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| September 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 SunGard
(Click on company name or banner to learn more.)
| EGTRRA Restatement Outsourcing Service |
| Do you have 300 or more defined contribution plans to restate for EGTRRA? Outsource them to us. SunGard’s expert Document Management Services (DMS) staff can work as your "invisible" back office resource to help you through the restatement process. Let us focus on your plan documents, so you can focus on growing your business. Contact Ellen Nasrallah at 800-326-7235, ext. 5968. |
[Guidance Overview] Does Green Mean Go? Trustee Decision-Making in the Post-PPA '06 Era (PDF)
Excerpt: "The NewsLetter reviews the development of pension funding guidelines over time and how Segal recommends plan sponsors approach long-term funding with the advent of the Pension Protection Act of 2006 . . . ." (The Segal Group, Inc.)
[Guidance Overview] IRS Finalizes Mortality Tables for DB Plans
Excerpt: "The IRS has finalized the regulations proposed in 2007 regarding the mortality assumptions used to determine present values for minimum funding purposes for defined benefit (DB) pension plans under the Pension Protection Act of 2006. There are no surprises in the final rules for the standard mortality tables . . . . Despite comments urging the IRS to make some changes, the rules for plan-specific mortality tables remain mostly the same, too, except that the IRS expanded the study period for making a credible case for using substitute tables from four to five years. Sponsors must use the applicable tables for 2008 and later plan years." (Watson Wyatt Worldwide)
[Guidance Overview] Transition Relief Expanded for Small Pension Plan Funding Requirements
Excerpt: "The IRS has issued a Notice expanding upon the transition relief for certain small pension plans provided in Notice 2008-21 . . . . The earlier Notice provides that proposed regulations regarding the maintenance of certain funding balances, the limits on benefits and benefit accruals under single employer defined benefit plans . . . and the substitute mortality tables . . ., when finalized, would not apply to plan years beginning before January 1, 2009." (Wolters Kluwer)
[Guidance Overview] Two More Circuit Courts Allow Cashed-Out Former Employees to Sue as 'Participants' for Losses Caused by Fiduciary Breach
Excerpt: "EBIA Comment: These cases join a growing list of federal circuit court decisions allowing cashed-out former employees to pursue fiduciary breach claims under ERISA Section 502(a)(2). The Evans case is especially interesting for its discussion of some of the issues that arise if cashed-out former employees are treated as participants, including plan fiduciaries' obligation to allocate any recovery to the affected participants, and plan administrators' potential obligation to resume ERISA disclosures to former employees who have a colorable claim for benefits." (Employee Benefits Institute of America)
The Intergenerational Transfer of Public Pension Promises
Excerpt: "The value of pension promises already made by US state governments will grow to approximately $7.9 trillion in 15 years. We study investment strategies of state pension plans and estimate the distribution of future funding outcomes. We conservatively predict a 50% chance of aggregate underfunding greater than $750 billion and a 25% chance of at least $1.75 trillion (in 2005 dollars). Adjusting for risk, the true intergenerational transfer is substantially larger. Insuring both taxpayers against funding deficits and plan participants against benefit reductions would cost almost $2 trillion today, even though governments portray state pensions as almost fully funded." (University of Chicago, Graduate School of Business via Social Science Research Network)
Removing Barriers To Retirement Saving in Medicaid and Supplemental Security Income
24 pages. Excerpt: "In addition to imposing what amounts to a steep implicit tax on saving, asset tests in means-tested benefit programs treat retirement saving in a confusing and seemingly arbitrary manner. Each program has its own asset policy, so some retirement accounts are counted in certain programs but not in others. And in some programs, a retirement account is counted in some states but not in others. As a result, one family may be able to retain its retirement savings when it needs to turn to means-tested benefits, while a similar family that uses a different retirement saving vehicle or lives in a different state may have to deplete its retirement savings or forgo means-tested benefits during a time of need." (The Retirement Security Project)
Justifying 401(k) Fees: A Challenge for Fiduciaries (PDF)
11 pages. Excerpt: "Underlying the current spate of lawsuits over 401(k) fiduciary misconduct (particularly fee levels, revenue sharing, self-dealing, and active versus passive management) is a simple question: Are participants getting their money's worth for the fees they pay? That seemingly simple question gives rise to a multitude of other questions which are anything but simple." (Richard D. Glass via Investment Horizons)
According to New Survey, Nearly One in 10 Plan Sponsors Still Believes That They Pay No Fees for Their Retirement Plan
Excerpt: "On the other hand, the Spectrem Group survey of an undisclosed number of plan sponsors . . . claims that nearly one in four plan sponsors was of that opinion as recently as 2005. Not that they aren't getting that information. Overall, 84% of sponsors responding to the Spectrem Group survey receive a written fee disclosure statement from their plan providers, and 88% receive one from their advisers and consultants." (planadvisor)
General Motors Corp. Announced a Deal to Help Its Former Parts Unit Emerge from Bankrup.tcy
Excerpt: "Late Friday General Motors Corp. announced a deal to help its former parts unit emerge from bankrup.tcy Friday, agreeing to assume $3.4 billion of Delphi Corp.'s pension plan. According to the Detroit News, GM said it would also make $1.2 billion in payments through the remainder of 2008 to Delphi to shore up its liquidity. GM and Delphi announced the deal late Friday, heading off the filing of a new lien against another $900 million in Delphi's foreign assets by the Pension Benefit Guaranty Corporation (PBGC)." (PLANSPONSOR.com; free registration required)
What Plan Fiduciaries Should Be Doing As the 'Hub' of Responsibility and Enforcement
Excerpt: "It is widely acknowledged that ERISA expects a lot from fiduciaries. As the courts have often observed, the act establishes the highest standard of care under American law. Yet the rules set out in ERISA are very flexible, which has kept it relevant and modern by permitting adaptation to the many changes that have occurred in the financial and plan worlds in the last 30-plus years. However, a flexible law can pose a challenge for fiduciaries because it can lack detail . . . ." (Principal Financial Group via Investment News; free registration required)
A Reality Check on Criticisms of Debit Card Loan Programs
Excerpt: "This recent debate has revealed a number of common misconceptions about 401(k) loan products, and criticisms that rely on these misconceptions need a reality check. Commentators who have singled out debit card loan programs have failed to acknowledge Congress' intent to allow retirement plans to permit loans. Critics of debit card loan programs also have failed to recognize their advantages over 'traditional' plan loan products, which generally have escaped criticism." (Investment News; free registration required)
Roman Catholic Archdiocese of Boston Considers Overhaul of Clergy Benefits
Excerpt: "The Roman Catholic Archdiocese of Boston, short tens of millions of dollars in its funds for assisting ailing and retired priests, is proposing to bring in a group of lay financial specialists to help overhaul its troubled clergy benefits plans." (The Boston Globe)
DB Plans Need Additional Guidance, GAO Says
Excerpt: "The Government Accountability Office on Wednesday, September 10, called on the Department of Labor to provide guidance for defined-benefit plan investments in hedge funds and private equity so fund executives understand the challenges and risks of those asset classes." (Workforce Management; free registration required)
[Opinion] Can Brokers Be Fiduciaries?
Excerpt: "Judging by newly proposed regulations on investment advice, it looks as if the Department of Labor is trying hard to engineer a sharp turn from the course established by Congress. On Aug. 22, the Labor Department released its long-awaited guidance to implement the investment advice provisions of the Pension Protection Act of 2006. But the DOL simultaneously proposed a new class exemption to allow commission-based registered representatives to become fiduciary advisers and give advice to participants and beneficiaries of participant-directed retirement plans and individual retirement accounts." (Investment News; free registration required)
[Opinion] American Benefits Council Letter: Additional Guidance Requested for Form 5500 (PDF)
6 pages. Excerpt: "After reviewing the FAQs, the Council's 5500 Task Force has identified a number of additional issues for which additional guidance would be helpful and appropriate. Accordingly, we respectfully request that EBSA issue additional guidance addressing these and other issues. As discussed in our earlier conversations with members of your staff, the Council has drafted the request for additional guidance in the form of questions and proposed answers. The remainder of this letter outlines the questions and proposed answers." (American Benefits Council)
[Opinion] The DOL's New Math: Form 5500 + 408(b)(2) = Fireworks
Excerpt: "'Were there any nonexempt transactions with any party in interest?' Plan administrators have been answering that question (or versions of it) on Form 5500 for years, as part of either Schedule H (for large plans) or Schedule I (for small plans). In the past, answering the question has largely been a simple matter of looking for the 'usual suspects' of delinquent deposits, excessive participant loans or other obvious financial transactions of the plan. That world, however, is about to change." (Baker & Daniels)
Sponsored by: The National Institute of Pension Administrators
(Click on company name or banner to learn more.)
| NIPA’s APA/APR online exam registration deadline is October 15 |
| The National Institute of Pension Administrators’ (NIPA) Accredited Pension Administrator (APA) and Accredited Pension Representative (APR) designation exams will be administered online, beginning with the November 2008 exam testing period.
The new online exam format, the result of a partnership with KRYTERION, makes it easier and more convenient for retirement plan professionals to schedule and complete their APA/APR exams. Visit www.nipa.org to download the November 2008 APA/APR brochure and to register by October 15. |
| (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
[Official Guidance] Text of IRS 2008-2009 Priority Guidance Plan, Including Reg Projects for Retirement Benefits, Executive Comp, Healthcare and Other Benefits (PDF)
31 pages; dated September 10, 2008. (Internal Revenue Service)
[Guidance Overview] Heroes Act Requires Changes to Employee Benefit Plans (PDF)
3 pages. Excerpt: "The changes to employee benefit plans, some required and others optional, generally expand the availability of benefits under retirement and cafeteria plans to employees who have been called to military service. All employers should review the Heroes Act to determine the provisions that apply to their benefit plans, and the applicable effective dates. A summary of the employee benefit provisions of the Heroes Act, and a chart outlining the provisions and their respective effective dates, are provided [on the target page]." (Employee Benefit Plan Review via Winston & Strawn LLP)
Bankrupt Worldcom Wants Court to Let It Make Enhanced Payouts to 19 Top Officials Who Had Been Terminated
Excerpt: "WorldCom Inc. is seeking bankrup.tcy court approval to pay remaining severance benefits to employees it laid off or gave notice before it filed for bankrup.tcy. The company had sought authority to pay severance obligations only up to $4,650 per dismissed employee, according to a motion filed late Tuesday." (AP via The Baltimore Sun)
SEC Proposes U.S. Companies Shift to Global Financial Reporting Rules
Excerpt: "The Securities and Exchange Commission (SEC) is moving forward with a proposal to phase in a requirement for U.S. registrants to move from U.S. generally accepted accounting principles (GAAP) to International Financial Reporting Standards (IFRS) over the next six to eight years. The SEC approved a proposed road map to adopting IFRS, which is contingent on convergence of U.S. GAAP and IFRS in certain key areas, by a unanimous vote on August 27. If adopted as proposed, the changeover would have a far-reaching impact on companies' financial statements, including the way employers account for employee benefits and, to a lesser extent, stock-based compensation." (Towers Perrin)
Newly Posted Events
ERISA Advisory Council Working Groups Teleconference
Nationwide on September 29, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Section 409A: What Your Clients May Be Missing - Webcast
Nationwide on September 17, 2008
presented by Association for Advanced Life Underwriting (AALU)
Webinar - On-Site Employee Health Clinics: Delivering Health Improvement to the Worksite
Nationwide on October 7, 2008
presented by Global Media Dynamics
Wellness Rewards Congress
in Arizona on February 18, 2009
presented by Global Media Dynamics
Newly Posted Press Releases
Two Step Software Earns Top Ranking 2nd Year In A Row In Annual Technology Survey
Two-Step Software, Inc.
Department of the Treasury 2008-2009 Priority Guidance Plan Joint Statement
U.S. Treasury Department and Internal Revenue Service
ING Advisors Network Reduces Ticket-Charge Fees for Producers; Advisory-related Fees Down 10-25 Percent
ING Group
Newly Posted or Renewed Job Openings
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Employee Benefits / ERISA Attorney
for Hill Ward Henderson
in FL
Defined Benefits Due Diligence
for Vanguard
in PA
Retirement Plan Account Specialist
for Third Party Administration Firm
in KS
Paralegal - Employee Benefits Practice - Buffalo, NY
for Hodgson Russ LLP
in NY
Business Technical Analyst w/OmniPlus
for Enterprise Iron
in ANY STATE
Associate Pension Consultant
for Sentinel Financial Group
in MA
Business Technical Analyst
for Enterprise Iron
in ANY STATE
Technical Analyst
for Enterprise Iron
in ANY STATE
Conversion Department Manager
for Wilmington Trust Retirement & Institutional Services Company (formerly known as AST Capital Trust Company)
in AZ
Defined Benefit Business Analyst
for Enterprise Iron
in ANY STATE
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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