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| November 7, 2007 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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| Software for 401(k), Pension and Flex Administration |
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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
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(a) New Guidance Documents
Text of Proposed Regs on Automatic Enrollment in 401(k), 403(b), 457 Plans for 2008 Plan Year (PDF)
51 pages. Excerpt: "Sections 401(k)(13), 401(m)(12), and 414(w), and the amended provisions of sections 411(a)(3)(G) and 4979(f), are effective for plan years beginning on or after January 1, 2008. These regulations are proposed to be effective for plan years beginning on or after January 1, 2008. Taxpayers may rely on these proposed regulations for guidance pending the issuance of final regulations. If, and to the extent, the final regulations are more restrictive than the guidance in these proposed regulations, those provisions of the final regulations will be applied without retroactive effect." (Internal Revenue Service)
Rev. Rul. 2007-67: Mortality Table for Single-Sum Distributions in 2008; Anti-Cutback Rules (PDF)
9 pages. Excerpt: "[T]he rules of §§ 1.417(e)-1(d)(4) and 1.417(e)-1(d)(10)(ii) regarding the time for determining the applicable interest rate continue to apply for plan years beginning on or after January 1, 2008, without regard to the change in the basis for determining the applicable interest rate. . . . The § 417(e)(3) applicable mortality table for 2008 is published in the Appendix to this revenue ruling . . . . Pursuant to section 1107 of PPA '06, an amendment to determine the applicable interest rate under the § 417(e)(3) rules in effect for plan years beginning on or after January 1, 2008, will not violate § 411(d)(6) of the Code or the corresponding provision of ERISA solely because of a reduction in accrued benefits or a reduction in the amount of any distribution with an annuity starting date occurring during a plan year beginning in 2008 or in a subsequent year if the cause of such reduction is the substitution of the modified segment rates for the 30-year Treasury rate for the same period. However, if the amendment changes the time for determining the interest rate, the requirements of § 1.417(e)-1(d)(10)(ii) must be satisfied. In addition, if the cause of the reduction is an amendment to substitute the modified segment rates for a rate that is not the 30-year Treasury rate, the amendment must satisfy § 411(d)(6)" (Internal Revenue Service)
Text of IRS 'Employee Plans News': Section 204(h) 45-Day Notices Not Required for Certain PPA Amendments (PDF)
2 pages. Excerpt: "Advance notice to participants of 45 days (or 15 days in the case of a multiemployer plan) -- often referred to as a 'section 204(h) notice' -- is generally required when a plan is amended to significantly reduce the rate of future benefit accrual. . . . [Regulations to be issued shortly will provide that a] reduced single-sum benefit resulting from an amendment to a traditional defined benefit plan to substitute the PPA-prescribed actuarial assumptions under IRC §417(e)(3) for the pre-PPA actuarial assumptions under §417(e)(3) does not require a section 204(h) notice." (Internal Revenue Service)
(b) News
Suit Claims Citigroup Stock Drop Cost 401(k) Participants $1.3B
Excerpt: "Citigroup, which suffered a recent management shakeup over its subprime mortgage crisis fallout, has been charged with imprudently allowing 401(k) company stock investments despite 'serious mismanagement.'" (PLANSPONSOR.com; free registration required)
Lump Sum Distribution Mortality Table Released by IRS
Excerpt: "The Internal Revenue Service (IRS) . . . issued Revenue Ruling 2007-67 indicating the required mortality table defined benefit plan sponsors have to use to figure out minimum lump-sum distributions starting with the 2008 plan year." (PLANSPONSOR.com; free registration required)
(c) Summaries of Guidance; Filed Comments
Treasury/IRS Officials Provide Guidance to Defined Contribution Plan Questions at Annual ASPPA Conference
Excerpt: "From Spencer's Benefits Reports: At the annual conference of the American Society of Pension Professionals and Actuaries (ASPPA) held last month in Washington, D.C., the 'IRS Questions & Answers' sessions often were punctuated with the phrase, 'I can't comment until regulations are issued.' [On this page] are some of the more detailed answers to defined contribution plan questions provided . . . ." (Wolters Kluwer Financial Services)
FAQs: 403(b) Plan Transfer Rules
Excerpt: "For transfers after September 24, 2007 and before January 1, 2009 (effective date of the regulations), must the employer and the new investment vendor sign an information sharing agreement? The IRS has not addressed this question. However, the IRS intends to issue guidance soon that will answer this question." (SunGard Corbel LLC)
Customer Has SEP IRA & SIMPLE IRA -- Can He Transfer Them into His Existing Traditional IRA?
Excerpt: "An individual may transfer his/her Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA to a traditional IRA after two years from the initial contribution date." (Wolters Kluwer Financial Services)
(d) Trends, Surveys, Research
Adding Some Vacation Days to Your 401(k)
Excerpt: "American workers have a reputation of all work and no play. We get less vacation time than our peers in other countries, and even then we don't always use it all. But what if you could put the cash equivalent of those unused vacation days into your 401(k)? This option has been available for many years but never caught on with employers." (Newsday Inc.)
