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| November 21, 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
Text of Proposed Amendment to Prohibited Transaction Class Exemption for Lawsuit Settlements by Plans (PDF)
7 pages. Excerpt: "The proposed amendment to the class exemption, PTE 2003-39 (68 FR 75632, Dec. 31, 2003), would apply to transactions engaged in by a plan in connection with the settlement of litigation, including bankrup.tcy litigation. This amendment is being proposed in response to requests from practitioners and independent fiduciaries who sought an expansion of the types of consideration that plans could accept in connection with the settlement of litigation." (Employee Benefits Security Administration, U.S. Department of Labor)
(b) News
DOL Proposes New Asset Types Allowed for Settlements
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) has announced a proposed amendment to an existing class exemption that would expand the categories of assets under the exemption that plans can accept to settle litigation with related parties, if the transaction is otherwise beneficial to the employee benefit plan." (PLANSPONSOR.com; free registration required)
(c) Summaries of Guidance; Filed Comments
Overview: Qualified Default Investment Alternatives for Participant-Directed Individual Account Plans (PDF)
7 pages. Excerpt: "For purposes of the final regulations, a QDIA means an investment alternative that meets the following requirements: It does not hold or permit the acquisition of employer securities (except for two limited exceptions . . . ." (Morgan, Lewis & Bockius LLP)
Analysis: Asset Protection in Oregon Using Trusts, Retirement Accounts and 529 Plans
Excerpt: "This outline covers the uses and limits of trusts, retirement accounts and 529 plans to shield assets from creditors in Oregon." (Jonathan A. Levy)
Can a Nonspouse Beneficiary Change a Deceased Person's IRA Into His/Her Own IRA?
Excerpt: "There are no circumstances under which a nonspouse beneficiary of a traditional or Roth IRA may treat the assets as his/her own IRA." (Wolters Kluwer Financial Services)
The Audit CAP Rule Changes Have an Additional and Unanticipated Consequence
Excerpt: "In 2006, the IRS released Rev. Proc. 2006-27, which contains the Employee Plans Compliance Resolution System (EPCRS) for fixing plan qualification defects. One of the EPCRS programs is the correction procedure for plans subject to an IRS audit. The purpose of this article is to focus on the new audit CAP provisions and how the IRS has decided to interpret them." (Reish Luftman Reicher & Cohen)
(d) Trends, Surveys, Research
Retirement Debit Cards Seem Inappropriate, But Have Some Benefits
Excerpt: "Many believe the idea of making it easier for retirement plan participants to borrow against their savings is borderline reprehensible given anemic employee savings. Yet experts also know that most plans not only make loans possible, but also that workers occasionally need to raid their retirement cupboard. The question then becomes one of, if workers are going to do it, what can an employer do to make it as painless as possible?" (Employee Benefit News; free registration required)
Clarifying Employee Concerns About 401(k) Annuities
Excerpt: "Some employees are reluctant to buy an annuity because they're unsure about how long they will live and wary about the durability of a lifetime promise. Indeed, participants may risk losing all or part of their guaranteed benefit if they leave their job, or if their employer drops the insurer, experts say." (Employee Benefit News; free registration required)
Singapore's Government to Introduce Re-Employment Law
Excerpt: "Employers would have to offer re-employment to employees beyond the retirement age of 62 under a proposed law that will take effect in 2012 if approved by Singapore's parliament. Initially, the proposal would require employers to offer re-employment to workers up to age 65. Eventually, this would be raised to age 67." (Watson Wyatt Worldwide)
Newsletter: UK Pensions Update (PDF)
3 pages. Excerpt: "This newsletter summarizes key regulatory and legal developments in the UK Pensions sector. The October 2007 issue includes information on flexible retirement and pension provision, the government's reply to the deregulation review, transfer values calculation and other articles." (Baker & McKenzie)
Picture of European Employee Share Ownership in 2007 - Comparing 14 Countries and Austria (PDF)
7 pages. Excerpt: "This information is based on EFES database, including all European groups whose market capitalisation was more than 200 millions Euro in May 2007. These are 2.500 groups, employing 33 millions people, on which 41 Austrian groups. Compared with a set of 14 European countries, employee share ownership looks underdeveloped in Austria." (European Federation of Employee Share Ownership)
(e) Policy, Opinion, Advocacy
Policy Paper: Building on Social Security's Success
Excerpt: "The United States needs a new conversation about how Social Security is part of the solution to the growing economic risks American workers face. The key question for policy makers is: How can we build on the strengths of Social Security -- its fiscally responsible design, its universality, progressivity, efficiency, and its effectiveness -- to meet the needs of working families in the 21st century?" (Economic Policy Institute)
Policy Paper: Protecting Social Security's Beneficiaries - Achieving Balance Without Benefit Cuts
