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| February 26, 2008 |
| 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. |
[Guidance Overview] Supreme Court Ruling Enables §401(k) Plan Participants to Sue for Losses in Their Accounts Caused by Administrative Errors
Excerpt: "On February 20, 2008, the U.S. Supreme Court held that ERISA allows a defined contribution (DC) plan participant to sue for losses incurred as a result of the plan administrator's mishandling of his or her account, even if the plaintiff was the only person harmed by the breach." (The Segal Group, Inc.)
[Guidance Overview] Supreme Court Expands Liability Exposure of Fiduciaries of Individual Account Plans (PDF)
3 pages. Excerpt: "In a unanimous decision, the U.S. Supreme Court has held that individual participants in defined contribution plans can sue to recover losses incurred by their individual plan accounts. The long anticipated decision in LaRue v. DeWolff, Boberg & Associates, Inc. will affect the rights and obligations of participants, sponsors, and fiduciaries of all defined contribution plans, including 401(k), profit-sharing, and employee stock ownership plans." (Morgan, Lewis & Bockius LLP)
[Guidance Overview] Supreme Court Expands Remedies Available for ERISA Fiduciary Breach Claims
Excerpt: "Plan fiduciaries and administrators can take several precautionary steps in an attempt to ward off new lawsuits based on LaRue, and employers should review their existing fiduciary insurance coverage." (McDermott Will & Emery)
[Guidance Overview] Suits Based on 'Impaired Value' of Plan Accounts Confirms Yet Another Risk for Plan Fiduciaries (PDF)
2 pages. Excerpt: "In conclusion, the Court's decision, although obviously detrimental to plan sponsors and fiduciaries, is not a surprising one. What will be important to monitor going forward is the extent to which Chief Justice Roberts' comments regarding the impermissibility of recasting claims for benefits as claims for breach of fiduciary duty will be emphasized by lower courts." (Dechert LLP)
[Guidance Overview] Supreme Court Rules That 401(k) Participant Can Pursue Fiduciary Breach Claim for Alleged Investment Losses
Excerpt: "EBIA Comment: While the Court's decision was unanimous, there were two concurring opinions. One, by Justice Thomas, rejected the importance of the distinction between defined benefit and defined contribution plans and suggested that the Court's result could be reached without inquiry into the kind of harm, by simply acknowledging that a loss to a participant is necessarily a loss to the plan, because the plan is essentially the sum of its parts. The other concurrence, by Chief Justice Roberts, raised a significant issue for future litigants -- whether this type of claim should be brought as a claim for benefits (under ERISA Section 502(a)(1)(B)) rather than as a fiduciary breach claim. " (Employee Benefits Institute of America)
[Guidance Overview] Case of Pension Fund Trustees and Conflict of Interest Now Pending Review by California Supreme Court
Excerpt: "Pensions & Investments reports on a California court ruling that allegedly has pension fund trustees in that state -- and across the country -- walking out of board votes rather than risking charges of conflict of interest. The ruling by California's Fourth District Court of Appeal found that trustees, who are often participants in the retirement systems on whose board they serve, can be criminally liable if they approve a measure that even tangentially provides them a personal benefit." (Cypen & Cypen)
[Guidance Overview] A Bank Asks -- Can We Exercise Our Right of Setoff Against an IRA Account?
