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| November 13, 2008 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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[Official Guidance] Text of Rev. Proc. 2008-67: Requests by Multiemployer Pension Plans for Extension of Amortization Period (PDF)
14 pages; supersedes Rev. Proc. 2004-44. Excerpt: "This revenue procedure describes the procedure by which the plan sponsor of a multiemployer pension plan may request and obtain approval of an extension of an amortization period in accordance with §431(d) of the Internal Revenue Code . . . ." (Internal Revenue Service)
[Guidance Overview] EBSA Clarifies Fiduciary Duties Regarding Proxy Voting
Excerpt: "Emphasizing that a key consideration is whether the shareholder activity - the proxy voting, the statement of investment policy, or shareholder activism - seeks to enhance the economic value of the plan's investments (and does not subordinate the economic interest of the plan to unrelated objectives), the Employee Benefits Security Administration (EBSA) issued Interpretive Bulletin 08-2 to update its prior guidance on the duties of ERISA fiduciaries when exercising shareholder rights." (Deloitte via BenefitsLink.com)
Court Says Mutual Fund Company not an ERISA 'Party in Interest'
Excerpt: "The U.S. District Court for the Central District of California has found that a mutual fund company charged by a multi-employer plan of engaging in a fee agreement is not a 'party in interest' under the Employee Retirement Income Security Act (ERISA). The court agreed with Massachusetts Financial Services Company (MFS) that it is not a 'party in interest,' because ERISA creates a specific exemption to party-in-interest liability for mutual funds and mutual fund advisers. The court said it was dismissing the ERISA claims with prejudice because the multi-employer plan made clear that its only basis for asserting that MFS is a 'party in interest' is that MFS provided the opportunity for others to invest plan assets in mutual funds, which is not a sufficient basis for invoking an exception to the statutory exemption." (PLANSPONSOR.com; free registration required)
Law May Block Pension Fund Distributions - Some Can Only Receive 50 Percent, or Nothing
Excerpt: "Due to the loss in the market, a new pension law called Adjusted Funding Target Attainment Percentage may be preventing pension distributions to retirees and those who need their pension to pay bills. The new restrictions, which became effective in 2008, were enacted as part of The Pension Protection Act of 2006." (Seacoast Media Group)
Retirement Plan Experts Argue for Reforming the 401(k) System Rather Than Getting Rid of It
Excerpt: "The tax-advantaged accounts deserve a tough review in the wake of the stock market collapse that has crushed account values and evidence that 401(k)s tend to benefit wealthier workers, said attendees of the annual West Coast Defined Contribution Conference in San Francisco late last month. But by and large, officials with retirement plan sponsors as well as industry officials conveyed a 'mend, don't end' attitude about the 401(k) system." (Workforce Management; free registration required)
Prudent Investors: The Asset Allocation of Public Pension Plans
Excerpt: "We identify four indicators for DB plans' imprudent investment behavior: no portfolio rebalancing, employer conflicts of interest, trustee conflicts of interest, and failure to implement best investment practices." (Social Science Research Network)
The Rise of Retirement Among African Americans: Wealth and Social Security Effects
Excerpt: "My findings have implications for understanding racial differences in trends in retirement and independent living. I show that the retirement rates of both blacks and whites rose between 1900 and 1930 but that convergence in black and white rates and in living arrangements only occurred between 1930 and 1950. I argue that income effects from the institution of Social Security explain up to half of the convergence in black-white retirement rates and in living arrangements." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
Recent Survey Finds That African Americans Employees Tend to Contribute Far Less to Their Retirement Plans Than Whites
Excerpt: "When it comes to effectively closing the gap between the amounts black employees and their white counterparts are putting aside for retirement, it may take far more than simply holding a few investment-education seminars or ensuring that the slick brochures from retirement-plan administrators feature more diverse couples on their pages. In fact, the reasons for the disparity may have as much to do with culture and history as with a lack of knowledge about investing." (Human Resource Executive Online)
The Ongoing Development of Pan-European Pension Plans
Excerpt: "Companies are attracted to the benefits provided via these arrangements but few have actually implemented a pan-European pension plan due to the complexities involved in executing such a plan across the member states. However, the fact that we do not see many pan-European pension arrangements in place does not mean that we won't in the future. Although there are still issues to resolve, there has been a concerted effort to move forward in the pan-European pension arena and the impediments are being addressed." (Faegre & Benson)
Removing Barriers to Retirement Saving in Medicaid and Supplemental Security Income (PDF)
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)
'Disturbing' Lack of Employee Understanding of Retirement Security Needs Is a Multinational Problem
Excerpt: "A new Mercer study of multinational companies' retirement savings and other benefit programs concludes that employees' 'disturbing' lack of understanding of how to achieve retirement security is a major employer challenge. A Mercer news release said shortfalls in employee understanding of how much to save and how to invest that savings are becoming more of a problem as more responsibility for retirement is put on the individual with the continued growth of defined contribution plans, which Mercer said are 'becoming the norm.'" (PLANSPONSOR.com; free registration required)
Retirement Industry Reps Optimistic about Future Trends
Excerpt: "Despite volatile investment markets, the freezing and terminating of defined benefit plans, and limited formation of new plans, industry representatives consulted by Diversified Investment Advisors say they are upbeat about the industry's future over the next five years. A Diversified news release said its Prescience 2013: Expert Opinions on the Future of Retirement Plans study attributed this positive outlook in part to the cultural shift from a voluntary benefits approach to automation. Another contributing factor: market growth spurred by employees' realization that they need to save more money for retirement than originally planned in light of market instability and inflation." (PLANSPONSOR.com; free registration required)
[Opinion] Group Letter to House Education and Labor Committee Urging Immediate Action on Pension Funding (PDF)
6 pages. Excerpt: "We are in no way advocating an overhaul of the PPA funding changes. Rather, we urge Congress to consider making technical corrections to the PPA, that we believe implement Congressional intent, and adopting temporary provisions that deal with the financial crisis. Such provisions should include permitting full smoothing of unexpected losses, removing restrictions on asset smoothing, allowing sufficient time to transition to the PPA's 100% funded target, providing automatic IRS approval for certain funding elections to keep plans viable, clarifying end-of-year valuations, and permitting fixed interest rates to be used for Code section 415 limit purposes so as to avoid benefit reductions." (American Benefits Council)
[Opinion] It's Time to Rethink Our Retirement Plans
Excerpt: "It's not that 401(k)s are bad, it's just that they were conceived as supplementary retirement vehicles, not as a holistic retirement system. A new approach, combining the best of traditional pensions and new savings vehicles, is needed." (The Wall Street Journal)
[Opinion] Plan Loans - Dispelling the Myths
Excerpt: "The argument regarding the depletion of retirement savings is that by taking out a loan, a participant loses the benefit of investing the loan principal in the plan. The recent financial crisis might be proof enough as to why this argument lacks merit. Many people reading this article probably wish they had taken a plan loan out several months ago. As I sometimes tell people, a plan loan may be the best performing asset one has right now." (Robert M. Richter via SunGard)
Sponsored by: SunGard's Relius Education
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| 2009 Orlando Advanced Pension Conference |
| Disney’s Contemporary Resort, February 9-11. As a new president and Congress take office, more legislative and regulatory changes affecting retirement plans are expected. Stay current, attend this important conference. Our agenda will reflect the latest updates, including: EGTRRA update, 403(b) plans, fee and expense issues in 401(k) plans, engagement contracts after the Final DOL regulations, new participant disclosure requirements, EPCRS and Rev. Proc. 2008-50. Plus, "Ask the Experts" workshop, concurrent sessions, and over 900 minutes of CE credits. Register today.
Relius Education by SunGard. |
| (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] Document Compliance Deadline for Section 409A
Includes a list of arrangements that could be subject to Section 409A and that should be reviewed and amended prior to December 31, 2008 for compliance with Section 409A. (Trucker Huss)
Newly Posted Events
4th Quarter Update - Looking Ahead on Employee Benefits Issues
Nationwide on November 19, 2008
presented by Ogletree Deakins
All-Day Seminar with Sal Tripodi, Esq., APM
in Colorado on December 9, 2008
presented by Western Pension and Benefits Conference-Denver Chapter
Four Strategies to Cut Your Group Medical Premiums
Nationwide on November 13, 2008
presented by Healthy Halo
Hot Topics in Employee Benefits 2008
in New York on November 19, 2008
presented by New York City Bar Association, Committee on Employee Benefits and Executive Compensation
Legislative Update with Craig J. Davidson, CEBS -- New ADA Rules, Mental Health Parity Act and New Definitions under FMLA
Nationwide on November 18, 2008
presented by Davidson Marketing Group -- FutureOffice Network
Newly Posted Press Releases
Former Head Of Human Resources For Major Electronic Manufacturer Arrested For Defrauding Health Care Plan Of Close To $8 Million
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Employers Want National Approach to Health Care — Still Believe Employer-Based System Works Best
International Foundation of Employee Benefit Plans
Newly Posted or Renewed Job Openings
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Administrative Team Member
for Benefit Solutions Corporation
in WI
Senior Defined Benefit Data Analyst
for Diversified Investment Advisors, Inc.
in MA
Retirement Plans Consultant
for McKay Hochman Co., Inc.
in NJ
Pension Administrator
for 401(k) Recordkeeper
in NY
Defined Contribution Client Management Specialist (Client Consultant)
for Prudential Financial
in PA
Retirement Plan Administrator
for PENSYS, INC.
in CO
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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