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December 12, 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

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E-learning Benefit Courses From the International Foundation

If you need compliance education and are under pressure to cut travel expenses, the International Foundationís e-learning courses are the perfect choice. With the Foundationís commitment to high quality education, you can be certain you are receiving need-to-know employee benefit information. A wide range of benefit topics are available, from the basics to compliance technicalities. Stay within your travel budget and stay on top of benefit complexities with the International Foundationís e-learning courses.

[Guidance Overview]
Final FMLA Regulations Are Issued: Employers Must Comply By January 16, 2009

Excerpt: "The most noteworthy change in the final FMLA regulations results from legislation enacted earlier this year. The 2008 National Defense Authorization Act amended FMLA to add additional leave rights for families of members of the armed forces." (Deloitte)


[Guidance Overview]
Common Fund Doctrine Applied in ERISA Subrogation Case Where Plan Language Ambiguous

Excerpt: "Here is a recent district court opinion out of the Third Circuit that applies the common fund doctrine where the summary plan description did not explicitly address whether the plan's recovery would be burdened with a pro rate share of attorneys' fees. The opinion has several interesting aspects in addition to the plan language issues. The facts are those of a typical plan recovery case." (Health Plan Law blog by Attorney Roy F. Harmon III)


[Guidance Overview]
'Wellness Benefits' May Appear Expendable by Comparison to Health Insurance Premium Costs

Excerpt: "It's no secret to anyone that health care costs are continuing their rapid increases. In the current economy many companies may view that wellness programs are an unnecessary expenditure. In this article, we discuss why that 'expenditure' may really generate large savings." (JPMorgan Chase & Co.)


[Guidance Overview]
Massachusetts Finalizes Guidance on Minimum Creditable Coverage Certification Process (PDF)

4 pages. Excerpt: "In October, the Massachusetts Connector Board approved final regulations on the minimum creditable coverage requirements under the Massachusetts health reform law, which included two alternatives for satisfying the requirements. Now the Connector has issued additional guidance finalizing the process for plan sponsors to obtain certification that they have met the minimum creditable coverage standards." (Buck Consultants)


[Guidance Overview]
Final Regulations Issued on the Newborns' and Mothers' Health Protection Act (PDF)

Excerpt: "The IRS, DOL and HHS recently issued final regulations providing guidance on the requirements for minimum hospital stays in connection with childbirth under the Newborns' and Mothers' Health Protection Act. The final regulations, which are substantially similar to the 1998 interim final rules, provide information on, among other things, how to measure the required hospital stay and how the law interacts with state law." (Buck Consultants)


[Opinion]
Princeton Economist Says Health Care Key to Stimulus

Excerpt: "Uwe Reinhardt, professor of economics and public affairs at Princeton University, calls the health care sector the 'strongest economic locomotive working for us.' He estimates that by 2015, health care will be one-fifth the size of the U.S. economy and says this is a good time to expand health insurance coverage for the uninsured." (All Things Considered via National Public Radio)



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Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
Section 409A Proposed Regulations Addressing Income Inclusion

Excerpt: "[A]mounts deferred under a nonqualified deferred compensation plan are includible in income unless certain requirements are satisfied. The proposed regulations interpret this rule to provide that failures to comply with §409A(a) apply to amounts deferred under a plan in the year in which the failure occurs and all previous taxable years, to the extent such amounts are not subject to a substantial risk of forfeiture and have not previously been included in income. As a result, each taxable year is analyzed independently with respect to whether there is a failure." (Deloitte)


[Guidance Overview]
IRS Provides Limited Relief for Certain Section 409A Operational Failures

Excerpt: "Notice 2008-113 applies only [to] inadvertent and unintentional failures in operation of a plan that otherwise complies with section 409A. In addition, the service recipient must take commercially reasonable steps to avoid recurrence of the failure." (Deloitte)


[Guidance Overview]
Proposed Regulations Regarding Section 409A Violations and Deferment of Reporting Requirements

Excerpt: "Notice 2008-115 generally extends the reporting and withholding guidance provided in Notice 2006-100 and Notice 2007-89 applicable to 2005, 2006, and 2007; however, the Notice provides that compliance with the proposed regulations will also constitute compliance with the Notice. The Notice is effective for 2008 and is expected to remain in effect for subsequent years until the proposed regulations are finalized and effective." (Morgan, Lewis & Bockius LLP)


