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| June 9, 2008 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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[Guidance Overview] Duke Energy ERISA Decision Update
Excerpt: "At issue in George v. Duke Energy Retirement Cash Balance Plan (D. S.C.) was whether the employer's conversion to a cash balance plan violated ERISA or the ADEA." (Workforce Management; free registration required)
[Guidance Overview] For Actual PPA Cost Savings, Look to New Lump-Sum Calculations (PDF)
4 pages. (Milliman)
[Guidance Overview] Breaking from a Long-Term 403(b) Provider
Excerpt: "A private college wanted to modernize its traditional retirement program, including moving away from its longstanding relationship with a bundled mutual fund/annuity provider. Upon notification of the transfer of recordkeeping and plan assets, the provider informed the college that both its 403(b) and 401(a) plans were covered under contracts between the provider and individual employees, although no copies of the contracts could be found. The employer knew this was the case for the 403(b) plan, but it was unexpected news about the employer-sponsored 401(a) plan." (Milliman)
[Guidance Overview] Section 408(b)(2) Proposed Regulations and ERISA's General Fiduciary Obligations (PDF)
5 pages. Excerpt: "Proposed regulations revising Section 408(b)(2) of the Employee Retirement Income Security Act are designed to redefine what constitutes a reasonable contract or arrangement. When finalized, the regulation will provide a statutory exemption for a prohibited transaction claimed under ERISA § 406(a)(1)(C)." (The Bureau of National Affairs, Inc. via Fiduciary Risk Assessment LLC)
[Guidance Overview] Watson Wyatt's Pensions News Filter Covering the United Kingdom
Excerpt: "Over the last few months, there has been an overwhelming flurry of activity in the pensions arena. We have now seen the outcome of many of last year's consultation exercises, including revisions to the employer debt, dispute resolution and transfer rules. However, some of last year's proposals appear to have made no progress, such as the conversion of Guaranteed Minimum Pensions. No doubt this issue is proving more complicated than the Government first thought." (Watson Wyatt Worldwide)
Current Pension Legislative and Regulatory Outlook
Excerpt: "In this article we survey current pension policy initiatives both in Congress and in the government agencies." (JPMorgan Chase & Co.)
According to Survey, Employee Share Ownership Is More Common Than Originally Expected in Austria (PDF)
3 pages. (European Federation of Employee Share Ownership)
Asset Allocation and Location over the Life Cycle with Survival-Contingent Payouts
Excerpt: "This paper shows how lifelong survival-contingent payouts can enhance investor wellbeing in the context of a portfolio choice model which integrates uninsurable labor income and asymmetric mortality expectations." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
Automatic Annuitization Proposed for DC Plans
Excerpt: "Defined contribution plan participants would automatically get temporary annuity-like benefit distributions under a new proposal floated today by several authors affiliated with the Retirement Security Project." (Baker & Daniels)
Immediate Income Annuities and Defined Contribution Plans (PDF)
12 pages. Excerpt: "With the growing interest in generating retirement income, plan sponsors are weighing whether to offer an immediate income annuity as a 'within-the-plan' distribution option. However, fiduciary, tax, and other considerations are likely to inhibit the use of payout annuities as a plan feature. Meanwhile, a broad array of retirement income solutions are emerging outside the qualified plan system." (The Vanguard Group, Inc.)
