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| August 21, 2007 |
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Large Employers Back Away from Employee Stock Plans
Excerpt: "A recent study suggests that big public companies are backing away from employee stock ownership plans (ESOPs), a form of defined-contribution savings plan in which employers reward employees with company stock." (Financial Week; free registration required)
Overview: EBSA Reg Provides Penalties for Failure to Notify Participants of Stock Diversification Rights
Excerpt: "The Employee Benefits Security Administration (EBSA) has released a final regulation providing penalties against plan administrators who do not inform participants and beneficiaries of their right to divest employer securities in their accounts and reinvest those amounts in certain diversified investments." (Wolters Kluwer Law & Business)
Managed Accounts Have Universal Appeal with Today's Retirement Plan Sponsors and Their Participants (PDF)
7 pages. Excerpt: "The report presents data and observations regarding use of The Standard's managed account solution, known as Mainspring Managed, among 401(k) plans and participants, reflecting the experience of 284 plans that offered the managed account option to their participants as of March 31, 2007." (The Standard)
Officials to Shore Up Thrift Savings Plan Against Transaction Influxes
Excerpt: "At a monthly Federal Retirement Thrift Investment Board meeting, officials overseeing the 401(k)-style retirement plan said that increased volatility in the markets last week led to increased transfers out of the plan's three equity funds -- the common stocks (C), small- and mid-sized companies (S) and international (I) funds. TSP Chief Investment Officer Tracey Ray said the movement generated $9.5 million in trading costs on Thursday alone." (GovExec.com)
Rev. Rul. 2007-58: Expanded Definition of Retirement Plans for Segregated Asset Accounts in Variable Annuity or Life Insurance Contracts (PDF)
Excerpt: "Under section 817(h) of the Internal Revenue Code, a segregated asset account upon which a variable annuity or life insurance contract is based must be adequately diversified in order for the variable contract to be treated as an annuity under § 72 or as a life insurance contract under § 7702. . . . For purposes of determining whether this requirement is satisfied, § 1.817-5(f)(3)(iii) provides that beneficial interests held by the trustee of a qualified pension or retirement plan are disregarded." (Internal Revenue Service)
Overview: IRS Extends Indian Tribal Governmental Plans' Transition Relief for Six Months After Guidance Issued
Excerpt: "EBIA Comment: This extension is good news for those struggling to meet the September 30th deadline for their ITG plans. But although this notice extends the transition relief until after guidance under Code Section 414(d) is issued, we remind readers that Notice 2006-89 did not address transition issues for ITG 401(k) plans and whether, if at all, the transition relief applies to ITG welfare plans." (Employee Benefits Institute of America Inc.)
Overview: Civil Penalties Reg Amended to Include Penalties for Failure to Provide Employer Stock Diversification Notice
Excerpt: "EBIA Comment: While the DOL has issued the amendments as a final rule, it has requested comments, which must be received by September 10, 2007. If the DOL receives significant adverse comments, it will withdraw the final rule before the scheduled effective date and treat it as a proposed rule, addressing the comments in a subsequent final rule." (Employee Benefits Institute of America Inc.)
Securities Filings' References in Summary Plan Description Can Support Fiduciary Breach Suits
Excerpt: "While corporate financial disclosures may only be required under federal securities law, a plan sponsor referring to its securities filings in a summary plan description (SPD) is vulnerable to fiduciary breach claims from those documents." (PLANSPONSOR.com; free registration required)
Baby Boomers and Retirement: A Generation's Catch-22 -- The Gap between Readiness and Expectations (PDF)
16 pages. (Thrivent Financial Services for Lutherans)
Vanguard Urges Target-Date Benchmarks
Excerpt: "The lack of a benchmark to track target-date funds is impeding the growth of the funds, according to an analysis that will be released next week by The Vanguard Group Inc." (Investment News; free registration required)
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Links to Items on Executive Comp, Benefits in General
Outline on Deferred Compensation Arrangements and the Final 409A Regulations (PDF)
45 pages. Excerpt: "As a reaction to certain real and perceived corporate abuses, Congress passed the American Jobs Creation Act of 2004 ('AJCA') on October 11, 2004. The AJCA added Section 409A to the Internal Revenue Code, which completely revamped the rules for 'non-qualified deferred compensation plans.'" (Snell & Wilmer L.L.P.)
