BenefitsLink |   |
| September 13, 2007 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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
Contact sales@datair.com or call 1-888-328-2474. |
New Compliance Rules; News
Countrywide Financial 401(k) Plan Participants Sue Over Plan LossesExcerpt: "Employees enrolled in Countrywide Financial Corp.'s 401(k) plan claim that illegal actions by those overseeing the plan led to millions of dollars in losses during a recent stock plummet. The employees of the mortgage company filed a suit in a federal court in Santa Ana, California saying the 401(k) plan suffered steep losses after news of the company's tumultuous financial status prompted a drop in stock prices." (PLANSPONSOR.com; free registration required)
PBGC Disaster Relief Announcement in Response to Severe Storms and Flooding in Illinois
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the severe storms and flooding that occurred on August 7, 2007, in Illinois." (Pension Benefit Guaranty Corporation)
PBGC Disaster Relief Announcement in Response to Severe Storms, Tornadoes and Flooding in New York
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the severe storms, tornadoes and flooding that occurred on August 8, 2007, in New York." (Pension Benefit Guaranty Corporation)
Cuomo Invokes Antifraud Law to Widen Inquiry into State Pension Fund
Excerpt: "In a major escalation of his investigation into the state comptroller's office, Attorney General Andrew M. Cuomo has begun issuing subpoenas under a sweeping state antifraud law, Mr. Cuomo's office announced . . . ." (The New York Times; free registration required)
CalPERS to Use Its Investment Might on Government Infrastructure Projects
Excerpt: "California's deep-pocket public pension fund is poised to invest up to $1.5 billion over the next year in building bridges, power generating plants and other government rebuilding projects. In approving a pilot investment program Monday, trustees of the $246 billion California Public Employees' Retirement System are signaling a push into an emerging investment category drawing enormous interest from pension funds worldwide." (The Sacramento Bee; free registration required)
Compliance Rule Summaries/Analysis/Filed Comments
Overview: DOL Proposed Guidance on Annuities in Defined Contribution Plans (PDF)3 pages. Excerpt: "The proposed regulations would reiterate that the selection of an annuity to distribute benefits from a defined contribution plan is subject to the fiduciary standards of ERISA generally. The proposed regulations would then provide a safe harbor under the ERISA prudence standard . . . ." (Sutherland Asbill & Brennan LLP)
Overview: IRS Provides Normal Retirement Age Relief
Excerpt: "The final rules prohibit a pension plan from adopting an NRA before age 62 if the NRA is earlier than is typical for the sponsor's industry. The regulations presume that an NRA earlier than 55 is too young unless the sponsor proves otherwise to the IRS, and NRAs between 55 and 62 are subject to a facts and circumstances test." (SunGard Corbel LLC)
Overview: Finalized IRS Section 403(b) Regulations (PDF)
7 pages. Excerpt: "Shortly after the Section 403(b) regulations were issued by the IRS, the DOL issued Field Assistance Bulletin 2007-02, clarifying how a 403(b) plan exempt from ERISA can comply with the new Section 403(b) regulations without affecting its exempt status." (Buck Consultants)
Another Question is Answered in the Who's the Employer Q&A Column
As a TPA, we are constantly confronted with potential controlled group issues. Through your Q&A column in BenefitsLink and your wonderful book &"Who's the Employer&", we can probably make a determination as to whether we have a controlled group. But I am not certain a TPA should be taking on this task, because to make a determination of controlled group status might be expressing a legal opinion and constitute the unauthorized practice of law. But, if I tell the client they need to hire an attorney for the project, the reality is that it probably will not happen -- so the TPA is stuck without a legal determination but knows the plan should be administered in compliance with the controlled group rules. Should a TPA take on the task of determining controlled groups and affiliated service group or is this venturing into legal territory that should be avoided as the unauthorized practice of law? (BenefitsLink.com)
Anticipating Additional Changes to the Status Quo: PPA'06 Requires Revising Retirement Plan Administration (PDF)
2 pages. Excerpt: "[The target document] discusses what sponsors of retirement plans may want to do to coordinate Pension Protection Act of 2006 . . . changes to current administration procedures and processes to ensure ongoing smooth plan administration." (The Segal Group, Inc.)
Trends; Surveys; Research
Will DC Automatic Programs Eliminate Need for Education and Advice in the Workplace?Excerpt: "Fortunately, the Pension Protection Act of 2006 (PPA) helps us move in a positive direction. Influenced heavily by behavioral research, the PPA supports automatic enrollment and automatic escalation programs because the programs are likely to successfully circumvent participant inertia. 'Auto' programs can address each of the three key measures of success." (Journal of Financial Planning)
401(k) Fee Debate Continues
Excerpt: "Larry Goldbrum, general counsel at the SPARK Institute, says any investment information presented to participants 'should be in a simple format and in plain English.' The most relevant fee information participants need is the fund's total expense ratio or cost of owning the investment, and any transaction based fees, he says." (Employee Benefit News; free registration required)
How One 401(k) Advisor Gathered $10 Million in Two Months
Excerpt: "The president and founder of Private Wealth Consultants, an RIA in Toledo, Ohio, [Gary] Rathbun has been on a tear for the last 2 months. His firm has brought in $10 million in 401(k) assets since July, and he is so confident about his approach that he's set his sights on $100 million within 12 months. His secret? Low-cost plans using ETFs instead of mutual funds, and an emphasis on the trust and accountability that comes with a fiduciary relationship." (Registered Rep)
Working Paper: Regulating Markets for Retirement Payouts: Solvency, Supervision and Credibility
Excerpt: "Soon the largest cohort of workers in U.S. history will be eligible to retire. Most will have only their personal saving and a lump-sum benefit from a 401(k) plan to supplement Social Security benefits during retirement. . . . This chapter evaluates the regulatory and enforcement structures in place to protect individuals from financial loss through the insolvency, fiscal mismanagement, and/or malfeasance of those who help them manage and invest their retirement distributions." (Pension Research Council; registration required to download fulltext of paper)
Links to Items on Executive Comp, Benefits in General
Overview: Minimal Relief for 409A Compliance
Excerpt: "Unfortunately, the relief provided does not preclude the need to complete a thorough review of all arrangements subject to 409A by year-end. Arrangements must be reviewed and amended to insure compliance with those requirements that must be met by December 31, 2007." (Gray, Plant, Mooty, Mooty & Bennett, P.A.)
Overview: 409A Document Compliance Deadline Extension
Excerpt: "Employers should not mistake the extension of the documentary compliance deadline with an extension of good faith compliance similar to the extensions that occurred at the end of 2005 and 2006. Employers need to confirm that their plans have, in writing, a compliant time and form of payment. In addition, employers should review the transition relief available only this year and determine whether they intend to take advantage of this relief." (Dorsey & Whitney LLP)
Employee's Exercise of Stock Option with Unlimited Term Violated Code Sec. 409A
Excerpt: "Compensatory nonstatutory stock options granted by an employer to two non-key employees were both subject to Code Sec. 409A as a nonqualified deferred compensation plan, the IRS has privately ruled. However, whether the exercise of an option was subject to tax under Code Sec. 409A was determined by whether the option was set to terminate 10 years after the date of the grant or 90 days after the employee terminated employment." (Wolters Kluwer Law & Business)
Court Rules New York State G.ay Married Benefits Legal
Excerpt: "An Albany court has dismissed a challenge to a decision by New York State's Comptroller that treats out-of-state marriages of same-sex couples the same as any other legal marriage in terms of benefits afforded to state employees through the New York State Retirement System." (365G.ay.com)
Overview: Deadline Extension for Written Compliance with Final Nonqualified Deferred Comp Regulations (PDF)
3 pages. Excerpt: "Plan sponsors of nonqualified deferred compensation arrangements or any compensation program should carefully review such arrangements and programs to determine whether Code Section 409A applies to them. If Code Section 409A applies, plan sponsors should review and implement any required design changes and consider any other discretionary changes." (Kutak Rock LLP)
Overview: IRS Issues Limited 'Relief' to Bring Documents into Compliance with Section 409A Regulations
Excerpt: "Achieving full compliance by the end of 2007 has proven to be a daunting task. Many requests for further delays in the compliance deadline were submitted . . . . On September 10, the IRS and Treasury responded by issuing Notice 2007-78 . . ., which extends the Section 409A documentary compliance deadline from December 31, 2007, to December 31, 2008, for certain provisions required to be in writing." (Jones Day)
