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| October 16, 2007 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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(a) New Guidance Documents
(None today.)
(b) News
Judging from Recent UAW Contracts, Auto Workers Can Now Expect Lower Pay/Fewer Benefits Than Predecessors
Excerpt: "Officially, pay cuts aren't part of the deals. But the launch of a two-tier system, offering many new hires lower wages, raises the curtain on an era when overall pay will be lower. In benefits, a new contract ratified by UAW workers this week allows General Motors to contribute to a cash-balance retirement plan for new entry-level workers, rather than providing a guaranteed pension." (The Christian Science Monitor)
Cash-Strapped Americans Raiding Their 401(k)s
Excerpt: "Despite potential tax and investment problems, more investors have been borrowing from their 401(k) plans or taking hardship withdrawals in recent months, some retirement plan providers say. Many in the field expect more borrowing in 2008, as consumers struggle with tighter credit and potentially higher mortgage payments." (Dow Jones Newswires via Chicago Tribune; free registration required)
New Hampshire Governor Asks Special Committee to Investigate State Pension Underfunding
Excerpt: "New Hampshire Governor John Lynch called the state's place at the bottom rung of pension plan performance for the past decade 'inexcusable,' and has entrusted a special commission to look at ways to dig the fund out of its spot at the bottom quarter." (PLANSPONSOR.com; free registration required)
For Rhode Island, Switch to DC Scheme Comes with Hefty Price Tag
Excerpt: "Shifting the Rhode Island retirement system to a defined contribution plan would cost taxpayers $151.5 million next year and more than $520 million over the next seven years before the state reaps any savings, the Providence Journal reported." (PLANSPONSOR.com; free registration required)
(c) Summaries of Guidance; Filed Comments
Please Take Survey by IRS Advisory Group: Improving the Employee Plans Compliance Resolution System (EPCRS)
Excerpt: "Are you an attorney, accountant, consultant, third-party administrator or other kind of retirement plan practitioner? Please help an official IRS advisory group supply the IRS with ideas for improving the Employee Plans Compliance Resolution System, by completing this online survey or emailing your response to the group. The deadline is the end of this week (October 19)." (IRS Advisory Committee (ACT) on Tax Exempt and Government Entities)
Overview: 403(b) Regulations -- Understanding the Changes (PDF)
20 pages. Excerpt: "This resource will provide you with a review of the new regulations, answers to commonly asked questions and concerns, and a game plan for streamlining your compliance process." (StanCorp Equities, Inc.)
Overview: Tax Issues on Distributions from Retirement Plans (PDF)
28 pages. A very brief overview emphasizing loans, QDROs and minimum distributions prepared by the IRS for presentation at its 2007 IRS Nationwide Tax Forum. Probably most useful to tax professionals whose practice does not already include a substantial amount of time on retirement plan distribution issues. (Internal Revenue Service)
Aug. 1 Letter to Treasury Department from Six U.S. Senators on Application of PPA's 'Whipsaw' Distribution Rules to Pending Cases (PDF)
2 pages; August 1, 2007. Excerpt: "We write to express concern about views enumerated by several colleagues in a May 8th letter regarding cash balance provisions contained in the Pension Protection Act . . . . Congress specified that [PPA rules on calculation of lump sum distributions] would apply only to distributions made after the effective date of the Act, and thus would not apply to pending cases involving alleged underpayments of lump sum distributions made prior to the Act's effective date . . . [as] is plainly stated in the legislative history. . . . The recent court decision in West v. AK Steel Corp. Retirement Accumulation Pension Plan correctly construed the Act's prospective application." (U.S. Sen. Sherrod Brown (D-Ohio), Five Other Senators)
Overview: Final 415 Regulations Definition of Post-severance Compensation
Excerpt: "The proposed regulations provided specific guidelines regarding when amounts received after severance from employment would be considered 'compensation' for 415 purposes. Under the proposal, post-severance payments were included in compensation if they were paid within 2-1/2 months following severance from employment, and they were either . . . ." (McKay Hochman Co., Inc.)
