BenefitsLink |
 |
 |
| December 7, 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) SUMMIT |
| Join over 1,400 retirement sales and investment professional at the retirement industry's longest running conference, The ASPPA
401(k) SUMMIT. Attend advisor centered workshops, general sessions with internationally known speakers, secure insurance and other CE credits, network with your peers and more in Orlando, Florida, February 10-12, 2008. Don't miss your opportunity to join the best of the best. Early bird savings apply so register NOW. |
(a) New Guidance Documents
(None today.)
(b) News
Washington Mutual Faces Class Action Suit on Alleged ERISA Violations
Excerpt: "Washington Mutual . . . Inc employees participating in the company's 401(k) plan filed a class-action lawsuit, claiming the group failed to adequately monitor the plan and advise participants when the company stock investment was no longer prudent." (CNNMoney.com)
CalPERS, CalSTRS Are Teaming with 150 Business Leaders on Climate Change Issues
Excerpt: "California pension fund leaders are going international with their climate change campaign, joining 150 corporate executives from around the globe in demanding mandatory curbs on greenhouse gas emissions. The unprecedented call comes as international talks begin today in Indonesia to craft a new global climate change pact." (The Sacramento Bee)
New Nevada State Retirement Regulations Established
Excerpt: "The Public Employee Benefits Program adopted regulations Thursday to put in place rules for which retirees can be in the plan and which ones can't. Effective Sept. 1, 2008, only those public employee groups which have their active members in the state plan can send their retirees to the state. At present, any public retiree can join the state plan whether his government or school district is in the plan." (Nevada Appeal)
(c) Summaries of Guidance; Filed Comments
What Is the 401(k) Successor Plan Rule?
For the answer to the title question, scroll down to the third item on the target page. (McKay Hochman Co., Inc.)
Overview: 2008 Retirement Plan Changes
Excerpt: "This article reviews the current list of 2008 changes for defined contribution plans." (McKay Hochman Co., Inc.)
Overview of Automatic Enrollment and the QDIA Notice
Excerpt: "If a plan does not have automatic enrollment, it is not required that it have a QDIA. However, if there are participants who are defaulted into an investment, for example, due to lack of response to the investment selection, the employer who wants fiduciary relief for the default investment will need a QDIA. If the employer does not wish fiduciary relief in a plan without automatic enrollment, there is no requirement to have a QDIA." (McKay Hochman Co., Inc.)
ASPPA Comments on Mid-Year Changes to a Safe Harbor §401(k) Plan (PDF)
4 pages. Excerpt: "The American Society of Pension Professionals & Actuaries (ASPPA) appreciates this opportunity to comment on mid-year modifications of the provisions of a safe harbor plan under Internal Revenue Code (Code) §§401(k) and 401(m), as requested by the Internal Revenue Service (IRS) and Treasury in Announcement 2007-59." (American Society of Pension Professionals & Actuaries)
Overview: IRS Sample Automatic Enrollment and Default Investment Notice
Excerpt: "The sample notice requires a general description of the automatic enrollment feature, but also obligates a plan sponsor to address specific issues such as: the employees to whom the plan's automatic enrollment feature applies, focusing on employees who have pre-existing deferral elections in effect when the arrangement is implemented; and the limits under the arrangement on withdrawals of vested or unvested account funds and the availability of loans and hardship distributions based on the accounts." (Wolters Kluwer Financial Services)
Overview of the 403(b): New Rules, New Risks, New Consequences
Excerpt: "The new 403(b) regulations will change the way these plans are administered and present new risks for the employers that offer them." (Milliman)
PPA '06 Makes IRA Rollovers More Attractive: Maybe It's Time to Switch to a Self-Directed IRA? Think Again! (PDF)
26 pages. Excerpt: "Federal legislation passed in 2006 affords participants and beneficiaries of eligible retirement benefits new distribution options that can result in the reduction or deferral of federal income taxes. These new distribution options may have the domino effect of making rollovers to IRAs a more desirable funding vehicle. If this occurs, the continued interest in self-directed IRAs (i.e., in which the IRA owner is not limited to the IRA trustee's or custodian's investment options, but instead can choose his or her investment options) will become increasingly marketed by custodians. There is particular interest in self-directing in real estate investments. This article first explores the new benefit distribution options and then discusses the practical and legal issues that IRA owners should consider before making self-directed investment decisions, especially with respect to real estate investments." (Professor Kathryn J. Kennedy)
ERISA's Participant Benefit Statement Requirements: Current Rules Under PPA '06 and a Suggested Blueprint for Future Interpretations (PDF)
25 pages. Excerpt: "[T]his article explains the new requirements in light of prior proposed regulations (issued under prior law) and the recent [DOL] field assistance bulletin, and then provides a suggested blueprint for change that hopefully will result in meaningful disclosure to participants and beneficiaries without unduly burdening plan administrators." (Professor Kathryn J. Kennedy)
(d) Trends, Surveys, Research
401(k) Participant Loans on the Increase, But Not Always a Good Thing to Do
Excerpt: "Here's an example of the financial impact of a 401(k) loan from T. Rowe Price. Assume that the participant has been making monthly contributions of $264 to his 401(k) account and has been earning annualized return of 8%. Now at age 40, he takes out a loan for $50,000 for 5 years at an interest rate of 7%. His after-tax monthly loan repayment would be $198 and he halts his monthly contributions to the plan." (National Benefits Services, Inc.)