Policy; Opinion; Advocacy
Congressional Letter to Treasury Regarding Combined Plan Limit Interpretation (PDF)2 pages. (U.S. Congress via American Benefits Council)
Newly Posted Events
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in North Dakota on October 3, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in North Dakota on October 5, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Illinois on October 17, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Idaho on October 19, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Indiana on October 24, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in North Dakota on October 2, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in North Dakota on October 4, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Illinois on October 16, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Idaho on October 18, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Indiana on October 23, 2007
presented by BISYS Retirement Services
401(k) Plans
in Washington on September 25, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
401(k) Plans
in California on October 9, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
401(k) Plans: Beyond the Basics
in Kansas on October 18, 2007
presented by SunGard Relius
Cafeteria Plans
in Washington on September 26, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
Cafeteria Plans
in California on October 10, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
COBRA Compliance for Group Health Plans
in Washington on September 28, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
ERISA Compliance for Health & Welfare Plans
in Washington on September 27, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
ERISA Compliance for Health & Welfare Plans
in California on October 11, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
ERISA Workshop
in Iowa on October 17, 2007
presented by SunGard Relius
ERISA Workshop
in Missouri on October 17, 2007
presented by SunGard Relius
HIPAA Portability, Privacy & Security
in Washington on September 28, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
HSAs, HRAs, and Consumer-Driven Health Care
in Washington on September 27, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
HSAs, HRAs, and Consumer-Driven Health Care
in California on October 11, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)
Newly Posted Press Releases
Hewitt Launches Defined Contribution Consulting Practice
Hewitt Associates LLC
U.S. Labor Department Proposes New Disclosure Rules For Multiemployer Pension Plans
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
National Survey Shows Employee Fears About Consumer-Driven Health Plans on Decline; CDH Plans Continue To Grow in Popularity Among Employers and Employees
Aon Consulting
The Bottom Line: Employers Can Manage Obesity Problem with Actionable Information
Gordian Health Solutions, Inc.
Keller Rohrback L.L.P. Files Complaint on Behalf of Participants and Beneficiaries of the Countrywide Financial Corp. 401(k) Savings and Investment Plan
Keller Rohrback
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs |
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Pension Actuary
for Chicago Suburban Pension Firm
in IL
Employee Benefit Attorney With at Least 2 Years Experience
for Chang, Ruthenberg & Long PC
in CA
Employee Benefit Attorney With at Least 5 Years Experience
for Chang, Ruthenberg & Long PC
in CA
Employee Benefit Attorney With ESOP Experience
for Chang, Ruthenberg & Long PC
in CA
Non-Qualified / Deferred Compensation Plan Financial Analyst
for Client-oriented, results-oriented privately held firm
in GA
Associate Pension Administrator
for Alliance Pension Consultants
in IL
Pension Plan Administrator
for The Pension Alliance
in PA
Participant Services Representative
for Sentinel Benefits Group
in MA
Account Manager, Health & Welfare
for Cammack LaRhette Consulting
in NY
Healthcare Consulting Senior Manager
for Deloitte Aers - Midwest
in TX
Sr. Defined Benefit Administrator/Client Manager
for Stephen H. Rosen & Associates, Inc.
in NJ
Client Service Consultant - Regional
for StanCorp Equities, Inc.
in CT
ESOP/401 (k) Administrator
for Polycomp Administrative Services
in CA
Client Service Consultant - Regional
for Standard Insurance Company
in TX
Client Service Consultant - Regional
for Standard Insurance Company
in TX
Pension Administrator
for Polycomp Administrative Services
in CA
Data Project Administrator
for Vanguard
in PA
Retirement Compliance Testing Administrator
for Vanguard
in PA
Defined Contribution Analyst II
for Standard Insurance Company
in TX
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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