Excerpt: "We don't believe you can exercise your right of setoff against an individual retirement account (IRA), for at least three reasons. First, it would breach your fiduciary obligations as trustee or custodian of the IRA. Second, IRAs have been deemed 'special deposits' immune from setoff. And third, the Federal Tax Code provides that IRAs are not 'forfeitable'." (Wolters Kluwer Financial Services)
NYC Public Pensions to Companies - Reveal Political Payouts
Excerpt: "Acting on behalf of New York City's Pension Funds, William C. Thompson, Jr., the city's comptroller, is asking ten of America's biggest companies to disclose their political contributions. Thompson submitted the resolution to: Halliburton Corp.; Duke Energy; Charles Schwab Corp.; DTE Energy; Wal-Mart; United Technologies; Devon Energy; Computer Sciences Corp.; Entergy Corp.; and Union Pacific. United Technologies has already has agreed to adopt the proposal." (CFO.com)
Participants Want Guaranteed Retirement Income But Sponsors Don't Think It's an Important Plan Option
Excerpt: "Separate surveys of plan sponsors and participants conducted by Spectrem Group reveal a disconnect between plan sponsors and participants, regarding whether some form of income option should be included in retirement plans." (Spectrem Group)
New Retirement System for Federal Employees Gets a Test Drive
Excerpt: "With RetireEZ, as the new system is called, the OPM will find it easier to provide benefits when they are first due and agency officials will find it easier to get the retirement claims process underway, Springer said. Employees also will find it easier to look at their retirement options, she said." (The Washington Post; free registration required)
America Saves Week Is Kicked Off with Release of Savings Survey Results
Excerpt: "A new survey taken in connection with the kickoff of the second annual America Saves Week found that 57% of those not yet retired said they are socking away enough of a nest egg to pay for 'a desirable standard of living.'" (PLANSPONSOR.com; free registration required)
The Key to Target-Date Funds is Diversity and Downside Protection
Excerpt: "A new research paper about hugely successful target-date funds finds that the most effective designs include extended and alternative assets and remain highly diversified for the entire investment horizon." (PLANSPONSOR.com; free registration required)
Selecting the Best Target Date Strategy for Your Participants
Excerpt: "We take the view that structuring target date strategies to accommodate such highly unpredictable and diverse post-retirement cash flows could lead to poor target date fund design. We believe a more prudent approach is to help as many participants as possible meet the basic income replacement goal defined in this paper." (JPMorgan; free registration required to access paper)
Advisers Starting to Scrutinize Quality and Design of Investment Advice Tools
Excerpt: "If you or your clients offer individual investment advice to employees, you may be able to avoid some legal landmines down the road by monitoring and updating the tools that are used to calculate and produce the advice." (Employee Benefit Advisor; free registration required)
[Opinion] Employers Should Keep ERISA Rules in Mind When Rehiring Former Employees
Excerpt: "[B]oomerang employees can be a valuable resource for employers. But employers [should] plan for the benefit matters in advance." (The Retirement Plan Blog)
Sponsored by: University Conference Services
(Click on company name or banner to learn more.)
| Signs of the Times: The Future of Plan Management |
| Auto enrollment, QDIAs, plan fees, liability driven investing...The times are changing for employer-sponsored retirement plans. Makes plan now to attend the Mid-Sized Retirement & Pension Plan Management Conference in San Francisco, March 11-14, 2008, to learn how these changes will affect your plan and participants. |
| (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
[Guidance Overview] Court Finds No 'Bright Line' Test for Eliminating Duplicative ERISA Claims
Excerpt: "Noting a split of authority as to whether a plaintiff may simultaneously pursue claims for benefits under § 502(a)(1)(B) and for breach of fiduciary duty under § 502(a)(3), a federal district court refused to dismiss the plaintiff's claims under § 502(a)(3). The case arose out of a dispute over the terms of insurance contracts issued by Aetna and subject to ERISA." (Health Plan Law blog by Attorney Roy F. Harmon III)
[Guidance Overview] IRS Grants Retroactive Relief From §162(m) Letter Ruling (PDF)
2 pages. Excerpt: "The IRS has announced that its controversial letter ruling holding that some common bonus arrangements do not qualify for the performance-based compensation exception to the $1,000,000 annual cap on deductible compensation will be applied prospectively only." (Seyfarth Shaw LLP)
[Guidance Overview] Six-Month Deferral Elections and Performance-Based Pay Under Section 409A (PDF)
Excerpt: "In addition to focusing on rules governing performance-based compensation under Section 409A of the tax code, this article also takes into account a recent Internal Revenue Service private letter ruling that may undermine the validity of performance-based compensation arrangements subject to Section 162(m) that are commonly found at many public companies. The authors also review Section 409A transition relief available during 2008 that allows employees to make deferral elections on a more liberal basis." (Pension & Benefits Reporter via Groom Law Group)
[Guidance Overview] 2007 - The Year in Review for Executive Compensation (PDF)
13 pages. Excerpt: "This summary provides highlights of the major regulatory and technical developments in 2007, as well as emerging executive compensation issues for U.S. corporations. The specifics details may be found in the related 'alert' letters listed at the end of this memo and are accessible via our web site at www.fwcook.com." (Frederic W. Cook & Co., Inc.)