Commentary: Give Young Workers the Straight Dope on Retirement Saving
Excerpt: "A 30-year-old tells employers why his colleagues need a kick in the rear when it comes to saving for retirement. 'Lock us in a room during that first day on the job and tell us we can't leave until we agree to contribute something to a 401(k).'" (Workforce Management; free registration required)
Working Paper: The Effect of Economic Conditions on the Employment of Workers Nearing Retirement Age
Excerpt: "The decline in employment of men near retirement age was concentrated between the early 1970s and 1980s, a period of dramatic shifts in the United States labor market. The paper begins to explore the effect of these shifts on retirement behavior. To do so, it analyzes the effect of changes in economic conditions at the individual, industry, and state level on employment of workers near retirement." (Center for Retirement Research at Boston College)
Working Paper: Why Are Companies Freezing Their Pensions?
Excerpt: "In an attempt to identify factors that led specific companies to freeze their plans, this paper explores the relationship between the probability that a plan was frozen and characteristics of the plan, the firm, and the industry. The results imply that plans where credit balances are high relative to income, legacy costs are substantial and funding ratios are low have a higher probability of being frozen." (Center for Retirement Research at Boston College)
Working Paper: The Cost of Owning Employer Stocks: Lessons from Taiwan
Excerpt: "The under-diversification resulting from the bias toward employer stocks is highly costly. Holding current portfolio risk constant, employees forego 4.89 percent per annum in raw returns by investing in employer stocks, which represents 39.74 percent of their average 1998 salary income. Our findings have important implications for social security reform and retirement account management." (Center for Retirement Research at Boston College)
Working Paper: Capital Income Flows and the Relative Well-Being of America's Aged
Excerpt: "One way to assess the effectiveness of a nation's pension system is to measure its success in bringing the incomes of the aged close to those enjoyed by the nonaged. The comparability of income estimates for the aged and nonaged depends, however, on the relative accuracy of the income reports for the two populations." (Center for Retirement Research at Boston College)
The Private Equity Buyout Phenomenon: What Trustees Should Know (PDF)
4 pages. Segal Advisors suggests that plan sponsors interested in understanding more about private equity buyout funds should: understand the risk characteristics of private equity buyout funds, explore the factors that have led to record levels of capital fund raising, understand the impact of private equity buyout funds on other asset classes, including stocks and bonds and investment manager line-up, and review the impact of this phenomenon on investment guidelines and/or overall investment strategy. (The Segal Group, Inc.)
Working Paper: Why Does the Law of One Price Fail? An Experiment on Index Mutual Funds (PDF)
Excerpt: "We report experimental results that shed light on the demand for high-fee mutual funds." (National Bureau of Economic Research via Reish Luftman Reicher & Cohen)
Timing Your Social Security Benefits
Excerpt: "For retirees with additional income-generating assets, finding the right time to start drawing benefits is the first step to getting the most out of Social Security[.]" (BusinessWeek)
Japan Looking to Cash Balance Plans for Pensions
Excerpt: "PLANSPONSOR.com's NewsDash has an interesting story about how Japanese plan sponsors are looking towards cash balance plans to protect against market volatility for workers' pensions:" (Workplace Prof Blog)
Recent and Prospective Developments in Retirement Programs in the United Kingdom
Excerpt: "Like in the United States -- and for many of the same reasons -- there has been a shift in the United Kingdom in the provision of retirement benefits to workers by private-sector employers from defined benefit (DB) to defined contribution (DC) plans. The change has unfolded differently, however, in the two countries.' (Watson Wyatt Worldwide)
(e) Policy, Opinion, Advocacy
Issue Brief: Why Have Defined Benefit Plans Survived in the Public Sector?
Excerpt: "The brief's key findings are: Defined benefit pension plans, while disappearing in the private sector, are alive and well in the state and local government sector due to three factors . . . ." (Center for State and Local Government Excellence)
Hewitt Federal Legislation Quick Guide Updated as of December 5, 2007, for Retirement Plans (PDF)
13 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)
Sponsored by: ERISAdiagnostics, Inc.
