerpt: "The Labor Department on July 11 submitted to the Office of Management and Budget a proposal for the types of investments that may be used as default options in 401(k) plans. While neither the DOL or OMB would discuss details of that proposal, sources say the DOL continues to exclude conservative stable-value insurance products.' (Financial Week; free registration required)
Commentary: Will a Credit Crunch Affect 401(k) Plans?
Excerpt: "Employers may want to consider the impact of the stalling real-estate market on the behavior of defined-contribution-plan participants. With income squeezed and debt increasing, workers may not respond as favorably as they have in the past to automatic plan features." (Dallas Salisbury via Human Resource Executive Online; free registration required)
Court Declines to Dismiss Fiduciary Breach Claims Based Upon Unreasonable Fees Charged to Plan
Excerpt: "Claims by 401(k) plan participants that the plan sponsor and administrator had breached their fiduciary duties, by failing to disclose revenue sharing agreements and causing the plan to incur unreasonable fees and expenses, should survive initial motions to dismiss, according to a U.S. District Court in California." (Wolters Kluwer Law & Business)
Dollar-Cost Averaging: Some Experts Say Steady Contributions Defeat Volatility
Excerpt: "Investors who make regular contributions, such as through a 401(k) plan, have both time and compounding interest on their side and are likely to see their returns outpace those of less disciplined investors or even those who make bigger contributions but over a shorter time period, research has shown." (The Washington Post; free registration required)
Opinion: Asset-Allocation Solutions, Particularly Target-Date Funds, Becoming a Force in Retirement Plans
Excerpt: "[T]he notions of what constitutes an 'appropriate' asset allocation, much less an appropriate asset-allocation fund -- or fund family -- are varied, to say the least. Almost as varied as the number of choices, in fact -- and it appears that those notions are shifting as well." (PLANSPONSOR.com; free registration required)
American Benefits Council Fast Facts on 401(k) Plans - 401(k) Plan Statistics (PDF)
1 page. Excerpt: "401(k) plans are the most popular employer-sponsored retirement plan in the U.S." (American Benefits Council)
Letter Writers Plead with DOL Not to Go Overboard on Fee Disclosure
Excerpt: "[C]orrespondents to the U.S. Department of Labor (DOL) with input on the 401(k) fee disclosure issue said educating plan sponsors and participants about fees was a terrific idea. [However,] the correspondents cautioned, rulemakers needed to be particularly conscious of not drowning participants in unintelligible data or effectively forcing employers not to have a plan because of the added expense and bureaucratic headache." (PLANSPONSOR.com; free registration required)
Stretching the Limits of 401(k)s
Excerpt: "Two recent trends are gaining momentum that could improve financial prospects for workers heading toward retirement. One is helping ensure that employees get themselves into a 401(k) without having to take direct action. The other provides professional investment choices, again with the worker barely having to break a sweat over it." (The Washington Post; free registration required)
Overview: Intended Operation of New 403(b) Transfer Rules Requires Immediate Attention (PDF)
4 pages. Excerpt: "Further study of the new Section 403(b) regulations, and informal contacts with IRS and Treasury personnel involved in their development, suggests that the regulations may functionally require (i) changes in procedures for certain transfers or exchanges of existing contracts as early as September 25, 2007, and (ii) potentially, conversion of many 'orphan' Section 403(b) products to IRAs prior to January 1, 2009." (Sutherland Asbill & Brennan LLP)
Overview: Final 403(b) Regulations
Excerpt: "The final 403(b) regulations, reflecting some 40 years of guidance, have been issued and are generally effective for plan years starting after December 31, 2008." (McKay Hochman Co., Inc.)
Overview: New 403(b) Transfer Rules
Excerpt: "'Old style' outside-of-plan 90-24 transfers will not be permitted after September 23, 2007. Note: New regulations are still being interpreted and this story represents our best understanding of transfer rules now." (403bwise.com)
More on House Education and Labor Committee Chairman George Miller's 401(k) Fee Bill
Excerpt: "Chairman Miller's bill would not impose any mandates on service providers. Instead, it would force 401(k) plan administrators to use their powers as purchasers to extract the necessary information from their service providers. And it would require the Secretary of Labor to notify the Securities and Exchange Commission or other appropriate regulatory authority if it finds a service provider is engaging in a 'pattern or practice' that precludes plan administrators from complying with these requirements." (Deloitte)
Overview: Partial Plan Terminations - Revenue Ruling 2007-43
Excerpt: "[The Revenue Ruling] addresses partial plan terminations. It provides a specific fact set that demonstrates that if 20% or more of employees leave a job involuntarily, then a partial termination has presumably occurred. The IRS continues to assert the 20% standard, even though it has not always prevailed in court." (McKay Hochman Co., Inc.)
Educating Employers on Plan Compliance
Excerpt: "In its sixth report to the IRS, The Advisory Committee on Tax Exempt and Government Entities (ACT) made suggestions to ensure greater compliance with the qualification rules by employers adopting preapproved plans." (McKay Hochman Co., Inc.)