[Guidance Overview] Revenue Ruling 2008-13 Provides Prospective Application of New IRS Position on Performance-Based Compensation Exemption under Code Section 162(m) (PDF)
4 pages. Excerpt: "Under a new Revenue Ruling issued on February 21, 2008 (Rev. Rul. 2008-13), the Internal Revenue Service confirmed its reversal (as expressed in a January 2008 private letter ruling) of its prior position as to the effect of common severance provisions on the performance-based compensation exemption from Code Section 162(m) and, most significantly, provided a transition period for application of this new position." (Alston & Bird LLP)
Employers Increasing Internal Communications to Engage Workers in Benefits Plans - Better Targeting of Messages Is Necessary As Well
Excerpt: "One size does not fit all when it comes to communicating with your employees about their benefits. Maybe a memo describing Plan A versus Plan B was once all that workers needed. But that was in the days before wellness plans and before baby boomers were more interested in retirement planning than vacation time." (Human Resource Executive Online)
Ford Is Pushing Buyouts to Workers
Excerpt: "[Ford] is pitching a buffet of buyout packages that are easily among the richest ever offered to factory workers, including one-time cash payments of $140,000 or college tuition plans for an entire family." (The New York Times; free registration required)
Report of the Taskforce on the Aging of the American Workforce (PDF)
48 pages. Excerpt: "The aging of the American people will affect many aspects of our society, from the health care system to financial markets, and has many implications for the U.S. labor market. Employers rely on the skills and experience of this skilled labor pool, and as the population ages and more people retire, many industries could face worker and skill shortages." (U.S. Department of Labor Employment and Training Administration)
German Corporations Trim Retired Executives' Perks
Excerpt: "After decades of extending such perks as chauffeurs and secretaries to retired executives, Germany Inc. has begun tapping the brakes. That represents a behind-the-scenes revolution in Europe's largest economy, where the old guard traditionally enjoys plenty of privilege and pull long after leaving the executive suite." (The Wall Street Journal)
Newly Posted Events
2008 Spring Conference
in Arizona on April 29, 2008
presented by Western Pension & Benefits Conference - Phoenix Chapter
New EEOC Guidelines on Treatment of Caregivers: How to Avoid Liabilities?
Nationwide on March 5, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group
The Supreme Court's LaRue Decision: What's the Next Generation of 401(k) Litigation?
Nationwide on April 8, 2008
presented by ABA Joint Committee on Employee Benefits
Top 10 Mistakes Companies Make When Using Independent Contractors - And How to Avoid Them!
Nationwide on March 6, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group
Newly Posted Press Releases
ExpertPlan Hires Two Business Development Veterans to Expand National Presence
ExpertPlan
Great-West Retirement Services® Appoints Regional Sales Directors To Focus On Advisors, Consultants And TPAs
Great-West Retirement Services
Extreme Weather Wreaking Havoc on Employee Attendance
Kronos Incorporated
Legal Advantage, LLC appoints Louis A. Charest, Vice President, Document Review
Legal Advantage, LLC
Legal Advantage, LLC Establishes "Customer Bill of Rights"
Legal Advantage, LLC
Health Care Spending Expected To Double By 2017, Reaching $4.3 Trillion And Consuming Nearly One-Fifth Of The Economy, Federal Report Says
Health Affairs
Newly Posted or Renewed Job Openings
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401(k) Administration Manager
for Malcolm Thompson & Associates, Inc.
in TX
Senior Plan Administrator
for The Allocation Company, Inc.
in TX
Relationship Manager, Health and Benefits
for Mercer
in MA, TX
Human Resources Benefits Administrator
for The Orphanage
in CA
Retirement Plan Administrator
for Valley Forge Pension Managment, Inc.
in PA
Pension Account Manager Sales Consultant
for First Niagara Benefits Consulting
in NY
Benefits Manager
for SUNY Upstate Medical University
in NY
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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