Don't Look at Life-Cycle Funds As One Size Fits All
Excerpt: "Many investors choose life-cycle funds because they're looking for something individually tailored for them. However, these funds are anything but tailored investments. The funds are managed based solely on a person's age and/or number of years until retirement." (The Lowell Sun)
Merging Defined Benefit Plans May Yield Brighter Financial Future
Excerpt: "The defined benefit world is not afraid to reinvent itself, and one idea gaining momentum entails pension plan mergers. 'We are seeing more opportunities for and different scenarios of DB mergers,' Joseph Hicks, Jr., a managing consultant at Pennsylvania-based Savitz Organization, Inc. told attendees yesterday at the 53rd Annual International Foundation of Employee Benefits Plans Conference in Anaheim, California." (Employee Benefit News; free registration required)
Government Retirees Say Social Security Provisions Pinch Their Pensions
Excerpt: "The two provisions are the windfall elimination provision, called the WEP, and the government pension offset, known as the GPO. Both reduce the Social Security benefits of retirees who also receive a government pension that is not part of the Social Security system." (The Washington Post; free registration required)
Cash-Balance Plans May Make a Comeback
Excerpt: "[T]hanks to the Pension Protection Act and a key court decision favoring cash-balance plans, which are a hybrid of defined-benefit and defined-contribution plans, a number of large organizations are considering them as part of their benefits package. In the past year, Dow Chemical, MeadWestvaco and SunTrust Banks have announced plans to make cash-balance plans available to employees, while FedEx has expanded its existing cash-balance plan." (Workforce Management; free registration required)
(e) Policy, Opinion, Advocacy
Video: The Pension Benefit Debate
One hour 10 minutes. From the 53rd Annual Employee Benefits Conference (International Foundation of Employee Benefit Plans)
Bill Allows Use of 401(k) Funds for Homes
Excerpt: "Sen. Norm Coleman (R-Minn.) has submitted legislation allowing 401(k) participants who are 60 days late in meeting mortgage payments to withdraw up to $100,000 penalty-free, providing the money is restored to the retirement account by 2009." (Defined Contribution & Savings Plan Alert via Institutional Investor)
Workers Crave IRAs, Study Says
Excerpt: "Seventy-one percent of workers without access to an employer-based retirement plan believe that employers should be required by law to offer workplace access to an individual retirement account, according to a study . . . . " (Workforce Management; free registration required)
Links to Items on Executive Comp, Benefits in General
SERP Compensation Definition: Counting Severance Pay
2 pages. Excerpt: "The Ninth Circuit was asked to determine whether severance pay counted as compensation under a SERP. The court concluded that severance pay did not constitute 'earnings' for purposes of calculating an executive's benefit under the particular nonqualified top-hat plan at issue. The case is Gilliam v. Nevada Power Company." (National Association of Stock Plan Professionals via Utz Miller & Kuhn, LLC)
Video: Perceptions of Risk and Financial Realities for Baby Boomers for the Next 30 Years
36 slides. 54 minutes. Thomas R. Prohaska, Ph.D., Professor, Director of the Gerontological Public Health Training Program, Co-Director, Institute for Health Research and Policy Center for Research on Health and Aging, Univ of Illinois, Chicago, IL (International Foundation of Employee Benefit Plans)
2007 Executive Benefits Survey of Current Trends (PDF)
44 pages. Excerpt: "In the 2007 Survey, Clark Consulting has identified many noteworthy highlights. Perhaps the most significant trend indicates that Nonqualified Deferred Compensation (NQDC) plans continue to gain prevalence throughout various industries." (Clark Consulting)
Newly Posted Events
403(b) Plan Workshop
in California on November 30, 2007
presented by SunGard Relius
Health and Welfare Update: What Plan Sponsors Should be Doing Now
Nationwide on December 11, 2007
presented by ABA Joint Committee on Employee Benefits
Looming Fiscal Challenge: Preparing Today for Tomorrow's Budget Crunch - Webcast
Nationwide on November 15, 2007
presented by Deloitte
Staying Below the Health Care Cost Curve - Managing Health Care Costs in Greater St. Louis - Webcast
Nationwide on December 5, 2007
presented by Towers Perrin
Staying Below the Health Care Cost Curve - Managing Health Care Costs in Greater Washington DC - Webcast
Nationwide on December 6, 2007
presented by Towers Perrin
Staying Below the Health Care Cost Curve - Managing Health Care Costs in Metro New York - Webcast
Nationwide on December 5, 2007
presented by Towers Perrin
Staying Below the Health Care Cost Curve - Managing Health Care Costs in New England - Webcast
Nationwide on December 4, 2007
presented by Towers Perrin
Staying Below the Health Care Cost Curve - Managing Health Care Costs in Southern California - Webcast
Nationwide on December 4, 2007
presented by Towers Perrin
Understanding the New Final Circular 230 Regulations - Webcast
Nationwide on November 13, 2007
presented by CCH, a Wolters Kluwer business
Webcast: Automatic Enrollment & QDIAs - New Rules, New Opportunities
Nationwide on December 5, 2007
presented by National Institute of Pension Administrators
Newly Posted Press Releases
Employer Support for Long Term Care Insurance Grows
Unum
The Standard Recommends Best Practices for 403(b) Plan Sponsors
The Standard
Business Associations and Companies Unite to Protect Employee Health and Retirement Benefits
National Coalition on Benefits
Newly Posted or Renewed Job Openings
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Employee Benefits Administration
for Primary Consulting, Inc.
in ANY STATE
Retirement Plan Administrator
for MVP Plan Administrators, Inc.
in NC
University Director of Retirement Program Services
for Indiana University
in IN
Supervisor, CTA Member Services
for Standard Insurance Company
in OR
Team Lead Operations - Cash Accounting
for Charles Schwab
in CA
Senior Editor
for Thomson Tax & Accounting
in WA
Senior Client Services Director, Defined Contributions
for Mercer
in MA
401(k) Plans Administrator
for Gerdau Ameristeel
in FL
Relationship Manager - Defined Contribution Plans
for Vanguard
in AZ
ERISA Consultant
for Vanguard
in AZ
Customer Service Representative
for Great-West Corporate
in KS
401k and Trust Consultant
for Aureus Group
in NE
Supervisor, Benefits Administration (Ref# JP29083-FF)
for Southern California Edison
in CA
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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