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| November 5, 2008 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is National Institute of Pension Administrators (NIPA)
(Click on company name or banner to learn more.)
| Register for NIPA’s 2009 Business Management Conference (2009BMC) |
| Learn more about the only retirement industry conference focused on the business aspects of running a TPA company. The National Institute of Pension Administrators’ 2009 Business Management Conference is an exclusive venue for leading executives and professionals from third party administration firms to garner and share information and insights on the most effective business methods. Register by December 12 and save! |
[Guidance Overview] Proposed Regs on Consequences of Failing to Defer Receipt of Qualified Retirement Plan Distributions and Expansion of Notice Period for Certain Notices (PDF)
2 pages. Excerpt: "The Internal Revenue Service (IRS) has issued proposed regulations that would: expand the content of the notice required under Internal Revenue Code (Code) section 411(a)(11), dealing with the right of a participant to defer receipt of an immediately distributable benefit; extend the election period for waiving the Qualified Joint and Survivor Annuity (QJSA) under Code section 417 from 90 days to 180 days; and extend the period for distribution of the notices required under Code sections 402(f), dealing with rollover eligibility and tax treatment of distributions, 411(a)(11) and 417 from 90 days to 180 days." (Transamerica Center for Retirement Studies)
[Guidance Overview] IRS Fact Sheet Explains How to Avoid Incorrect Self-Employed Retirement Plan Deductions
Excerpt: "The IRS has released a fact sheet covering retirement plans established by self-employed business owners for themselves and their employees. In particular, the fact sheet explains how self-employed individuals can avoid IRS examinations and additional assessments by preventing incorrect deductions for contributions to retirement plans." (CCH INCORPORATED)
GM-Chrysler Union Would Create Pension Goliath
Excerpt: "A General Motors Corp. acquisition of Chrysler LLC would solidify GM's ranking as the world's largest corporate employee benefit fund, giving it total assets estimated at $170 billion. The deal also would unite companies that, despite their financial challenges, both have overfunded defined benefit plans." (Pensions & Investments)
American Benefits Council Requests Signers for Group Letter Urging Immediate Relief for Defined Benefit Plan Sponsors
Excerpt: "Action Requested: Review the following letter to Congress [linked . . .], which urges immediate measures to mitigate the impact of the Pension Protection Act of 2006 (PPA) defined benefit pension funding rules, and include your company's name to the list of signees." (American Benefits Council)
Orange County, CA Voters Overwhelmingly Support Effort to Block Public Pension Spikes
Excerpt: "Voters overwhelmingly endorsed limiting the power of county supervisors to sweeten pension payouts for public employees. In early returns, Measure J was supported by a whopping 78 percent of the vote, among the absentee and early voting results being reporting as of 9:30 p.m. last night. The measure is a public rebuke of the stewardship that county supervisors have given the pension system, which is now only 73 percent funded and runs a $3 billion unfunded liability." (Orange County Register)
Pension Plan May Offer Time-Limited Lump Sum, Appeals Court Rules
Excerpt: "A pension plan that offers employees the opportunity to elect a lump sum payment on termination of employment, but not at any later date, does not impose a 'significant detriment' that invalidates the employees' consent to an immediate distribution, according to the Seventh Circuit (McCarter v. Ret. Plan for the Dist. Managers of Am. Family Ins. Group). The decision, along with recent informal IRS guidance, might give employers more confidence about offering time-limited payment options." (Mercer LLC)
Immediate Legislation Required to Weather Financial Impact on Pensions, American Benefits Council Says
Excerpt: "The financial crisis is having an unprecedented impact on qualified retirement plans across the board at the employer, employee, and retiree levels, James Klein, President of the American Benefits Council (ABC) stated at a press briefing in Washington, DC on October 22, 2008. Unveiling ABC's '10-Point Plan to Help Employees and Retirees and to Strengthen the Economy and the Retirement System,' Klein emphasized that existing tax law is standing in the way of an immediate solution and that Congress needs to act quickly to remedy the situation." (Wolters Kluwer)
Court Affirms Denial of Survivorship Benefits not Provided for in QDRO
Excerpt: "A federal judge has ruled that the lack of language in a qualified domestic relations order (QDRO) assigning survivorship benefits to an ex-spouse is a clear indication of the intent not to provide those benefits." (PLANSPONSOR.com; free registration required)
Former Putnam Executives Agree to SEC Settlement
Excerpt: "The Securities and Exchange Commission (SEC) announced that on October 31, 2008, the United States District Court for the district of Massachusetts entered a final judgment by consent imposing permanent injunctions and other relief against two former executives of transfer agent Putnam Fiduciary Trust Company (PFTC). . . . The SEC's complaint alleged that the two engaged in a scheme beginning in January 2001 by which they and other executives of PFTC defrauded a defined contribution plan client and group of mutual funds of approximately $4 million." (PLANSPONSOR.com; free registration required)
The Financial Crisis and Private Defined Benefit Plans
Excerpt: "Between October 9, 2007 and October 9, 2008, the value of equities in retirement plans dropped by about $4 trillion, with the decline divided equally between defined benefit and 401(k)/Individual Retirement Accounts (IRAs). The decline in the defined benefit arena was in turn divided equally between private sector plans and those sponsored by state and local governments. This brief explores what a loss of roughly $1 trillion of private sector defined benefit equities means for the individual participants and for the firms that sponsor those plans." (Center for Retirement Research at Boston College)
Federal Judge Rules That John Hancock Life Insurance Co. Is Not Entitled to Indemnification and Contribution
Excerpt: "John Hancock cannot demand that a pension plan trustee suing it in an excess fee case actually pay for any plan losses charged by the trustee as a result of a Hancock fiduciary breach, the court said. U.S. District Judge Nathaniel M. Groton of the U.S. District Court for the District of Massachusetts ruled that Hancock was not entitled to rely on the legal principle of indemnification and contribution in the suit filed against Hancock by 401(k) plan trustee John Charters." (planadvisor)
Recession Might Reduce Employer Matching Contributions to 401(k) Plans
Excerpt: "Frontier Airlines suspended its 401(k) match on June 1 as part of a wider effort to cut costs as it works its way through Chapter 11 bankrup.tcy protection. The airline's plan matched 50 percent of employee contributions, up to 10 percent of salaries. The company reported that the match cost it $4.2 million in 2006. 'This is a recession-type of response. These employers are really up against it and they have to decide to cut somewhere and this seems like the least bad place for them to cut,' said Alicia H. Munnell, director of the Center for Retirement Research at Boston College." (The Associated Press via Google)
Sponsored by: DATAIR Employee Benefit Systems, Inc.
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| DATAIR’s TWO for ONE sale* |
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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
[Official Guidance] Text of Final IRS Regs: Information Reporting on Employer-Owned Life Insurance Contracts (PDF)
8 pages. Excerpt: "Effective Date: These regulations are effective on November 6, 2008. Applicability Date: These regulations are applicable for tax years ending after November 6, 2008. . . . [O]n January 24, 2008, the IRS released Form 8925, 'Report of Employer-Owned Life Insurance Contracts,' for taxpayers to use to comply with the reporting requirements . . . . [T]his Treasury decision adopts the proposed regulations without substantive change and removes the corresponding temporary regulations." (Internal Revenue Service)
[Guidance Overview] Employment Law Risks in the Current Financial Crisis
Excerpt: "The current economic crisis may lead employers to consider reductions in force. Employers that are considering reductions in force and providing severance payments to laid-off employees may wish to consider establishing a severance plan governed by the Employee Retirement Income Security Act (ERISA). One advantage in having an ERISA-governed severance plan is that it provides many protections to employers who are sued by employees in connection with severance benefits." (Littler Mendelson P.C.)
Sample of TARP/Executive Compensation Agreement
Excerpt: "The Letter Agreement contains this language: 'In addition, the Company is required to review its Benefit Plans to ensure that they do not encourage senior executive officers to take unnecessary and excessive risks that threaten the value of the Company. To the extent any such review requires revisions to any Benefit Plan with respect to you, you and the Company agree to negotiate such changes promptly and in good faith.' All of this is agreed to 'in consideration of the benefits' that the executive will receive as a result of the Company's participation in the government's Capital Purchase Program." (Attorney B. Janell Grenier via Benefitsblog.com)
Newly Posted Events
Accounting Basics for Employee Benefit Lawyers
Nationwide on December 4, 2008
presented by ABA Joint Committee on Employee Benefits
Aon Consulting’s 2008 Replacement Ratio Study™
in Colorado on November 11, 2008
presented by Western Pension and Benefits Conference Denver Chapter
Same-Sex Marriages: Overcoming Policy, Benefit, Payroll Challenges
in California on November 24, 2008
presented by HRTrainingCenter.com
What’s Happening in Washington? A Legislative Update on Benefit Plans
in Georgia on November 20, 2008
presented by WEB (Worldwide Employee Benefit Network) Atlanta Chapter
Newly Posted Press Releases
Dobrow New ASPPA President, Four Seated on ASPPA Board of Directors
American Society of Pension Professionals & Actuaries (ASPPA)
No License Fees For BLAZE SSI Employee Benefit Software
BLAZE SSI Corp.
Newly Posted or Renewed Job Openings
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Health and Welfare Professionals
for Towers Perrin
in DC, NJ, NY, PA
Senior Pension Specialist
for Chemtura Corporation
in CT
401k Sales Person
for Katz Zlotnick Associates, Inc.
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Sr. Retirement Annuity Business Analyst
for Pacific Life Insurance Company, Newport Beach, CA
in CA
Education Specialist
for Kibble & Prentice, A USI COMPANY
in WA
Health & Welfare Consulting Actuary ( min. 8 yrs experience)
for Milliman, Inc. (New York City office)
in NY
Health & Welfare Consulting Actuary (12 -15 years experience)
for Milliman, Inc. (New York City office)
in NY
Senior Retirement Plan Analyst and Supervisor
for Mid Size New York City TPA
in NY
Vice President, Consultative New Logo Sales
for Buck Consultants
in CA, NJ, NY, PA, TX
Handy Links:
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- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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