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| October 4, 2007 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is ASPPA
(Click on company name or banner to learn more.)
| 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. |
(a) New Guidance Documents
Identifying, Correcting and Avoiding Common 401(k) Plan Errors (PDF)
43 pages. Excerpt: "If mistakes are made with respect to your 401(k) plan, you may utilize the IRS's Employee Plans Compliance Resolution System (EPCRS) to remedy your mistakes and avoid the consequences of plan disqualification. A correction for a mistake should be reasonable and appropriate. The correction methodology should resemble one already provided for in the Code and all applicable facts and circumstances should be considered." (Internal Revenue Service)
(b) News
Qualified Default Investment Rules May Spark Legal Action, According to Compass Institute
Excerpt: "U.S. workers will have legal recourse against Plan Sponsors when, at retirement, they are left with insufficient balances in their 401(k)s because their Plans were defaulted into Formulaic Asset Allocation (FAA) funds, (Lifecycle, Target Date, Managed Accounts), according to the Chicago-based research organization, Compass Institute, LLC." (PR Newswire via Human Resource Executive Online; free registration required)
(c) Summaries of Guidance; Filed Comments
Federal Court Dismisses Backloading Claim
Excerpt: "In this article, we examine the court ruling in the case of Wheeler v. Boeing relating to cash balance plan issues. Particularly, determining if Boeing violated ERISA backloading rules by following PPA grandfather provisions to attain qualified status." (JPMorgan)
Cashed-Out Former Employee Claiming Fiduciary Breach Diminished Account Value Is 'Participant' with Right to Sue
Excerpt: "EBIA Comment: In its analysis, the Third Circuit noted its agreement with a recent Seventh Circuit decision, which reasoned that stock losses are 'benefits' and that the cashed-out former employee had the right to sue based on a claim that an ERISA fiduciary breach had diminished the value of the account as of its cash-out date. We note that, without resolving the issues of fiduciary status and liability, these decisions merely allow for continued litigation of those matters." (Employee Benefits Institute of America)
Overview: New IRS Normal Retirement Age Regulations an Increasing Source of Concern
Excerpt: "The new regulations (which, for a governmental plan, will apply for plan years beginning on or after January 1, 2009) will now permit a pension plan (a defined benefit plan or money purchase pension plan) to pay benefits upon an employee's attainment of normal retirement age, even if the employee has not yet had a severance from employment with the employer maintaining the plan." (National Council on Teacher Retirement)
(d) Trends, Surveys, Research
The Computer-Driven Advice Model
Excerpt: "When Congress debated the various ways to provide investment advice to 401(k) participants, a primary concern was objectivity, particularly when advice was being provided by an adviser affiliated with a service vendor that had its own group of mutual funds. Congress defined this new role as that of a 'fiduciary adviser.' The two 'eligible investment advice arrangements' under which the fiduciary adviser could provide advice to participants are: fee-neutral advice and computer-driven advice models." (Investment News; free registration required)
A Symposium on Pension Finance
Excerpt: "In this article, we eavesdrop on a fictional dialogue amongst colleagues regarding pension plan assets and financing. Follow along, as our fictional characters weigh different factors in regards to funding pension obligation liabilities." (JPMorgan)
United Kingdom Pensions Update for September 2007 (PDF)
3 pages. Excerpt: "This newsletter summarizes key regulatory and legal developments in the UK Pensions sector. The September 2007 issue includes information on the revised clearance guidance, the actuarial profession's response to the draft Transfer Values Regulations and changes to the Financial Assistance Scheme." (Baker & McKenzie)
Companies in Netherlands Given One-Year Grace Period from Pension Governance Fines
Excerpt: "De Nederlandsche Bank has announced that it will not apply penalties for failing to comply with the new pension fund governance rules until January 1, 2008, when inspections are due to start. The new Pension Act took effect on January 1, 2007." (Watson Wyatt Worldwide)
Government and Unions Agree on Increasing Retirement Age in Italy
Excerpt: "The retirement age may increase from 57 to 58 in 2008 and then gradually up to 61 in 2013, under an agreement the government reached with unions on July 20, 2007. This controversial provision of pension reform faces a difficult road in the Parliament." (Watson Wyatt Worldwide)
