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September 26, 2008

Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy.


Today's sponsor is International Foundation of Employee Benefit Plans

(Click on company name or banner to learn more.)
Banner ad for International Foundation of Employee Benefit Plans

Be Smart by Association with the International Foundation

Smart is not a permanent state of being. What's your maintenance plan? Take advantage of the education and information available through the International Foundation of Employee Benefit Plans, a nonprofit educational association, and find out why over 35,000 industry professionals like Cindy Conway rely on the Foundation to stay informed and educated. Make sure you have the most comprehensive information on health, pension and compensation issues. Be smart by association. www.ifebp.org/memberkit

[Official Guidance] Disaster Relief Announcement 08-27 Relating to PBGC Deadlines in Response to Hurricane Ike in Texas
Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to Hurricane Ike that occurred on September 11, 2008, in Texas." (Pension Benefit Guaranty Corporation)


[Official Guidance] Disaster Relief Announcement 08-28 Relating to PBGC Deadlines in Response to Hurricane Ike in Louisiana
Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to Hurricane Ike that occurred on September 11, 2008, in Louisiana." (Pension Benefit Guaranty Corporation)


[Guidance Overview] Incentives to boost voluntary contributions to pensions introduced in Russia
Excerpt: "The Russian government will match voluntary contributions made to individual pension accounts, according to new regulations effective from October 1, 2008. The state will also put into place tax incentives for employers and employees, effective from January 1, 2009, in an effort to stimulate voluntary pension savings." (Watson Wyatt Worldwide)


[Guidance Overview] How New DOL Fee Disclosure Rules Could Affect You
Excerpt: "The proposed regulations suggest disclosures to participants and their beneficiaries on both plan fees and on the investments in their plan. This Regulatory Brief offers more details and Vanguard perspectives on the disclosures that would need to be provided to participants in the categories of general plan information, administrative expenses, and individual expenses. The brief can also help pinpoint disclosures with respect to 'designated investment alternatives' that should be part of your summary plan description." (The Vanguard Group)


[Guidance Overview] Financial Markets Impact ERISA Retirement Plans and Plan Fiduciaries
Excerpt: "At a minimum, plan fiduciaries should contact their investment providers and investment advisors and ask for a current update on the status of the mutual funds and other investment vehicles. Fund ratings should be reviewed, as should the plan's investment policy statement. In any case, even where no action is warranted, it is important to document the efforts of fiduciaries." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.)


'Those Close to Retirement Are Likely to Have a Substantial Reduction in Their Standard of Living,' According to Study
Excerpt: "Middle-income Americans now retiring will have to reduce their standard of living by an average of 24% to avoid outliving their financial assets, a new study finds. Even those still seven years out from retirement, less prepared, could be looking at a 37% reduction in their living standard. That holds true even when assuming that retirees can get by on 59% to 71% of their pre-retirement wages, according to the study, done by Ernst & Young LLP on behalf of the Americans for Secure Retirement coalition." (PLANSPONSOR.com; free registration required)


What to Do If You Are About to Retire and It Looks Like Your Money Is Vanishing
Excerpt: "[I]t's easy for someone who is 25 years from retirement just to ignore the current gyrations, but if you're going to actually need that money? Or you already do? It's hard not to look. And what you see when you look probably isn't pretty. In fact, you probably feel angry, and fearful, and powerless to do anything about it. But there are a few things you can do to minimize the damage, and maybe even come out a bit ahead." (The Motley Fool)


Testimony for the PBGC on the State of the Pension Benefit Guaranty Corporation
September 24, 2008, Testimony of Charles E.F. Millard, Director Pension Benefit Guaranty Corporation before the Committee on Ways and Means Subcommittee on Oversight United States House of Representatives. (Pension Benefit Guaranty Corporation)


Delphi to Send Pension Obligations to General Motors
Excerpt: "Delphi Corporation was preparing to send $3.4 billion worth of pension obligations to General Motors on Thursday, in an unusual transaction that Delphi said would remove a major obstacle to its emergence from bankrup.tcy after almost three years." (The New York Times; free registration required)


New AHA/Diversified Survey Reveals Overhaul of 403(b) Regs Impacting Retirement Plans for Healthcare Sector More than PPA
Excerpt: "The survey, Retirement Plan Trends in Today's Healthcare Market -- 2008, was conducted by the American Hospital Association (AHA) and Diversified Investment Advisors, Inc. (Diversified). According to the survey, currently in its sixth year, more than double the number of plan sponsors replaced an investment manager or record keeper -- 19% and 20% respectively -- based on the 403(b) regulations as compared with just 8% who did so because of PPA." (MarketWatch)


Savers Seek Yields as Market Trims Retirement Plans
Excerpt: "Savers who have seen their retirement accounts slashed by a 19 percent drop in the Standard & Poor's 500 Index this year may be looking for higher yields to prepare for retirement. That is if they have any money left to invest." (Bloomberg L.P.)


