BenefitsLink |   |
| August 30, 2007 |
| Here are the Internet's newest links on plan operation, design and policy; emphasis is on compliance and costs. |
Today's sponsor is 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
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Official Guidance; News
Judge Denies Venue Change for International Paper 401(k) Fee SuitExcerpt: "A judge in the U.S. District Court for the Southern District of Illinois has denied a request by International Paper Company to have an excessive 401(k) fee suit brought against it moved to a Tennessee federal court." (PLANSPONSOR.com; free registration required)
Summary/Analysis of Official Guidance
6th Circuit Joins 3rd and 7th in Finding Cash Balance Plans Don't Violate ERISA's Age Discrimination Provision (PDF)3 pages. Excerpt: "The opinion, authored by Judge John M. Rogers, rejected plaintiffs' argument that cash balance plans are 'necessarily age discriminatory,' reasoning that 'any disparity in the benefits that employees of different ages receive from cash balance plans is merely the result of the time value of money.'" (Alston & Bird LLP)
Scrutiny Over 401(k) Expenses Expands in D.C.
Excerpt: "A recent legislative proposal that would require 401(k) retirement plans to reveal more information about fees is being described as the beginning of a discussion about the issue. But in Washington, the scrutiny surrounding costs is becoming a low roar." (Workforce Management; free registration required)
Overview: IRS Will Tax 401(k) Savings Used to Buy Retiree Health Coverage
Excerpt: "The IRS, in its proposed rules, says Congress has 'carefully and strictly limited the ability to prefund' health care benefits on a tax-favored basis." (Workforce Management; free registration required)
Overview: Internal Revenue Service Final Regulations Under Code Sections 403(b) and 414(c)
Excerpt: "Published together with the final Code Section 403(b) regulations are final regulations under Code Section 414(c) that make official the Internal Revenue Service position on controlled group status for tax-exempt organizations." (Bond, Schoeneck & King, PLLC)
Overview: IRS Final Section 415 Rules on Defined Benefit Plans (PDF)
7 pages. Excerpt: "WHO'S AFFECTED These rules affect sponsors of and participants in qualified defined benefit plans, including multiemployer plans, governmental plans and nonelecting church plans. BACKGROUND AND SUMMARY Section 415 of the Internal Revenue Code limits the amount of benefits that may be paid to a participant in a defined benefit plan. It also limits the amount of contributions that may be made to a participant's account in a defined contribution plan." (Prudential Financial)
More Cashed-Out Participants Get Go Ahead for Fiduciary Breach Claim
Excerpt: "Employees who have cashed out of their employer-sponsored retirement plans but still want to bring fiduciary breach suits seem to be getting some judiciary backing, with another federal court giving the go ahead for another such suit to proceed." (PLANSPONSOR.com; free registration required)
Trends; Surveys; Research
Poll Shows 401(k) Match Important for Employee Benefit PackagesExcerpt: "Four in 10 workers polled in a recent survey indicated that a 401(k) match is the most valued benefit of the current employee benefit lineup." (PLANSPONSOR.com; free registration required)
Franchisees Funding Businesses with Retirement Funds
Excerpt: "At the crossroads of growing retirement assets and franchising are a small handful of qualified providers who specialize in enabling individuals to acquire a franchise by investing their retirement funds into businesses without taking a taxable distribution or incurring penalties." (NuWire, Inc.)
Most Plan Sponsors Buy-In to Rollover Services and Products
Excerpt: "New research from LIMRA [Opportunities in the Rollover Market - Plan Sponsor Perspective] finds most plan sponsors have no preference what terminating participants do with their plan money, but most utilize services and products offered by providers for those participants that take distributions." (PLANSPONSOR.com; free registration required)
Retirees Face 'Guaranteed Income Gap,' Fidelity Warns
Excerpt: "U.S. workers are living longer, and those extra years are running up against declines in the types of retirement income guaranteed to last as long, like Social Security and defined-benefit pension plans, according to a report issued . . . by the Fidelity Research Institute." (Financial Week; free registration required)
Structuring Income for Retirement: Addressing America's Emerging Guaranteed Income 'Gap'
Excerpt: "This report outlines a conceptual framework to manage the complex interplay between the uncertainties of future investment returns and life expectancy, and the role that guaranteed income can play in helping retirees secure sustainable retirement income. We explore key trade-offs among spending rates, retirement risk, and bequest desires and provide 5 guidelines retirees should consider when developing an income plan." (Fidelity Research Institute)
Legal Issues Must Be Carefully Considered When Shifting from DB to DC Plan
Excerpt: "Shifting from a DB plan to a DC plan forces employees to assume risk traditionally taken on by employers by essentially removing a result-oriented benefit (such as a specific pension income . . . ) and replacing it with an allowance. It is this fundamental shift in responsibility that gives rise to an array of legal issues, due to regulations under the Employee Retirement Income Security Act, making those responsible for administering benefit plans subject to ERISA's daunting fiduciary duty rules." (Employee Benefit News; free registration required)
Pension Rights Center Provides Listing of Reports Related to Retirement Security
You can access reports and polls on the following topics: General Pension Studies; General Wealth and Savings Reports; Defined Benefit vs. Defined Contribution Plans; Defined Benefit Plans; Defined Contribution Plans; Pension Plan Freezes, Changes, and Trends; Women's Retirement Security; and, Polls related to Retirement Security. (Pension Rights Center)
Policy; Opinion; Advocacy
Text of National Tax Sheltered Accounts Association Request to IRS for More 403(b) Guidance (PDF)2 pages; large filesize though. Excerpt: "Based on comments by our membership, which includes law firms, benefits consulting firms, governmental plan representatives, employee groups, employer groups, individual 403(b) plan participants, insurance companies, registered investment companies, broker dealers and marketing organizations working in the 403(b) marketplace, there is confusion, misunderstanding and conflicting conclusions regarding the . . . tax-free exchange and transfer provisions of the final regulations . . . . [We seek] additional guidance and time to properly comply . . . ." (National Tax Sheltered Accounts Association)
Commentary: Defined Benefit vs. Defined Contribution -- 'Why Can't We All Just Get Along?'
BenefitsLink hopes you enjoy this chuckle. (Special Taskforce for Reconciling Competing Interests in Plan Design and Policy)
Sponsored by: Mid-Sized Retirement & Pension Plan Management Conference
(Click on company name or banner to learn more.)
| 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. |
| (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
Eleventh Circuit Rejects Application of 'De Facto' Administrator Doctrine to Claims Administrator
Excerpt: "In this ERISA claim for benefits case, the Eleventh Circuit augments its prior views on the scope of the de facto administrator doctrine. In effect, the opinion attempts to clarify when a party, not designated as a plan administrator, may nonetheless properly be named as a defendant as such based upon functional aspects of actual plan administration." (Health Plan Law blog by Attorney Roy F. Harmon III)
Overview: SEC Staff Comment Letters on Proxy Disclosure of Executive Compensation (PDF)
4 pages. Excerpt: "[The SEC issued] comment letters to select companies on August 21. The comment letters do not require the companies to amend their proxy statements, but rather reflect the comments in next year's proxy statements and, if applicable, provide additional information to the SEC staff about certain disclosures. The select companies are given until September 21 to respond. It is our understanding that additional letters will be issued in the next month . . . ." (Frederic W. Cook & Co., Inc.)
Automatic Extension of Stock Option Term Because of Inability to Exercise Due to Delinquent Company SEC Filings (PDF)
2 pages. Excerpt: "The inclusion of an automatic extension provision would give appropriate protection to an optionee who is not responsible for the inability to exercise a stock option before it expires and would avoid the necessity of the company considering cash or other payments to the optionee as compensation for the expired stock option." (Frederic W. Cook & Co., Inc.)
2006 International Stock Plan Design and Administration Survey (PDF)
56 pages. Excerpt: "The survey consisted of questions addressing eight areas: General Information; International Plans; Stock Option Plans; Employee Stock Purchase Plans; Performance Plans; Other Stock Grants/Awards; Utilization, Allocation, and Source of Plan Shares; and, Country-Specific practices covering the EU and nine countries." (The National Association of Stock Plan Professionals and Deloitte Tax LLP)
Aligning Internet Technologies with Reward and Recognition Programs
Excerpt: "Employers have embraced technology to improve benefits delivery -- including health, retirement and open enrollment -- and are beginning to adopt similar strategies for rewards and recognition programs. Web-based solutions allow employers to better understand what workers want from rewards and recognition, rewards and incentive consultants contend." (Employee Benefit News; free registration required)
Newly Posted Events
Interactive Cafeteria Plan Seminar on 9/19/2007 & 9/26/2007
Nationwide on September 19, 2007
presented by HRcertification.com
New Cafeteria and Dependent Care Plan Regulations: Treasury Speaks & Organizes
Nationwide on September 20, 2007
presented by ABA Joint Committee on Employee Benefits
Qualified Plan Document Update
Nationwide on October 9, 2007
presented by McKay Hochman Co., Inc.
Taxing & Reporting Fringe Benefits Under Increased IRS Scrutiny - Audio Conference
Nationwide on September 18, 2007
presented by HRcertification.com
Newly Posted Press Releases
ASPPA announces the ASPPA 401(k) Leadership Award
ASPPA (American Society of Pension Professionals & Actuaries)
Aspen Publishers Offers Comprehensive, New Qualified Plans Self-Audit Guide
Aspen Publishers
Employee Benefit Plans Can Expect Increased Transparency In The Quality Of Financial Reporting Controls, AICPA Says
American Institute of Certified Public Accountants (AICPA)
Labor Day Survey Reveals Unspoken Needs of America's Employees
Kronos Incorporated
LTC Financial Partners Applauds Kiplinger's Personal Finance for 'Authoritative' Advice on Long Term Care Insurance
LTC Financial Partners
Newly Posted or Renewed Job Openings
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Retirement Plan Writer
for The Capital Group Companies
in CA
Retirement Plan Processor
for Heaton & Eadie, PSC
in IN
Document Specialist
for The Newport Group
in FL
Assistant Actuary and Administrator
for Chatham Consulting Group, Inc..
in NY
Account Executive - Retirement Services
for The Principal Financial Group
in MI
Defined Benefits (DB) Domain Manager
for Hewitt Associates
in ANY STATE
WRS Education Services Team Leader
for Wachovia
in MN
Paralegal - Employee Benefits Practice
for Hodgson Russ LLP
in NY
Retirement Compliance Advisor
for NRECA
in VA
Client Service Consultant - Regional
for Standard Insurance Company
in WA
Retirement Plan Administrator
for Presser, Lahnen & Edelman
in FL
Sr. Financial (Pension) Benefits Analyst
for Houston-based NYSE Listed Company
in TX
Pension Administration Analyst Experienced
for Hewitt Associates
in GA
Senior Pension Administrator
for Retirement Benefit Solutions, LLC
in DC, DE, MD, NJ, PA, VA
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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