(d) Trends, Surveys, Research
Working Paper: Learning from the Chilean Experience: The Determinants of Pension Switching
Excerpt: "This chapter uses a change in the regulatory rules governing the marketing of AFP pensions . . . in Chile to investigate the empirical basis for sources of market frictions. We find that switching patterns are on a par with trading in US 401(k) accounts, and further, that switchers tend to be highly educated and relatively more highly paid. Switching is also more common among those with higher levels of financial literacy. The 1997 regulatory change appears to have reduced switching, particularly among the better educated." (Pension Research Council; registration required to download fulltext of paper)
Public Catches on to Roth 401(k)
Excerpt: "The types of employers that have been at the forefront of offering Roth 401(k) plans tend to be law firms, medical groups, engineering firms and other providers of professional services . . . ." (The Contra Costa Times; free registration required)
BGI Annuity Offering Seen As Alpha-Enhancing Default Option for 401(k)s
Excerpt: "Barclays Global Investors wants to turn the employer match in 401(k) plans into an annuity with capital appreciation to boot." (Pensions & Investments)
Employee Ownership Update for October 15, 2007
NCEO Executive Director Corey Rosen discusses Leland Stanford and employee ownership, a new book on how employee ownership built SAIC, and how company stock holdings in 401(k) plans continue to fall. (National Center for Employee Ownership)
African-American Investors Remain Behind in Retirement Savings, According to Study
Excerpt: "The average black male in America currently has $35,454 less saved in his retirement fund than his white counterpart, according to the 2007 Ariel-Schwab Black Investor Survey as reported October 11 in New York City." (Financial-Planning)
European Union's High Court Backs System of Mandatory Retirement Age to Combat High Unemployment
Excerpt: "In a judgment, the European Court of Justice said that even though discrimination based on age was illegal, the imposition of the 65-year threshold for workers can be justified to stabilize the labor market and if proper pension is provided." (AP via The Washington Post; free registration required)
African Americans Age 65 and Older: Their Sources of Retirement Income in 2005
Excerpt: "In 2005, older African Americans were only 8.4 percent of the total population age 65 and older, yet they made up 19.3 percent of all those age 65 and older living below the poverty threshold. This Fact Sheet focuses on the poverty status and sources of retirement income for older African Americans." (AARP)
Retirement Income Market at the Brink of Significant Growth, According to Study
Excerpt: "Financial Research Corporation (FRC) has released a new study which reveals the retirement income market is poised for innovation and significant future growth." (PLANSPONSOR.com; free registration required)
Overview of Guidance on Missing Participant -- PPA Updates Added on October 5, 2007
Excerpt: "In February 2007, the DOL amended the . . . rules for terminating plans to add the PPA provision for an inherited nonspouse beneficiary IRA, that requires the establishment of an inherited IRA for a missing beneficiary of a deceased participant." (McKay Hochman Co., Inc.)
Recent Changes to Defined Benefit Plan Design (PDF)
20 pages. Excerpt: "Our survey of more than 125 Vanguard® DB plan sponsors indicates that 6 of 10 respondents altered their DB plan design during 2000-2006. The most common change was a pension freeze combined with an enhanced 401(k) plan, although hybrid designs were important, especially at large firms. Our findings highlight the ongoing evolution of the private-sector retirement system away from formula-based DB plans toward account-based DB or 401(k) programs." (Vanguard Center for Retirement Research)
(e) Policy, Opinion, Advocacy
Opinion: Wrongdoing Involving Securities Brokerages, Pension Consultants
Excerpt: "'The entire investment return attributable to an individual's retirement account over a lifetime may be eaten away by excessive fees and other malfeasance. While excessive fees of one percent or more may seem insignificant, when compounded over an investor's lifetime, they may reduce a retiree's nest egg by more than 50%." (Benchmark Financial Services, Inc.)
Opinion: Why Would Rational Employer Be Willing to Take on Retirement System Headaches?
