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| December 17, 2007 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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| The ASPPA 401(k) SUMMIT |
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(a) New Guidance Documents
Text of Final PBGC Reg Adding 'Termination Premium' and Amending Premium Regs for PPA 2006 and Deficit Reduction Act of 2005 (PDF)
10 pages. Excerpt: "The provisions implemented by this rule change the flat premium rate, cap the variable-rate premium in some cases, and create a new 'termination premium' that is payable in connection with certain distress and involuntary plan terminations. This rule does not address other provisions of the Pension Protection Act of 2006 that deal with PBGC premiums. . . . Effective [date is] January 16, 2008." (Pension Benefit Guaranty Corporation)
(b) News
Senators Introduce 401(k) Fee Disclosure Legislation
Excerpt: "Senator Tom Harkin (D-Iowa) and Senator Herb Kohl (D-Wisconsin) introduced legislation . . . designed to protect American workers by ensuring they can access information on the cost of 401(k) plan management fees." (PLANSPONSOR.com; free registration required)
U.S. Pilots Can Fly Until Age 65
Excerpt: "Ending an airline industry controversy that has smoldered for a half-century, President Bush signed a bill Thursday that raises the retirement age for commercial pilots to 65 from 60, a standard observed by the rest of the world." (Chicago Tribune)
Charles E. F. Millard Confirmed as PBGC Director
Excerpt: "Millard is the first-ever presidentially appointed, Senate-confirmed Director of the federal pension insurance agency. The requirement of the US Senate's confirmation of the private pension insurer director post was part of the Pension Protection Act (PPA), reflecting legislative concern about the financial stability of the PBGC." (PLANSPONSOR.com; free registration required)
American Tower Settles with Pension Fund over Options Backdating
Excerpt: "Attorneys announced American Tower Corporation has agreed to a $14 million settlement agreement with Steamship Trade Association-International Longshoreman's Association Pension Fund (STA-ILA) and other plaintiffs for charges relating to stock options backdating." (PLANSPONSOR.com; free registration required)
Japan Warns of Missing Pensions
Excerpt: "Japan began sending warnings to an estimated 8.5 million people Monday that their pension data may have gone missing, as the government seeks to clean up a scandal that has damaged its credibility." (AP via The New York Times; free registration required)
(c) Summaries of Guidance; Filed Comments
Overview: Additional Guidance Provides Model Plan Language for Public School 403(b) Plans
Excerpt: "On November 27, 2007, the IRS published supplemental guidance offering model plan language for public schools to use in preparation and adoption of a written plan document as required under the final § 403(b) regulations issued on July 26, 2007. This language may also be used as a reference for other eligible employers who offer 403(b) plan arrangements." (403(b) "Gatekeeper" Services)
Overview: Lump-Sums for Plans Terminating Before, but Distributing After January 1, 2008
Excerpt: "The PBGC has issued guidance, in the form of a Technical Update, for plans with termination and final distribution dates which straddle the effective date for PPA-required changes in the interest rate and mortality assumptions for lump-sum valuations." (Wolters Kluwer Financial Services)
Overview: Defined Contribution Fee Disclosure Act Introduced in Senate
Excerpt: "This is the first Senate bill to address the retirement plan fee disclosure issues; it covers only ERISA plans and so would not directly affect state and local government 457 plans. [The target page provides links to view a draft of the bill; the one-page summary of the legislation prepared by the Senate offices; and, Senator Harkin's floor statement.]" (ICMA-RC)
Investment Company Institute Comments on Labor Department's Investment Advice Initiative, December 2007
Excerpt: "We understand that the Department of Labor is considering providing regulatory guidance on the new investment advice exemption under section 408(b)(14) of ERISA or, alternatively, issuing a class exemption covering similar investment advice related transactions. We welcome this initiative and are submitting this letter to provide the views of the Investment Company Institute on the types of conditions that may be appropriate to include in developing regulations or an exemption." (Investment Company Institute)
Summary: DOL Proposed 408(b)(2) Regulations on Fee Disclosure (PDF)
