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| October 17, 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. |
(a) New Guidance Documents
(None today.)
(b) News
City and County Plans 90% Funded in 2006, Wilshire Says
Excerpt: "The study authors admitted the figures could be misleading. 'Aggregate statistics such as these can mask the underlying fiscal strength or weakness of individual plans because assets in well-funded retirement systems are not transferable to underfunded systems.'" (Pensions & Investments)
(c) Summaries of Guidance; Filed Comments
DOL Outlines Upcoming 401(k) Fee Regulations During Testimony Before House Committee
Excerpt: "Testifying before the House Committee on Education and Labor on October 4, 2007, DOL Assistant Secretary for EBSA Brad Campbell said updated Form 5500 disclosure requirements are imminent and proposed regulations on disclosures by service providers to plan fiduciaries are not far behind. Campbell also urged Committee members to proceed cautiously on related legislation introduced by Chairman George Miller (D-CA)." (Deloitte via BenefitsLink.com)
Overview: DOL Revision of Timing of Participant Benefit Statements
Excerpt: "On October 12, 2007, the DOL released Field Assistance Bulletin 2007-03, which provides welcome relief to plan sponsors regarding the timing of participant statements for plans that do not provide for participant direction of investments (i.e., plans that must provide participant benefit statements at least once each calendar year)." (Thelen Reid Brown Raysman & Steiner LLP)
Overview: Nonspouse Beneficiary Rollover Document Change
Excerpt: "[I]n 2008, the IRS states that the PPA nonspouse beneficiary rollover rules will be required in the operation of qualified plans; and in 2009, it will be part of the required provisions to be included in the PPA plan document amendment." (McKay Hochman Co., Inc.)
Overview: The IRS Enrolled Retirement Plan Agent
Excerpt: "In late September 2007, the IRS issued final Circular 230 rules introducing the Enrolled Retirement Plan Agent. The first IRS designation permitting such agents limited practice before the IRS." (McKay Hochman Co., Inc.)
Hewitt Federal Legislation Quick Guide Updated as of October 10, 2007, for Retirement Plans (PDF)
9 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)
Participant's Attempt to Recover Investment Losses for Rollover Delay Fails
Excerpt: "EBIA Comment: A little more communication and better planning possibly could have kept the parties out of court. For example, the participant was already age 60 when she retired and could have requested an age 59-1/2 withdrawal under the terms of the plan even before she severed employment -- a more effective approach, in light of the employer's desire to keep her available on a per diem basis. In the words of the court, the result was an 'unfortunate' delay and loss of earnings." (Employee Benefits Institute of America)
Overview: IRS Guidance on Yield Curve for Calculating Funding Requirements, Lump Sums
Excerpt: "Filling in the Pension Protection Act's pieces one by one, the IRS on October 9, 2007 announced the corporate bond yield curve ('yield curve') single employer defined plans will be required to use to calculate minimum funding contributions and lump sum distributions beginning in 2008." (Deloitte via BenefitsLink.com)
(d) Trends, Surveys, Research
Companies Being Sued by Employees Who Say That 401(k) Fees Are Too High, Not Being Properly Disclosed
Excerpt: "Even as Congress examines current 401(k) plan fee structures, companies may have plenty of incentive to revisit the issue now rather than wait for any resulting legislative changes. That incentive comes in the form of class-action lawsuits launched against a number of large companies, including Lockheed Martin, General Dynamics, Bechtel Group, and nearly a dozen others." (CFO.com)
Pioneer Calculators Compare Micro Retirement Plan Options
Excerpt: "Pioneer Investments now offers two online calculators on its Web site that compare benefits of various types of retirement plans available to individual business owners." (planadvisor)
(e) Policy, Opinion, Advocacy
Policy Report: Does It Pay to Save?
Excerpt: "The U.S. fiscal system penalizes young, lower-income households that should be given incentives to save early in life. There is a federal tax incentive that provides a federal match of up to 50 cents for each dollar saved by a low- to moderate-income family. However, households with a zero or negative tax liability are ineligible for this Saver's Credit. This is one of the many ways that unrelated provisions of the tax and benefit systems interact to penalize even the most negligible savers." (National Center for Policy Analysis)
Benefits Groups Urge Congress Not to Impose 'Unnecessary Burdens' in 401(k) Plan Fee Disclosure
Excerpt: "According to the organizations, 'It is critical to emphasize that the disclosure rules should take into account the sharply different circumstances of participants and plan fiduciaries. Participants need clear, simple, short disclosures that effectively communicate the key points that they need to know to decide whether to participate and, if so, how to invest. Excessive detail can prevent employees from reading or understanding the disclosure and can also serve to obscure key points." (Wolters Kluwer Financial Services)
Research Report on Sweden's Move to Defined Contribution Pensions
Excerpt: "In 1994 Sweden converted its defined benefit public pension scheme into a combination of a notional defined contribution (NDC) pay-as-you-go scheme and a financial defined contribution (FDC) scheme. At the time, there were only a few examples of national mandatory financial schemes in the world." (AARP)
Links to Items on Executive Comp, Benefits in General
Overview: EBSA Offers Online Penalty Calculator for Form 5500 Delinquent Filer Voluntary Correction Program
Excerpt: "The EBSA's Web site provides the following description of 'How the Calculator Works': The calculator is designed to calculate the DFVCP penalty for each plan that is submitted under the program. After entering the required fields the calculator will determine the amount owed on each individual plan filing, then provide a final amount due for all the filings being submitted for that plan. The calculator is intended to be used for only one plan at a time." (Deloitte via BenefitsLink.com)
