BenefitsLink
Retirement Plans
Newsletter

To BenefitsLink home page Fill your job openings fast on EmployeeBenefitsJobs.com!
Search Earlier Newsletters:

Sort by date
Sort by closest match

February 5, 2008

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


Today's sponsor is ASC & The ASC Institute

(Click on company name or banner to learn more.)
Banner ad for ASC & The ASC Institute

Failed a discrimination test?

Let ASC help you provide creative and money saving solutions to your clients!

ASC's Compliance Testing software automatically provides multiple ADP/ACP corrective options – including HCE distributions, prorata and contributory Qnecs, as well as Targeted Qnecs. Our 401(a)(4) testing provides multiple rate calculation methods, as well as banding and component testing options. Partner the sophistication of the Compliance Testing software with our Money Manager Link (MML) and Single Step Processing (SSP) automation tools for even more efficiencies.
Learn more! Email: sales@asc-net.com


[Guidance Overview] IRS Delays Effective Date of Regs on Funding and Benefit Restrictions for Single-Employer Pension Plans
Excerpt: "The delay in the effective date of the regulations and the opportunity to use a reasonable interpretation of the law is welcome. This is especially true for the benefit restriction rules, which would be difficult to administer following the detailed requirements of the proposed regulations." (The Segal Group, Inc.)

[Guidance Overview] Feds Offer Cash Balance Conversion Relief
Excerpt: "New guidance issued by the Treasury Department and the Internal Revenue Service (IRS) provides that cash balance conversions that have filed for an IRS determination letter, and occur before next year, won't be disqualified solely for relying on traditional conversion rules.' (PLANSPONSOR.com; free registration required)

[Guidance Overview] Converted Pension Plan Satisfied 'Backloading' Rules
Excerpt: "A defined benefit plan that converted from a traditional pension plan to a cash balance plan, prior to the effective date of the new conversion rules under the Pension Protection Act of 2006 (P.L. 109-280), satisfied the accrual rules of Code Sec. 411(b)(1) (commonly referred to as 'backloading' rules) for the 2002 plan year." (CCH Incorporated)

[Guidance Overview] California Court of Appeal Upholds Optional Compensation Plan with Restricted Stock Opinions
Excerpt: "In the first Court of Appeal decision following the Supreme Court's recent decision in Prachaseisoraedj v. Ralphs Grocery Co., Inc., 42 Cal.4th 217 (2007), the Second District upheld a compensation plan that allowed an employee to direct his employer to purchase shares in the company's stock on his behalf with a portion of his cash compensation. The court upheld the plan even though participants forfeited the stock and the money used to buy it if they were discharged or voluntarily terminated within two years." (Thelen Reid Brown Raysman & Steiner LLP)

[Guidance Overview] Match Return on Failed ADP Test
Excerpt: "A cash or deferred plan must satisfy both the ADP and ACP tests and, after those tests are performed and any corrective distributions made, must satisfy the nondiscrimination rules under §401(a)(4). After all the testing is done, the HCEs must not have a matching percentage larger than the matching percentage for the NHCEs. This point is illustrated in [an example on the target page]." (McKay Hochman Co., Inc.)

How Companies Can Help Retiring Employees Transition from Savers to Consumers
Excerpt: "Minus the security of a [pension] check, millions of boomers will confront longevity risk -- the possibility of outliving their assets. They must manage that [defined contribution plan] lump sum to last a lifetime, not the easiest thing to tackle in one's 70s, 80s, and beyond. Rising concern over employees' post-retirement welfare is prompting companies, and the federal government, to help workers in their last working years make the right decisions about their future needs." (CFO.com)

EU to Set Up Harmonised Rules for Pension Funds
Excerpt: "The European Union plans to harmonise the regulation of pension funds to prevent countries from luring funds by offering more lenient rules, Handelsblatt reported, citing Thomas Steffen, the head of the EU's insurance regulatory body CEIOPS." (Thomson Financial News Limited via Forbes.com)

How to Tell How Well-Funded Your Pension Plan Is
Excerpt: "Private pension plans are required to file a financial report called a Form 5500 every year with the federal government. The Form 5500 provides information regarding the plan's financial condition, investments, and operations. If you are a participant in a private pension plan, you have the legal right to request the most recent Form 5500 from your plan administrator." (Pension Rights Center)

Working paper - To Roth or Not? That is the Question
Excerpt: "This paper uses ESPlanner (Economic Security Planner) -- a financial planning software program co-developed by Kotlikoff -- to study the relative merits of regular and Roth retirement accounts. In providing its consumption smoothing recommendations, ESPlanner makes the highly detailed tax and Social Security benefit calculations needed to compare retirement account options. In particular, ESPlanner can determine how different retirement account options affect different households' living standards under different assumptions about future tax policy." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Proposed Pension Funding Regs Criticized at IRS Hearing
Excerpt: "Proposed regulations issued by the IRS on benefit restrictions for underfunded pension plans enacted by the Pension Protection Act of 2006 (PPA; P.L. 109-280) (CCH Pension Plan Guide ¶20,262D ) came under criticism from benefits practitioners at a January 28, 2008 IRS hearing in Washington, D.C." (Wolters Kluwer Financial Services)