Effect of the Economy on Executive Compensation Programs: Survey Results (PDF)
8 pages. Excerpt: "The current financial crisis is significantly affecting the executive compensation programs of most companies. Compensation committees and management are being challenged to balance their need to retain key executive talent while responding to economic and public pressures to adjust executive pay levels and program components. Overall, executives will see their compensation decrease in 2009: half of all companies surveyed will cut the size of their annual bonus pool compared to the prior year; nearly 40 percent have decreased planned merit increases or expect to do so; and almost one in four companies have frozen salaries, or expect to do so. In addition, one-quarter of companies expect to decrease the value of their longer-term incentive grants in 2009." (Watson Wyatt Worldwide)


Kodak Announces Match Suspension, No Executive Compensation Increases
Excerpt: "Saying that 'most signs indicate that we may be facing a prolonged global recession,' Antonio M. Perez, Kodak Chairman and Chief Executive Officer, said the company is taking steps to ensure its solid position remains until the economic recovery. Among steps the company is taking, Kodak announced that where permissible by law, its executives will not receive a salary increase in 2009, and that it will temporarily suspend for 2009 the company's U.S. 401(k) match. A report on the Web site of an NBC news station in Albany said that company management also does not expect a payout in 2009 for the executive Leadership Stock program that is based on 2008 performance." (PLANSPONSOR.com; free registration required)


Mid-Atlantic Tech Companies Use Flexible Benefits to Attract Workers
Excerpt: "The findings of the KnowledgeBank 2008-2009 Total Compensation Survey of Mid-Atlantic Technology Companies suggest that responding companies embrace flexible human resource practices to recruit and retain staff in a challenging marketplace. According to a press release, 84% of respondent companies provide for variable work schedules and 64% encourage telecommuting. Other perks used to retain and recruit staff include providing special recognition awards (60%) and paying new hire bonuses for referrals (59%)." (PLANSPONSOR.com; free registration required)


Many Companies Will Continue to Provide Employees with Holiday Bonuses, Gifts, and Parties
Excerpt: "According to a new survey from Hewitt Associates, 42% of companies will continue to provide employees with holiday bonuses this year, although the value of those bonuses may be slightly lower than in the past. Hewitt's 2008 holiday survey of more than 160 organizations reveals that of companies offering holiday bonuses this year, more than half (52%) will provide them in the form of cash - spending an average of $863 per employee, Hewitt said in a press release." (PLANSPONSOR.com; free registration required)


[Opinion]
Rabbi Trust Funding Prohibition?

Excerpt: "Code Sec. 409A(b)(3) could prohibit a public company that has an 'at risk' pension plan anywhere within its controlled group from making contributions to a rabbi trust (or otherwise setting aside funds) for non-qualified plan benefits. It appears that an affected company could still pay non-qualified plan benefits directly from its general assets." (Michael S. Melbinger via Winston & Strawn LLP)




Newly Posted Events
(Post Yours!)

2009 MidWinter Tour: Advanced IRA
in Oregon on January 28, 2009
presented by Ascensus

2009 MidWinter Tour: IRA Essentials
in Oregon on January 27, 2009
presented by Ascensus

2009 Web/Telephone Seminar: Advanced HSAs
Nationwide on January 22, 2009
presented by Ascensus

2009 Web/Telephone Seminar: Basic IRAs
Nationwide on January 27, 2009
presented by Ascensus

2009 Web/Telephone Seminar: HSA Basics
Nationwide on January 13, 2009
presented by Ascensus

2009 Web/Telephone Seminar: Introduction to QRP Distributions
Nationwide on January 29, 2009
presented by Ascensus

2009 Web/Telephone Seminar: IRA Reporting
Nationwide on January 20, 2009
presented by Ascensus

2009 Web/Telephone Seminar: QRP Beneficiary Rollovers to Inherited IRAs
Nationwide on January 15, 2009
presented by Ascensus

Pension Relief Legislation and 403(b) Regulatory Relief
Nationwide on December 16, 2008
presented by Convergent Retirement Plan Solutions, LLC



Newly Posted Press Releases
(Post Yours!)

Recession Forcing Companies to Cut Executive Bonuses, Watson Wyatt Survey Finds
Watson Wyatt

PBGC Moves To Protect Pensions At Lehman Brothers Holdings Inc.
Pension Benefit Guaranty Corporation (PBGC)

Progressive Benefit Solutions Joins Benefit Advisors Network
Benefit Advisors Network

Retirement Plans for Public Schools and Exempt Organizations Get Extension on Time to Complete Written Plans
Internal Revenue Service (IRS)

Statement by ERIC President on House and Senate Passage of Pension Funding Relief
ERIC (ERISA Industry Committee)

Council Commends Senate On Passage Of Pension Relief
American Benefits Council

Finance, HELP Leaders Applaud Senate Passage of Pension Protection Plans
U.S. Senate



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Institutional Services Employee Benefit Operations Administration Analyst II
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