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| May 30, 2008 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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OPM Suspends Contract for Electronic Retirement System
Excerpt: "The Office of Personnel Management has suspended a 10-year, $290 million contract awarded to Hewitt Associates to create a new electronic retirement system. Two federal sources who requested anonymity said on Thursday that OPM Director Linda Springer decided late Wednesday to suspend the contract with Hewitt, a human resources consulting company based in Lincolnshire, Ill. Under the contract, Hewitt would create a database that would allow employees to view their work history and salary, calculate different annuity scenarios, and process their retirement online." (GovernmentExecutive.com)
OPM Halts Work on Retirement Calculator
Excerpt: "The Office of Personnel Management sent a 'stop work' letter to the contractor developing a software system to calculate retirement benefits for federal employees, officials said yesterday. The contractor, Hewitt Associates, was given 10 days to propose a remedy for flaws and defects uncovered by the OPM during tests of the benefits calculator. Only five of 61 functions worked as intended during recent testing." (The Washington Post; free registration required)
Airline Pilots Retirement Lawsuit
Excerpt: "The BLT (Blog of Legal Times) has posted an update on litigation by pilots against the FAA over the mandatory retirement age. Let me give you the background before that update to give the issue context." (Workplace Prof Blog)
Tax Incentive for Small Employers of Those Called Up for Active Duty
Excerpt: "The Senate unanimously passed H.R. 6081, the Heroes Earnings Assistance and Relief Tax (HEART) Act, which includes a tax credit for small employers (fewer than 50 workers) who pay a salary differential to employees called up for active duty. The bill now goes to the President for his signature." (CCH Workweek via Workplace Prof Blog)
Reservist Benefits Measure Heads to Bush
Excerpt: "Under the legislation, H.R. 6081, which President Bush is expected to sign, employers would have to include the amount of so-called differential pay for pension benefit and defined-contribution plan purposes." (Workforce Management; free registration required)
Retires Steelworkers' Pensions Slashed by PBGC
Excerpt: "Hundreds of retired steelworkers from the former Republic Technologies International are being notified their pensions will be cut, in some cases by as much as 75 percent, to less than $300 a month, due to new calculations by the federal agency that guarantees employer-paid pensions." (Chicago Tribune)
Study Shows Returns Earned in Retirement Actually Fund Most of It
Excerpt: "The investment returns generated by a 401(k) plan during retirement actually play a much more significant role in funding retirement than previously thought. The findings of a new research study should push advisors toward reshaping clients' perception as to how retirement income is actually earned." (On Wall Street)
Retirement 401(k) Debit Cards Are Costly, Finra Says
Excerpt: "Using a debit card to take cash from your 401(k) retirement plan may generate hefty fees and trigger duplicate taxes, the main U.S. brokerage regulator said." (Bloomberg)
Kravitz National Cash Balance Research Report (PDF)
3 pages. Excerpt: "Kravitz has compiled research on all of the Cash Balance Plans in the nation as of December 31, 2006. Following are some data points we believe will be of use and interest to retirement plan professionals, particularly those who are interested in learning about these dynamic plans and using these plans to grow their qualified plan business." (Louis Kravitz & Associates)
Benefits Groups Call for Flexibility in IRS Regs on Automatic 401(k) Contributions
Excerpt: "In testimony presented at a May 19 hearing on the Internal Revenue Service's proposed regulations governing automatic contribution arrangements under 401(k) and similar plans, the American Benefits Council and the Investment Company Institute (ICI) called for the IRS to provide greater flexibility in the rules. On Nov. 8, 2007, the IRS proposed regulations under IRC Secs. 401(k)(13), 401(m)(12), and 414(w) relating to automatic contribution arrangements." (Wolters Kluwer)
Study of Retirement Income Account Allocations Among Equities, Bonds and Fixed Income Annuities (PDF)
52 pages. Excerpt: "The objective of this study was to gain insight on how alternative combinations of retirement income asset classes might have performed had a full range of retirement income solutions been offered at the start of this test period." (Massachusetts Mutual Life Insurance Company)
Monsanto Cash-Balance Suit Gets Class-Action Status
Excerpt: "A federal judge in Illinois designated as a class action a lawsuit that claims cash-balance plans offered by Monsanto Co. and companies it spun off since 1997 illegally discriminate against former participants in St. Louis-based Monsanto's defined benefit plan." (Pensions & Investments)
Kentucky Governor May Call Special Session in June on Pension Crisis
Excerpt: "The state is facing a $26.6 billion shortfall in its public pension systems. Beshear said that by acting on pension reform before the end of the fiscal year -- June 30 -- the state could keep the shortfall from growing by another $500 million." (courier-journal.com)
Plans Continue to Embrace Target-Date Funds as QDIAs
Excerpt: "A new research report says target-date investments of the future are likely to be offered in 'multiple flavors' according to the participant's risk tolerance. The report from MassMutual's Retirement Services Division, 'Participants Embrace Target Retirement Date Investments,' said providers are now developing conservative, moderate, and aggressive portfolios for the same target retirement date. The report examined the use of target retirement date investments as the default option for retirement plans with automatic enrollment." (PLANSPONSOR.com; free registration required)
San Diego Mayor Wants New Pension Plan on Ballot
Excerpt: "Mayor Jerry Sanders proposed a new pension plan for city workers yesterday as he pledged two weeks ago, and continued to pressure the San Diego City Council to put the measure on the November ballot." (San Diego Union Tribune)
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| (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] California Same-Sex Marriage and Genetic Testing Laws Affect Health & Welfare Plans (PDF)
6 pages. Excerpt: "A recent California Supreme Court decision to recognize same-sex marriages and recent federal legislation banning discrimination based on genetic testing may warrant a 'checkup' for group health, life, and other welfare benefits." (Seyfarth Shaw LLP)
[Guidance Overview] Abstract of June 2008 Bulletin, 'Health Plan Implications of the California Court Ruling Allowing Same-Gender Marriage'
Excerpt: "Employers and other plan sponsors based in California or with California employees should carefully review their benefit offerings and plan documents to determine whether and how to accommodate participants' same-gender spouses, and then clearly communicate the decisions they make to participants." (The Segal Group, Inc.)