Trying to Read Pension Plans' Financial Positions
Excerpt: "NEW pension rules being phased in this year may make some employees curious about the financial health of their pension plans -- but it's still hard to get enough information to make an intelligent judgment." (The New York Times; free registration required)

PBGC Premium Hike and Employer Retirement Savings Accounts in 2009 Budget
Excerpt: "President Bush announced a legislative proposal . . . allowing the PBGC to raise premiums it charges underfunded pension plans. . . . The 2009 budget also includes a series of proposals . . . that would simplify the rules applied to a variety of defined contribution and other savings plans. Among other things, the proposals would consolidate 401(k), SIMPLE 401(k), SARSEPS (salary reduction simplified employee pensions), thrift plans, 403(b) and governmental 457(b) plans into a new Employer Retirement Savings Account." (Pensions & Investments)

Take the IRS 'Timing is Everything' Feature Validation Survey
Excerpt: "The IRS's Employee Plans Customer Education and Outreach is accepting suggestions from the benefit community about their publication 'Timing is Everything' . . . . [The 'Timing is Everything' feature] is currently found as an insert at the end of the IRS publication 'Retirement News for Employers' . . . which can be found on-line at: http://www.irs.gov/retirement/article/0,,id=122823,00.html. [The short survey is on the target page.]" (McKay Hochman Co., Inc.)

Pension Fund Assets Rise and Fall
Excerpt: "Global institutional pension fund assets in the 11 major markets grew by about 9 percent during 2007 to more than USD 25 trillion, a new study shows, but many pension funds have lost ground since January 1, 2008. The recent turn in the markets has highlighted the benefits, for trustees and plan sponsors, of using a wider range of asset classes." (Watson Wyatt Worldwide)

North Carolina Treasurer Sued over Public Pension Fund Records
Excerpt: "The State Employees Association of North Carolina has filed a lawsuit against State Treasurer Richard Moore asking a judge to force Moore to respond completely to its public records requests. The Associated Press reports the association wants the documents to determine whether political considerations play a role in how retirement money is handled, according to the lawsuit." (PLANSPONSOR.com; free registration required)

Americans Planning for a Later Retirement
Excerpt: "Most working Americans responding to a recent poll declared they had begun saving for retirement, but didn't expect to be able to start using the money until six years later than they wanted -- at age 64.' (PLANSPONSOR.com; free registration required)

Active Retirement Savers Least Confident about Retirement Preparedness
Excerpt: "In examining the relationship between savings confidence and actual savings behavior, a study released by MassMutual Financial Group found individuals who save more and are more active in managing their retirement savings actually are less confident in their retirement security and the retirement decisions they make compared to individuals with lower savings rates." (PLANSPONSOR.com; free registration required)

Self-Directed IRAs Directing Money Into Real Estate
Excerpt: "'Most self-directed IRA investors think that even though the real estate markets have tanked, it's a buying opportunity,' said Stephan Roche, president and COO of Guidant Financial Group. 'They view it as a chance to get decent investment opportunities on the cheap.'" (Financial Week; free registration required)

Plan Mergers May Yield Brighter Financial Future - Offer One Way to Relieve Funding Pressures
Excerpt: "To remain competitive in the marketplace, more companies and industries are starting to consolidate with one another. If all parties offer a defined benefit plan, then naturally the idea of merging those plans may be brought to the table." (Employee Benefit News; free registration required)


Sponsored by: SunGard

(Click on company name or banner to learn more.)
Banner ad for SunGard

SunGard's Relius Government Forms 1099/W-2 Outsourcing Service

Why buy additional forms, print and stuff envelopes, or pay for postage when you can have Relius Government Forms 1099/W-2 Outsourcing Service electronically file and mail your 1099/W-2 forms for only $1.77 per recipient copy?

Learn more. 800-326-7235, Ext. 1100


(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

[Opinion] Companies with Long-Term Incentive Plans Based on Relative Total Return Need to Re-Examine Their Objectives
Excerpt: "Many long-term incentive plans for executives have undergone extreme makeovers, often by eliminating stock options and the use of free shares as a substitute. Some companies have made a stab at basing compensation on how well total return stacks up against a group of peer companies." (Bloomberg News)

[Guidance Overview] Who is Entitled to Survivor Benefits from ERISA Plans?
Excerpt: "ERISA pension plans must incorporate the only two ERISA required beneficiary designations, QDROs and spousal survivor benefit designations. Neither statutory designation applies to an ERISA plan that is not a pension plan, such as a life insurance or disability plan. Thus, neither statutory designation may supersede a beneficiary designation made pursuant to the explicit terms of an ERISA life insurance or disability plan." (Social Science Research Network)