Social Security Payments to Increase 2.3 Percent in 2008
Excerpt: "Payments to Social Security retirement and disability recipients and millions of federal retirees will increase 2.3 percent in January, the lowest cost of living adjustment since 2003 as the pace of inflation eased." (The Washington Post; free registration required)
Select Tax and Social Security Benefit Issues Relating to Military Personnel, Volunteer Firefighters, Peace Corps Volunteers, and AmeriCorps Volunteers (PDF)
Excerpt: "The Subcommittee on Select Revenue Measures and the Subcommittee on Income Security and Family Support of the House Committee on Ways and Means has scheduled a joint public hearing for Wednesday, October 17, 2007, on a bill to provide tax relief to military personnel, volunteer firefighters, Peace Corps volunteers, and AmeriCorps volunteers. This document, prepared by the staff of the Joint Committee on Taxation, provides a description of select issues in present law relating to the taxation of these groups." (U.S. Joint Committee on Taxation)
Hewitt Federal Legislation Quick Guide for October 10, 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)
Overview: SEC Observations on 2007 Executive Compensation Disclosures (PDF)
Excerpt: "On October 9, 2007, the SEC's Division of Corporation Finance released its much-awaited report, based on its review of 2007 executive compensation disclosures in 350 proxy statements filed by public companies. On the same day, the SEC's Director of the Division of Corporation Finance, John White, was the keynote speaker at the 2nd Annual Proxy Disclosure conference. This DechertOnPoint update summarizes the report and Mr. White's observations." (Dechert LLP)
Opinion: Large Stock Options Grants May Hurt Investors
Excerpt: "A large stock option may motivate a chief executive officer to such great risks that he ends up making decisions that can backfire for shareholders. That's the conclusion of two business school professors in their paper published by the Academy of Management Journal: ``Swinging for the Fences: The Effects of CEO Stock Options on Company Risk-Taking and Performance.''" (Bloomberg News)
$117.5 Million Settlement Reported in Options Case
Excerpt: "Hewlett-Packard has agreed to settle a shareholder lawsuit for $117.5 million in a two-year-old case related to stock options backdating at Mercury Interactive, the business software company H.P. acquired last year, a lawyer for the plaintiffs said . . . ." (The New York Times; free registration required)
Definition of Spouse Overview Updated October 5, 2007
Excerpt: "What happens when a state law permitting same-sex marriages conflicts with the Federal Defense of Marriage Act?" (McKay Hochman Co., Inc.)
Say-on-Pay -- Executive Pay -- Law Could Mean Lawsuits Galore, Oxley Says
Excerpt: "Proposed legislation to give investors an advisory vote on executive pay, if passed, would lead to the unintended consequences of messy litigation and more lawmaking from Congress, according to Michael Oxley, vice chairman of Nasdaq and a former Republican representative from Ohio." (Financial Week; free registration required)
Severance Plan Lacking a Sufficient 'Ongoing Administrative Scheme' Is Not Subject to ERISA
Excerpt: "[T]he decision illustrates the difficulty in predicting litigation outcomes on this issue. Employers sponsoring severance arrangements should consider up front whether ERISA applies, keeping in mind the significant advantages ERISA can confer, like protection from otherwise applicable state-law claims and attendant larger damage awards (including possible consequential and punitive damages)." (Employee Benefits Institute of America)
Brief: Working Wives Reduce Social Security Replacement Rates
Excerpt: "[T]o understand the role of Social Security in the nation's retirement income system, it . . . is crucial to consider the replacement rate of couples . . . and how that rate has changed over time. Indeed, the increasing labor force participation of married women has led to a significant reduction in the replacement rates for couples." (Center for Retirement Research at Boston College)
First U.S. Baby Boomer Applies for Social Security
Excerpt: "Retired school teacher Kathleen Casey-Kirschling on Monday became the first ripple in a 'silver tsunami' of retiring baby boomers applying for pension benefits that threatens to overwhelm U.S. government finances." (Reuters)
Newly Posted Events
Applying Health Plan Standards for Improved Performance - eValue8 and Employer Success Stories
in Connecticut on October 31, 2007
presented by Southern New England Chapter ISCEBS
Health Savings Accounts 2007 HSA Consumer Basics Webinar
Nationwide on October 18, 2007
presented by Collin W. Fritz & Associates, Ltd.
Health Savings Accounts 2007, HSA Consumer Basics Webinar
Nationwide on October 18, 2007
presented by Collin W. Fritz & Associates, Ltd.
PBM Auditing Webinar
Nationwide on November 7, 2007
presented by The Seneca Group
Newly Posted Press Releases
PSCA Elects 2007-2008 Board of Directors; G. Dawn Anderson Elected to Second Term as Chairperson
Profit Sharing/401(k) Council of America (PSCA)
IRS Warns Taxpayers About Certain Trust Arrangements Sold As Welfare Benefit Funds
Internal Revenue Service (IRS)
myCafeteriaPlan, Third Party Administrator - TPA, Introduces New Improved Web Site at www.myCafeteriaPlan.com!
BusinessPlans, Inc. - myCafeteriaPlan.com
Department of Labor Presentation Helps Employers Learn about Their Responsibilities as 401(k) Plan Sponsors
Foundation for Fiduciary Studies
J.D. Power Reports: Tips For Open Enrollment
J.D. Power and Associates
Legal Advantage, LLC Announces Expansion to Further Solidify Position as Premier Provider of Legal Support Services
Legal Advantage, LLC
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs |
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401(k) Sales
for A.N. Ansay & Associates, Inc.
in WI
Senior Retirement Plan Coordinator
for ERAS, LLC
in KY
Daily Record Keeping Specialist
for AKT Retirement Plan Services LLC
in OR
401(k)/DC Administrator
for Levy & Associates
in FL
Senior DC Plan Consultant\Administrator
for Simpkins & Associates (a regional administrative firm with Dallas opening)
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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