(e) Policy, Opinion, Advocacy
Proposals to Reform 401(k) Fees, Investment Strategies Spark Debate
Excerpt: "As Congress considers mandating greater fee disclosure for 401(k) and other retirement plans, groups representing plan sponsors and others interested in shaping the debate are girding for a tough fight." (MarketWatch)
Opinion: Why 'Free' 403(b) Third Party Administrators Are A Bad Idea (PDF)
Excerpt: "With the increased administrative burden placed on school districts due to new 403(b) regulations it might now be prudent to think about hiring a Third Party Administrator (TPA) to ensure your school district (community college, County Office of Education, nonprofit, or church organization) doesn't run afoul of the new rules that will soon apply (1/1/2009) in the 403(b). Many School Administrators are now fielding calls from TPA service companies across the country who want to provide Compliance." (Scott Dauenhauer via 403bwise.com)
Congress Examines Impact of Hedge Fund, Private Equity Taxation on Public Pensions
Excerpt: "Tax hikes for private equity -- and the potential impact of increased fees on investors, particularly public pension plans, that could result -- continue to be a major focus for the Congress. For example, the Senate Finance Committee held a hearing in early September specifically to examine this issue. While NCTR and NASRA have now made their 'no position' position explicitly clear, the unprecedented retraction of an August 24 letter from NCPERS on this hot topic continues to be something of a hot topic itself." (National Council on Teacher Retirement)
Links to Items on Executive Comp, Benefits in General
Audio of October 2nd Panel on the Next Steps in Providing Benefits to Low-Wage Workers
Excerpt: "Panelists discussed what is missing from the debate about improving the income, benefits, and related work supports for low-wage workers, especially those with children." (Urban Institute)
FAQs: Revised Form LM-30 - Labor Organization Officer and Employee Report
Excerpt: "Note: The information in these Frequently Asked Questions (FAQs) applies to the revised Form LM-30 which must be filed by a labor organization officer or employee for reports covering any of his or her fiscal years that began on or after August 16, 2007. The current Form LM-30 may be filed for reports covering any fiscal year beginning before that date." (U.S. Department of Labor)
Newly Posted Events
New Proposed Cafeteria Plan Regulations with Craig J. Davidson, CEBS - Webinar
Nationwide on October 16, 2007
presented by Davidson Marketing Group -- FutureOffice Network
Preapproved Cross-Tested Plans: The Next Generation
Nationwide on October 16, 2007
presented by SunGard Relius
Newly Posted Press Releases
PBGC Assumes Brooklyn Hospital Center Pension Plan
Pension Benefit Guaranty Corporation (PBGC)
U.S. Labor Department Testifies Before House Education and Labor Committee on 401(k) Fee Disclosure
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Unnecessary Burdens on 401(k) Retirement Plans Will Slow Growth, Reduce Participants' Benefits
American Benefits Council
ERIC, PSCA, and Other Groups Support Enhanced Fee Disclosure, But Opposed to Chairman Miller's Approach
ERISA Industry Committee
Survey: Most Crave Financial Advice Over Personal Trainer, Fashion Consultant
Securities Industry and Financial Markets Association (SIFMA)
RetireeWorkforce / Vizu Corporation Research Finds 75% Of Labor Force Plans To Work After Retirement
RetireeWorkforce.com
Triveris Introduces Personal Health Record with Built-in Health Advisor
Triveris
Newly Posted or Renewed Job Openings
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ERISA Attorney
for O'Neil, Cannon, Hollman, DeJong S.C.
in WI
Account Manager
for JR Katz
in IL
Retirement Plan Administrator / Consultant
for Applied Plan Administrator LLC
in MI
Daily Valuation/Recordkeeping Manager
for Pension Specialists, Inc.
in CA
Enroller - Employee Benefits Meeting Presenter
for Total Benefit Communications
in ANY STATE
Retirement Plan Administrator
for PENSYS, INC.
in CO
Administrative Assistant, LA Pension Office
for Transamerica
in CA
Field Service and Underwriting Manager
for Standard Insurance Company
in CT
Statutory Disability Benefits Processor
for Standard Insurance Company
in NY
Stable Library, Disability Benefits Processor
for Standard Insurance Company
in NY
Pension Analyst
for Metro Benefits, Inc.
in PA
Defined Contribution Analyst I or II
for Standard Insurance Company
in ME
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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