[Guidance Overview] Is Your ERISA Plan Up-to-Date?
Excerpt: "The Employee Retirement Income Security Act was enacted in 1974. Since then, more than 75 laws have been passed that affect employee benefit plans and the protections afforded them by ERISA. Many of these subsequent laws have mandated extensive changes to benefit plans. [This paper presents] a few of the provisions contained within the statute . . . ." (Aiken & Aiken)
Employees' Commuter Benefit Opportunities Grow
Excerpt: "Responding to workers' frustration with soaring prices at the gas pump, employers are beefing up commuter benefits as a way to offer some financial relief, reports the Society of Human Resource Management." (Employee Benefit Adviser; free registration required)
House Committee OKs Extenders Package with Pension, Deferred Compensation Provisions
Excerpt: "The House Ways and Means Committee, on May 15, 2008, approved the Energy and Tax Extenders Bill of 2008 (H.R. 6049), legislation that includes provisions affecting IRAs, qualified plan distributions, and nonqualified deferred compensation. The measure was scheduled to be considered by the full House on May 20, 2008." (Wolters Kluwer)
California Lawmakers Sign Off on Mandatory Paid Sick Leave
Excerpt: "On Wednesday, the California Assembly passed a bill that would require paid sick leave for all workers, poising California to be the first state to adopt such a requirement, the Sacramento Bee reports." (California HealthCare Foundation)
H.R. 6081: Heroes Earnings Assistance and Relief Tax Act of 2008
Excerpt: "On May 22, 2008, Congress passed the Heroes Earnings Assistance and Relief Tax Act of 2008 (Heroes Act or HEART Act) which will now go to the President for his signature. A lot of great links here on the Act. Benefits-related provisions are as follows (as taken directly from the Congressional Research Service Summary) . . . ." (Attorney B. Janell Grenier via Benefitsblog.com)
GM Says 19K U.S. Hourly Workers Taking Its Buyout Offers
Excerpt: "Under the program, retirement-eligible workers were offered financial incentives to retire with their full pension and benefits, while workers who were within four years of their 30th anniversary with the company were allowed to retire early and get reduced pay until their benefits kicked in. Workers could also take up to $140,000 to leave the company with no ties, including pension or health benefits." (AP via The New York Times; free registration required)
What Is Your Firm Doing About Rising Fuel Costs? Survey Results
Excerpt: "With the rising cost of fuel – and, for many, the cost of getting to work – [PLANSPONSOR] asked readers what, if anything, their firm had done to help folks deal with those rising costs." (PLANSPONSOR.com; free registration required)
Employees Want Employer Help with Benefit Decisions
Excerpt: "Employers and their human resource departments are now the number one source consulted for advice during open enrollment season (63%), according to MetLife's 2008 Open Enrollment Survey." (PLANSPONSOR.com; free registration required)
[Opinion] When to Take a Severance Package
Excerpt: "Companies offering severance packages are generally established companies who sold the concept of lifetime employment. They are not places that fire employees without warning. I've found that people leaving old-line companies, even with a severance package, were more bitter than those where companies treated employees like interchangeable parts." (Richmond Register)
Newly Posted Events
Form 5500 for Health and Welfare Plans: A Guided Tour for Employers, Form 5500 Preparers, and Advisors
Nationwide on May 15, 2008
presented by Employee Benefits Institute of America (EBIA)/Thomson Tax & Accounting
Newly Posted Press Releases
MassMutual Offers Free Research Paper on Target Retirement Date Investments as QDIAs
MassMutual
Newly Posted or Renewed Job Openings
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Employee Benefits Attorney
for Hershner Hunter, LLP
in OR
Employee Benefits / ERISA Attorney
for Hill Ward Henderson
in FL
401(k) Daily Administrator – Contribution Processing
for Pension and Investment Firm
in TX
Actuary
for Nova Actuarial Associates
in TX
Senior Benefits Administration and Technology Consultant
for The Segal Company
in CA, DC
Retirement Plan Specialist
for Diversified Investment Advisors
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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