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December 29, 2008

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

Today's sponsor is DATAIR Employee Benefit Systems, Inc.

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*Limited time offer: 2 DATAIR systems for 1 license fee…plus 0% financing. Restrictions apply, contact DATAIR’s sales department:   (888) 328-2474

[Guidance Overview]
The Worker, Retiree, and Employer Recovery Act of 2008: Defined Contribution-Related Provisions (PDF)

2 pages. Excerpt: "The Act includes Technical Corrections related to the Pension Protection Act of 2006 (PPA) and pension recovery provisions designed to provide relief for individuals and plan sponsors to help them deal with the economic downturn. This summary focuses on the defined contribution-related provisions of the Act and includes a brief explanation of the new provisions and the corresponding effective dates." (Transamerica Center for Retirement Studies)

[Guidance Overview]
Worker, Retiree and Employer Recovery Act Signed Into Law
Excerpt: "On December 23, 2008, President Bush signed the Worker, Retiree and Employer Recovery Act of 2008 into law. While the legislation, which Congress passed by unanimous consent, includes provisions to provide much-needed relief for pension plan sponsors as well as individual investors, it does not include a number of key proposals the business community is seeking." (Watson Wyatt Worldwide)

[Guidance Overview]
Another Question is Answered in the Who's the Employer Q&A Column

This question relates to credit unions and the common control regulations for tax-exempt organizations (Sec. 1.414(c)-5). There are a number of credit unions that are "sponsored" by various types of employers (corporations, school districts, government agencies, etc.). The credit unions were essentially established to serve as financial institutions for the organizations' employees. And, in many cases, the credit union membership is limited to employees of those organizations. Every credit union has a board of directors. In situations where a credit union is sponsored by an employer organization, the board of directors is mainly comprised of employees of the organization. They are elected by the credit union membership, not appointed by the employer organization. But they are nonetheless employees of the organization. My question is: Are these credit unions under common control with the sponsoring employer under the new regulations? (

Government's Attempt at Support Fell Short of Hopes of Retirees Facing Required Minimum Distributions for 2008
Excerpt: "Many hoped that the government would suspend the rules to allow retirement account holders to skip their RMDs this year. But Congress instead suspended the rules for 2009, while leaving them in place for this year. . . . Unfortunately, the problem is much larger in 2008 than 2009." (The Motley Fool)

IRS to Open Pre-Approved Program for 403(b) Plans, Says Key Official
Excerpt: "The IRS's Employee Plans (EP) unit intends to open a pre-approved program for vendors of prototype 403(b) plans, EP Tax Law Specialist Robert Architect announced on December 4, 2008, in an IRS phone forum." (Wolters Kluwer)

Retirement Postponed, Investment Withdrawals Increase in Economic Turmoil
Excerpt: "Nearly one-fifth (18%) of 750 individuals surveyed by Bank of America have prematurely withdrawn assets from their retirement accounts because of recent economic conditions. The leading reasons for the premature withdrawals are to pay off credit card debt (26%), to pay down mortgages (22%), and the loss of a job (22%)." (Wolters Kluwer)

Retirees Consider Other Investments to Boost Returns, According to Survey
Excerpt: "Forty-two percent of retirees surveyed by MetLife are considering reallocating their assets to investments that might provide a higher rate of return, but 47% of them aren't sure how they'll do it." (Pensions & Investments)

401(k) and Profit Sharing Plan Eligibility Survey 2008 (PDF)
11 pages. Excerpt: "This is the eleventh year that PSCA has collected defined contribution plan eligibility data. The changes over time have been significant. In 1998, only 24 percent of plans allowed employees to begin contributing to their 401(k) plans immediately upon employment. This percentage has more than doubled; 55.1 percent of all plans and 70.5 percent of plans with 1,000 or more employees now permit immediate participation in their 401(k) programs. Employees are eligible to participate within the first three months of employment at 72.7 percent of companies and at 87.2 percent of large companies (1,000 or more employees). Only 14.7 percent of all plans have a one-year or longer service requirement prior to eligibility." (Profit Sharing / 401k Council of America)

