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| August 13, 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] Roth 401(k): A Tool for a Broad Spectrum of Employees (PDF)
Pages 1-4 of 8 pages. Excerpt: "Many more organizations are considering adding Roth accounts to their 401(k) plans now that the rules that govern them have become permanent . . . . Doing so could provide valuable tax benefits for many employees, including expanded income deferral opportunities for those whose contributions are limited by 401(k) plan deferral limits . . . . It may also benefit employees who think their tax brackets will be higher when they retire than they are currently." (Aon Consulting)
[Guidance Overview] IRS Application of IRC Section 72(w) to Annuity Partially Accrued While a Non-Resident Alien (PDF)
2 pages. Excerpt: "In PLR 200828037 (April 14, 2008), the Internal Revenue Service for the first time ruled on the application of Code Section 72(w), enacted as part of the American Jobs Creation Act of 2004 and effective for distributions on or after October 22, 2004." (Sutherland)
[Guidance Overview] DOL's Proposed Defined Contribution Plan Investment and Expense Disclosure Rules (PDF)
2 pages. Excerpt: "The U.S. Department of Labor (DOL) recently proposed regulations to address concerns that participants who self-direct investment of their retirement plan accounts are paying excessive plan-related fees because they lack the information necessary to make informed investment decisions. If adopted, the proposed rules will substantially expand the investment disclosure requirements applicable to ERISA-covered 401(k), profit-sharing, and 403(b) plans that permit participant self-direction. The rules are proposed to be effective for plan years beginning on or after January 1, 2009." (Hay Group)
Boeing Says It Doesn't Raid Workers' Pension Funds
Excerpt: "Boeing doesn't raid workers' pension funds to pay extraordinary executive pension benefits, the company said [Monday August 11]. That statement came in reply to a request from a union representing its engineering and technical workers about whether Boeing was moving some of its executive pension liabilities to the workers' pension fund in a way some companies did in a recent Wall Street Journal article. 'We don't make the kinds of transfers described in the Wall Street Journal article,' said Boeing spokesman Tim Healy." (Tacoma News)
Social Security Benefits and the 'Windfall Elimination Provision'
Excerpt: "Most people would love to have a financial windfall. A chunk of unexpected money that appears out of nowhere. But there is another kind of windfall. It is a formula that can eat into the Social Security benefit anticipated by tens of thousands of long-time (CSRS) federal workers, school teachers and employees of some nonprofits. It also takes a huge chunk out of the Social Security benefits received each month by millions of retired federal and postal workers." (Federal News Radio)
Auto-Annuity Could Stretch 401(k) Savings
Excerpt: "A Washington-based think tank published a paper proposing a way that companies could automatically enroll a portion of retiring employees' 401(k) assets into a lifetime income option that would provide them with monthly payments." (Workforce Management; free registration required)
Storm Clouds Ahead for 401(k) Plans? (PDF)
10 pages. The paper is an overview of recent issues concerning 401(k) plans highlighting 'A Progress Report on Automatic 401(k) Plan Features' and 'The Threat from LaRue." (Urban Institute)
Insurance Buyout Offers Realistic Solution for Settling Pension Liabilities (PDF)
1 page. Excerpt: "Employers with large accrued pension obligations, including global companies, are finding it increasingly cost-effective to arrange a buyout to fully settle the liabilities by passing them on to an insurance company. One option from a suite of possible retirement risk solutions, buyout arrangements have traditionally been viewed as expensive and slow to implement. However, recent developments in the U.K. and U.S. are challenging this perception." (Towers Perrin)
Legislation Defeated that Would Limit Pension Fund Investments in Commodities
Excerpt: "The House of Representatives on July 30 was turned back from approving legislation that would have threatened the ability of pension funds to legitimately invest in commodities, derivatives, and other financial instruments. Pension funds utilize legitimate hedging to counter volatility in market rates, which has become particularly important since enactment of the Pension Protection Act of 2006." (The ERISA Industry Committee)
Do Households Have a Good Sense of Their Retirement Preparedness?