[Guidance Overview] Major Expansion of FMLA Allows Six-Month Leave to Care for Injured Servicemembers
Excerpt: "Employees may take up to six months of job- and benefit-protected leave to care for family members injured in the line of active military duty. In certain other circumstances, workers may take up to 12 weeks of leave when a family member is on active duty or has been notified of an impending call to active duty." (Watson Wyatt Worldwide)

Most Employers Intend to Retain Their Nonqualified Plans, Survey Indicates
Excerpt: "The issuance of final Code Sec. 409A regulations by the IRS will not result in widespread termination of nonqualified executive retirement plans, according to the benefits consulting firm Buck Consultants. In Buck's '2007 Nonqualified Deferred Compensation Survey,' 95% of the eighty organizations surveyed indicated that they intend to retain their nonqualified defined contribution plans, and 89% intend to retain their nonqualified defined benefit plans." (Wolters Kluwer Financial Services)

[Guidance Overview] Entitlement to Incentive Compensation on Termination of Employment May Result in Loss of Treatment as Performance-Based Compensation under Section 162(m) (PDF)
Excerpt: "In what may be a substantive reversal of previous guidance, the IRS recently issued a private letter ruling (PLR 200804004) that concluded that all compensation payable to an executive under an incentive plan will not be treated as 'performance-based compensation' under Section 162(m) of the Internal Revenue Code if it is payable in the event of certain severance scenarios, regardless of actual performance." (Frederic W. Cook & Co., Inc.)

[Guidance Overview] Highlights of Final Rules for Nonqualified Defined Benefit Deferred Compensation Plans (PDF)
6 pages. Excerpt: "These rules apply to sponsors of and participants in nonqualified defined benefit plans, commonly referred to as Supplemental Executive Retirement Plans (SERPs). These rules do not apply to qualified defined benefit plans." (Prudential Retirement)

[Guidance Overview] Highlights of Final Rules for Nonqualified Defined Benefit Plans (PDF)
3 pages. (Prudential Retirement)

California Research Bureau Report Highlights Concerns About Actuarial Practices for Public Employee Benefits
Excerpt: "The California Research Bureau (CRB) at the California State Library has released a report that explains in plain language how actuarial practices determine funding levels for public employee pensions and retiree health benefits." (State of California)

NY Court Rules to Recognize Same-Sex Marriages from Other States
Excerpt: "A New York appellate court has decided that same-sex marriages validly performed out-of-state must be legally recognized, just as the law recognizes those of heterose.xual couples married elsewhere." (PLANSPONSOR.com; free registration required)

New York Court Recognizes G.ay Unions
Excerpt: "A New York appellate court has granted the same recognition to out-of-state marriages of g.ay couples as heterose.xual couples married outside of New York. New York State does not permit homose.xual couples to marry. The state does permit the voluntary extension of healthcare benefits to same-sex couples, however." (United Press International)


Newly Posted Events

Dependent Care Assistance Programs in Cafeteria Plans: Your Checklist for What Expenses Are Reimbursable in 2008
Nationwide on January 31, 2008
presented by Employee Benefits Institute of America (EBIA)/Thomson Tax & Accounting

Employee Wellness / Disease Management Programs -- a Panel Discussion
in Washington on February 15, 2008
presented by International Society of CEBS - Pacific NW Chapter

ESOPs Social and Economic Performance: The Recent Past and Immediate Future - Roundtable Conversation
in Pennsylvania on April 25, 2008
presented by Employee Ownership Foundation


Newly Posted Press Releases

ExpertPlan Earns CEFEX Certificate of Fiduciary Excellence
ExpertPlan

New Web-Product Connects Retirement Plan Advisors with Plan Sponsors
Venture (k) Corp.

MFS Launches Diversified Target Return Fund
MFS

Most CEOs Overpaid, One in Three Company Directors Say in Study
Heidrick & Struggles International, Inc.


We're one of the top 350 employment sites on the web!Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs | RSS feed for jobs RSS Feed )

401(k) Administrator
for Continental Benefits Group, Inc.
in NJ

Defined Contribution Team Manager/401K Plan Administrator
for National Life Group
in VT

National Broker Dealer Channel Manager
for Ascensus (formerly Bisys Retirement Services)
in ANY STATE, DE, NJ, PA

Regional Director of Client Services-TPA Retirement Plans
for DailyAccess Corporations
in AL

Director of CHR Compliance-50040682
for MassMutual Financial Group
in MA

Plan Administrator
for ABG-Carolinas, LLC
in NC

Omni BA
for Group H, Inc.
in ANY STATE, CO

Document Specialist
for Continental Benefits Group, Inc.
in NJ

Pension Administrator
for Benetech, Inc.
in CA, IL, TX

DB Implementation Specialist
for Milliman
in TX




Handy Links:


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 2008 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: