BenefitsLink |   |
| August 27, 2007 |
| Gathering links about retirement plan operation, design and policy, with emphasis on compliance and costs |
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| ASPPA's Annual Conference, October 21-24, 2007 |
| Be a part of it all at ASPPA's Annual Conference this year. Join over 1,500 retirement professionals, choose from over 60 workshops, attend numerous networking opportunities and participate in ASPPA's bi-annual march to the hill. All this and more await you at the Hilton Washington, October 21-24, 2007. Register Now. |
Official Guidance; News
OPM Proposes New Rules for Electronic Retirement SystemExcerpt: "The Office of Personnel Management has issued a proposal aimed at accommodating changes associated with implementing its new electronic retirement record-keeping system. The proposed rules . . . would authorize alternative methods for processing retirement, health and life insurance applications, notices, elections, and other records under the agency's Retirement Systems Modernization project. Certain regulatory provisions governing benefits processing are incompatible with the effort . . . ." (GovExec.com)
Deducting 401(k) Loan Repayments Can't Help Debtor Escape Bankrup.tcy Abuse Finding
Excerpt: "A U.S. Bankrup.tcy Court judge in Ohio has ruled that a 401(k) participant can't deduct $269 in monthly repayments for three plan loans from his monthly income to meet a legal showing that the debtor is not abusing federal bankrup.tcy laws." (PLANSPONSOR.com; free registration required)
6th Circuit Case: Cash Balance Jail Affects Participants
Excerpt: "The Sixth Circuit Court of Appeals this week, in Jensen v. Moore Wallace North America, included cash balance jail in their reasoning on why participants in Moore Wallance North's cash balance plan were not entitled to the plan's surplus. Jenson v. Moore Wallace North America, No. 06-4388, (6th Cir. Aug. 21, 2007)." (Pension Protection Act Blog)
Industry Groups Ask Treasury for Cash Balance Intervention
Excerpt: "Concerned that the Internal Revenue Service (IRS) will take a dim view of 'greater-of-the-two' formulas employed in the conversions of a number of traditional pension plans to cash balance plans, a number of industry organizations have now asked Treasury Secretary Henry Paulson to intervene and 'suspend temporarily any adverse actions relating to backloading of benefits resulting from grandfather provisions in hybrid pension plans.'" (PLANSPONSOR.com; free registration required)
Summaries or Analysis of Official Guidance
Overview: 403(b) Final Regs Publication Brings ClosureExcerpt: "Many 403(b) plan sponsors are breathing a sigh of relief since the publication of the final Internal Revenue Service (IRS) regulations late last month. After waiting on pins and needles for months, plan sponsors affected by the new rules, generally not-for-profit and tax-exempt entities, got more time to implement what were seen largely as less stringent requirements than previously proposed." (PLANSPONSOR.com; free registration required)
Trends; Surveys; Research
Annuities: The Next Big 401(k) CrazeExcerpt: "The move to include annuities is part of a broader trend in which employers offer options that enhance stability and make it easier for their workers to reapportion their 401(k) holdings as they get older and earn more." (The Kiplinger Washington Editors, Inc.)
Citi, J.P. Morgan, Others, Eye Pension-Buyout Biz for U.S. Companies
Excerpt: "If market volatility is giving you a pension fund migraine, consider this option: Sell the whole thing to a financial institution. That's what some U.K. companies have done in the last few years, and industry players say major banks on this side of the pond could signal that they're willing to strike such deals before year-end." (Financial Week; free registration required)
Same-Sex and Worried about Retirement
Excerpt: "Unmarried couples lack the automatic legal protections that kick in when one member of a married couple dies. And they lack other advantages in planning for financial security in retirement that are taken for granted by most couples." (The Washington Post; free registration required)
Roth 401(k) Plans Useful, but Know the Rules
Excerpt: "Roth 401(k) plans are 401(k) plans that permit participants to contribute after-tax amounts into separate accounts, known as designated Roth accounts." (Sun-Times News Group)
New edition of Employee Ownership and Corporate Performance
If employees own stock in their company, will the company perform better? The NCEO presents excerpts from the revised version of Employee Ownership and Corporate Performance: A Review of Research on U.S. Companies, which summarizes the research to date. Most of the studies are on ESOPs, but some are on stock options. (National Center for Employee Ownership)
FAS No. 158 Impact Not As Great on Shareholder Equity; Median Funded Status Improves to 89% for 2006
Excerpt: "From Spencer's Benefits Reports: The impact of Financial Account Statement (FAS) No. 158 on shareholder equity of publicly-traded companies has not been as negative as expected, according to research conducted by Mercer Human Resource Consulting and Mercer Investment Consulting." (Wolters Kluwer Law & Business)
Working Paper: The Impact of Employer Matching on Savings Plan Participation under Automatic Enrollment
Excerpt: "This paper's results suggest that the match has only a modest impact on opt-out rates. We estimate that moving from a typical matching structure - a match of 50% up to 6% of pay contributed - to no match would reduce participation under automatic enrollment at six months after plan eligibility by 5 to 11 percentage points. Our analysis includes a firm that switched from a match to a non-contingent employer contribution." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
Policy; Opinion; Advocacy
Interest Rates and Pension FundsExcerpt: "Check out Mike Barry's Pension Parable . . . ." (PLANSPONSOR.com; free registration required)
Links to Items on Executive Comp, Benefits in General
Executive Misconduct: Recovering Amounts from Beneficiary Following Death
Excerpt: "A recent trial court decision serves as a reminder that it is easier to refuse to pay an amount than to recover it once it has been paid! The case is Miniace v. Pacific Maritime Association, 2007 WL 963160 (N.D. Cal. 2007). In Miniace, the court considered payments made to a beneficiary of a deceased executive under a split dollar life insurance arrangement." (The NASPP Advisor via Utz Miller & Kuhn, LLC)
Working Paper: Inequality and Mobility in Social Security Earnings Data since 1937
Excerpt: "This paper uses Social Security Administration longitudinal earnings micro data since 1937 to analyze the evolution of inequality and mobility in the United States. Earnings inequality follows a U-shape pattern, decreasing sharply up to 1953 and increasing steadily afterwards." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
Contribution Among ERISA Fiduciaries? - The Eighth Circuit Weighs In on the Issue
Excerpt: "Say an employer has to pay substantial sums in restitution and civil penalties for a fiduciary breach that it contends was caused, all or in part, by its third party administrator. Does ERISA provide a remedy? Most employers would probably think so - but this recent Eighth Circuit decision holds otherwise." (Health Plan Law blog by Attorney Roy F. Harmon III)
Top Attorneys Seek One-Year Delay on Section 409A
Excerpt: "The American Bar Association has suggested the agency set up a voluntary correction program for inadvertent violations. The IRS currently has no plans to provide such a program, and it's staying firm on its deadline. Spokesman Andrew Desouza said that while the IRS has received the letter and is reviewing it, the agency 'doesn't plan on extending the deadline.'" (Financial Week; free registration required)
California Supreme Court Says Employer Can Reduce Incentive Compensation by Expenses
Excerpt: "The California Supreme Court has ruled that incentive compensation plans that use calculations based on profits can subtract out certain expenses that are beyond an employee's control." (PLANSPONSOR.com; free registration required)
Where SPD & Plan Document Conflict, Participant Need Not Show Reliance on SPD in Order to Enforce Its Terms
Excerpt: "EBIA Comment: The Fifth Circuit in this case notes that courts in other circuits have reached five different conclusions regarding whether an ERISA claimant must show reliance and/or prejudice when the terms of an SPD conflict with the plan itself. Although the Fifth Circuit sided with those courts that do not require a showing of reliance or prejudice, it expressly limited this holding to situations where the conflicting terms of the SPD unequivocally grant the employee a vested right to benefits." (Employee Benefits Institute of America Inc.)
Newly Posted Events
ERISA Litigation Forum - Update on Stock Drop Litigation and Other Recent Developments
Nationwide on September 25, 2007
presented by Paul, Hastings, Janofsky & Walker LLP
Newly Posted Press Releases
New Poll on Awareness and Perceptions of the Movie "Sicko"
Kaiser Family Foundation
U.S. Labor Department Obtains Judgment Restoring More Than $600,000 To Profit-sharing Plan Of Orlando, Fla., Manufacturer
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Prudential Names New President of Retirement Business
Prudential Financial, Inc.
BLAZE SSI Releases Profit Sharing Allocation Product
BLAZE SSI Corp.
Pentegra Retirement Services to Offer SSgA Index Funds
Pentegra Retirement Services
Newly Posted or Renewed Job Openings
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Assistant Key Account Manager
for Transamerica Retirement Services
in CA
Vocational Case Manager
for Standard Insurance Company
in OR
Disability Benefits Analyst
for Standard Insurance Company
in NY
ERISA / Employee Benefits Attorney
for Faro Consultants International, LLC
in MN
Team Leader, New Business
for Standard Insurance Company
in PA
Retirement Plan Administrator
for Employee Fiduciary
in AL
Sr. Executive Compensation Analyst
for Marathon Oil Corp.
in TX
WRS Education Consultant
for Wachovia Corporation
in MN
Enrolled Actuary
for Chatham Consulting Group, Inc..
in NY
Retirement Plan Analyst
for First National Bank of Omaha
in NE
Primary Administrator for Qualified Retirement Plans
for Kidder Benefits Consultants, Inc.
in IA
Handy Links:
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- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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