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| September 24, 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
Small (Typo) Correction to Final IRS Regs on 403(b) Plans (PDF)2 pages. (Internal Revenue Service)
Compliance Rule Summaries/Analysis/Filed Comments
Overview: New Standard Regarding 'Partial Plan Termination' of Tax-Qualified Retirement PlansExcerpt: "Because of the uncertainty of the application of the partial termination rule and the severe adverse consequences that could result from making an erroneous determination in this regard, an employer who has seen its workforce shrink in recent times should engage in a significant and careful analysis as to whether or not any tax-qualified retirement plan sponsored by it has incurred a 'partial termination.'" (White & Case LLP)
Overview: Final, Proposed Regs to Comply with PPA Annuity Provider Selection Provisions
Excerpt: "The Employee Benefits Security Administration (EBSA) has released interim final and proposed regulations to comply with the Pension Protection Act of 2006 (P.L. 109-280; PPA) annuity provider selection provisions. Previously, both defined benefit and defined contribution plans were required to meet the 'safest available annuity standard' in selecting an annuity provider to distribute benefits." (Wolters Kluwer Law & Business)
Another Question is Answered in the Who's the Employer Q&A Column
Can an individual employer make a $12,000 retirement plan contribution for a domestic employee? The employer does NOT have any trade or business. He is actually an 87 year-old retired gentleman. (BenefitsLink.com)
Trends; Surveys; Research
50th Annual Survey of Profit Sharing and 401(k) Plans Now AvailableExcerpt: "This year's survey contains 114 tables of data on important topics such as participation rates, participant deferrals, company contributions, investment options, asset allocation, Internet usage, vesting, loans, the Roth 401(k), and more. Data is frequently broken down by plan size and plan type." (Profit Sharing/401(k) Council of America)
Employers Worry About Workers Tapping 401(k)s Amid the Mortgage Crisis
Excerpt: "During the past few weeks, financial advisers have received an increasing number of calls from 401(k) plan sponsors concerned about two things: how plan participants are reacting to the crisis and whether they, as plan fiduciaries, should replace funds in their plans that might be affected by the blowup in subprime mortgages." (Financial Week; free registration required)
401(k) Options Dismay Workers -- Fund Choices, Fees Hurt Morale
Excerpt: "By limiting employees' choices to a few mutual funds with high fees, companies can reduce the amount they have to pay fund firms for administering retirement plans. But such savings can be shortsighted because they can hurt employee morale and may even hinder recruitment efforts.' (The Wall Street Journal via The Courier-Journal)
Higher Education Faculty Like Having Several Choices in 403(b) Plan Vendors
Excerpt: "In a recent survey of over 500 faculty in colleges and universities, Fidelity found 51% of faculty said having two to three 403(b) plan providers would be ideal." (PLANSPONSOR.com; free registration required)
California Seeks Fix for Crisis in Pensions as Panel Weighs Options for $5 Billion Cost
Excerpt: "Alarmed that the annual taxpayer tab for teachers' and state workers' pensions and health benefits has soared from $1 billion to more than $5 billion since 2000, California officials called on Friday for fixes to stem the financial outpouring. The calls come amid growing concern about California's pension crisis, which has deepened over the past seven years as the average county fund has gone from being flush with cash to being at least 9 percent underfunded." (DailyNews.com)
For Every Dollar City of Chicago Collects in Property Taxes, About 47 Cents Goes Toward Public Employee Pensions
Excerpt: "In a potential sign of trouble down the road, each of the pension funds -- like most public pensions these days -- faces a widening gap between its assets and the amount of money it expects to ultimately have to pay retirees. Their investments are growing, but not as fast as the anticipated future pension payouts." (Chicago Sun-Times)
National Save for Retirement Week Kicks Off Oct. 21
Excerpt: "National Save for Retirement Week kicks off Oct. 21-27 this year. For the second year, ICMA-RC will spearhead a national campaign effort to get employers and workers across the U.S. more actively involved in saving for their future." (ICMA-RC)
Policy; Opinion; Advocacy
Testimony of Registered Investment Advisor MJM401k to ERISA Advisory Council Meeting on Fee Disclosure (PDF)9 pages. Excerpt: "There are numerous examples of plans properly using revenue sharing payments with the sole interests of their participants at heart, and where these payments have been used to provide good plans to participants at a reasonable price. However, due to its opaque nature, revenue sharing easily can also be used to facilitate the payment from a plan of an unreasonable fee. Suffice it to say that, sadly, I have seen a number of examples . . . ." (Michael J. Malone of MJM401k)
Social Security: Evaluating the Structure for Basic Benefits (PDF)
8 pages. Excerpt: "After careful study of the issues involved, the Social Insurance Committee of the American Academy of Actuaries has concluded that the defined benefit structure is preferable to the defined contribution structure for providing basic retirement benefits under Social Security. Because of its ability to tailor benefits that meet the needs of beneficiaries in different circumstances and its inherent risk-sharing attributes, the defined benefit structure is more efficient . . . ." (American Academy of Actuaries)
Statement of Pension Rights Center Before ERISA Advisory Council Working Group on Participant Benefit Statements (PDF)
Excerpt: "It is our view that the annual notice is misguided and undermines the purpose of requiring benefit statements in the first place. If benefit statements are not automatically furnished, if participants have to take affirmative actions to receive benefit statements, fewer benefit statements will wind up in the hands of participants. The exception virtually guarantees that relatively few defined benefit plan participants will receive and read their benefit statements." (Pension Rights Center)
Legislation to Partly Renege on Pension Funding Break
Excerpt: "Legislation passed in a Senate committee on Friday threatens to take back some of the relief given to some companies, such as American Airlines and Continental Airlines, granted a pension funding break earlier this year." (PLANSPONSOR.com; free registration required)
Hewitt Federal Legislation Quick Guide Updated as of September 19, 2007, for Retirement Plans (PDF)
7 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding retirement plans. (Hewitt Associates)
Sponsored by: ASC & the ASC Institute
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| (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
Overview: Guidelines for Deferred Compensation Arrangements Maintained by Tax-Exempt Entities & State & Local Governments
Excerpt: "By way of background, Section 457 of the Internal Revenue Code governs, with limited exception, all deferred compensation arrangements maintained by tax-exempt entities or state or local governments. Under Section 457, the arrangements must meet either Section 457(b) or Section 457(f)." (PlanAdvisor Magazine)
Backdating: Economic Analysis and Observations on the Stock Option Scandal
Excerpt: "This Article considers the effects of and several possible explanations for backdating non-executive options, including reducing apparent rank and file compensation. Finally, this Article argues that the backdating phenomenon is not an accounting scandal. Backdating has accounting consequences, but it is unlikely to have been accounting driven." (Boston University Law Review via Social Science Research Network)
Broad Definition Under Section 409A Creates Potential Pitfalls for Employers
Excerpt: "Voluminous final Treasury regulations were issued April 10 under Section 409A of the Internal Revenue Code. The section governs nonqualified deferred compensation arrangements -- a term that is broad in its reach. In addition to regulating traditional executive compensation and equity compensation arrangements, Section 409A also regulates compensation devices that many employers have not typically considered as deferred compensation." (Workforce Management; free registration required)
Overview: Deadline Extension for Some, but Not All, Sec. 409A Document Compliance Amendments (PDF)
7 pages. Excerpt: "On September 10, the Internal Revenue Service issued Notice 2007-78, which generally extends the deadline for making final plan amendments to comply with section 409A of the Internal Revenue Code . . . by one year, from January 1, 2008, to January 1, 2009. However, nonqualified deferred compensation plans, employment contracts and other arrangements will still need to be reviewed, and in some cases amended, by the end of 2007." (Pillsbury Winthrop Shaw Pittman LLP)
Hewitt Federal Legislation Quick Guide for September 19, 2007, on Human Resources & Employment Law (PDF)
11 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates)
409A: What Employers Need to Do by December 31, 2007 for 409A Compliance (PDF)
4 pages. Excerpt: "Lastly - but perhaps most importantly - design a system to track compliance with all operational requirements under the final regulations. The Notice requires that written plan amendments made during 2008 be retroactive to January 1, 2008 and that such amendments demonstrate how operational compliance with the requirements of the final regulations was achieved during 2008." (Womble Carlyle Sandridge & Rice, PPLC)
Overview: IRS Provision of Limited Relief from Looming IRC § 409A Deadline
Excerpt: "Unfortunately, the Notice does not extend (i) the deadline for making distribution election changes; (ii) the good faith compliance standard; or (iii) the transition rules. Accordingly, binding distribution elections that comply with 409A must be made in writing by the end of 2007." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.)