U.S. House Members Demand 2008 Required Minimum Distribution Relief from Bush
Excerpt: "Refusing to give up the battle over granting the same relief from required minimum distribution (RMD) rules in 2008 that has been granted for 2009, a 61-member U.S. House coalition has called on President Bush to order the U.S. Treasury Department to give investors the 2008 relief. The letter by the group, led by Representatives Spencer Bachus (R-Alabama) and Rodney Frelinghuysen (R-New Jersey), demands that Bush order the Treasury Department to reverse its decision not to extend the RMD relief to 2008 . . . and to allow those already forced to take a distribution to recontribute it 'in order to give their savings time to recover from the down market.'" (; free registration required)

Companies Move Toward Faster Eligibility for Retirement Plans
Excerpt: "Profit Sharing/401k Council of America (PSCA) research shows a dramatic change over time to employee eligibility requirements for company sponsored retirement plans. PSCA noted that in 1998, when it first began collecting defined contribution plan eligibility data, only 24% of employers allowed employees to begin contributing to their 401(k) plans immediately upon employment. This percentage has more than doubled to 55.1% of all employers in the fall of 2008." (; free registration required)

A Recession Lesson: Reduce Your Debt
Excerpt: "[I]f you don't have enough money to meet your basic living expenses, you can't afford to invest right now -- even for retirement. When you invest, you place your money at risk. It would be unwise to accept free money that you can't get to for years or without paying a hefty penalty for early withdrawal, then have to accumulate debt to pay your everyday expenses. So leave the company's money on the table and use your money to put food on your family's table. Until your husband gets steady employment, you should stop contributing to your retirement fund." (The Washington Post; free registration required)

Federal Judge Allows Ford ESOP Suit to Move Forward
Excerpt: "The U.S. District Court for the Eastern District of Michigan has denied a motion to dismiss a case brought by participants of Ford Motor Co.'s employee stock ownership plans claiming the plans' investment in Ford company stock was imprudent." (planadvisor)

Rebuild Retirement Savings with 401(k) and Smart Use of Stocks
Excerpt: "As difficult as the year was, you may have learned some important things about yourself. You may be far less willing to take risks than you think. 'We've been through one of the most rapid and extreme bear markets in history,' says Stephen Utkus, principal at Vanguard's Center for Retirement Research. 'And if that wasn't a test of your risk tolerance, I don't know what would be.' If you're still comfortable with your asset allocation, then your risk and return are in a good balance. But if you've lost much sleep this year, you know it's time to reduce your risk and adjust your investment priorities." (USA TODAY)

9 Retirement Resolutions for 2009
Excerpt: "Here are nine financial resolutions for '09 with extra relevance for retirement planning, as recommended by a variety of personal finance experts . . . ." (AP via Google)

How Layoffs Affect Retirement Plans
Excerpt: "It's one of a heap of financial worries that come with a layoff: What happens to your company-sponsored retirement plan? The answer depends on how long you worked for the company, the amount you saved up and whether the money's in a 401(k) or a pension plan. For the most part, federal regulations protect retirement savings, even if a company goes belly up . . . ." (AP via Asbury Park Press)

Tribune Seeks Approval for Union Pension Payments
Excerpt: "U.S. media group Tribune Co is asking a judge for permission to pay unpaid pre-bankrup.tcy contributions owed to its union pension plans. In a motion filed on Wednesday in U.S. Bankrup.tcy Court in Delaware, the publisher of The Chicago Tribune and The Los Angeles Times said the payments were aimed at maintaining morale, union relationships and an essential union employee workforce." (Reuters)

New Jersey Pension Funding Fight Signals What Lies Ahead
Excerpt: "IN a preview of political battles to come over the state's mounting fiscal problems, Republican lawmakers and labor union leaders are voicing opposition to Gov. Jon S. Corzine's proposal to allow county and municipal governments to skip $584 million in pension fund payments in the coming year." (The New York Times; free registration required)