IRS 30 Year Treasury Securities Rate Updated for July 2007
30 Year Treasury Securities Rate for July 2007: 5.11% (Internal Revenue Service)
IRS Composite Corporate Bond Rate Table Updated for August 2007
Corporate Bond Weighted Average Interest Rate = 5.84 for August 2007 (Internal Revenue Service)
Hewitt Federal Legislation Quick Guide Updated as of July 31, 2007, for Retirement Plans (PDF)
8 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding retirement plans. (Hewitt Associates)
Overview of IRS Update of Cyclical Remedial Amendment Period Rules (PDF)
4 pages. Excerpt: "The IRS has issued Revenue Procedure 2007-44, which updates and clarifies the submission procedures for plan qualification under the new cyclical or 'staggered' remedial amendment period system, superseding its previous guidance." (Buck Consultants)
Highlights of S. 1974 - The Pension Protection Technical Corrections Act of 2007 (PDF)
1 page. The document presents the major concerns addressed in the Act. (American Benefits Council)
Text of The Pension Protection Technical Corrections Act of 2007, S. 1974 (PDF)
53 pages. (U.S. Senate via American Benefits Council)
Text of Description of the Pension Protection Technical Corrections Act of 2007 (PDF)
25 pages. Excerpt: "This document, prepared by the staff of the Joint Committee on Taxation, provides a description of the 'Pension Protection Technical Corrections Act of 2007,' as introduced on August 2, 2007, in the Senate as S. 1974 and on August 3, 2007, in the House of Representatives as H.R. 3361." (Joint Committee on Taxation via American Benefits Council)
Overview: IRS Guidance on Partial Plan Terminations
Excerpt: "In Revenue Ruling 2007-43, the IRS clarifies that a participant turnover rate of at least 20 percent creates a presumption of a partial plan termination, although the ultimate determination still rests with the specific facts and circumstances. While the ruling does not establish any new principles for determining when a partial termination has occurred, it consolidates existing guidance and important case law." (Watson Wyatt Worldwide)
Sponsored by: Mid-Sized Retirement & Pension Plan Management Conference
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| October 7-10, 2007 -- Chicago Marriott Downtown |
| Does your retirement program feel as though it's boxed in, challenged by regulatory concerns, fiduciary issues and uncertainty over new plan design options? There is good news ahead! One educational program provides real, take-away solutions to all your 401(k) or defined benefit plan issues. The Mid-Sized Retirement & Pension Plan Management Conference can enable your company to think "outside of the box," reach its goals and help your employees meet their retirement income needs. |
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Links to Items on Executive Comp, Benefits in General
ERISA Case Not Moot, Brief Before U.S. Supreme Court Says
Excerpt: "Attorneys for a Texas man involved in a major test case on rights to benefits in employee plans urged the Supreme Court on Friday to go ahead and decide the case and to reject a move to dismiss the case as moot." (Lyle Denniston via SCOTUSblog)
NFL Treatment of Former Players Is Coming Under Unprecedented Scrutiny
Excerpt: "While a pension may not seem important to millionaire pro athletes today, it is crucial to aging baby boomers who sacrificed their bodies playing in the era before free agency and sky-rocketing salaries. And how the various leagues treat their retirees is a study in contrasts." (The Star-Ledger)
Does Executive Compensation Communicate to Stakeholders That Company Is 'Doing the Right Thing'?
Excerpt: "Executive compensation is controversial regardless of what you do, but becomes a lightning rod when executives win and the company, shareholders, workforce and customers lose. Studies show that companies that pay for performance outperform those that don't. HR leaders must take a stronger role in guiding and educating the executive team on executive-compensation direction and its impact on the rest of the organization and other interested parties." (Human Resource Executive Online; free registration required)
Hewitt Federal Legislation Quick Guide for July 31, 2007, on Human Resources & Employment Law (PDF)
12 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates)
Practitioner's Forum Discussion: The Proposed $1 Million Cap on Nonqualified Deferred Compensation
Excerpt: "The [target page] is a transcript of an informal discussion of employee benefit practitioners held in Washington, D.C., on May 17, 2007. The topic involved the proposed cap on the amount of compensation that could be deferred each year under a nonqualified plan." (BNA Tax Management)
From Very Beginning of the Nation's Modern Social Welfare System There Was Tension in It
Excerpt: "What should the government be expected to provide? What should be left to the individual? How much government is too much? The questions were asked even in 1935, not exactly a time to instill confidence in the resilient power of private markets." (The New York Times; free registration required)
Newly Posted Events
409A: Problem Solving and Document Drafting
Nationwide on August 30, 2007
presented by ALI-ABA (American Law Institute-American Bar Association)
Gearing Up for EGTRRA Restatements Webinar
Nationwide on August 16, 2007
presented by ftwilliam.com
Newly Posted Press Releases
Adding Annuities May Be Next Frontier in 401(k) Plans, Watson Wyatt Experts Say
Watson Wyatt
ABG to Host 401k Service Training Program
Alliance Benefit Group
Statement of PBGC Interim Director Charles E.F. Millard on Protection Secured for Chrysler Pensions
Pension Benefit Guaranty Corporation (PBGC)
Great-West to Assume Franklin Templeton 401k Recordkeeping Business
Great-West Life & Annuity Insurance Company
MetLife and ProManage Form Alliance
MetLife
New NIA Online Publication Features Health and Retirement Study
National Institutes of Health (NIH)
Newly Posted or Renewed Job Openings
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Associate Director, Benefits
for Virginia Tech
in VA
Account Manager-Defined Contribution Plans
for Standard Insurance Company
in OR
Health and Welfare Analyst
for Affiliated Computer Services
in NJ
Plan Document Specialist
for Caribbean Pension Consultants, Inc.
in FL
Assistant Client Service Associate
for Bank of America Corporate Insurance Agency, LLC
in NJ
Client Service Consultant - Regional
for Standard Insurance Company
in MO
Non Qualified Plan Administrator
for McCamish Systems
in GA
Senior Consultant
for Schloss & Co., a BenefitStreet co.
in NY
Legislation Counsel
for Joint Committee on Taxation
in DC
ESOP Administrator
for Mid-Atlantic Third Party Administrator
in ANY STATE
401(k) Processor
for Leggette Actuaries, Inc.
in TX
401k Administrator
for Mid-Atlantic Third Party Administrator
in ANY STATE
Retirement Plan Consultant III - Account Manager
for Standard Insurance Company
in CA
Institutional Relationship Manager
for Fifth Third Bank
in OH
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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