Excerpt: "A better measure of Social Security's cost and affordability is the percentage of gross domestic product (GDP) the program consumes. Unlike dependency ratio measures, which simply reflect age distributions, and when more refined, work status, GDP focuses on the productivity of the nation as a whole. When the cost of Social Security is examined in terms of GDP, it becomes unquestionably obvious that our economy can support our elderly, the widespread demographic anxiety notwithstanding." (Economic Policy Institute)
Policy Paper: Guaranteed Retirement Accounts
Excerpt: "This paper proposes a rescue plan for the American retirement income security system, based on a mixed system composed of Social Security, employer defined-benefit pension plans, and a new type of personal retirement savings account called a Guaranteed Retirement Account (GRA). This rescue plan will not work without a strong defined-benefit pension system and a strong Social Security system." (Economic Policy Institute)
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Links to Items on Executive Comp, Benefits in General
American Benefits Council Comments on Proposed Regulations -- Accident and Health Benefits Under Qualified Plans (PDF)
3 pages. Excerpt: "With regard to the proposed regulations, we are concerned that they could affect a wide variety of common practices that our members use to provide and protect on a nondiscriminatory basis the qualified retirement plan income of disabled employees. These practices include: the provision of continued employer-funded defined benefit pension accruals for employees on long-term disability, the provision of continued defined contribution plan accruals for employees on long-term disability -- with funding from employer contributions, the purchase of a special long-term disability policy designed for DC plans, or from a companion welfare benefit trust." (American Benefits Council)
Overview: IRS Implementation of Information Reporting for Employer-Owned Life Insurance (PDF)
2 pages. Excerpt: "The temporary regulations authorize the Service to prescribe the information reporting form, effective as of November 13 for taxable years ending after that date." (Sutherland Asbill & Brennan LLP)
Overview: IRS Regulations on Reporting Employer-Owned Life Insurance Contracts (PDF)
3 pages. Excerpt: "The Pension Protection Act of 2006 (PPA) established reporting requirements and income exclusion rules applicable to an employer that is a direct or indirect beneficiary of a life insurance contract covering one or more of its employees. The IRS has issued identical temporary and proposed regulations to give taxpayers 'immediate guidance' on reporting of such employer-owned life insurance contracts." (Pillsbury Winthrop Shaw Pittman LLP)
Health Care Benefits, Paid Vacation, Retirement Savings Best for Attracting, Retaining Employees
Excerpt: "From Spencer's Benefits Reports: Employers rate medical benefits and paid vacation as the top programs to attract and retain employees, according to a survey by WorldatWork. Also seen as 'high impact' programs for recruiting and retaining employees are defined benefit plans, flex-time, and telecommuting." (Wolters Kluwer Financial Services)
Leveraging Technology to Improve Benefits Communications
Excerpt: "When implementing a technology-driven communications initiative, [it is recommended] that employers: Know your audience and your own HR limitations. If your employee population doesn't understand their benefits communications on paper, chances are they're not making smart decisions. Tailor your message to your audience, even if that involves bilingual communications or audio messaging for less literate employees." (Employee Benefit News; free registration required)
Newly Posted Events
Automatic Enrollment and QDIA Regulations- What You Need to Know About the Final Rules
Nationwide on December 18, 2007
presented by Thompson Interactive, A Division of Thompson Publishing Group
Compensation and Benefits Go Global: Expatriates, Tax Section 409A, and Cross-Border Plans - Webcast
Nationwide on November 21, 2007
presented by West LegalEdcenter
Preparing for Retirement Plans in 2008
in Kentucky on December 11, 2007
presented by ASPPA Benefits Council of Greater Cincinnati
Newly Posted Press Releases
Commentary on Retiree Health VEBAs
The Segal Company
Use of Automatic Retirement Savings Tools Triples in One Year; Major Retirement Trends Revealed in Annual Report from The Principal
Principal Financial Group
Presidio Announces an Exclusive Relationship with Assist America to Provide Global Emergency Medical Assistance Services to its Clients
Assist America, Inc.
HSA Plans are Covering Preventive Care on a First-Dollar Basis
America's Health Insurance Plans (AHIP)
Newly Posted or Renewed Job Openings
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Defined Benefit Client Account Manager
for New York Life Retirement Plan Services
in MA
Director, International Benefits
for 20th Century Fox
in CA
Pension Administrator
for Jordan & Andrews
in CA
Sr. Account Executive - Retirement Services
for The Principal Financial Group
in MD
Compliance Specialist
for CPActuaries
in FL
Health & Welfare Legal Consultant
for Mercer
in DC
Pension Analyst
for Long Island Employee Benefits Group, Ltd.
in NY
Enrolled Actuary
for Long Island Employee Benefits Group, Ltd.
in NY
Internal 401(k) Sales
for ePlan Services, Inc.
in CO
Retirement Services Education & Enrollment Specialist
for Prudential Financial
in MI
Employee Benefits Service Supervisor
for Rue Insurance - Voted one of NJ's Best Places to Work
in NJ
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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