A Sweet Deal on Roth IRA Conversions
Excerpt: "Employees who make (or who have made) after-tax contributions to their employer's retirement plan, listen up. You can now take that money and convert it to a Roth IRA tax free. . . . Not all retirement plans allow after-tax contributions. But if yours is among those that do, this is a great way to keep some of your retirement savings growing tax free without paying the usual price of admission to convert to a Roth IRA." (Kiplinger's Personal Finance via The Washington Post; free registration required)

Everyone's Pension Plan Fund Is in the Same Boat
Excerpt: "During these days of stock market malaise, there is increasing concern about the security of company pension plans. 'The good news is everybody's got the same problem, you get to share it with all your friends,' says Angus Watt of National Bank Financial, while addressing the Northern Alberta regional council of the Canadian Pension & Benefits Institute. 'In the U.S., 800 companies of the S&P 1,500 have pension plans. They started the year with US$60-billion surplus, by the end of last month they had a US$280-billion unfunded liability.'" (Financial Post)

Worker Disability: A Growing Risk to Retirement Security (PDF)
14 pages. Excerpt: "Insecurity strikes at the very heart of the American Dream. It is a fixed American belief that people who work hard, make good choices and do right by their families can buy themselves long-term security. The rising tide of risk swamps these expectations, leaving individuals who have worked hard to reach their present heights facing uncertainty about whether they can keep from falling. With the economy now in its most precarious state in years, insecurity is certain to be one of the most pressing domestic challenges faced in the coming years. In this context, the Council for Disability Awareness has issued an important reminder that one of the most serious risks that workers face is disability. As documented in this report, traditional sources of support for disabled workers have eroded even as the risk of disability has risen. The Council shows that a response will have to come from all of us, because disability is a risk that faces all of us." (The Council for Disability Awareness)

U.S. House Members' Letter to Bush Demanding 2008 Required Minimum Distribution Rules Relief

Excerpt: "'We respectfully request that you use your executive authority to direct the Secretary of the Treasury to use the flexibility provided by statute to immediately waive the same rules for the 2008 tax year. Furthermore, we ask that you use the same authority to allow retirees who have already withdrawn in 2008 to make recontributions to their accounts. By doing this, you will allow retirees to protect some of their savings during these rough economic times.'" (; free registration required)

Pension Funds Collapse: The End of Retirement?

Excerpt: "Unless things change fast, human history will show that the phenomenon of 'retirement' was limited to one generation. After World War II, when European and Japanese economies stood in tatters, American capitalism could fulfill 'the American dream,' since there was little foreign competition to speak of. For the first time ever, workers were promised that -- after working thirty or so years -- they would be able to securely retire. That was largely the case ... for one generation." (AlterNet)

University Conference Services (Sponsor)

(Click on company name or banner to learn more.)
Banner ad for University Conference Services

The Keys to Successful Plan Management in Today’s Challenging Environment

Today’s volatile financial market, battered economy and changing regulatory environment have many plan sponsors trying to unlock the secrets to effectively managing their retirement plans. The Orlando Mid-Sized Retirement & Pension Plan Management Conference, January 25–28, 2009, gives you access to expert speakers and valuable information that will help you find the keys to managing your retirement program in today’s challenging environment.

Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
Connecticut Insurers Must Extend Equal Rights to Same-Sex Spouses
Excerpt: "Connecticut insurers must provide the same rights and coverage for same-sex spouses as they do for opposite-sex spouses effective Oct. 28, according to a state regulatory bulletin (IC-21). The rights extend to all lawful same-sex spouses, whether married in Connecticut or in another jurisdiction that authorizes same-sex marriage." (Mercer LLC)

CEO Pay Moves Toward Stock Compensation
Excerpt: "CEO pay moved toward stock compensation and away from cash and stock options, but median cash compensation increased in several industries, according to The Conference Board's Top Executive Compensation report. In the financial services category, the average percent of total compensation delivered in non-equity incentives fell to 21.6% from 24.2%. The data for the report were compiled from proxy statement tables filed as of June 2008 for fiscal year 2007." (Pensions & Investments via Financial Week)

