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August 15, 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.)
Banner ad for DATAIR Employee Benefit Systems, Inc.

5500 / PBGC / 1099-R / 5300 / FAS 158 Software from DATAIR

DATAIR Pension Reporter System. Easy to use and economical for electronic and paper filing with instant access to forms and instructions. Live, expert support included. Choose from 4 modules:
  • Annual Reporting Series: EFAST 5500-series, PBGC Premium-series, SAR, and 5500 electronic filing;
  • 1099-R Series: 1099-R and related forms, 945/945-A, and 1099 electronic filing;
  • Qualification & Termination: 5300/5310-series and PBGC 500/600-series forms.
  • FAS 132/158: Audit Letter, Worksheets, Schedules
Contact or call 1-888-DATAIR-4 (1-888-324-2474)

[Official Guidance] Text of Rev. Proc. 2008-50: Employee Plans Compliance Resolution System, Updating and Expanding Rev. Proc. 2006-27 (PDF)
179 pages; the document's table of contents does not include page numbers, but it is the version released to the public today. See pages 8 through 10 for a summary of the modifications being made to the previous version of EPCRS (Rev. Proc. 2006-27). Excerpt: "This revenue procedure updates the comprehensive system of correction programs for sponsors of retirement plans that are intended to satisfy the requirements of 401(a), 403(a), 403(b), 408(k), or 408(p) . . . but that have not met these requirements for a period of time. . . . This revenue procedure modifies and supersedes Rev. Proc. 2006-27." (Internal Revenue Service)

[Official Guidance] Aug. 14 Special Edition of IRS Employee Plans News: Announcing Rev. Proc. 2008-50, Including Survey to Practitioners (PDF)
2 pages. Excerpt: "[The] Self-Correction Program . . . has been expanded with respect to employers who discover failures in their plans and have begun the correction process. The time by which a plan sponsor substantially corrects a significant operational failure, and is thereby entitled to use SCP, has been liberalized . . . . [Excess annual additions in DC plans under section 415] will be corrected in accordance with the provisions of this revenue procedure . . . . Streamlined Voluntary Correction Program Application Procedures . . . have been significantly expanded to include the following failures: . . . " (Internal Revenue Service)

[Guidance Overview] HEART Act Provides Additional Private Pension Benefits to Members of the Military (PDF)
4 pages. Excerpt: "[The target document includes a chart which] summarizes the pension provisions of the HEART Act and identifies affected plans and applicable effective dates." (Prudential Retirement)

[Guidance Overview] Hewitt's Global Retirement Update, August 2008 (PDF)
3 pages. Excerpt: "[Hewitt's] Global Retirement Update summarizes recent legislative developments and trends related to retirement and financial management and highlights recently passed and pending legislation that may require employers to take action to comply with new rules or review existing plans." (Hewitt Associates)

[Guidance Overview] Annualization Agreements Taken Out of 457 and 409A
Excerpt: "The tax planning probably wasn't what the IRS had in mind when the final Code 409A regulations listed income annualization agreements as possible 409A situations. An example will demonstrate what an annualization agreement is and why the IRS would view it as a deferral arrangement." (SunGard)

[Guidance Overview] Has Your ERISA Defined Contribution Plan Been Updated for 2008 PPA Changes?
Excerpt: "Among the provisions of the PPA that affect DC plans, some of the most significant changes are effective for the 2008 plan year. [Those provisions include testing changes, Safe Harbor for Automatic Enrollment, Rollovers to Roth IRA, and returned contributions.]" (Aiken & Aiken)

Employers Showing More Interest in Phased Retirement Programs, Hewitt Says
Excerpt: "'For many years, employers have focused on the perceived legal barriers to phased retirement, but changes made by Congress in 2006 reduced some of the legal constraints,' said Steinberg. 'More importantly, as employers really dig into the design of phased retirement programs, they realize that the legal barriers may not be nearly as significant as internal -- or primarily cultural -- obstacles.'" (Wolters Kluwer)

Indiana Taxpayers Contribute Millions to Lawmakers' Generous Pension Plan
Excerpt: "[U]nder the lawmakers' plan, taxpayers hand out a $4 match for every $1 lawmakers invest in their accounts. Year after year, the state contributes an amount equal to 20 percent of a legislator's salary, including hefty per diem payments in many cases." (

Pension Benefit Guaranty Corporation Pressuring Delphi Over Pension Obligations
Excerpt: "The government is trying to force Delphi to transfer more than $1.5 billion of unfunded pension obligations to General Motors by Sept. 30. It is warning Delphi, the big auto parts maker, that if it misses the deadline, it will have to contribute more than $2 billion to the fund, a burden that could dash any hopes of Delphi emerging from bankrup.tcy with its pension plan intact." (The New York Times; free registration required)