Excerpt: "This brief examines whether households have a good sense of their own retirement preparedness -- do their retirement expectations match the reality that they face? Do people 'at risk' know that they are 'at risk?'" (Center for Retirement Research at Boston College)
Update on the IRS Governmental Plans Initiative
Excerpt: "The Internal Revenue Service (IRS) is preparing to survey a small group of randomly-selected governmental plans as part of its new 'compliance' initiative, to then be followed by a much larger survey effort. NCTR has registered its strong objections to both the scope and methodology of this questionnaire/survey effort, and Congressional concern has been expressed to the IRS as well. The IRS initiative coincides with a push to encourage public plans to seek determination letters." (National Council on Teacher Retirement)
Public Sector Eyes DC Plans to Offset Benefit Costs
Excerpt: "Taking a page from the private sector's playbook, more state and local jurisdictions may start to call for their workers to take on more responsibility for financing their own retirement through defined contribution plans. Total assets in DC plans for public sector employers increased almost 10% over 2006, Bob Wuelfing, president of RG Wuelfing & Associates and the SPARK Institute, told attendees at the group's 2008 conference in June." (Employee Benefit News; free registration required)
Anheuser-Busch Releases Details of Enhanced Retirement Program to Be Offered to Certain Employees
Excerpt: "The nation's largest brewer announced this summer that it would offer early retirement to salaried employees in the third quarter. Of the 8,600 employees eligible for the program, including 1,300 who are 55 and older, the company expects 10 percent to 15 percent will accept the plan. In a filing with the Securities and Exchange Commission, the maker of Bud Light and Budweiser said it is boosting its retirement plan options for salaried employees who will be at least 55 by the end of the year." (AP via Google)
New York Life Settles ERISA Suit with a $14 Million Class Action Settlement
Excerpt: "The suit was brought by employees who claimed the company mismanaged its pension funds by exclusively investing billions in NYL's own mutual funds. According to the suit, the key problem with the practice was that it caused the NYL pension plans to pay investment management fees and expenses far in excess of what the plans should have paid. The suit alleged that the company knew, or should have known, that the fees were far in excess of what the plans would have been charged if they had invested in non-NYL mutual funds, which must compete for the business of large institutional investors on the basis of price." (Jere Beasley Report)
[Opinion] Massachusetts Governor Casts a Prudent Veto on Pension Hike
Excerpt: "The pension hike approved by the Legislature would have changed the base amount used to calculate annual cost-of-living increases, and that would have cost the state an estimated $3 billion over the next 20 years. That's simply unaffordable in today's economic climate, no matter how much one might wish to support retirees and former teachers and state workers." (The Republican)
[Opinion] Outline of Issues on Proposed Regulations Relating to Determination of Minimum Required Pension Contributions (PDF)
3 pages. On August 4, 2008, ASPPA testified before an IRS public hearing on proposed minimum required contribution regulations. (American Society of Pension Professionals & Actuaries)
Sponsored by: SunGard's RELIUS Education
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| 2008 Chicago Advanced Pension Conference |
| Early registration discount extended to 8/15/08. Downtown Chicago, September 3-5 – Don’t miss this timely program. Our leading ERISA experts will cover important topics such as the new disclosure mandates for 401(k) fees, EGTRRA updating, IRS and DOL audits, participant disclosure update, cash balance plans for DC administrators, practical advice on 403(b) plans, and much more. Plus, "Ask the Experts" workshop, more concurrent sessions, and over 900 minutes of CE credits. Reserve your seat today. |
| (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] IRS Guidance on Withholding from Supplemental Wages
Excerpt: "In Revenue Ruling 2008-29, the IRS provides guidance on when and how to withhold income taxes from supplemental wages such as commissions, severance pay and signing bonuses. The ruling presents different scenarios to clarify issues that have sometimes puzzled payroll departments." (Watson Wyatt Worldwide)
[Guidance Overview] The Final 415 Regulations: Post Severance Compensation and Post Year End Compensation
Excerpt: "Few concepts are more confusing than how post severance compensation and post year end compensation actually work in a defined contribution plan. The concepts were introduced in the proposed section 415 regulations and included in the final 415 regulations released in April of 2007. This article will define and compare each term and apply the definitions to a plan with a participating employee terminating in December. Finally, the implications of each definition of compensation on employee elective deferral elections, employer contributions and reporting will be discussed." (Fort William LLC)
Former CareFirst CEO Sues State of Maryland, Calls Decision Over Severance 'Irrational'
Excerpt: "William L. Jews, former CEO of CareFirst BlueCross BlueShield, is suing state insurance regulators who decided last month to cut in half his $18 million severance package from the health insurer. In a federal lawsuit filed in U.S. District Court in Baltimore on Aug. 11 against Maryland Insurance Commissioner Ralph Tyler, Jews calls the decision 'irrational' and alleges the reduction of his severance to about $9 million violates federal law. CareFirst also is named in the suit." (Baltimore Business Journal via bizjournals.com; free registration required)
A Public Employer's Ability to Modify Retiree Benefits
Excerpt: "Three trends pushing public-sector employers to reduce retirement costs are: (1) new accounting rules requiring employers to show on their books how much promises to retirees will cost; (2) the spiraling cost of providing medical benefits to retirees; and (3) the increasing longevity of retirees." (Jones Day)
Benefits Costs Rise More Slowly Than Wages for Second Consecutive Quarter
Excerpt: "Benefits costs rose at 0.6% and compensation increased 0.7% for the period from March 2008 to June 2008, according to the most recent Employment Cost Index from the Department of Labor's Bureau of Labor Statistics (BLS). In the last quarter's BLS statistics, benefits costs also rose at a slightly slower pace than salaries." (Wolters Kluwer)
Verizon Contract Includes Health Care, Pension Reform
Excerpt: "A new tentative three-year union contract with Verizon will continue providing health care for both active and retired workers and increase wages and pensions for 65,000 workers." (PLANSPONSOR.com; free registration required)
Newly Posted Events
Document Institute-8 week training
Nationwide on August 27, 2008
presented by pensionpodcasts.info
EPCRS Workshop: Preventing and Correcting Qualified Plan Problems
Nationwide on August 25, 2008
presented by ALI-ABA (American Law Institute-American Bar Association)
Executive Compensation Highlights: § 409(A) Drafting, Design, Corrections, and Severance
Nationwide on August 21, 2008
presented by ALI-ABA (American Law Institute-American Bar Association)
Hot Summer Guidance for HSAs: What's in the "Grab Bag"?
Nationwide on July 31, 2008
presented by EBIA / Thomson Reuters
Pension, Profit Sharing, Welfare and Other Compensation Plans
in California on March 18, 2009
presented by ALI-ABA (American Law Institute-American Bar Association)
Proposed Regulations on 401(k) Fee Participant Disclosure – Be Prepared Webcast
Nationwide on August 28, 2008
presented by International Foundation of Employee Benefit Plans
Section 409A Compliance and Corrections: Ask the Experts - Part II
Nationwide on October 29, 2008
presented by ALI-ABA (American Law Institute-American Bar Association)
Summary Plan Descriptions for Health and Welfare Plans: A Step-by-Step Guide to Preparing, Revising, and Distributing SPDs
Nationwide on September 11, 2008
presented by EBIA / Thomson Reuters
Newly Posted Press Releases
Newport Reminds 403(b) Plan Sponsors About End-of-Year Deadline
Newport Group, The
New Research from EBRI: 401(k) Participant Experience May Hold Lessons for Consumer Engagement in Health Plans
Employee Benefit Research Institute (EBRI)
Former Congressman Rob Portman and McKay Hochman Partner on Seminar
McKay Hochman
CFDD Launches New Online Advertising, Marketing & Web Development Services For Providers & Advisors
Center for Due Diligence
IFLC Announces Plan Sponsor Task Force
Investment Fiduciary Leadership Council (IFLC)
Industry Veteran Joins OneFiduciary Group, LLC
OneFiduciary Group, LLC
HealthFitness’ HRA Detects Health Risks of Client’s Global Employees
HealthFitness
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs |
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401(k) Client Relationship Manager
for The Douglas Group
in NJ, NY
Pension Administrator
for Retirement Benefit Solutions, LLC
in VA
Qualified Retirement Plan Administrators
for J.M. Singley & Associates, Inc.
in PA
Senior Pension Administrator
for Benefits Integrity
in CO
Director of Compliance and Fiduciary Review
for Unified Trust Company, N.A.
in KY
Manager, Retirement Services and Education
for Administaff
in TX
Experienced Consulting Manager- Retirement Plan Management
for RSM McGladrey
in DC, MD
Manager
for The Angell Pension Group, Inc.,
in RI
Director of Benefits
for John Mulligan & Associates
in AL
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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