What Will Human Resources Look Like a Decade from Now?
Excerpt: "As it did in 1998, Workforce Management has asked a group of HR executives and thought leaders to make their best predictions." (Workforce Management; free registration required)

Employers Reviewing Severance Plans
Excerpt: "As the recession continues to grip the nation, more employers are laying off -- or making plans to lay off -- employees. The coming year will bring more of the same, experts say, so it's a good time now for HR leaders to scrutinize their severance policies." (Human Resource Executive Online)

In Trying Times, HR Must 'Step Up to the Plate'
Excerpt: "With the United States entering year two of a recession and companies facing massive layoffs nationwide, businesses are looking within their HR departments for all kinds of assistance -- and not just the administrative kind. According to China Miner Gorman, Chief Operating Officer of the Society for Human Resource Management (SHRM), 'The expectation for HR to step up to the plate with strategic business solutions is increasing, and HR is looked to more and more for bottom-line strategies.' Gorman was speaking as moderator of the Dec. 16, 2008, 'HR as Strategic Business Partner' panel discussion sponsored by Lee Hecht Harrison, a global provider of integrated human capital solutions. The program held in Vienna, Va., featured as panelists senior HR executives from SAIC, AOL and Sodexo." (Society of Human Resource Management)

Caterpillar to Lower Top Executives' Incentive Compensation
Excerpt: "If the compensation reduction measures announced Monday, December 22, were applied to all forms of executive pay acknowledged in the proxy -- including stock and option grants -- the top officers at Caterpillar could see their total take-home lowered by more than $25 million next year." (Workforce Management; free registration required)

Americans Baffled by Finance, According to Survey
Excerpt: "Whether it's counting reindeer or purchasing Christmas gifts, most Americans lack the math skills and financial savvy they need for the holiday season -- and the rest of the year, according to a survey from the Center for Economic and Entrepreneurial Literacy." (Investment News; free registration required)

UAW Will Fight Any Concessions on Wages and Benefits

Excerpt: "The government gave the Big Three a $17.3 billion bailout based on the idea that both management and the unions would make concessions. Now the UAW says no thanks. Can we have our money back?" (Investor's Business Daily)

A Special Holiday Package

Excerpt: "Here's a couple of things to help get you in the mood for the holidays . . . ." (; free registration required)

Newly Posted Events
(Post Yours!)

2009 RMD Relief Enacted! Are You Ready?
Nationwide on January 6, 2009
presented by Convergent Retirement Plan Solutions, LLC

RMD Waiver, Technical Corrections, and Other Legislative Changes
Nationwide on January 8, 2009
presented by Ascensus

RMD Waiver, Technical Corrections, and Other Legislative Changes
Nationwide on January 14, 2009
presented by Ascensus

Newly Posted Press Releases
(Post Yours!)

2008 401k Plan Eligibility Survey Released
Profit Sharing/401(k) Council of America (PSCA)

Multiemployer Withdrawal Liability - Final Rule
Pension Benefit Guaranty Corporation (PBGC)

U.S. Department Of Labor Sues Defunct Atlanta Software Consulting Company To Protect 401(k) Plan Participants
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Labor Department Sues President Of Emergency Consultants Inc. To Recover 401(k) Assets
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Labor Department Seeks Federal Court Judgment Ordering Distribution Of 401(k) Assets Of Shaker Heights, Ohio Business
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Labor Department Sues To Recover Retirement Assets For 401(k) Participants Of Defunct San Jose, Calif., Company
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Optimatum Solution Saved Employers on Average $1086.00 per Employee in 2008 Without Shifting Costs
Optimatum Group LLC

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401(k) Wholesaler
for Howard Simon & Associates, Inc.
in IL

Exclusive Care Plan Manager
for County of Riverside
in CA

Assistant Manager, Health Plan Operations
for Ralcorp Holdings, Inc.
in MO

Client Relationship Manager
for Acropolis Investment Management, LLC
in MO

DC / 401(k) Compliance Consultant
for The Savitz Organization
in DE, NJ, PA

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