IRS Issues Corrections Program Update
Excerpt: "The Internal Revenue Service (IRS) has released an in-depth rewrite of its correction programs for retirement plan sponsors who have not complied with tax laws for a period of time. The 179-page Revenue Procedure 2008-50 applies to the three-part Employee Plans Compliance Resolution System (EPCRS), made up of the Self-Correction Program (SCP), the Voluntary Correction Program (VCP), and the Audit Closing Agreement Program (Audit CAP)." (; free registration required)

Big Funds Eye Reinvesting in Tobacco Firms
Excerpt: "[C]alifornia's public pension fund system is considering reversing its policy of refusing to invest in tobacco companies. The California State Teachers' Retirement System, the nation's third-largest public pension fund with $162 billion in assets, could vote as early as this fall on a plan to start buying tobacco stocks, which it has shunned since 2000." (The New York Sun)

[Opinion] The Stock Market, Returns, and Investing for Retirement
Excerpt: "Sometimes when I see a news story about the stock market that sounds either too ominous or overly optimistic, I ask myself what headline I might write instead. It usually goes something like this: 'In the long run, stock returns are likely to revert to historical averages.' It's not very snappy, sensational, or even very interesting. But it's a guidepost that you can stick to in both good markets and bad ... for the long term." (The Vanguard Group)

[Opinion] Happy 73rd Birthday, Social Security
Excerpt: "Social Security has survived another year. In at least one important policy area, good sense has triumphed over ideology. We have not shredded the safety net in a celebration of rugged individualism. We have not promised to transfer resources from the poor to the rich, from women to men, from the old to the young. In a curiously American drama, 'liberal' commitment to tried and true policy has beaten back the 'conservative' drive for radical change. We can only hope that this liberal caution will mark the next president's policy . . . ." (The Century Foundation)

[Opinion] Yet Another Reporting Issue for Private Equity and Other Investment Funds
Excerpt: "To me, the first step is to limit the analysis to where it belongs. The level of valuation information to be given over time by a fund should be considered another factor, not some super-factor, taken into account by a court in analyzing whether, on all facts and circumstances, the fiduciary has satisfied its Section 404(a)(1) obligations." (Pension & Benefits Blog)

[Opinion] A Retirement Crisis - Most Americans Saving Too Little
Excerpt: "Congress must do a lot more to help Americans have more secure retirements. Modest tax increases and modest benefit cuts, phased in over decades, could put Social Security on a firm financial footing, if only Congress would act. A modernized system of unemployment compensation and universal health care coverage would allay the potentially devastating financial setbacks of joblessness and illness. Both would help to ensure that money that is put in a retirement account stays there." (The New York Times; free registration required)

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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] HEART Act Provides Special Benefits for Active Duty Military
Excerpt: "On June 17, President Bush signed into law the Heroes Earnings Assistance and Relief Tax Act (HEART Act) of 2008. This bill . . . provides certain qualified plan and other tax benefits for members of the military on active duty (or who become disabled or die while on active duty). In this article, we'll discuss briefly the benefit plan issues raised by the HEART Act." (JPMorgan Chase & Co.)

San Francisco Mandates Transit Benefits
Excerpt: "Employers with 20 or more employees in San Francisco will be required to offer commuter benefits to their workers under an ordinance passed Tuesday, August 12, by the city's Board of Supervisors. . . . The mayor has 10 days to decide whether to sign or veto the measure." (Workforce Management; free registration required)

New Data on Federal-Private Compensation Gap Rekindles Debate
Excerpt: "Recent data indicating that the average federal employee enjoys better pay and benefits than the typical private sector worker is misleading, according to federal employee groups and nonprofit organizations. The data, released last week by the Bureau of Economic Analysis, does not break down compensation by profession or geographical area, critics noted." (

Employee Ownership Update for August 14, 2008
NCEO Executive Director Corey Rosen discusses final rules for reimbursable costs for government contractors that have ESOPs; a study finding broad-based stock options in venture-backed companies are both common and effective; a model for engaging employee-owners in innovation; a conference celebrating the top small workplaces; and a new survey on equity compensation. (National Center for Employee Ownership)

Newly Posted Press Releases
(Post Yours!)

IRS Revises Voluntary Correction Program for Retirement Plans
Internal Revenue Service (IRS)

New Report Says Pensions Can Provide Retirement Income at Half the Cost of Individual Accounts
National Institute on Retirement Security

AvMed, Inc. Unveils New Self-Funded Solutions for Large Employers
AvMed, Inc.

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Marketing Representative
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Retirement Plan Administrator
for Dewey & LeBoeuf LLP
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Retirement Plan Advisor/Sales
for Full Service Retirement Plan Company
in WI

Pension 401(k) Administrator
for Actuaries and Associates
in TX

Pension/Benefit Analyst
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in CT

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for Ceridian Benefit Services

for Erisa Pension Systems
in FL

Benefit Administrator
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in MD

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