(Click on company name or banner to learn more.)
| Introducing An ERISAdiagnostic™ - Self audit guide for 401(k) plans! |
The ERISAdiagnosticTM can help you:
|
| (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
Final SEC Regs: Exemption of Compensatory Employee Stock Options From Registration Under Section 12(G) of the Securities Exchange Act of 1934 (PDF)
15 pages. Excerpt: "SUMMARY: We are adopting two exemptions from the registration requirements of the Securities Exchange Act of 1934 for compensatory employee stock options. The first exemption will be available to issuers that are not required to file periodic reports under the Exchange Act. The second exemption will be available to issuers that are required to file those reports because they have registered under Exchange Act Section 12 a class of security or are required to file reports pursuant to Exchange Act Section 15(d). The exemptions will apply only to the issuer's compensatory employee stock options and will not extend to the class of securities underlying those options." (U.S. Securities and Exchange Commission)
Employment at Older Ages and the Changing Nature of Work
Excerpt: "In this AARP Public Policy Institute Issue Paper . . . the changes over time in job demands and the impact of these changes on the employability of older workers [is examined]." (AARP)
Overview: IRS's Limited 409A Correction Program (PDF)
5 pages. Excerpt: "Sponsors of deferred compensation plans are likely to be disappointed in the relief provided by the new Notice, particularly if they are comparing it to the type of relief granted to qualified retirement plans in the EPCRS program. While there may be certain instances in which the new relief will be useful, it is very narrow in scope, is subject to a variety of conditions, and will require sponsors of such plans to notify the IRS that they have self-corrected under the program, all of which may reduce the attractiveness of this relief to sponsors." (Miller & Chevalier Chartered)
Congress OKs New Military Pay and Benefits Provisions
Excerpt: "After months of bickering, congressional negotiators have approved a $649 billion defense policy bill that includes a 3.5 percent military pay raise, improvements to treatment and benefits for wounded combat veterans, and precedent-setting changes in reserve retired pay and survivor benefits." (Army Times Publishing Company)
Review of Workplace Laws and Regulations -- Changes at Federal, State Levels
Excerpt: "Civil unions: New Hampshire law now permits same-gender couples to enter into civil unions and have the same, rights, responsibilities and obligations as married couples. However, federal ERISA and the Defense of Marriage Act prohibit the recognition of civil unions or same-sex marriage. Employers need to look at the applicable law for every benefit they offer to married spouses to determine whether they are required, prohibited or allowed to offer the same benefit to civil union partners." (New Hampshire Business Review)
Hewitt Federal Legislation Quick Guide for December 5, 2007, on Human Resources & Employment Law (PDF)
12 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)
Newly Posted Events
Fundamentals of Employee Benefits Law -- On-Site in Texas or Live Webcast
Nationwide on March 6, 2008
presented by ALI-ABA (American Law Institute-American Bar Association)
Newly Posted Press Releases
North Branford, Connecticut Employer Agrees To Restore $30,000 To Employee pension plan, Settling U.S. Labor Department Lawsuit
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Department of Labor Secures $20,000 For Participants of Delmont, Pennsylvania 401(k) Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Labor Department Obtains Judgment Leading To Disbursement Of 401(k) Plan Assets To Workers In Auburn Hills, Michigan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
2007-08 Holiday Season Shows Employers Demonstrating Unprecedented Generosity to Workers in the Form of Parties and Paid Leave, While External Charitable Giving Drops
BNA, Inc.
Michigan Health Plans Continue Focus On Generics For Cost Savings
HealthLeaders-InterStudy
Synapses Opens Production Facility to Meet Growing Customer Orders for 401(k) Education Materials
Synapses Inc.
Mass. Tax Group Sees Big Healthcare Hit To Employers
Boston Globe
Study: Investors In Broker-Sold Mutual Funds Miss Published Performance Numbers By Wide Margin, Timing Is Culprit
Zero Alpha Group
MTF Analysis: Employers to Spend an Additional $175 Million a Year Under Health Reform
Massachusetts Taxpayers Foundation
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs |
RSS Feed )
Defined Benefit Administrator and DB/DC Combo Administrator
for Boyce & Associates, Inc.
in AZ
401(k) / Defined Contribution Administrator
for Pension Investors Corp.
in FL
Pension Administrator
for Redwood Administrators, Inc.
in NJ
401(k) Sales
for Weber Asset Management
in NY
Defined Contribution Analyst II
for Standard Retirement Services
in WA
PepsiCo - 401K Planning and Compliance Analyst
for PepsiCo, Inc.
in NY
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too!
Sign-up form is at https://benefitslink.com/newsletter (free).
This newsletter is sent to you each workday except federal holidays.
This email has been published by:
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151
David Rhett Baker, J.D., Editor
Copyright 2007 BenefitsLink.com, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.
Anyone can receive these emails; just have them sign up at this web page: https://benefitslink.com/newsletter/
Other useful links: