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| September 25, 2008 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is www.ftwilliam.com
(Click on company name or banner to learn more.)
| Switching to ftwilliam.com just got easier. |
| The IRS is now accepting applications for opinion/advisory letters for sponsors who are word-for-word adopters of ftwilliam.com mass submitter plans. This means that you may obtain a letter in your firm's name even if you missed the earlier filing deadlines - all you pay is the $200 IRS filing fee. Already filed for a DB letter? Now you can switch your application to ftwilliam.com. Contact Holly Roussel-Godfrey for details at sales@ftwilliam.com or call us at 800.596.0714. |
[Guidance Overview] Webcast on Employee Plans Compliance Resolution System - Revenue Procedure 2008-50 (PDF)
46 pages. Powerpoint presentation. (Morgan, Lewis & Bockius LLP)
[Guidance Overview] Relaxed Restrictions on Off-Cycle Applications for New Pre-Approved Plans
Excerpt: "The modifications apply to sponsors of pre-approved plans that adopt the language word-for-word of a mass submitter plan that has received a favorable EGTRRA opinion or advisory letter. A sponsor may also adopt the identical language of a mass submitter plan for which an application for such opinion or advisory letter is pending. The new application must also be filed according to the procedures governing mass submitter plans under Rev. Proc. 2005-16 . . . ." (Wolters Kluwer)
[Guidance Overview] Enrolled Retirement Plan Agent Program
Excerpt: "The IRS has announced the opening of the program which allows individuals to obtain the ERPA designation. An individual who has obtained the ERPA designation will be able to represent taxpayers before the IRS with respect to the following programs and issues: Determination letters; Plan corrections under the employee plans correction resolution system (EPCRS); Master and prototype and volume submitter programs; Form 5500 issues." (SunGard)
[Guidance Overview] Disclosure of Fees Charged by Plan Service-Providers: Some Practical Implications
Excerpt: "In this ErisaALERT we will discuss [information which must be provided by the service provider to a responsible plan fiduciary especially where fees will be paid from plan assets] referred to as the Reasonable Contract or Arrangement Under Section 408(b)(2) -- Fee Disclosure guidance and its impact on Plan Sponsors. This guidance touches on some very important basics of fiduciary responsibility." (ERISAdiagnostics, Inc.)
Capitol Hill Meeting Regarding Proposed IRS Oversight of Public Plans
Excerpt: "On Friday, September 19, NCPERS and other public plan stakeholders joined Congressman Earl Pomeroy, Chairman Charles Rangel (by teleconference), and Democratic and Republican staff of the Ways & Means Committee, as well as representatives from the IRS and Treasury, to discuss issues related to IRS proposed oversight of public pension plans. . . . At the meeting, Congressman Earl Pomeroy asked representatives of IRS and Treasury whether they could be counted on to work in a cooperative and collaborative fashion, but those representatives refused to commit to do so. The public plan community, for its part, proposed a plan with a two-week timeframe help the IRS develop its survey of public plans." (National Conference on Public Employee Retirement Systems)
Pensions of 5 Companies in Crisis Underfunded by $400 Million
Excerpt: "The pension plans of five key companies in the ongoing mortgage crisis are underfunded by $400 million, a situation that could put pressure on the bottom line of the already cash-strapped Pension Benefit Guaranty Corp. should it have to intervene in the underfunded plans. PBGC Director Charles E.F. Millard said it is too soon to say whether it might have to get involved with any of the pension plans." (CNNMoney.com)
Legislators Ask for Funding Calculation Relief for Small Pensions
Excerpt: "In a letter to Treasury Secretary Henry Paulson, members of the House Ways and Means Committee and Senate Finance Committee asked that certain provisions of unpassed Pension Protection Act technical corrections legislation be enacted immediately." (PLANSPONSOR.com; free registration required)
Public Plan Accounting Rules Can Mask Underfunding Woes
Excerpt: "Within the next 15 years, state pension plans will be have a two-third probability of being underfunded to the tune of almost $1.5 trillion in 2005 dollars, two academic researchers assert in a new study." (PLANSPONSOR.com; free registration required)
[Opinion] Don't Panic - Re-Evaluate Conventional Retirement Plan Strategies
Excerpt: "So, besides not panicking, the second thing you can do is this. Every calamity creates an opportunity to revisit your investment plan. . . . For those who have a time horizon of five years or more, it's quite possible that you don't have to change a thing. Your standard 60% stocks and 40% bonds portfolio was built, presumably, to withstand this sort of volatility and bounce back some years later. For those who need to tap into their nest egg within five years, it's possible that you may not have to change anything either, especially when you factor in how long the portfolio has to last." (MarketWatch)
[Opinion] Gihilarducci on Defined Benefit Pensions Are Dead; Long Live DB Pensions
Excerpt: "Teresa Ghilarducci, Bernard L. and Irene Schwartz Chair of Economic Policy Analysis The New School for Social Research, and author of 'When I'm Sixty-Four: The Plot Against Pensions and the Plan to Save Them,' has penned this response to the recent blog post we did on Zelinsky and the 401(k) Lessons from the Crash of 2008." (Workplace Prof Blog)
[Opinion] The IRS and Normal Retirement Age for Public Employees
Excerpt: "The new rules on Normal Retirement Age, currently scheduled to apply to plan years beginning on or after January 1, 2009, would require that governmental pension plans specifically define normal retirement age, or redefine normal retirement age, so that it is not based wholly or partly on years of service. Because of this new imposition on public plans, and other issues with the regulations, one of the top priorities for NCPERS is to delay the implementation of, and then seek major modifications to the Normal Retirement Age regulations." (National Conference on Public Employee Retirement Systems)
[Opinion] Paternalism In Retirement Savings
Excerpt: "Professor Ed Zelinsky comments in [a] recent article on provisions in the Pension Protection Act of 2006 (PPA), directing the Secretary of Labor to promulgate regulations specifying the 'default investments' to which 401(k) funds will be directed if participants fail to make their own investment choices. He takes issue with regulations promulgated under that authority, observing that they are, in effect, a paternalistic endorsement of a predominantly equity-based approach to investing." (Health Plan Law blog by Attorney Roy F. Harmon III)
[Opinion] For Most People, Retirement is Just Not Going to Work - Until Education Measures Matter (PDF)
5 pages. Excerpt: "[T]oday's retirement education has no measures of individual success. How can retirement education be designed well or improved if no success measures exist? [A version of this article appeared in the July 2008 issue of Benefits & Compensation Digest.]" (Dennis Ackley)
[Opinion] Group Letter to DOL Regarding Effective Date of 408(b)(2) Regulations (PDF)
2 pages. Excerpt: "We want to emphasize one key issue at this time: the effective date of the regulation addressing disclosure by service providers. It is essential that the regulations not be effective earlier than the first plan year beginning after at least 12 months after the final regulations are published. Accordingly, if, for example, the final regulations are published in November of 2008, the regulations should not be effective prior to January 1, 2010 in the case of a calendar year plan." (American Benefits Council)
[Opinion] American Benefits Council Letter Urging Defined Benefit Plan Measures As Part of Financial Relief Proposal (PDF)
3 pages. Excerpt: "Without Congressional action on two issues, we could be permitting the recent market events to undermine our retirement security by triggering another wave of pension plan freezes. The failure to correct these two issues could also place large unexpected burdens on companies and thereby significantly hinder our economic recovery." (American Benefits Council)
[Opinion] Using Favorable Tax Treatment for Pension Distributions to Blunt Nation's Mortgage Crisis
Excerpt: "AS the federal government debates the details of a plan to bail out corporations devastated by the mortgage crisis, taxpayers wonder how it is we can afford the $700 billion it will take to do so. In fact, much of that sum can be raised by accelerating tax collections in a way that benefits the government, the mortgage industry and the taxpayers. With about $18 trillion sitting untapped and untaxed in pension funds, the answer lies in providing favorable tax treatment for retirees to withdraw that money to pay down existing mortgages." (The Seattle Times)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview] Webcast and Podcast: Keeping Global Stock Plans in Tune With the Times
Excerpt: "Changes in accounting rules and best practices have prompted organizations to rethink their 'one size fits all' approach to granting equity incentives across borders." (Towers Perrin)
Companies Increasingly Allow Options Exchange
Excerpt: "Firms are increasingly offering equity exchange programs by which employees can trade worthless options for new options or restricted stock, according to recent research conducted by Aon Consulting's Radford Surveys + Consulting, a provider of compensation market intelligence to the technology industries." (PLANSPONSOR.com; free registration required)
Canadian Employers Use Variable Comp, Perks to Attract Employees
Excerpt: "Research conducted by Hewitt Associates finds Canadian organizations are relying on variable compensation (performance-related rewards that must be re-earned each year and do not increase base salary) and, in some locations and for some roles, perquisites to attract, retain, incent and reward key employees." (PLANSPONSOR.com; free registration required)
OPM Opposes Domestic Partnership Benefits Bill - Says Could Lead to Insurance Fraud
Excerpt: "Howard Weizmann, OPM deputy director, said the agency opposes a bill (S. 2521) offering such benefits to g.ay and les.bian federal employees' partners because OPM requires state-issued marriage certificates to prove that heterose.xual couples are married in case of a question or dispute -- and no comparable documentation exists for many same-sex couples. He said OPM would have to rely on sworn affidavits from couples in long-term committed relationships, and that some might not report the end of a relationship to keep insurance benefits." (GovernmentExecutive.com)
Benefit Practices Inside the 'Best' Workplaces
Excerpt: "[At EBN's Benefit Forum & Expo] three benefits executives discussed why their companies landed on this year's list of Fortune's 100 Best Companies to Work For in America. 'We all know that there is not one magic pill you take to become an employer of choice. It's a matter of your entire benefits package, which includes benefits, compensation, your management team, employee communication programs; and how you treat your employees . . . .' " (Employee Benefit News; free registration required)
BLS's New Employment Cost Indexes for 14 Metropolitan Areas
Excerpt: "This article presents a first look at new estimates from the National Compensation Survey (NCS): Employment Cost Index (ECI) 12-month change in total compensation and in wages and salaries for private industry for 14 selected metropolitan areas." (U.S. Bureau of Labor Statistics)
National Compensation Survey: Employee Benefits in the United States, March 2008
The annual bulletin has Tables Organized by Ownership and Tables Organized by Benefits. (U.S. Bureau of Labor Statistics)
Generations Value Different Rewards at Work, According to Survey
Excerpt: "A new WorldatWork survey finds that most total rewards programs were not put in place to address the needs of a specific workforce segment. Phased retirement is an exception - 20% of survey respondents say their phased retirement program was put in place due to concern that the workforce would suddenly shrink as a large number of middle-aged employees met retirement age. Phased retirement is also cited as most used by the silent generation (born 1924 - 1946)." (PLANSPONSOR.com; free registration required)
Hard Times Drive Employers to Increase Benefit Education Efforts
Excerpt: "Tough economic conditions and a growing multigenerational work force are leading employers to focus on implementing targeted communication programs to better inform employees on the merits of their benefits offerings [according to The Study of Employee Benefits: 2008 & Beyond, a new report released by Prudential Financial, Inc." (PLANSPONSOR.com; free registration required)
[Opinion] Reviewing the Scope of Section 409A Transition
Excerpt: "It may be time to review the present state of Section 409A transition. Market circumstances have changed (AC/DC, still alive and rockin', might say things are 'all screwed up'), and the financial crisis has thrown a wide range of institutions into total disarray. That situation is not one that was present as little as several weeks ago, and was not so much as a glimmer in anyone's eye when the year-end 2008 extended deadline was established." (Pension & Benefits Blog)
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