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December 18, 2007

Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy.


Today's sponsor is RELIUS Education - Seminars and Conferences for Pension Professionals

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Banner ad for RELIUS Education - Seminars and Conferences for Pension Professionals

2008 Orlando Advanced Pension Conference

Orlando, FL - February 6-8. We are back at Walt Disney World® Resort for this important Conference. Leading ERISA experts present the most current analysis of new legislative and regulatory guidance. Hot topics include: automatic enrollment, final QDIA regs, PPA '06 forms, Rev. Proc. 2007-44, cash balance plans, final regs for 403(b) plans, 401(k) fees and the new disclosure mandates, and nonqualified deferred compensation arrangements under the final rules. The program also features a Washington update with Brian Graff, "Ask the Experts," concurrent sessions, and over 900 minutes of continuing education credits. Register now.

Relius Education by SunGard.


(a) New Guidance Documents

U.S. Labor Department Proposes Civil Penalty Rules Under Pension Protection Act
Use the foregoing headline to view the text of the DOL press release. The text of the proposed regulations will be in Wednesday's Federal Register.

(b) News

Thrift Savings Plan Officials Hear from Participants on Interfund Restrictions
Excerpt: "Thrift Savings Plan officials said Monday they were receiving both positive and negative feedback on a new proposal to limit the number of interfund transfers that participants can conduct each month. Officials overseeing the 401(k)-style plan said so far the TSP has received two letters in favor of and 10 letters opposed to interfund transfer restrictions. They pointed specifically to a letter sent Nov. 27 by one participant, who opposed the plan's taking away the rights of participants to 'protect their investments.'" (GovExec.com)

Houston Pension Board Decisions Not Subject to Judicial Review
Excerpt: "Police officers and former police officers sought declaratory judgment against Houston Municipal Employees Pension System as to whether or not they were entitled to certain credited service. The statute creating HMEPS provides that 'the determination of any fact by the pension board and the pension board's interpretation of this Act are final and binding on any interested party, including members, deferred participants, retirees, eligible survivors, beneficiaries, and the city.'" (Cypen & Cypen)

(c) Summaries of Guidance; Filed Comments

Overview: The New QDIA Regulations
Excerpt: "The regulation creates three types of long-term QDIAs. Those are commonly called: age-based or target maturity investments; risk-based, or balanced or lifestyle, investments; managed accounts. The regulation goes on to say that the investment must either be a mutual fund or must be managed by a fiduciary: registered investment adviser (RIA), a bank or trust company, or the plan sponsor." (Reish Luftman Reicher & Cohen)

What to Do With Prior Default Contributions?
Excerpt: "In advising plan sponsors about the QDIA regulation, you may be asked what to do with the participant accounts invested in the prior default investment. Answering that question involves determining whether it is eligible to be a QDIA." (Reish Luftman Reicher & Cohen)

Overview: IRS Corrects Rules for 2008 Benefit Restriction Presumptions
Excerpt: "The IRS has published a corrected proposal relating to the application of presumptions to the 2008 year. In this article, as we understand it, and based on the IRS's correction, is how the presumptions apply for 2008." (JPMorgan)

Overview of New Disclosures of Adviser Compensation Required on Form 5500
Excerpt: "Beginning with the 2009 plan year, both direct and indirect compensation paid to service providers, including advisers, must be reported on Schedule C to the Form 5500." (Reish Luftman Reicher & Cohen)

Overview: DOL's Long-Awaited Proposed Fee Disclosure Regulations
Excerpt: "The proposed regulation would also require that service providers notify plan fiduciaries within 30 days of the provider's knowledge of any material modification to the information provided at the outset of the contractual term. As explained in the preamble, if a change to the information previously provided to the plan 'would be viewed by a reasonable plan fiduciary as significantly altering the 'total mix' of information... or significantly affecting a reasonable plan fiduciary's decision to hire or retain the service provider, then the change is material.'" (Baker & Daniels LLP)

(d) Trends, Surveys, Research

Global Retirement Update, December 2007 (PDF)
3 pages. Excerpt: "[Hewitt's] Global Retirement Update summarizes recent legislative developments and trends related to retirement and financial management and highlights recently passed and pending legislation that may require employers to take action to comply with new rules or review existing plans." (Hewitt Associates)

(e) Policy, Opinion, Advocacy

Opinion: For 401(k) Plans, New Rules Provide for Better Investing by Default (PDF)
Excerpt: "In this article for Pensions & Investments, Vanguard's Ann Combs and Financial Engines' Olena Berg Lacy discuss how autoenrollment and new rules for default funds can help plan sponsors increase the odds that their participants achieve retirement security. Both Combs and Lacy previously held the position of Assistant Secretary of Labor." (Pensions & Investments via The Vanguard Group, Inc.)

Opinion: 2007 Letter to the Pension Santa
Excerpt: "Dear Santa: I've worked hard this year so I hope I get something other than coal. (Hey, we had to freeze the plan. Our stock was sagging.) It's been a tough year, with market volatility, investment complexity and ERISA lawsuits taking up much of my time. I thought 2008 would be a lay-up after a tough 2007 but it's not looking good. There's sub-prime fallout, low employee morale and a depressing outlook for growth in corporate profits. How much more can a fiduciary take?" (Pension Risk Matters; posted by Susan Mangiero)


Sponsored by: Swerdlin & Company

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Banner ad for Swerdlin & Company

Attention Pension Actuaries: Are you prepared for the new DB laws?

  • Are you prepared for the new defined benefit laws effective on January 1, 2008?
  • Does this mean new software?
  • Modifications to current software?

Don't let these new laws add to your workload and stress level. Let Swerdlin & Company 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

Conference Board Unveils Mature Workforce Employer Practices Database
Excerpt: "The Conference Board has launched an Employer-Practices Locator, a Web-based database that includes specific actions employers have taken to address challenges presented by the mature workforce." (PLANSPONSOR.com; free registration required)

Acquiring Technology for Benefits Administration (PDF)
6 pages. Excerpt: "The acquisition of benefits administration software for Taft-Hartley funds can appear far more intimidating, expensive and risk filled than it needs to be. With a little planning and a focus on developing a detailed design for the new system prior to implementation, funds can identify solutions that are often more efficient, more cost-effective and much less painful." (International Foundation of Employee Benefit Plans via Milliman)

Section 409A Operational Error Relief: Summary and Comments (PDF)
11 pages. Excerpt: "Generally, the Notice provides penalty-free corrections for certain errors that are corrected in the same calendar year in which they occurred. During a transitional period, there are mitigated penalties for certain errors involving small amounts that are corrected in a subsequent calendar year. The Notice also includes an outline of a potential correction program." (Hewitt Associates)

New IRS Rules Restrict Corporate Abuses on Deferred Compensation
Excerpt: "The increase in corporate scandals at companies such as Enron prompted formation of the American Jobs Creation Act, added to the Internal Revenue Code in 2004. The new law created Section 409A, meant to control compensation abuses by high-level corporate executives and thereby quell future scandals. The Internal Revenue Service also has created a tandem audit initiative focusing on executive compensation practices. The enactment focused on taming abuses by substantially changing the tax treatment of 'nonqualified deferred compensation plans,' which often are designed for upper-level management." (The Kansas City Star)

Executive Compensation Consultant Explains Why the Advising Process Is Being Criticized
Excerpt: "The issue of compensation for chief executives was muted in 2007 but the issue will heat up again in 2008, says George Paulin, CEO of Frederick W. Cook & Co., a leading compensation consultancy that works for 54 of the largest 250 companies in the U.S. One issue that will be hot is whether compensation consultants, whose advice is critical in helping boards make decisions, have inherent conflicts of interest, a subject that Paulin testified on before the House Committee on Oversight & Government Reform in early December. Here are edited excerpts from a recent conversation we had . . . ." (BusinessWeek)

IRS Expected to Issue a New, Significantly Revised Form 990 Soon
Excerpt: " An IRS spokesman acknowledged that the tax agency will make a major announcement about Form 990 the week of Dec. 17, and industry sources say the announcement is expected to be the unveiling of the much-anticipated new form, which requires nonprofits to report, among other things, executive compensation, charity care and information on joint ventures and management companies (which makes it much easier for enforcers to determine, among other things, whether hospitals are charging for costs only from related parties on their cost reports)." (AISHealth.com)


Newly Posted Events

Code Section 409A's Effect on Employee Benefits and Executive Compensation
in Oregon on January 22, 2008
presented by Durig Capital, LLC

Pension & Benefits Conference - Orange County
in California on January 30, 2008
presented by The Waage Law Firm, APC

Pension & Benefits Conference - San Diego County
in California on January 23, 2008
presented by The Waage Law Firm, APC


Newly Posted Press Releases

Former Ligonier Company Owner Admits Embezzling From Profit Sharing Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Labor Department Proposes Civil Penalty Rules Under The Pension Protection Act
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

New Book Provides Fiduciaries with Guidance When Choosing Professional Advisors
International Foundation of Employee Benefit Plans

Perritt Funds Added to CPI Retirement Platform
CPI Qualified Plan Consultants, Inc.


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Defined Contribution / 401(k) Plan Administrator
for The Savitz Organization
in PA

Pension Plan Administrator
for Future Planning Associates, Inc.
in VT

ERISA Attorney
for CitiStreet
in MA, ME, NJ

Global Head Employee Benefits
for Barclays Global Investors
in ANY STATE, CA

Daily Valuation Operator
for Fringe Benefits Design
in MN

Defined Contribution Administrator
for Creative Plan Designs, Ltd.
in NY

Benefit Analyst
for Kibble & Prentice
in WA

Plan Document Specialist
for Sentinel Benefits Group, Inc.
in MA

Director of Brokerage Services
for USI Consulting
in CT

Sales Professionals
for Sentinel Benefits Group, Inc.
in MA

ERISA Services Specialist
for ExpertPlan, Inc.
in NJ




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