Budget Secretary Offers Plan to Address Rising Commonwealth of Pennsylvania Pension Cost
Excerpt: "The plan is explained in a white paper on pension reform that was released today by the Governor's Budget Office. [Budget Secretary Michael J.] Masch said the plan solves the 2012-13 pension 'rate spike' problem through changes in state pension funding policy and incremental changes in contribution amounts that will enable the state and local school districts to gradually absorb the impact of higher pension contributions over a manageable period of time." (Gant Media)
Retirement Plans See Spike in Early Withdrawals for Everyday Expenses
Excerpt: "Record numbers of Americans are raiding their retirement savings as the economy has soured, threatening their long-term financial security to make their mortgage payments, pay medical bills and cope with rising food and fuel costs." (San Francisco Chronicle)
Hybrid Pension Plans Poised for Resurgence
Excerpt: "New regulation, led by the Pension Protection Act of 2006, has offered clarity on the murkiest issue regarding hybrid plans -- the age-discrimination dilemma. 'The PPA made it clear that these plans do not violate any of the age-discrimination provisions of ERISA,' said Russell Hirschhorn, an employee benefits attorney at law firm Proskauer Rose. 'We had argued that this was the case for quite some time, but the PPA gave more legitimacy to those claims and really validated hybrid plans.'" (Financial Week; free registration required)
Tech Workers Finding It Easy to Get Lost on Road to Retirement As IPO Market Isn't As Dependable As It Once Was
Excerpt: "The mythology of the technology boom was that employees would give their all for the company cause and then wait for the big payoff. It could come from an initial public offering -- where frenzied investors would magically turn stock options into cash -- or from a lucrative buyout by a larger firm." (The Austin American-Statesman)
Retirees Fear Spending Down Retirement Nest Eggs, According to Survey
Excerpt: "A new Nationwide survey found that 57% of retirees are only spending their pension distributions and Social Security benefits without dipping into the rest of their retirement savings." (PLANSPONSOR.com; free registration required)
ERISA Accounts Offer a 'New' Way of Offsetting Plan Costs
Excerpt: "Many advisers have failed to take advantage of a long-standing program in retirement plan regulations that enables some plans to gain a share of any excess revenue earned by their investment funds and use those dollars to pay for plan expenses or allocate the money directly to participants. Known as the ERISA budget, or ERISA account, the account captures revenue produced by investments that exceed recordkeepers' actual costs." (planadvisor.com)
The Evolution of 403(b)
Excerpt: "A written plan document, coordination of distribution and transfer activity, contribution limits, and remittance timing: Under the new IRS regulations, 403(b) plan structure and administration will look much more like those of their Employee Retirement Income Security Act (ERISA)-governed 401(k) counterparts. Will this work for the 403(b) plan model?" (planadvisor.com)
Wachovia 401(k) Plan Under Investigation
Excerpt: "A law firm investigates whether conduct of fiduciaries to the Wachovia Savings Plan violated ERISA by not disclosing the risk of company stocks in light of the sub-prime mortgage risks." (planadvisor.com)
Green 401(k) Plans
Excerpt: "Even though socially responsible investing (SRI) has been around for decades, only recently have some companies begun to offer their employees greener options for 401(k) retirement investment accounts. According to Rona Fried of SustainableBusiness.com, SRI options for retirement plans are still only offered to about 20 percent of employees, but that's changing fast." (HealthNewsDigest.com)
City of Detroit Pension Venture Turns Sour
Excerpt: "Two city employee pension funds may be out as much as $30 million in loans that helped a member of Mayor Kwame Kilpatrick's legal defense fund buy a freight airline company. A mayoral appointee on the pension boards -- city Treasurer Jeff Beasley, a former fraternity brother of Kilpatrick's -- late last year proposed the investment in Donald Watkins' purchase of TradeWinds Airlines. At the time, a pension board researcher called the venture 'very risky,' in a report." (The Detroit News)
Employer Plan Not Necessary for Retirement Savings
Excerpt: "You may think that saving for retirement starts when you land a job with a defined-contribution plan, such as a 401(k) or 403(b). But even without this benefit, you can build retirement savings on your own. The way to start is through an individual retirement account, or IRA. You may have seen the acronym before or are familiar with what an IRA is." (Chicago Tribune)
[Opinion] Connecticut Legislature Skips Voting on Bill to Set Up State-Sponsored 401(k) Plan for Small Businesses
Excerpt: "Now, one can hardly argue that small business owners are, as a rule, intimately familiar with their retirement plan options, and surely there are any number of them who are not comfortable committing to making contributions every year. But, IMHO, neither of those is a major impediment to adoption of these programs by small businesses." (PLANSPONSOR.com; free registration required)
Sponsored by: ASPPA
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| It's the best of both worlds, and should not be missed. Join the Western Pension & Benefits Conference and ASPPA for this unique conference designed with all retirement, health, welfare and benefits professionals in mind. The Western Benefits Conference offers attendees seven separate professional learning tracks with over 50 individual sessions all led by nationally renowned speakers and both national and local government representatives. Network with your peers, private sector experts, and government officials at planned events throughout the conference. Be in Seattle with over 900 of your colleagues July 13-16, 2008 and experience this conference first hand. Register NOW and don't miss out. |
| (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] Plaintiffs Argue Fiduciary Exception to Attorney Client Privilege
Excerpt: "Exceptions to the attorney client privilege rank along side inadvertent loss of the privilege as anxious topics for defense counsel. ERISA presents a variant on a trust law exception to the privilege which has been given discussion in two recent cases." (Health Plan Law blog by Attorney Roy F. Harmon III)
[Guidance Overview] New Law Provides Additional Benefits to Employees in Military Service
Excerpt: "The [target page] chart summarizes the most significant provisions of the Heroes Act that apply to employee benefit plans and includes information about mandatory and optional action steps that employers may need to take." (Davis Wright Tremaine LLP)
[Guidance Overview] A Bonus Paid in Stock - Why You Might Refuse
Excerpt: "Why would any employee want to refuse a bonus in stock? Well, that would depend. What would the tax effect be to him on the receipt of the stock? How much value would the stock have for tax purposes? Where would the cash to pay the tax come from? Could any of the stock be sold to raise the cash to pay the tax? And if the stock couldn't be sold now, when could it be sold and what if the stock loses value by then?" (Tax Management Inc.)
