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| December 31, 2007 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is DATAIR Employee Benefit Systems, Inc.
(Click on company name or banner to learn more.)
| Software for 401(k), Pension and Flex Administration |
| Pick and choose the software modules you need:
DC/401(k) Proposals & Administration - DB Proposals & Administration - Retirement Plan Documents (Prototype and
Volume Submitters) - Government Forms (5500s, 1099-Rs, 5300s) - Cafeteria Plan Administration & Documents - Participant Termination Calculations - FAS 132 Reporting
Contact sales@datair.com or call 1-888-328-2474. |
(a) New Guidance Documents
(None today.)
(b) News
Farm Bill Includes Provision for Governmental Roth 457 Plans
Excerpt: "A provision that would allow Governmental Roth 457 plans was included in the Senate Farm Bill approved on Dec. 14, 2007 as part of the Manager's Package of Amendments (Amendment 3855). The House did not move on the Senate version of the farm bill before the holiday recess and the two will have to reconcile the differences in a conference in early 2008." (ICMA-RC)
PBGC Asks Court to Terminate Racing Association Pension Plans
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) announced it has initiated court action to protect the benefits of more than 1,700 workers and retirees covered by the pension plans of the New York Racing Association Inc. (NYRA), a nonprofit corporation that operates the Aqueduct, Belmont, and Saratoga racetracks under a New York state franchise." (PLANSPONSOR.com; free registration required)
Embarq, Sprint Retirees File Suit Over Revoked Benefits
Excerpt: "Ten former telephone company employees have filed a class action lawsuit against landline company Embarq Corp. and its former wireless parent, Sprint Nextel Corp., over Embarq's decision this summer to reduce or withdraw some retiree benefits. The suit, filed Friday in Kansas City, Kan., federal court, claims Embarq violated federal law protecting retirement benefits and seeks to have those benefits restored." (AP via WVEC.com)
(c) Summaries of Guidance; Filed Comments
Overview: PBGC Issues PPA Transitional Guidance: Minimum Lump Sums and Standard Terminations (PDF)
4 pages. Excerpt: "We now focus on recent PBGC guidance in Technical Update 07-3 highlighting the importance of selecting a termination date -- not just a distribution date -- in the 2008 (rather than 2007) plan year to be able to use the PPA lump sum assumptions for 2008 distributions.)" (Keightley & Ashner LLP)
Employee Ownership Update for December 28, 2007
NCEO Executive Director Corey Rosen discusses Sam Zell's assumption of control at the Tribune Company, now owned by an ESOP; IRS Notice 2007-100, which provides transition relief under the Section 409A deferred compensation rules; a growing trend toward employee ownership in the construction industry; and the top 10 employee ownership stories of 2007, such as the decline in employees holding stock options. (National Center for Employee Ownership)
(d) Trends, Surveys, Research
More 401(k) Fee Cases Are in the Works
Excerpt: "The lawsuits put an intense spotlight on revenue-sharing practices of providers that receive money from investment managers. In the long run, they could place pressure on fees paid to managers and record keepers of 401(k) plans." (Workforce Management; free registration required)
Private Pension Plan Bulletin: Abstract of 2005 Form 5500 Annual Reports (PDF)
62 pages. Excerpt: "Over the past three decades, as the private pension system has shifted from defined benefit (DB) plans toward 401(k) type defined contribution (DC) plans, the financing of benefits has shifted from employers to participants. In 1978, when legislation was enacted authorizing 401(k) type plans that allow employees to contribute on a pre-tax basis, 29 percent of contributions to DC plans, and only 11 percent of total contributions to all DB and DC pension plans were contributed by participants. The percent of contributions made by the employee to DC plans has doubled since then, but has remained steady at 60 percent for the past seven years." (U.S. Employee Benefits Security Administration)
With Low Fees, ETFs Rival Mutual Funds: 401(k) Providers Could Add Option
Excerpt: "ETFs can be bought and sold throughout the trading day, rather than once a day as with mutual funds. While that could appeal to some investors, it makes it harder for 401(k) overseers. Imagine the difficulty faced by a company with thousands of employees who might want to place trades at various times during the day." (The Washington Post; free registration required)
'Payout Funds' a New Way to Invest After You Retire
Excerpt: "In October, Fidelity Investments unveiled a series of 11 funds called Income Replacement Funds. Each of these funds has an end date, ranging in two-year increments, currently from 2016 to 2036, and a payout strategy designed to allow participants to take regular monthly withdrawals until no money is left. In January, Fidelity expects to unveil three additional such funds, with end dates of 2038, 2040, and 2042." (The Christian Science Monitor)
Boomer Generation's Members About to Start Qualifying for Early Retirement Benefits
Excerpt: "Beginning Jan. 1, the first of 78 million baby boomers will turn 62 and qualify for early retirement benefits. About three in four are expected to claim those benefits before their full retirement age of 66 or 67." (The Dallas Morning News; free registration required)
The Case for Stock in Pension Funds (PDF)
6 pages. Excerpt: "The primary goal of this article is to show that stock investments are justified when the cash flows contain economic risk. Moreover, the appropriate discount rate is the expected rate of return of a cash-flow-matching portfolio rather than the risk-free rate. In fact, if the cash flows have economic risk that can be hedged in the market, investing 100 percent of the portfolio in bonds actually increases risk and discounting at the risk-free rate inaccurately represents the liability. These ideas are supported by the principles of financial economics and, in fact, clarify some of the myths about financial economics." (American Academy of Actuaries)
What Is Your 'Golden' Year for Social Security?