3 pages. Excerpt: "Written comments on both the proposed regulation and the proposed class exemption are due February 11, 2008. The proposed regulations and class exemption are expected to be effective 90 days after publication of the final versions in the Federal Register." (American Benefits Council)
Overview: Enhanced Disclosure and New Prospectus Delivery Option for Mutual Funds (PDF)
9 pages. Excerpt: "Comments to the proposed amendments to the mutual fund prospectus disclosure and prospectus delivery rules (collectively, the 'Proposed Amendments') must be received by the Commission on or before February 28, 2008." (Alston & Bird LLP)
Webcast: Know Your Fiduciary Responsibilities -- An Update on Pension Protection Act and Related Guidance for Practitioners
Excerpt: "The archived version of the December 6, 2007 webcast will remain on our website until further guidance is issued by the Department, but at least until the end of February. Strong fiduciary oversight and protecting workers' benefits is one of the highest priorities of the U.S. Department of Labor. Our compliance assistance program - Getting It Right - Know Your Fiduciary Responsibilities - increases awareness and understanding of fiduciary responsibilities when operating a retirement plan." (U.S. Department of Labor, Employee Benefits Security Administration)
Overview of Questions on Investment Managers and IRAs
Excerpt: "In recent months, we have received phone calls from several investment advisory firms asking about the need to comply with the disclosure rules under Prohibited Transaction Class Exemption 86-128, where they provided investment management services for IRAs. We thought you might be interested in the questions and the answers." (Reish Luftman Reicher & Cohen)
Overview of Advisor Do's and Don'ts
Excerpt: "This column focuses on fees and a proper characterization of your role." (Reish Luftman Reicher & Cohen)
Overview: ERISA Spending Accounts
Excerpt: "Fees, expenses and revenue sharing are the topics du jour for 401(k) plans -- and particularly for mid-sized and large plans. As a result of the focus on those topics, we are seeing more and more in the way of either 'revenue sharing' deposits or credits by recordkeepers for 401(k) plans. The purpose of those deposits or credits is to give plan sponsors the benefit of 'excess' compensation that was paid to 401(k) recordkeepers." (Reish Luftman Reicher & Cohen)
(d) Trends, Surveys, Research
Fund Investing in Publicly Traded Private Equity Efforts Now Available to 401(k) Plans
Excerpt: "Though assets under management barely totaled $9 million as of last week, the Listed Private Equity Plus fund -- which invests exclusively in the publicly traded securities of private equity and venture capital firms, as well as investment banks with their own private equity funds -- is now offered by more than a dozen brokerages' 401(k) platforms, including Fidelity Institutional Funds Network and TD Ameritrade Institutional." (Financial Week; free registration required)
Retiring with Very Little Risk
Excerpt: "Americans insure their homes, cars, and family members. But most of us are not protecting our retirement assets. Why? Because most of us are not familiar with the risk we face when it comes to retirement." (The Spectrum)
Employee Ownership Update for December 14, 2007
NCEO Executive Director Corey Rosen discusses a new study finding that the repurchase obligation is not a main driver of ESOP terminations; a useful summary of proposed changes in taxing S ESOP synthetic equity in Rep. Rangel's bill; an innovative idea for bonuses; and a new article on five common errors in equity compensation plan design. (National Center for Employee Ownership)
(e) Policy, Opinion, Advocacy
Working Paper: Footnotes Aren't Enough -- The Impact of Pension Accounting on Stock Values
Excerpt: "[D]ramatic swings in the financial conditions of large DB plans around the turn of the decade focused widespread attention on pension accounting practices, and dissatisfaction with current accounting standards has recently prompted the Financial Accounting Standards Board (FASB) to take up a project revamp DB pension accounting. Arguably, the increased attention should have made investors wise to the informational problems, thereby eliminating systematic mispricing in recent years. We test this proposition and conclude that investors continued to misvalue DB pensions, inducing sizable valuation errors in the stock of many companies. Our findings suggest that FASB's current reform efforts could substantially aid the market's ability to value firms with DB pensions." (Pension Research Council; registration required to download fulltext of paper)
