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| May 12, 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 Retirement and Cafeteria Plan Documents |
| DATAIR Pre-EGTRRA sale! License our Plan Document System before 6/1/08 for a $500 discount. Choose your documents:
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[Official Guidance] Funding Yield Curve Segment Rates, Updated for May 2008
Excerpt: "The 24-month segment rates are used for minimum funding requirements if a plan's first plan year begins after 2007, or if an election is made not to use the transitional rule of §430(h)(2)(G) of the Code. The following rates are the 24-month segment rates for use with respect to the applicable month and year listed." (Internal Revenue Service)
[Official Guidance] Composite Corporate Bond Rate Table, Updated for May 2008
Corporate Bond weighted average: 6.00 (Internal Revenue Service)
[Official Guidance] Weighted Average Interest Rate Table, Updated for May 2008
Weighted average interest rate: 4.76 (Internal Revenue Service)
[Guidance Overview] IRS Issues Plan Valuation Regulations For Single-Employer Defined Benefit Plans (PDF)
6 pages. Excerpt: "This Pension Analyst discusses the new funding requirements that apply to single-employer and multiple employer defined benefit plans in an effort to help plan sponsors determine the future actions needed to keep their plans in compliance with ERISA and the Internal Revenue Code." (Prudential's Pension Analyst)
[Guidance Overview] DOL Corrects and Clarifies Qualified Default Investment Guidance; What Employers Should Do Now (PDF)
2 pages. (Milliman)
[Guidance Overview] Winter 2008 Edition of IRS 'Retirement News for Employers' (PDF)
10 pages. Articles include 'Keeping Your Plan in Compliance' and 'Using a Plan Amendment for Correction in the Self-Correction Program." (Internal Revenue Service)
[Guidance Overview] Text of Congressional Research Service Report on H.R. 3185, 'Fair Disclosure for Retirement Security Act of 2007' (PDF)
6 pages. Excerpt: "As households become more reliant on 401(k) plans for retirement income, policymakers have become more concerned that participants are unaware of the fees charged in their 401(k) plans. Small differences in fees charged can have large impacts on 401(k) account balances upon retirement. This report provides information on the kinds of fees that are charged in 401(k) plans and details the provisions of H.R. 3185, the 401(k) Fair Disclosure for Retirement Security Act as introduced on July 14, 2007. was passed by the Committee on Education and Labor by a vote of 25-19 on April 16, 2008. It will updated to reflect other 401(k) fee disclosure legislation." (Congressional Research Service, U.S. Library of Congress)
[Guidance Overview] Special Edition of IRS 'Employee Plan News': Overview of Governmental Plans Roundtable Held 4/22/2008 (PDF)
Excerpt: "The roundtable was the first step in establishing a dialogue between the IRS and the governmental plans community in an effort to ensure that governmental entities understand the tax qualification requirements applicable to their plans and are aware of the tools and resources available to assist them in ensuring ongoing compliance. IRS representatives acknowledged that there is very little history examining governmental plans. They want to better understand the issues and barriers these plans face in attempting to satisfy tax qualification requirements." (Internal Revenue Service)
Connecticut Bill Providing 401(k) Participation by Private Employers Dies on Vine
Excerpt: "A bill allowing the state of Connecticut to sponsor a 401(k) plan for small businesses apparently was a casualty of the last-minute scramble by lawmakers to end their current session Wednesday night." (PLANSPONSOR.com)
Financial Advisors Have New Reasons to Review Fiduciary Practices and Liability Insurance
Excerpt: "The [LaRue v. DeWolff Supreme Court] case adds to the litigation concerns that threaten to chill growth of advisor-sold 401(k) plans to small- and mid-sized businesses, an increasingly productive area for many financial advisors. At Fidelity alone, total record-kept assets in such plans stood at $21.2 billion at the end of 2007, an increase of 26% from the previous year. Several factors are helping to drive the growth in advisor-sold 401(k) plans, including the Pension Protection Act of 2006, which provided guidelines necessary to encourage plan sponsors to retain qualified fiduciary advisors and to define safe harbor procedures to insulate them from the liability associated with the advice. " (Financial Advisor)
Mutual Fund Manager Transaction Fees: The Elephant in the Living Room
Excerpt: "In most mutual funds, total transaction costs are equal to or higher than the funds' entire expense ratio, though they are also paid out of fund assets. Of the several categories of transaction costs, only brokerage commission costs are publicly reported, as required by law. Otherwise, investment companies withhold the data. Enter U.S. Rep. George Miller (D-Calif.), the Securities and Exchange Commission (SEC) and the Department of Labor (DOL), all of whom have joined the fray over such costs." (Financial Advisor)
Americans' FY 2007 Retirement Assets Up $1.1 Trillion from 2006
Excerpt: "Americans held $17.6 trillion in retirement assets at the end of 2007, up $1.1 trillion from year-end 2006, the Investment Company Institute reported." (Occupational Health and Safety)
DOL FAB Addresses QDIA Issues
Excerpt: "The Department of Labor (DOL) has issued Field Assistance Bulletin (FAB) 2008-03 to respond to a number of questions practitioners have raised regarding the final regulations on qualified default investment alternatives (QDIAs) . . . . The FAB is in question and answer format, addressing 22 'most frequently asked' questions regarding the QDIA regulations. Here are highlights of the new guidance: . . . " (SunGard Relius)
Double-Dipping in New York: School Official Retires One Day, Is Rehired the Next
Excerpt: "On Jan. 2, [assistant school superintendent Ronald] Grotsky returned to the same job in the same district at the same salary he was making the day before, $174,900 annually. Coupled with his pension, Grotsky was now earning $275,582, paid by state and local taxpayers. The only difference was essentially a clerical one -- the district now classified him under the title 'interim' assistant superintendent. He said the district did not interview any other candidates for the job before approving his interim status." (Newsday.com)
New York City Mayor Asks Albany to Oppose Union-Backed Retirement Bills Expanding Coverage
Excerpt: "Mayor Michael R. Bloomberg of New York is appealing to Gov. David A. Paterson and legislative leaders to hold firm against two bills that the city believes would cost as much as $300 million a year." (New York Times)
Employers Eye Possible Change on 'Smoothing' in Pension Protection Act of 2006
Excerpt: "One [proposed technical correction to PPA '06] that is drawing fire centers on an accounting technique called 'smoothing,' which reduces volatility by permitting the use of expected returns on pension assets when calculating liability. The reform bill limited smoothing to 24 months instead of the previous four years." (HispanicBusiness.com)
Pension Take-Back by PBGC is 'Nightmare' for Steel Plant Retirees, Some Say
Excerpt: "Dec. 1, 2099. That's the date Rick Wyers was told he will be finished paying back what he owes the Pension Benefit Guaranty Corp., the federal agency that took over pensions from Republic Technologies International after it went bankrupt in 2002. . . . Wyers, of Florence Township, is one of more than 1,000 steel plant retirees who have learned that their pension benefits were overpaid for years by the Pension Benefit Guaranty Corp. The overpayment will be collected by a 10 percent reduction in their benefit rate . . . ." ([Lorain OH] MorningJournal.com)
Let's Make It Cool to Save
Excerpt: "A coalition of consumer advocates, public policy groups and academics wants to attack our country's dependence on debt by creating a national campaign much like the one used to curb smoking." (Michelle Singletary in the Washington Post; free registration required)
New York Sees Fraud in Some Lawyers' Pensions Granted by School Districts
Excerpt: "Hundreds of lawyers across the state have been illegally granted state pension benefits by school districts, towns and other governmental entities, according to Attorney General Andrew M. Cuomo, who has opened an investigation into the abuses." (New York Times)
Seven Out of Ten Employers Offer Retirement or Financial Planning to Employees
Excerpt: "A new survey from the International Foundation of Employee Benefit Plans (IFEBP) has found that 70% of respondents offered some type of retirement or financial planning initiative, education or program for employees or participants." (Wolters Kluwer)
Financial Engines Study Finds Self-Directed 401(k) Plan Participants Missing the Mark
Excerpt: "The analysis of nearly 1 million retirement portfolios found that 69 percent have inappropriate risk or diversification of holdings and 36 percent have worrisome concentrations of company stock. In addition, one-third of savers aren't putting enough aside to qualify for the full company matching contribution." (AP via Washington Post; free registration required)
[Opinion] Report of the Working Group on Financial Literacy of Plan Participants and the Role of the Employer
Excerpt: "For plan sponsors who wish to craft their own program, a best practices grid would point to the core literacy skills needed for a successful retirement. The Working Group recommends that the Department of Labor determine and publish best practices for the plan sponsor and fiduciaries to consider for use in educating plan participants with a focus toward increasing financial literacy." (Employee Benefits Security Administration, U.S. Department of Labor)
[Opinion] Text of Amicus Brief of American Benefits Council and Other Associations, in 7th Circuit Investment Fees Case (PDF)
48 pages; Hecker v. Deere & Co. Other associations on the brief are the ERISA Industry Committee and the National Association of Manufacturers. (American Benefits Council)
[Opinion] Letter to 401(k) Retirement Plan Sponsors and Vendors: You're Failing (PDF)
Excerpt: "In 2006, 87% of plan sponsors said they do not believe most employees are/will be financially prepared for retirement. (Deloitte/IFEBP) Just 13% said half might be ok. If that's not a sign of failure, what is?" (Dennis Ackley)
Sponsored by: ASPPA
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| ASPPA Spring Exam Window - Registration ends May 14, 2008 |
| Looking for a way to enhance your professional image and gain the knowledge you need to succeed in the retirement industry? ASPPA credentials provide that and more for the retirement professionals who have obtained the most sought after credentials in our industry. Comprehensive and practical, the ASPPA credentialing program has a path for you. The deadline for the spring exam window, May 14, is rapidly approaching. Don't wait another day to start your journey towards a professional ASPPA credential. Register Now. |
| (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] Postemployment Benefit Accounting and Financial Reporting for Government Plan Sponsors
Excerpt: "In this project, the Board will consider the possibility of improvements to the existing standards of accounting and financial reporting for postemployment benefits -- including pension benefits and other postemployment benefits (OPEB) -- by state and local governmental employers and by the trustees, administrators, or sponsors of pension or OPEB plans. One objective of this project is to improve accountability, or the transparency of financial reporting, in regard to the financial effects of employers' commitments and actions related to pension benefits and OPEB." (Governmental Accounting Standards Board)
[Guidance Overview] Prison Sentences Upheld for Unpaid Plan Contributions Under ERISA Theft Statute
Excerpt: "Over a two-year period, the corporate executives in this case (a CEO and CFO) failed to make required contributions to the company's retirement plans and failed to use employee health plan contributions to pay benefits under that plan (almost $1.4 million in contributions was involved). The executives were convicted of various federal crimes (including ERISA theft and false statements) and given ten- and seven-year prison terms." (Employee Benefits Institute of America (EBIA))
[Guidance Overview] Summary of FASB Statement 123R Share-Based Payment (Revised 05/08/08) (PDF)
Excerpt: "Financial Accounting Standards Board (FASB) Statement No. 123 (revised 2004), Shared-Based Payment (Statement 123R) repeals the longstanding 'intrinsic value' method of accounting for equity compensation prescribed by APB Opinion No. 25 (Opinion 25), and replaces original Statement 123 with a mandate that generally all equity awards granted to employees be accounted for at 'fair value.'" (Frederic W. Cook & Co., Inc.)
Growing Deficits Threaten Public Pensions
Excerpt: "The funds that pay pension and health benefits to police officers, teachers and millions of other public employees across the country are facing a shortfall that could soon run into trillions of dollars. But the accounting techniques used by state and local governments to balance their pension books disguise the extent of the crisis . . . ." (Washington Post; free registration required)
Retirement to Costa Rica? Retirement Bliss Can Be Dear in Developing World
Excerpt: "Health care is another revelation. What would it cost for non-citizens to purchase a health policy in Costa Rica? Now you are getting into the heart of how much it costs to retire to a developing country. Unless you are a citizen of Costa Rica, you may need to buy an overseas policy issued by an insurer in your home country. For U.S. citizens, Medicare generally doesn't cover treatment in foreign countries, so you may have to come back for medical care." (John Wasik on Bloomberg.com)
Study Reveals Pre-Retirement Attitudes Reinforce Inadequate Preparation for Retirement
Excerpt: "The survey evaluated a cross-section of Americans on their awareness of potential financial risks in retirement and how the awareness impacts the management of their finances before and during retirement." (Wolters Kluwer)
[Opinion] Financial Executives Institute Comments on FASB Proposal On Pension, Post-Retirement Benefit Disclosures
Excerpt: "On May 6, 2008, a joint comment letter was sent by FEI's Committee on Benefits Finance ('CBF') and Committee on Corporate Reporting ('CCR') to the Financial Accounting Standards Board (FASB), commenting on Proposed FASB Staff Position (FSP) No. 132(R)-a, Employers' Disclosures about Pensions and Other Postretirement Benefits ('the FSP'). The letter . . . stated support for FASB's objective to improve disclosures for assets held in postretirement benefit plans." (Financial Executives Institute)
[Opinion] Letter to FASB on Proposed Staff Position on Disclosure of Retirement and Other Post-Retirement Benefits (PDF)
5 pages. Excerpt: "As the chief investment officers for 110 major private-sector retirement plans, CIEBA members recognize the desirability of increased transparency and comparability in the financial statements of public companies. However, we posit that the proposals contained in this FSB will not lead to a meaningful increase in transparency and may reduce comparability." (Committee on Investment of Employee Benefit Plan Assets)
Newly Posted Events
Predictive Modeling Web Summit 2008
in California on June 5, 2008
presented by Healthcare Web Summit
Newly Posted Press Releases
Statement By PBGC Director Charles E.F. Millard On Expiration Of Pension Waivers At Delphi Corp.
Pension Benefit Guaranty Corporation (PBGC)
Charles Nelson Named President of Great-West Retirement Services®
Great-West Retirement Services
ERIC Urges Appeals Court to Uphold District Court Dismissal of 401(k) Excessive Fee Case
ERIC (ERISA Industry Committee)
The Female Factor 2008
Women's Institute for a Secure Retirement (WISER)
Buck Consultants Issues White Paper on Links Between Executive Compensation and Company Performance
Buck Consultants, an ACS Company
Engagement Key to Health Coaching Success, but Elusive Definitions Prevail, says Hummingbird Coaching Services
Hummingbird Coaching Services
Mutual Assurance Administrators Enhances Services with Benefit Informatics Data Analysis and Reporting
Benefit Informatics
Some Variable Annuities worth Considering for Retirees, Contends Journal Article
Financial Planning Association
Announcing a New Actuarial Firm that Listens - Clarity in Numbers LLC
Clarity in Numbers, LLC
Newly Posted or Renewed Job Openings
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401(k)/Defined Contribution Valuation Processor
for National Retirement Services, Inc.
in CA, NC
Internal Service Representative
for Northwestern Benefit Corporation of Georgia
in GA
401(k) / Defined Contribution Administrator
for DATAIR Employee Benefit Systems, Inc.
in IL
Conversion Manager
for EPIC Advisors, Inc.
in NY
Manager, Health Care Vendor Management (0806219)
for Johnson & Johnson
in NJ, NY, PA
Relationship Manager/Senior Relationship Manager
for Mutual of Omaha
in AL, AR, FL, GA, LA, MS, NC, SC, TN, VA
Defined Benefit / Contribution Consultant
for Qualified Benefits
in CA
DB Administrator / Actuary
for Nicholas, Hicks & Farmer, Inc.
in WA
401(k) Plan Administrator
for Retirement Planners
in VA
TPA Administrator-Level 1
for Atlantic Pension Services, Inc.
in PA
Retirement Plan Services Administrator
for Associated Bank
in IL
CRTFL - Customer Service Representative
for Citi
in ME
Sr Plan Administrator
for American National Insurance Company
in TX
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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