Excerpt: "[The real retirement] crisis is the majority of American workers who lack even the opportunity to participate in a workplace retirement plan." (PLANSPONSOR Institute)
Links to Items on Executive Comp, Benefits in General
Opinion: No. 1 Baby Boomer Signs Up for Social Security Benefits
Excerpt: "When it comes to the nation's finances, Kathleen Casey-Kirschling is Public Enemy No. 1. Her offense: being born. Specifically, being born on Jan. 1, 1946, just a tick after midnight. That made her the first member of the 80 million-strong baby-boom generation, which, starting next year, will begin to bankrupt the nation by crashing the Medicare and Social Security systems." (The Washington Post; free registration required)
Overview: SEC Review of Executive Compensation Disclosures (PDF)
3 pages. Excerpt: "While many companies spent a great deal of time and effort in working to comply with the novel and complex rules, and in particular in drafting the CD&A, reactions to the overall quality of the new disclosure have been mixed, with general comments and criticisms coming from the business media, shareholder and corporate groups, and members of the SEC staff." (Morgan, Lewis & Bockius LLP)
Judge Allows FedEx Drivers to Sue for Benefits As Group
Excerpt: "U.S. District Judge Robert Miller in South Bend, Ind., said the drivers could proceed with a class action against FedEx on claims that they deserve full-time benefits under federal law." (Bloomberg News via Los Angeles Times; free registration required)
Newly Posted Events
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Kansas on November 7, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Illinois on November 7, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in California on November 7, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in California on November 9, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Kansas on November 9, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Illinois on November 9, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Florida on November 14, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Minnesota on November 16, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Georgia on November 16, 2007
presented by BISYS Retirement Services
2007 Fall Tour: Beyond the Essentials: Beneficiary Issues and Answers
in Minnesota on November 14, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Kansas on November 6, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Illinois on November 6, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in California on November 6, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Kansas on November 8, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Illinois on November 8, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in California on November 8, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Minnesota on November 13, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Florida on November 13, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Minnesota on November 15, 2007
presented by BISYS Retirement Services
2007 Fall Tour: IRA Essentials
in Georgia on November 15, 2007
presented by BISYS Retirement Services
2007 Web/Telephone Seminar: Establishing IRAs and IRA Amendments
Nationwide on November 15, 2007
presented by BISYS Retirement Services
2007 Web/Telephone Seminar: Introduction to 401(k) Plans
Nationwide on November 1, 2007
presented by BISYS Retirement Services
2007 Web/Telephone Seminar: IRA Beneficiary Distributions
Nationwide on November 13, 2007
presented by BISYS Retirement Services
2007 Web/Telephone Seminar: IRA Compliance
Nationwide on November 6, 2007
presented by BISYS Retirement Services
2007 Web/Telephone Seminar: IRA Reporting
Nationwide on November 8, 2007
presented by BISYS Retirement Services
2007 Web/Telephone Seminar: IRA Reporting
Nationwide on November 27, 2007
presented by BISYS Retirement Services
2007 Web/Telephone Seminar: Roth IRA Distributions
Nationwide on November 20, 2007
presented by BISYS Retirement Services
Executive Compensation: Will Your Program Withstand Scrutiny? - Webcast
Nationwide on November 7, 2007
presented by Deloitte
Identify Care Gaps and Demonstrate Value to Employers
in California on November 7, 2007
presented by DST Health Solutions
Individual Health Plans: Marketing, Data & Strategic Implications
in California on November 1, 2007
presented by Healthcare Web Summit
THE ASPPA BENEFITS COUNCIL OF DELAWARE VALLEY PRESENTS - JEFF BROWN ON PERSONAL FINANCE
in Pennsylvania on November 13, 2007
presented by
The Next Frontier in 401(k) Plan Management - Distribution Management
in Massachusetts on November 13, 2007
presented by New England Employee Benefits Council
Various IRA and HSA Webinars
Nationwide on October 30, 2007
presented by Collin W. Fritz & Associates, Ltd.
Newly Posted Press Releases
401(k) Plans and Ethics for Insurance Agents E-Learning Courses Introduced
International Foundation of Employee Benefit Plans
Trone, Industry Expert On Fiduciary Responsibility, Selected To Head U.S. Coast Guard Academy Institute For Leadership
Foundation for Fiduciary Studies
NCPA Launches Web Site Dedicated to Retirement Issues
National Center for Policy Analysis (NCPA)
Bankrate Unveils New Retirement Calculators
Bankrate, Inc.
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs |
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Retirement Plan Analyst
for Benefit Strategies, LLC
in ME
Pension System Quality Assurance Analyst
for Milliman USA
in TX
Pension Consultant
for Pension & Estate Planners, Inc.
in DE, NJ, PA
Pension Administrator
for A Dynamic Retirement Administration Firm
in ANY STATE
Corporate Life Insurance Illustration Analyst
for Great-West Financial Services
in CO
Retirement Plan Specialist
for Diversified Investment Advisors
in FL
Client Service Associate
for Merrill Lynch
in CO, NJ
Conversion Department Manager
for First Mercantile
in TN
Pension Administrator
for Growing Central New Jersey Firm
in NJ
Defined Contribution / 401(k) Plan Administrator
for Strategic Pension Services, Inc.
in CA
Director of Executive Benefits
for Great-West Financial Services
in GA
DC Implementation Manager
for Milliman, Inc.
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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