Bankrup.tcy Bill Would Tie Executive Compensation to Workers' Wages
Excerpt: "[A] House Judiciary subcommittee held a hearing on a bill that would limit the flexibility companies have in bankrup.tcy to restructure their labor costs and retain management staff. The 'Protecting Employees and Retirees in Business Bankruptcies Act,' H.R. 3652, by Judiciary Committee Chairman John Conyers (D-MI) would, among other things, limit the ability of the company or bankrup.tcy trustee to restructure collective bargaining agreements, retirement plans and other benefits by tying such changes to changes in executive compensation practices." (HR Policy Association)
Recovering Executive Pay Based on Incorrect Financial Statements
Excerpt: "The data on the growing acceptance of clawback provisions emerged in a study by the Corporate Library, an independent research concern specializing in executive pay and corporate governance. It surveyed 2,121 companies and found that 295 of them, or 14 percent, had clawback provisions." (The New York Times; free registration required)
Government Asks Supreme Court to Broaden Remedies Under ERISA
Excerpt: "In response to a U.S. Supreme Court request for input, the Solicitor General has asked the Court to hear a case in hopes of broadening the types of equitable remedies available under the Employee Retirement Income Security Act (ERISA)." (HR Policy Association)
Who Benefits from Tax-Advantaged Employee Benefits? Evidence from University Parking
Excerpt: "We use university parking permits to study how firms and employees split the value of employee benefit tax subsidies." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
U.S. Economy not Affecting Overseas Assignments
Excerpt: "Despite U.S. economic stress, the vast majority of multinational corporations surveyed by GMAC Global Relocation Services are optimistic about their global business outlook and have no plans to reduce overseas business assignments." (PLANSPONSOR.com; free registration required)
[Opinion] A Career Killer for HR Pros—The Employee Free Choice Act
Excerpt: "This piece of legislation would cripple the competitiveness of American business, limit the rights of employees and eliminate the need for independent-thinking HR pros, all in one easy-to-sign law." (Workforce Management; free registration required)
Newly Posted Events
COBRA for Rookies: Understanding the Basics to Avoid Liability
Nationwide on June 26, 2008
presented by Employee Benefits Institute of America (EBIA)/Thomson Tax & Accounting
Newly Posted Press Releases
401k Training Group Launches Online Retirement Designation Program
Financial Service Standards, LLC
Free & Clear® Analysis Shows Workplace Smoking-Cessation Incentives Work
Free & Clear
DAK Americas Deploys Synapses Total Benefit Statement for Employees
Synapses Inc.
Newly Posted or Renewed Job Openings
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401 (k) Expert
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Attorney - Assistant General Counsel (In-house, Non-Profit ERISA Funds)
for 1199SEIU Benefit and Pension Funds
in NY
Family or Adult Nurse Practitioner or Physician Assistant
for MassMutual Financial Group
in MA
Plan Analyst
for Acuff & Associates, Inc.
in TN
Executive Compensation/Benefits Attorney
for CBS Corporation
in NY
Retirement Plan Administrator
for Pacific Rim Financial Group
in WA
Employee Benefits Attorney
for USAA
in TX
Pension Administrator
for Estate & Pension Advisory Board, Inc.
in PA
Account Manager I
for The Standard
in OH
Defined Contribution Analyst II
for The Standard
in CA
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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