Overview: The New Rules for Deferred Comp Arrangements -- A Compliance Strategy for Corporate Counsel (PDF)
11 pages. Excerpt: "The principal purpose of this paper is to outline a strategy that corporate counsel may utilize to assure compliance with the new rules. The new rules are not dealt with in detail, but the common types of arrangements that are potentially covered by the new rules are identified and a very general overview of the new requirements is provided." (Snell & Wilmer L.L.P.)
Conflict in Terms Between ERISA Plan Language and Summary Plan Descriptions - A Circuit by Circuit Synopsis
Excerpt: "When the terms of an ERISA plan and its summary plan description conflict, which terms apply? The answer to this question is another question - which circuit's law governs the dispute? As will be set forth [in the target page], the circuits differ in their conclusions." (Health Plan Law blog by Attorney Roy F. Harmon III)
Overview: All Deferred Compensation Arrangements Must be Amended to Comply with the Final 409A Regulations (PDF)
Pages 2,8 of 8 pages. Excerpt: "The final 409A regulations are applicable to tax years beginning on or after January 1, 2008, and may be relied on for tax years beginning before such date. This makes December 31, 2007, the critical date on which to bring all nonqualified deferred compensation plans and arrangements into compliance with the Code Section 409A requirements. Treasury has indicated that this deadline will not be extended." (Cohen & Grigsby)
What to Do If DOL Comes Knocking at Your Door? - Answers to Some Questions Regarding DOL Audit Process
Excerpt: "EBSA investigators conduct more than 4,000 audits per year. While most of the audits are civil, EBSA investigators also focus on enforcement of federal criminal laws. According to the DOL Web site, almost 75% of EBSA investigations result in a finding of one or more violations of ERISA." (PLANSPONSOR.com; free registration required)
Summary Plan Description Wins Out Against Conflicting Plan Terms
Excerpt: "The 5th U.S. Circuit Court of Appeals has ruled that a summary plan description affording an injured plant operator disability benefits trumps other plan provisions that require 10 years of service before benefit eligibility." (PLANSPONSOR.com; free registration required)
Coalition of More Than 80 Law Firms to Ask IRS for Deferred Compensation Plan Compliance Delay
Excerpt: "Regina Olshan, an employee benefits specialist at law firm Skadden Arps, which is spearheading the effort, said a 'who's who of law firms' was planning to send a letter to IRS acting commissioner Kevin Brown Tuesday morning seeking the delay. The 'very short' letter requests an extension of 409A compliance to Dec. 31, 2008, from the same date this year, she said." (Financial Week; free registration required)
Newly Posted Press Releases
The Standard Releases Managed Account Study
Standard Insurance Company
NBCH Releases eValue8 Report on Health Plans' Performance around HHS' Four Cornerstones of Value-Driven Health Care
National Business Coalition on Health
People Face More Stress As Out-of-Pocket Costs for Benefits Rise and Retirement Savings Rates Fall
Ameriprise Financial
The New American Workforce: Older Workers
Employment Guide
Newly Posted or Renewed Job Openings
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Pension Administrator
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Installation Administrator
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in CA
Sr. Specialist, Retirement & Executive Compensation
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Retirement Plan Analyst
for Benefit Strategies, LLC
in ME
Retirement Plan Specialist
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in IN, KY, OH
Director, 401(k) Marketing Manager
for Fidelity Investments, Fidelity Institutional Services Company, Rhode Island
in RI
401k Administrator
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in NC
Benefits Coordinator
for City of Costa Mesa
in CA
401(k) Administrator / Consultant
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in NY
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