Update in the On-Going ERISA 401(k) Class Action Against American Electric Power
Excerpt: "Stull, Stull & Brody announced today that it has filed its initial brief on the issue of whether Plaintiff's claim for Plan-wide relief under ERISA Section 502(a)(2), 29 U.S.C. Section 1132(a)(2), may continue notwithstanding an order denying class certification." (GlobeNewswire, Inc. via MarketWatch)


PSCA Survey Shows Auto Enroll/Higher Participation Link
Excerpt: "The Profit Sharing/401k Council of America's (PSCA) 51st Annual Survey of Profit Sharing and 401(k) Plans provides evidence of the link between automatic enrollment and higher plan participation rates. . . . [T]he survey found 81.9% of eligible employees have balances in their 401(k) plans. Pre-tax participant deferrals average 5.6% of pay for non-highly compensated workers (the first increase since 2004) and 7% percent of pay for highly compensated workers." (PLANSPONSOR.com; free registration required)


When Cashing Out of an Annuity Makes Sense
Excerpt: "Sometimes cashing out of an annuity can make more sense than doing a tax-free transfer into a new product -- even if it presents the client with a tax bill. 'If a new client comes in with an annuity that's inappropriate for him -- a young person whose tax rates will be higher in 30 years than they are now, for example -- I'd probably encourage him to get out of it this year, when tax rates are at a historic low' . . . ." (Investment News; free registration required)


[Opinion] 403(b) Rollovers vs. 403(b) Exchanges
Excerpt: "[W]hat are the chances the IRS would treat a rollover to a non-employer related 403(b) as a contract exchange rather than a rollover, and require an information sharing agreement? There is a tempting easy answer: a rollover is a rollover, and no information sharing agreement is required. But then you start thinking about it some more, and find that there are a number of 'hidden' issues. Let's work through what would happen here." (Baker & Daniels)



Sponsored by: SPARK and The SPARK Institute

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Banner ad for SPARK and The SPARK Institute

Register Now for the 2008 SPARK Forum, Nov. 2-4 at The Breakers

The 2008 SPARK Forum is the retirement plan industry’s premier event for executives, managers, and professionals to increase their knowledge, network with peers and enjoy golf, fishing and other events at the beautiful Breakers Resort in Palm Beach, Florida. In more than a dozen sessions, you’ll gain insights into the latest business, marketing and sales strategies, market trends, and legal issues. Special sessions have been planned for TPAs and financial advisors. You’ll also hear from TV finance commentator and author Terry Savage, and learn valuable selling techniques from author Paul Karasik.

(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] Eleventh Circuit Eliminates 'Heightened' Standard of Review for Benefit Claim Decisions (PDF)
4 pages. Excerpt: "The Eleventh Circuit has held that the 'heightened' arbitrary and capricious standard of review previously used by the court in cases where a conflicted plan administrator decided a claim for benefits -- and its accompanying burden-shifting analysis -- does not survive the Supreme Court's recent decision in Metropolitan Life Ins. Co. v. Glenn, 128 S. Ct. 2343 (2008). Instead, where a plan grants the fiduciary discretionary authority to determine eligibility for benefits, a decision denying plan benefits should be reviewed under an arbitrary and capricious standard, with the reviewing court considering any conflict as 'a factor' in its decision." (Alston & Bird LLP)


Rewarding a Multigenerational Workforce: A Survey of WorldatWork Members, September 2008
14 pages. Excerpt: "For the first time, WorldatWork conducted a survey to gather information about how employers are approaching the challenge of rewarding a multigenerational workforce. The goal was to increase understanding about the relationship between reward practices and generational issues, as well as identify best practices for rewarding multigenerational workforces." (WorldatWork)


HEART Act Guidance Coming, Says Key IRS Official
Excerpt: "The IRS is preparing guidance on the pension and benefit provisions in the Heroes Earnings Assistance Relief Tax (HEART) Act of 2008 (P.L. 110-245), according to Martin L. Pippins, manager, IRS Employee Plans Technical Guidance and Quality Assurance. However, Pippins, who spoke at the American Law Institute-American Bar Association (ALI-ABA) retirement benefits conference in Washington, D.C. on September 6, 2008, did not indicate when the guidance would be issued." (Wolters Kluwer)




Newly Posted Events
(Post Yours!)

Fall/Winter IRA Seminar Tour - Just the Basics
in Texas on October 7, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour - Just the Basics
in West Virginia on October 7, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour - More than the Basics
in Pennsylvania on October 7, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Wyoming on October 7, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Arkansas on October 8, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Colorado on October 8, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Pennsylvania on October 8, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Arkansas on October 9, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Colorado on October 9, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Texas on October 14, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Indiana on October 14, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Tennessee on October 14, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Tennessee on October 15, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Kentucky on October 15, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Texas on October 15, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Indiana on October 15, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Kentucky on October 16, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – Just the Basics
in Tennessee on October 16, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – More than the Basics
in Pennsylvania on October 10, 2008
presented by Wolters Kluwer Financial Services

Fall/Winter IRA Seminar Tour – More than the Basics
in Texas on October 16, 2008
presented by Wolters Kluwer Financial Services



Newly Posted Press Releases
(Post Yours!)

Gilsbar, Inc. Launches Gilsbar 360° AllianceSM -- A Proprietary PPO Network for Louisiana Providers, Employers and Employees
Gilsbar, Inc.

Fidelity Realizes More Than $7 Billion in New Assets From Breakaway Brokers Establishing RIAs
Fidelity Investments



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Retirement Consultant - Northern Virginia
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in VA

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in WA

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for MassMutual Financial Group
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