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| April 9, 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.
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| PPA'06 Defined Benefit Software from DATAIR |
| DATAIR's Defined Benefit System for Valuations, Discrimination Testing, and Proposals. Includes 412(e)(3) insured plans, Cash Balance Plans, DB/DC combos and Sole Proprietors. Live, expert support.
DATAIR's PPA'06 DB System includes
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[Guidance Overview] What Are Employer's Matching Contribution Requirements Under Savings Incentive Match Plan for Employees of Small Employers IRA Plan?
Excerpt: "IRC Section 408(p)(2)(A)(iii) requires an employer to match eligible employees' salary deferral contributions. This contribution is a dollar of matching contribution for each dollar of an employee's salary deferral, with no matching contribution for salary deferrals that exceed 3 percent of an eligible employee's compensation." (Wolters Kluwer)
[Guidance Overview] End of First Quarter Triggers Issuance of Multiemployer Pension Plan Notices Pursuant to the Pension Protection Act (PDF)
2 pages. Excerpt: "For any plan operating on a calendar year basis, its actuary by now should have certified whether the plan is critical or endangered. Many participating employers have started to receive their certification notices, and more should come throughout the month. Given the interest in this area, many plans that have been certified in the 'green' -- neither endangered nor critical -- also are issuing notices declaring their status." (Seyfarth Shaw LLP)
[Guidance Overview] Chart of Highlights of Proposed Rules for Hybrid Plans (PDF)
3 pages. (Prudential Retirement)
[Guidance Overview] IRS Publishes Proposed Regulations for Hybrid Plans (PDF)
6 pages. Excerpt: "These developments affect sponsors of and participants in hybrid plans, such as cash balance plans and pension equity plans. These developments also affect plan sponsors that are considering converting traditional defined benefit plans to a hybrid plan design." (Prudential Retirement)
[Guidance Overview] PBGC Waives Certain Small Employer Reporting of Missed Quarterly Contributions for Plan Years Beginning in 2008
Excerpt: "Administrators and contributing sponsors of single-employer plans must notify the PBGC, generally within 30 days, of specified reportable events (e.g., failure to make required minimum funding payments). However, the PBGC has authorized the waiver of the post-event notice requirement for certain designated reportable events. In addition, small employers are not required to report the failure to make quarterly contributions." (Wolters Kluwer)
SEC Charges Five Ex-Officials in San Diego Municipal Bonds Fraud
Excerpt: "The Securities and Exchange Commission has filed civil fraud charges against five former San Diego city officials -- mostly finance professionals -- for their roles in the city's financial crisis in 2002 and 2003. The SEC charged the individuals for failing to disclose to investors buying the city's municipal bonds that there were funding problems with San Diego's pension and retiree health care obligations and those liabilities had put the city in financial peril." (CFO.com)
Employer Fined for Lying on Form 5500
Excerpt: "A Charlotte construction contractor has been hit with $153,000 in penalties and fines and sentenced to one year of federal probation after pleading guilty to filing a false Form 5500." (PLANSPONSOR.com; free registration required)
Policy Uncertainty and Precautionary Savings in Relation to Pensions
Excerpt: "We use the quasi-experiment of the adoption and subsequent revocation of [German] pension reform to study how households reacted to the increase in uncertainty about the future path of income that such an event produced. Our estimates are obtained from a diff-in-diff estimator: this helps us overcome the identification problem that often affects measures of precautionary saving." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve full text)
Military Retirement, Concurrent Receipt, and Related Major Legislative Issues (PDF)
20 pages. Excerpt: "The military retirement system includes benefits for retirement after an active or reserve military career, disability retirement, and survivor benefits for eligible survivors of deceased retirees. The change to the system that has generated the most recent legislative activity involves whether some or all military retirees should be allowed to receive both military retired pay and any VA disability compensation to which they are otherwise entitled; this is referred to as 'concurrent receipt.'" (Congressional Research Service)
Employers Turning to Hybrid Plans, DC Plan Enhancements, Wyatt Finds
Excerpt: "During the past 10 years, over forty percent of large employers have closed or frozen their defined benefit plans and replaced them with defined contribution plans, according to a survey released by employee benefits consultant Watson Wyatt. During the same period, nearly one-fourth of the surveyed employers have modified their defined benefit plans into hybrid plans." (Wolters Kluwer)
The High Cost of 401(k) Fees: How Much Are You Paying?