Excerpt: "The payments are based on average life estimates, which means they're absolutely fair only if your life conforms to the actuarial estimates. Drop dead sooner, and you collect less. Live long and prosper." (The Washington Post; free registration required)
(e) Policy, Opinion, Advocacy
Opinion: On Ensuring Retirement Security by Limiting Fiduciary Liability
Excerpt: "Tom Gies of Crowell & Moring, who argued for DeWolff, Boberg in the pending ERISA 401(k) mega-case, has this opinion piece in the December 14th issue of the Los Angeles Daily Journal. As I read it, Tom's basic point is that fiduciaries make mistakes all the time and we should not allow litigation expense in this area to make affordable 401(k) plans less available to other employees because of these innocent mistakes." (Workplace Prof Blog)
Supreme Court ERISA Case Could Prompt Legislation Imposing Significant New Liability for DC Plans
Excerpt: "The issue for the Court is whether an individual participating in a 401(k) plan may sue for breach of fiduciary duty where the alleged losses only affected one individual's account and whether monetary or compensatory relief can be pursued against a fiduciary." (HR Policy Association)
Links to Items on Executive Comp, Benefits in General
Overview of SEC Launch of The Executive Compensation Reader
Excerpt: "On December 21, 2007, just in time for the holidays, the U.S. Securities and Exchange Commission launched The Executive Compensation Reader, which it described as 'the first-ever online tool that enables investors to easily and instantly compare what 500 of the largest American companies are paying their top executives.' The Executive Compensation Reader is available on the SEC's Web site." (Winston & Strawn LLP)
Newly Posted Events
401(k) Fees and the New Disclosure Mandates
in Michigan on January 22, 2008
presented by ASPPA Benefits Council of Detroit
403(b) Revolutionized!
in Pennsylvania on January 30, 2008
presented by ASPPA Benefits Council of Delaware Valley
The New Frontiers of ERISA Litigation: How to Proceed in a High-Risk Environment
Nationwide on December 28, 2007
presented by BNA, Inc.
Newly Posted Press Releases
U.S. Labor Department Announces FY 2007 Enforcement Results
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Morgan Stanley Hit with 401(k) Stock Suit
Stull, Stull & Brody
The Hartford Makes Another Retirement Business Acquisition
The Hartford
Wolf Haldenstein Adler Freeman & Herz LLP File Class Action Lawsuit - Egan v. Morgan Stanley & Co., et al.
Wolf Haldenstein Adler Freeman & Herz LLP
Blue Cross And Blue Shield Of North Carolina Waives Copayments On Drugs For Chronic Conditions
Blue Cross and Blue Shield of North Carolina
Newly Posted or Renewed Job Openings
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Defined Benefits Actuarial Consultant
for ERP Actuaries & Consultants
in NY
Senior Plan Consultant I
for Scholz, Klein & Friends Enlightened Retirement Group, Inc.
in TX
Associate Consultant
for Fidelity Investments
in MA
Vice President - Institutional Sales West Coast
for Raymond James
in ANY STATE
TPA Regional Manager - Northeast Region
for Transamerica Retirement Services
in MA, PA
401(k) Production Manager
for Malcolm Thompson & Associates, Inc.
in TX
Project Manager - Transition Manager
for MassMutual Financial Group
in MA
Manager, Retirement Services
for Aris Corporation of America
in PA
401(k) Plan Operations Manager
for ADP TotalSource
in FL
Editor, Knowledge Management
for Administaff, Inc.
in TX
Director of Pension Operations
for Delaware Valley Retirement, Inc.
in PA
Pension Administration Team Leader
for Schiller's Pension Consulting
in CA
Call Center Manager, Retirement Plans
for The Newport Group
in NC
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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