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| November 26, 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.)
| The ASPPA 401(k) Leadership Award |
| Do you know someone who has made a lasting impact within the 401(k) industry? If so, nominate them today for The ASPPA 401(k) Leadership Award. This new award, sponsored by Morningstar, will be given out at The ASPPA 401(k) SUMMIT in Orlando, Florida on Sunday, February 10th. Nominations are being accepted until midnight , Friday, November 30th. Don't let the opportunity pass to make known those who make a difference and are working for America's retirement today. |
(a) New Guidance Documents
(None today.)
(b) News
(Financial Press Coverage:) Retirement Fund Case at Top U.S. Court May Bolster Right to Sue
Excerpt: "Business groups, including the U.S. Chamber of Commerce, are asking the court to bar lawsuits that seek to recover alleged losses incurred by only a single account. . . . A federal appeals court in Richmond, Virginia, said the 1974 Employee Retirement Income Security Act, known as ERISA, bars LaRue's case from going forward." (Bloomberg)
(Coverage in the Popular Press:) Supreme Court to Consider Investor's 401(k) Lawsuit; DOL Supporting Participant
Excerpt: " James LaRue says he lost $150,000 when his instructions to his employer on where to invest money in his retirement plan were ignored. Now the Supreme Court will decide whether a federal pension-protection law gives LaRue the right to sue to recover his losses. Arguments in the case, which has far-reaching consequences, were scheduled for Monday. . . . The Bush administration, siding with [the plaintiff], says an appeals court ruling against him would leave participants in 'the most common form of pension plan who have been injured by a breach of fiduciary duty without a meaningful remedy from any court.'" (Washington Post)
Japanese Women Now Have Right to As Much as 50% of Husband's Pension Upon Divorce; Divorces Go Up
Excerpt: "A change in Japanese law this year allows a wife who is filing for divorce to claim as much as half her husband's company pension. When the new law went into effect in April, divorce filings across Japan spiked 6.1 percent. Many more split-ups are in the pipeline, marriage counselors predict." (Washington Post)
(c) Summaries of Guidance; Filed Comments
Overview: New 403(b) Regs Generate Biggest Changes in 40 Years
Excerpt: "Today, employees of nonprofits have about $680 billion invested in 403(b) plans. Yet the plans have received little regulatory oversight since they were first created, and many have become unwieldy and inefficient; '403(b)' and 'fiduciary' have rarely occurred in the same sentence because employers have not been concerned about fiduciary responsibility for 403(b)s. This is no longer the case with the new regulations." (Milliman)
When Must Plans Be Amended for Final 415 Regulations?
Excerpt: "In general, plans must be updated for a change in the qualification requirements, or a change that is integral to a change in the qualification requirements, by the due date of the employer's tax return (including extensions) for the year in which the change is effective. . . . Regardless of the general rule . . . , the timing of an amendment cannot result in a violation of the anti-cutback rules of Code § 411(d)(6). This means that, in some cases, the amendment must be adopted sooner than the deadlines stated above . . . . Unfortunately, there is no guidance from the IRS regarding the interaction of the changes made by the Final 415 Regulations and the anti cutback rules." (SunGard Relius)
(d) Trends, Surveys, Research
Liability-Driven Investing: A Measured Approach to Pension Funding
Excerpt: "[M]any sponsors of defined benefit (DB) plans are shifting their investment focus to longer-duration bonds and similar investments, and are also employing strategies such as liability-driven investing (LDI), which seeks to better match the risk/return profile of assets to pension payout liabilities. . . . The underlying principle of LDI is to manage the variability between asset performance and the performance of liabilities." (Milliman)
Lump Sum or Annuity? An Analysis of Choice in DB Pension Payouts (PDF)
12 pages. Excerpt: "We assess the lump-sum versus annuity payout choices made by retirement-age participants in two Fortune 500 defined benefit plans . . . . [We find that annuitization] rates are low, although not as low as commonly cited. We also find evidence of rising annuity demand among participants taking distributions from their retirement plans at older ages. Finally, it seems clear that there is a strong desire for married couples to 'deannuitize,' with many actively working to overcome the federally mandated default of a joint-and-survivor annuity." (Vanguard Center for Retirement Research)
Critics Wary of Target-Date Funds Despite DOL Approval
Excerpt: "Target-date funds got a huge boost from the Department of Labor's final regulation on qualified default options for defined-contribution plans with automatic enrollment. But industry observers say the investment structure of the funds is deeply flawed by their high exposure to stocks." (Workforce Management)
New Mutual Fund Products Address Retirees' Confusion About Withdrawals
Excerpt: "[M]any investors . . . reach retirement with only the vaguest notion of how to switch from accumulating assets to tapping them to finance their usual standard of living. . . . . [W]hile some funds offer annuity-like features, and expect to make consistent payouts, none carry an annuity's contractual guarantee of specific payouts. " (New York Times)
(e) Policy, Opinion, Advocacy
Opinion: Shortfalls in Current System of Encouraging Retirement Savings
Excerpt: "401(k) participants need specific numbers on how much they need to save depending on when they start saving. . . . [Also, regarding the PPA provisions on auto-enrollment,] a 3% starting contribution rate is too low for everybody [and] auto-enrollment keeps the default rate artificially low for job changers." (Jane White and Rick Meigs in Employee Benefit News)
Sponsored by: University Conference Services
(Click on company name or banner to learn more.)
| Is Your Plan Management Textbook Outdated? |
| Comprehensive legislative changes, increased regulatory scrutiny, mounting litigation and unprepared participants have created whole new chapters on plan management. With all of these changes, you need to update your textbook today. The Mid-Sized Retirement & Pension Plan Management Conference, January 27-30, 2008, at the Hilton in the Walt Disney World®, Orlando, Florida is your chance to study with the best. Keynote speaker Ann Combs, former Assistant Secretary of Labor and head of the Employee Benefits Security Administration, headlines an outstanding lineup of speakers in 40+sessions. Make plans now to attend and move to the head of the plan management class.
Presented by the University of North Carolina's Kenan-Flager Business School in conjunction with leading retirement plan providers and advisors |
| (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) |
Links to Items on Executive Comp, Benefits in General
Audio: Report From the 'Other' Washington -- What Is Happening on the Employee Benefits Agenda
Approximately one hour; emphasizes proposed federal healthcare legislation. available for a limited time from the International Society of Certified Employee Benefit Specialists. Presented at the ISCEBS 27th Annual Symposium. Additional selected audio presentations are online at http://www.iscebs.org/Symposium/default.asp#listen (James A. Klein of the American Benefits Council)
ISS 2008 Policy Updates to Proxy Policies Pertaining to Executive Compensation (PDF)
5 pages. Excerpt: "On November 19, ISS Governance Services ('ISS') . . . issued updates to its U.S., Can.ada, International, and U.K. proxy voting policies for 2008, which will be applicable to companies with annual meetings after February 1. This letter summarizes five policy updates pertaining to executive compensation in U.S. companies." (Frederic W. Cook and Co., Inc.)
Policy: Protecting Social Security's Beneficiaries -- Avoiding Benefit Cuts
Excerpt: "Social Security's actuaries project that the long-term cost of Social Security will level off at just above 6% of GDP in about 25 years. That percentage, the projected long-range cost of the program, is a substantially smaller percentage than a number of other nations currently spend on their Social Security programs today." (Nancy J. Altman published by the Economic Policy Institute)
Online DOL Booklet for Individuals: Retirement And Health Care Coverage -- Q&As For Dislocated Workers
Excerpt: "This booklet addresses some of the common questions dislocated workers ask. In addition, there is a brief guide to additional resources at the back. Together, they can help you in making critical decisions about your health care coverage and your retirement benefits." (Employee Benefits Security Administration, U.S. Department of Labor)
Newly Posted Events
Cafeteria Plans: Drafting for the Recent IRS Regulation Changes - Webcast
Nationwide on November 29, 2007
presented by ALI-ABA (American Law Institute-American Bar Association)
Deferred Compensation: Policy and Practice Conference
in District of Columbia on December 5, 2007
presented by U.S. Chamber of Commerce's Center for Capital Markets Competitiveness and the ERISA Industry Committee
HR Executives Summit 2008
in Texas on March 17, 2008
presented by World Trade Group
Newly Posted Press Releases
U.S. Department of Labor Sues Defunct Telford, Pennsylvania Company to Protect Participants of 401(k) Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Chamber President Addresses the Need for Comprehensive Health Care Reform
U.S. Chamber of Commerce
CAPTRUST Announces New Corporate Tower Headquarters
CAPTRUST Financial Advisors
Guaranteed Retirement Accounts Offer Rescue Plan For Failing Retirement Security System
Economic Policy Institute (EPI)
Newly Posted or Renewed Job Openings
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Senior Communications Consultant
for Boutique Communications Consulting Firm
in AZ
401(k) Senior Plan Administrator
for Matthews Benefit Group, Inc
in FL
Benefit and Planning Counselor
for The Principal Financial Group
in TX
Sr. Employee Benefit Specialist
for The Principal Financial Group
in TX
Benefits Analyst
for Towers Perrin
in NJ
Benefits Manager
for Gerdau Ameristeel
in FL
Compliance Officer, Retirement Plans
for Dyatech
in MS
Bilingual: Spanish / English Enroller - Employee Benefits Meeting Presenter
for Total Benefit Communications, Inc.
in DC
Senior Investment Consultant
for Merrill Lynch
in CO
Regional Sales Consultant, San Francisco area
for Gallagher Retirement Services
in CA
Pension Recordkeeper
for Northern NJ Pension Consulting Firm
in NJ
Benefits Associate - Mid-level
for Mazursky Constantine LLC
in GA
Health & Welfare Specialist
for Long Island Employee Benefits Group, Ltd.
in NY
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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