Excerpt: "Mutual fund returns in 401(k) plans are normally reported as net returns, meaning that fees for managing your investments are subtracted from your gains or added to your losses before calculating the annual return. Other costs, such as administrative and record-keeping fees, are often divvied up among plan participants but are not explicitly listed on individual investment statements. This lack of transparency is frustrating for investors . . . ." (Kiplinger.com)
Companies Find Ways to Retain Expertise of Older Workers
Excerpt: "Weyerhaeuser's new delayed-retirement project, called Gray Matters, is grounded in research about the attitudes of its employees age 55 and over. The vast majority say they want to work longer rather than completely retire. But they want it all -- a flexible schedule, health-care benefits and no negative financial impact. And they want the work to be meaningful. In response, Gray Matters offers selected employees the opportunity to retire gradually, but they must average 25 hours of work a week in order to keep health benefits. The part-time work also shouldn't go on for too many years or it could negatively impact their pension. Still, working part time rather than retiring entirely ultimately builds a bigger nest egg." (The Seattle Times)
EBRI's Retirement Confidence Survey - 2008 Results
The target page contains links to the following: 2008 RCS Press Release - April 9, 2008; 2008 RCS Findings - Published as the April 2008 EBRI Issue Brief; Five Fact Sheets: Cost of Health Care in Retirement, Saving for Retirement in America, Gender Comparisons Among Workers, Age Comparisons Among Workers, and, Attitudes About Social Security and Medicare; a list of the 2008 RCS Underwriters; Remarks by Jack VanDerhei, Temple University and EBRI Fellow; and, Remarks by Mathew Greenwald, MGA. (Employee Benefit Research Institute)
2008 Retirement Confidence Survey: Americans Much More Worried About Retirement with Health Costs Big Concern (PDF)
24 pages. Excerpt: "Retirement worries growing -- Americans' confidence in their ability to afford a comfortable retirement has dropped to its lowest level in seven years, reflecting worries about health costs, the economy, and home values, according to the 18th annual Retirement Confidence Survey® (RCS). Decreases in confidence occurred across all age groups and income levels but were particularly acute among younger workers and those with lower income." (Employee Benefit Research Institute)
Massachusetts High Court to Decide If Car Use Drives Public Pension Boost
Excerpt: "[T]he state's highest court [will] decide once and for all an issue that has popped up all over the state -- whether public employees who get to take home a vehicle at night are entitled to claim that as a form of compensation in order to boost their pensions." (The Eagle-Tribune)
Omaha, Nebraska, Police Union's Offer Does Little -- If Anything -- to Roll Back Lucrative Police Pensions
Excerpt: "Work for the Omaha Police Department 30 years, then retire with an annual pension that is just 1 percent less than your on-the-job wages. That's what the Omaha Police Union is proposing to the city as part of the ongoing contract negotiations, according to a recent union contract offer obtained by The World-Herald." (Omaha World-Herald)
Hancock Puts Out 401(k) Guaranteed Income Rider
Excerpt: "John Hancock Retirement Plan Services has launched its Guaranteed Income for Life (GIFL), an optional 401(k) rider featuring a principal guarantee. A John Hancock news release said the GIFL product offers participants upside potential, downside protection, and a lifetime income source." (planadviser)
Transfer Restrictions on Plan Investment Did not Breach Contract
Excerpt: "The U.S. District Court for the Eastern District of Pennsylvania has ruled that The Prudential Insurance Company of America did not breach terms of a variable insurance contract when it changed provisions for making transfers between contract investments." (PLANSPONSOR.com; free registration required)
Europe DC Plans Lagging on Participant Education
Excerpt: "Only a quarter of Europe's defined contribution plans offer financial planning or investment advice despite listing employee appreciation of the plan as a top sponsor challenge, a Mercer survey found." (PLANSPONSOR.com; free registration required)
Why Do More Older Men Work in Some States?