CCH Executive Compensation Update, September 2007 (PDF)
10 pages. Excerpt: "The newsletter contains articles titled: SEC Provides Significant Guidance on Executive Compensation Proxy Disclosures; SEC Proposes Registration Relief for Private Company Stock Options; Code Sec. 409A Compliance Deadline is Partially Delayed; Delaware Courts Continue to Develop Law on Option Award Timing; and, Use of Outside Counsel on Compensation Committee May Run Afoul of Code Sec. 162(m) Rules." (CCH Incorporated via Winston & Strawn LLP)
Summary of Employer Costs for Employee Compensation, June 2007
Excerpt: "In addition to retirement and savings the other benefit categories were: life, health, and disability insurance benefits, which averaged $2.32 (8.4 percent); legally required benefits, including Social Security, Medicare, unemployment insurance, and workers' compensation, which averaged $2.21 per hour (8.0 percent of total compensation); and paid leave benefits (vacations, holidays, sick leave, and other leave), which averaged $1.95 (7.0 percent)." (U.S. Bureau of Labor Statistics)
Newly Posted Events
401(k) Plans: Beyond the Basics
in California on October 25, 2007
presented by SunGard Relius
Compliance Assistance Seminar - Free
in Missouri on September 26, 2007
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
ERISA Workshop
in Colorado on October 18, 2007
presented by SunGard Relius
ERISA Workshop
in Tennessee on October 18, 2007
presented by SunGard Relius
ERISA Workshop
in Washington on October 19, 2007
presented by SunGard Relius
ERISA Workshop
in Illinois on October 25, 2007
presented by SunGard Relius
ERISA Workshop
in Wisconsin on October 26, 2007
presented by SunGard Relius
Newly Posted Press Releases
The Integrated Benefits Institute Offers Largest Benchmarking Database in U.S. Spanning Disability and Workers' Compensation Programs
Integrated Benefits Institute
National Retirement Partners Starts Next Round of Acquisition
National Retirement Partners, Inc.
Envestnet Partners with Business Logic to Offer Managed Accounts in DC Market
Envestnet Asset Management
SEC Issues 'Cease-and-Desist' Order to Callan Associates
NYTimes.com
GM, UAW Reportedly Talk Replacing Pension With 401(k)
Crain Communications, Inc.
Employers to Learn Tactics for Managing Ever-Increasing Costs of Employee Health Benefit Programs
Benefit Sources & Solutions
Avivia Health from Kaiser Permanente Launches Health and Productivity Optimization Product
Avivia Health
Yale Law Women Releases 2nd Annual List of the Top Ten Family-Friendly Firms
Yale Law Women
Newly Posted or Renewed Job Openings
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Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm
in NJ
Defined Benefit Client Account Manager
for New York Life Retirement Plan Services
in MA
Senior Communications Consultant
for Boutique Communications Consulting Firm
in AZ
General Manager, Pension & Savings Plans
for Maersk Inc.
in NJ
401(k) Recordkeeper
for Retirement System Group Inc.
in NY
New Business Installation Team Manager
for Transamerica Retirement Services
in CA
Omni Experience Needed
for Prestige Staffing
in ANY STATE, CO
Institutional Trust Consultant - Baltimore, MD and Richmond, VA
for BB&T
in MD, VA
Account Manager (Insurance/TPA)
for Zenith Administrators
in WA
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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