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| September 7, 2007 |
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Official Guidance; News
Pay Discrimination Bill Would Affect Benefit PlansExcerpt: "The legislation raises questions for retirement plans. First, although the bill states that it does not intend to change the current-law determination of when pension distributions are considered paid, the legislative language is not clear. Additional language is needed to clarify that pension distributions are considered paid when an employee retires. Second, it is not apparent how subsequent judgments in a plaintiff's favor would affect pension payments." (Watson Wyatt Worldwide)
PPA Remains on Legislative Agenda
Excerpt: "More than a year after its enactment, the Pension Protection Act of 2006 (PPA) remains under discussion on Capitol Hill and in the administration. Just before heading off for their month-long August recess, lawmakers introduced legislation that would make technical and clarifying changes to the PPA. Congress is also monitoring implementation issues, and the IRS is preparing to release implementing guidance." (Watson Wyatt Worldwide)
Summary/Analysis of Official Guidance
The Pension Protection Act of 2006: Essential Insights (PDF)31 pages. Excerpt: "The Pension Protection Act of 2006: Essential Insights offers the perspectives of three nationally known experts regarding how the new law will affect employers and plan administrators. It serves as a quick and handy resource that will not only inform its readers, but alert them as to what they can expect in years to come now that the PPA has entered the scene." (Thompson Publishing Group, Inc.)
Plan Asset Rule Changes: Their Relevance for Private Investment Funds (PDF)
4 pages. Excerpt: "A little-noticed section of the Pension Protection Act of 2006 affects investments by employee benefit plans into private-equity funds and other investment vehicles. Funds that have benefit plans as investors no longer must aggregate government pension funds and foreign funds with the Employment Retirement Income Security Act of 1974 (ERISA) plan funds when applying the 25 percent 'significant participation' limit." (American Academy of Actuaries)
IRS: Additional Arrangements That Qualify As 'Pension or Retirement Plan' for Purposes of Variable Annuity Rules
Excerpt: "The IRS has issued a Revenue Ruling that lists additional arrangements, including deemed IRAs and Roth IRAs, that qualify as a 'pension or retirement plan' for purposes of IRS Reg. §1.817-5(f)(3)(iii) that deals with diversification requirements for variable annuity contracts." (Wolters Kluwer Law & Business)
Overview: Proposed Rules on Benefit Limitations for Underfunded Pension Plans (PDF)
4 pages. Excerpt: "[This Actuarial Advisory is] a discussion of the proposed regulations. The Actuarial Advisory includes a summary of PPA's provisions on benefit limitations and an explanation of how to determine the 2007 Adjusted Funding Target Attainment Percentage, which is a pressing area addressed by the proposed regulations." (Hewitt Associates)
Trends; Surveys; Research
Waters Corp. in Mass. Joins Those Jumping to 401(k)s: Milford Firm Sees Move Reducing RiskExcerpt: "Waters Corp., which has 1,100 employees in Massachusetts, said it will phase out its traditional pension plan, joining a chorus of corporations nationwide that are dumping pensions in favor of 401(k) retirement accounts." (The Boston Globe)
Survey of Smaller 401(k) Plan Sponsors Finds Need to Educate Them on Fiduciary Roles
Excerpt: "From Spencer's Benefits Reports: Smaller 401(k) plan sponsors have little understanding of ERISA Sec. 404(c) protection, are not too knowledgeable about investment policy statements, and do not change the investment options in their 401(k) plans very often. These were among the findings of a survey conducted by Cowden Associates, Inc., of 105 employers in the greater Pittsburgh area and surrounding states." (Wolters Kluwer Law & Business)
How to Choose Between a Roth and a Regular 401(k)
Excerpt: "If you have that option where you work, you'll have to decide between a traditional and a Roth 401(k). Some employees will have to make a similar decision between a traditional 403(b) and Roth 403(b). Those are retirement plans for educators and employees of some non-profits. . . . In choosing between 401(k) plans, tax rates are key factors. A traditional 401(k) is likely to be your best bet if you expect to be in a lower tax bracket after you stop working and your income drops." (Investor's Business Daily via CNNMoney.com)
Pension Sponsorship and Participation: Summary of Recent Trends (PDF)
20 pages. Updated September 6, 2007. Excerpt from table of contents: 'Background: Employment and an Aging Workforce . . . Recent Trends . . . Plan Participation by Full-Time vs. Part-Time Employment; Retirement Plans and Employer Size; Plan Participation Among Men and Women; Plan Participation by Employee Age; Plan Participation by Employee Race; Plan Participation by Employee Earnings" (Congressional Research Service, U.S. Library of Congress)
In-Depth Report: Funding Strategies for DB Pension Plans to Avoid Lump Sum and Accrual Restrictions (PDF)
19 pages. Excerpt: "This article describes strategies employers can use to avoid restrictions on lump sums (and other accelerated distributions) and benefit accruals in 2008 and beyond, including special issues for plans with significant credit balances." (Washington Resource Group of Mercer Human Resource Consulting via American Benefits Council)
Executive Excess 2007: The Staggering Social Cost of U.S. Business Leadership (PDF)
32 pages. Excerpt: "CEOs at major American corporations enjoyed, on average, $1.3 million in pension gains last year. By contrast, only 58.5 percent of American households led by a 45-to-54-year old even had a retirement account in 2004, the most recent year with data. Between 2001 and 2004, the retirement accounts of these average households gained only $3,775 in value per year." (The Institute for Policy Studies and United for a Fair Economy)
401(k) Investing: Why Models Are Used (PDF)
Pages 1, 4 of 4 pages. Excerpt: "An accelerating trend in the large plan market is for plan sponsors to design risk-based or target maturity portfolios that use their plan's core fund options, instead of using 'off-the-shelf' lifestyle or lifecycle mutual funds. In other words, they use strategic asset allocation models and, for target-maturity models, a 'glide' path through the models." (The 401(k) Company)
How Efficient Are Retirement Programs in Delivering Dollars to Retirees? (PDF)
3 pages. Excerpt: "It is often stated but rarely demonstrated that a defined benefit plan is 'more efficient' than a defined contribution plan at delivering benefits to retirees. A client recently challenged us to quantify that 'efficiency.' What follows is a look at our response to that challenge and an expansion to several alternative design approaches." (American Academy of Actuaries)
Pension Effect from Tax Plan Is Called Slight
Excerpt: "Pension fund and tax specialists told Congress on Thursday that a proposal to more than double the tax rate of executives at private equity and hedge funds, who invest retirement monies, would have negligible impact on the returns received by pensioners." (The New York Times; free registration required)
Private Equity Tax a Thorny Issue for Pensions
Excerpt: "The debate over raising taxes on private equity firms has put pension fund managers in a tight spot. On one hand, the managers have reaped big investment returns from many private equity firms, which has helped keep retirement coffers well funded. On the other hand, the managers face a fierce protest from unions that represent pension workers who believe private equity dealmaking should be reined in, and that the firms should pay higher taxes." (Reuters via The Washington Post; free registration required)
Links to Items on Executive Comp, Benefits in General
Understanding the Employer's New USERRA Obligations (PDF)
13 pages. Excerpt: "DOL's regulations implementing USERRA are effective Jan. 18, 2006. While the regulations do not impose any new obligations on employers, they do provide important clarifications and examples of what is expected of employers. The new regulations are different in a number of respects from the proposed regulations that DOL issued in September 2004." (Thompson Publishing Group, Inc.)
Employer-Sponsored Benefits: Many Factors Affect Treatment of Pension & Health Benefits in Chapter 11 Bankrup.tcy
48 pages. Excerpt: "This report addresses (1) how, if at all, recent legislative changes affected the treatment of pension and health benefits during chapter 11 bankruptcies, and (2) what is known about the extent to which businesses have modified employee or retiree pension and health benefits. [Highlights are at http://www.gao.gov/highlights/d071101high.pdf.]" (U.S. Government Accountability Office)
Overview: Form 990 Executive Compensation Reporting
Excerpt: "Attached to this Alert is a chart comparing the executive compensation reporting requirements for the current Form 990 and the redesigned Form 990. Although the IRS may make further changes to the Form 990 during the process of finalizing the redesigned form, tax-exempt organizations can expect expanded reporting of executive compensation, along with the additional recordkeeping required to comply with the enhanced reporting obligations." (Venable LLP)
Newly Posted Events
Breakfast with Cornerstone Research: 401(k) Excessive Fee Cases: Do They Have Economic Merits?
in District of Columbia on October 17, 2007
presented by Cornerstone Research
FMLA and Medical Certification -- How to Deal With Complex Situations
Nationwide on September 25, 2007
presented by Thompson Interactive, A Division of Thompson Publishing Group
How to Determine Who is a Dependent
Nationwide on September 19, 2007
presented by Thompson Interactive, A Division of Thompson Publishing Group
Work and Retirement Roundtable: How Can Workers and Employers Navigate the Changing Landscape?
in Massachusetts on October 17, 2007
presented by Center for Retirement Research at Boston College
Newly Posted Press Releases
Microsoft Issues Case Study on InvestLink's New. NET Platform
InvestLink
Why Limit Your IRA to the Stock Market? PENSCO Trust Explains Self-directed IRA Rules and Reveals Opportunities for Professionals
PENSCO Trust Company
John Hancock Introduces New Program and Tools to Help 401(K) Participants on the Road to Retirement
John Hancock Retirement Plan Services
Humana Partners with Assist America for Global Emergency Services
Humana
Even the Best U.S. Corporations Fail to Provide Maternity and Paternity Leave; New Institute for Women's Policy Research Analysis Reveals Minimal Coverage for Working Parents
Institute for Women's Policy Research (IWPR)
401(k) Excessive Fee Cases: Do They Have Economic Merits?
Cornerstone Research
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs |
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Pension Administrator
for AKT Retirement Plan Services
in CA
Defined Benefit Administration Software IT Consultant
for Winklevoss Technologies
in CT
Pension Administrator
for Preferred Pension Planning Corporation
in NJ
Senior Managers
for Deloitte Consulting LLP
in IL, NY
Pension Administrator
for Actuaries Unlimited, Inc.
in CA
Regional Sales Director
for RolloverSystems, Inc.
in NC
Plan Administrator
for The Newport Group
in FL
ERISA Attorney
for Pacific Northwest ERISA boutique firm
in WA
HR Generalist (part time)
for Goodrich
in NY
Legal & Document Specialist
for Standard Insurance Company
in OR
Retirement Plans Administrator
for Memorial Sloan-Kettering Cancer Center
in NY
Pension Administration Firm Office Manager
for Western New York TPA Firm
in NY
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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