Excerpt: "One avenue of investigation not previously explored is the variation in labor force activity of older workers across different states. In South Dakota, nearly 90 percent of men aged 55-64 are in the labor force compared to only 40 percent in West Virginia. The question is the extent to which this variation can be explained by differences in replacement rates -- benefits relative to pre-retirement income -- across states." (Center for Retirement Research at Boston College)
Sample Agreement for Information Sharing between 403(b) Plan Sponsor and Vendor (PDF)
Excerpt: "The SPARK Institute has prepared this sample ISA for the convenience of its members, and with the collective input of its members. The sample ISA is being made available to the public for consideration and comment in an effort to facilitate broad acceptance and use in the 403(b) plans community. Accordingly, the sample ISA is subject to change based on the comments received by The SPARK Institute." (The SPARK Institute)
SPARK Seeks Comments on 403(b) Information Sharing Agreement
Excerpt: "The SPARK Institute has released for public review and comment a draft sample Information Sharing Agreement (ISA) for 403(b) plan vendors and employers. [The ISA and an exposure draft, 'Best Practices for 403(b) Plans Information Sharing -- Minimum and Comprehensive Data Elements,' summarizing what information will be shared among affected parties are available for review at http://www.sparkinstitute.org/comments-and-materials.php.] " (PLANSPONSOR.com; free registration required)
SEC Charges Five Ex-San Diego Officials with Fraud
Excerpt: "A Securities and Exchange Commission (SEC) news release said the five ex-officials knew that the city's pension funding shortfall was projected to leap from $284 million in 2002 to $2 billion seven years later. They also knew the city's liability for retiree health care was another estimated $1.1 billion, the regulators alleged." (PLANSPONSOR.com; free registration required)
Mercer Says Market Tumult Could Rock Balance Sheets
Excerpt: "It was a rough quarter for large US pension plans -- and that could mean trouble for those firms' balance sheets in coming months, according to a Mercer analysis. The balance sheets of large US companies deteriorated by in excess of $70 billion during the first quarter of 2008 as a result of changes in the value of the assets and liabilities of their pension plans, according to Mercer." (PLANSPONSOR.com; free registration required)
Schwarzenegger Backs Opening CalPERS to Private Sector
Excerpt: "Gov. Arnold Schwarzenegger announced Tuesday that he will back a proposal to open the California Public Employees Retirement System to the private sector. Schwarzenegger issued a statement before an afternoon press conference held by Assemblyman Kevin de León, D-Los Angeles, to announce the plan. De León's Assembly Bill 2940 would allow low- and moderate-income Californians whose employers don't offer retirement savings plans to put money into the California Employee Savings Program. Employers without retirement plans could also participate." (The Sacramento Bee)
[Opinion] Corporate Sponsors Agree: 401(k) Plan Results Don't Matter
Excerpt: "'If the results achieved by the retirement plan are not consistent with its stated objectives, then the fiduciaries to the plan will be called upon to defend themselves. To be sure, if you have a great process, you will be able to refer to it in your defense. But wouldn't it be better to continuously improve your plan steering it ever more precisely toward the achievement of its stated objective and thereby avoid a lawsuit altogether?'" (Benchmarkalert.com)
Sponsored by: University Conference Services
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| A New Era in Plan Management |
| The landscape and lexicon for managing your retirement plan have changed dramatically. The Mid-Sized Retirement & Pension Plan Management Conference, May 6-9, 2008, in Boston brings you up-to-date on the issues and places you out in front of new opportunities to enable your participants to reach their retirement goals. |
| (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
Study of Employee Benefits Trends: Findings from the 6th Annual National Survey of Employers and Employees (PDF)
65 pages. Excerpt: "The 6th annual MetLife Study of Employee Benefits Trends examines the attitudes of an increasingly diverse workforce toward financial and benefits-related issues. The Study also captures the benefits practices and perspectives of both small and large companies across a wide array of industries. Over a one-month period, MetLife surveyed 1,380 full-time employees and 1,652 benefits decision-makers nationwide about employee benefits and marketplace trends." (MetLife, Inc.)
St. Louis, Missouri, Pays Big for Public Employees' Unused Sick Time
Excerpt: "Under a system virtually extinct in corporate America -- and increasingly harder to find in government -- St. Louis city employees can bank all sick days they don't take and exchange them for lump sum payments and a higher pension upon retirement." (St. Louis Post-Dispatch)
[Opinion] Law Professor Amicus Brief Filed in Glenn ERISA Case
Excerpt: "Donald Bogan (Oklahoma) sent us a copy of an amicus brief he and a few others at the University of Oklahoma College of Law filed last week in the U.S. Supreme Court ERISA standard of review case, MetLife v. Glenn, which is set for oral agreement on April 23, 2008." (Workplace Prof Blog)
Newly Posted Events
401k Fiduciary Compliance: What Plan Sponsors Need to Know
in Virginia on April 23, 2008
presented by BNA, Inc.
Employee Benefits Conference
in Illinois on May 21, 2008
presented by Illinois CPA Society
New Alternatives for Retirement Savings: Real Estate IRAs - Seminar
in Illinois on April 16, 2008
presented by Millennium Trust Company, LLC
Newly Posted Press Releases
Former President Of Thomas Construction Services, Inc. Convicted Of Federal Felony And Ordered To Pay $138,478.80 In Restitution
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Secretary of Labor Elaine L. Chao Appoints New Members and Leaders to 2008 ERISA Advisory Council
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Benefits and Compensation Books Offered in New Catalog
International Foundation of Employee Benefit Plans
Newly Posted or Renewed Job Openings
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Pension Plan Administrator
for Future Planning Associates, Inc.
in VT
Defined Benefit Administrator
for Pension Strategies, LLC
in AZ
Conversion Quality Assurance Manager
for Charles Schwab
in OH
Education Consultant for Retirement Plans
for Charles Schwab
in AZ, OH
Plan Consultant Opportunity
for Weaver Partners, Inc.
in ANY STATE
Employee Benefits Director
for Prudential Financial
in NJ
Investment Information Manager
for Prudential
in CT
Retirement Plan Administrator/Consultant
for Baden Retirement Plan Services
in IN
Daily 401 (k) Administrator
for Geller Group, LLC
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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