CIEBA Letter to Chairman Kennedy on Delaying PPA Implementation (PDF)
1 page. Excerpt: "The Committee on Investment of Employee Benefit Assets (CIEBA) urges you to support a delay in implementation of the new funding rules required by the Pension Protection Act (PPA) until final guidance is available." (Association for Financial Professionals)
Why The Industry Should Re-Engineer Income Annuities
Excerpt: "So the question is: Why don't more retirees use traditional income annuities to insure the risks associated with retirement income? One important reason is the failure of SPIAs to keep pace with the complex needs of today's retirees. It is hard to believe, but the typical SPIA has changed little in the past 50 years." (The National Underwriter Company; free registration or paid subscription required)
Opinion: DB and DC Plans -- Differences and Results
Excerpt: "One can only wonder what might happen if we were to impose on individual workers and their defined contribution plans what we have already imposed on those defined benefit programs . . . a funding requirement sufficient to provide a promised benefit, rather than simply restricting how much money can be contributed to these programs." (PLANSPONSOR.com; free registration required)
Opinion: California Public Pension Rules Ripe for Change
Excerpt: "What should be done? For starters, the one-year rule should be changed. There's no reason that California should offer pensions based on just the best year of earnings when communities elsewhere in the nation use a more reasonable three- or five-year standard. Next, the portability rules should be reconsidered." (The Contra Costa Times; free registration required)
Sponsored by: ASC & the ASC Institute
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Links to Items on Executive Comp, Benefits in General
Text of Final SEC Rule Shortening Rule 144 Holding Period for Certain Restricted Securities (PDF)
29 pages. Excerpt: "Effective Date: February 15, 2008. The revised holding periods and other amendments that we are adopting are applicable to securities acquired before or after February 15, 2008." (Securities and Exchange Commission)
Overview: IRS Limited Correction Program for Nonqualified Deferred Compensation Plans (PDF)
5 pages. Excerpt: "Certain unintentional operational failures that are corrected within the same taxable year will result in no amount being includible in the service provider's income under Section 409A." (Pillsbury Winthrop Shaw Pittman LLP)
Newly Posted Events
2008 Mid-Winter Tour: Beyond the Essentials: Moving IRA Assets
in Minnesota on January 24, 2008
presented by BISYS Retirement Services
2008 Mid-Winter Tour: Beyond the Essentials: Moving IRA Assets
in Minnesota on January 30, 2008
presented by BISYS Retirement Services
2008 Mid-Winter Tour: IRA Essentials
in Minnesota on January 23, 2008
presented by BISYS Retirement Services
2008 Mid-Winter Tour: IRA Essentials
in Minnesota on January 29, 2008
presented by BISYS Retirement Services
2008 Web/Telephone Seminar: Advanced HSAs
Nationwide on January 22, 2008
presented by BISYS Retirement Services
2008 Web/Telephone Seminar: Basic IRAs
Nationwide on January 24, 2008
presented by BISYS Retirement Services
2008 Web/Telephone Seminar: HSA Basics
Nationwide on January 8, 2008
presented by BISYS Retirement Services
2008 Web/Telephone Seminar: Introduction to QRP Distributions
Nationwide on January 31, 2008
presented by BISYS Retirement Services
2008 Web/Telephone Seminar: IRA Reporting
Nationwide on January 15, 2008
presented by BISYS Retirement Services
2008 Web/Telephone Seminar: QRP Nonspouse Beneficiary Rollovers to Inherited IRAs
Nationwide on January 10, 2008
presented by BISYS Retirement Services
WorldatWork Total Rewards Conference & Exhibition 2008
in Pennsylvania on May 20, 2008
presented by WorldatWork
Newly Posted Press Releases
Employee Ownership Foundation Releases Report on Reasons for ESOP Termination
ESOP Association
The Hartford Agrees to Acquire Sun Life Retirement Services
The Hartford
Paycor and UNIFI Team Up to Offer Retirement Plan Options
UNIFI Companies Retirement Plans
Newly Posted or Renewed Job Openings
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Pension Administrator/TPA
for Block Consulting Actuaries, Inc.
in CA
WRS Senior Communications Specialist
for Wachovia
in NC
ERISA Consultant / Plan Document Specialist
for American Pensions, Inc.
in SC
Defined Contribution Compliance Specialist
for 401k ASP, Inc.
in FL
AVP Product Leader
for MassMutual Financial Group
in MA
ERISA Attorney/Consultant / Plan Document Specialist
for Financial services company
in PA
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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