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December 30, 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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[Official Guidance]
PBGC Final Regs: Allocation of Unfunded Vested Benefits to Withdrawing Employers from a Multiemployer Pension Plan (PDF)

10 pages. Excerpt: "This final rule . . . [implements] provisions of the Pension Protection Act of 2006 that provide for changes in the allocation of unfunded vested benefits to withdrawing employers from a multiemployer pension plan, and that require adjustments in determining an employer's withdrawal liability when a multiemployer plan is in critical status. . . . [It] also amends this regulation to provide additional modifications to the statutory methods for determining an employer's allocable share of unfunded vested benefits [and] amends PBGC's regulation on Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR part 4219) to improve the process of fully allocating a plan's total unfunded vested benefits among all liable employers in a mass withdrawal. Finally, this final rule amends [PBGC regulations To reflect the definition of a 'multiemployer plan' added by [PPA 2006]." (Pension Benefit Guaranty Corporation)

[Official Guidance]
Text of IRS-Corrected Revenue Ruling 2009-02 on Permitted Disparity in Contributions or Benefits (PDF)

Excerpt from IRS press release: 'Attached is a revised version of Rev. Rul. 2009-2, which provides the covered compensation tables under section 401 of the Code for the year 2009 for use in determining contributions to defined benefit plans and permitted disparity. Rev. Rul. 2009-2 has been revised to correct certain minor computation errors on the '2009 Rounded Covered Compensation Table', attachment II of the revenue ruling." (Internal Revenue Service)

[Guidance Overview]
Explanation of Updated IRS Correction Programs with Hypertext Links to Details of Various Provisions (PDF)

MARVELOUS; the linked document is just 4 pages, but it contains hypertext links that take the reader to extensive summaries of particular correction techniques. (Prudential's Pension Analyst)

Towers Perrin U.S. Legislative Tracking Chart: Retirement (PDF)
13 pages. Excerpt: "These charts summarize selected federal legislation that would affect employer benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

Many Retirees Overly Concerned with Liquidity; Investment Performance Suffers
Excerpt: "Many retirees could be losing out on building their savings because of excessive concern for liquidity, according to a new study by MetLife Inc. . . . [that] found 37% of retirees keep most of their assets in 'liquid' accounts such as certificates of deposit, savings accounts and money market funds, in order to have ready access to their assets." (National Underwriter)

How to Hold Money Managers Accountable
Excerpt: "Madoff case shows need for custodial accounts when working with advisers." (Christian Science Monitor)

Study Says Social Security Shifts Influencing Retirement Patterns
Excerpt: "The paper notes that one of the main reasons for enacting the 1983 Social Security reforms in the United States was to increase the labor force participation rate of older workers. Additionally, in 2000 Congress further expanded work incentives by abolishing the Social Security earnings test for people over the normal retirement age. As a consequence, the authors assert that in 2004 more men over age 65 were working than in earlier years." (; free registration required)

Law Firm Publishes Resource for Retirement Plans Impacted by Madoff Scheme
Excerpt: "For those looking for some good info to assist with recovery for retirement plans and IRAs impacted by the Madoff Ponzi scheme, Proskauer Rose has posted a Transcript which contains some helpful information." (Attorney B. Janell Grenier on BenefitsBlog)

Connecticut Plans Dodge Madoff Bullet But Should Amateurs Serve as Public Pension Trustees?
Excerpt: "For the most part, pension boards are made up of ordinary citizens, and many of those unpaid volunteers have little financial expertise. Some towns place a city official -- either a finance director, treasurer or elected council member -- on the board, but that's more the exception than the rule." (Connecticut Post)

Public Pension Scandal Investigations Mushrooming in New York State
Excerpt: "To date, state investigators have won more than $1.5 million in settlements, revoked pensions or rescinded pension credits of at least 45 lawyers and requested records from more than 4,000 local governments." (Newsday)

Four Unusual Ways to Boost Your Social Security Benefits
Excerpt: "If you're looking to tap into your Social Security benefits, there are some little-known strategies available that may help you decide when you or your spouse should apply. There are pros and cons to each opportunity and what may work for you may not work for your neighbor. However, one of these options may enhance the Social Security retirement benefits for you and your family." (Denver Post)

Why Are Fees Associated with 401(k) Plans So Difficult to Determine?
Excerpt: "In short, it is because of flexibility and the array of financial products available to invest in. [E]mployers are trying to provide employees with a wide menu of products to choose from. In part, this is to ensure that employees with various personal financial situations have the ability to select investments that best fit their particular situation. While this flexibility is generally a good thing, it does come with a price. In addition to understanding the fees associated with the administration of the overall plan; employees must also understand the fees and expenses for the individual investment products. To further complicate matters, each plan administrator and investment product may have different fees and different ways of charging those fees." (The Boston Globe)

State and Local Government Pensions Pay Out $168B in 2007
Excerpt: "State and local government pension plans paid $168 billion to 7.5 million retirees and their survivors last year, the Census Bureau said Monday. The figure was up $12 billion, or 8 percent, from the $156 billion paid to 7.3 million beneficiaries in 2006." (BusinessWeek)

A Question on Participation Education

Excerpt: "For ERISA plans, fiduciaries are responsible for all plan investment decisions, including participant decisions, unless they comply with 404c. [An] article from Fred Reish explains the attractiveness and requirements of 404c. You will note in that article that while sufficient information to allow participants to make informed investment decisions is required, participant education is not explicitly required. However, in testimony given by Mr. Reish arguing for improvements to 404c, he argues that general fiduciary provisions say that participants should be informed to make reasoned investment decisions for investing for retirement, and cites evidence that without education, participants are generally not informed." (fi360 Blog)

IRS & AIRE, LLC (Sponsor)

(Click on company name or banner to learn more.)
Banner ad for IRS & AIRE, LLC

The Enrolled Retirement Plan Agent Program is now available!

Earn the privilege of practicing before the IRS with the new Enrolled Retirement Plan
Agent (ERPA) designation. The initial exam window opens on January 6, 2009.
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Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
Overview of the Worker, Retiree and Employer Recovery Act of 2008

Excerpt: "Emergency Funding Relief For Defined Benefit Plans . . . Technical Modifications to the PPA . . . Non-Technical Retirement Security Provisions . . . Mental Health Parity and Addiction Equity Act For Collectively Bargained Plans . . . ." (McGuireWoods)

[Guidance Overview]
President Signs Worker, Retiree and Employee Recovery Act of 2008

Excerpt: "[The new law] provides much needed funding relief to pension plans in light of the current economic crisis. The Recovery Act also temporarily suspends the age 70˝ required minimum distribution rules for participants in 401(k), 403(b), and other defined contribution plans; clarifies rules on nonspouse beneficiary rollovers; and extends favorable tax treatment for health care premiums paid by government retirement plans on behalf of retired public safety officers." (Ballard Spahr Andrews & Ingersoll, LLP)

[Guidance Overview]
Worker, Retiree, and Employer Recovery Act of 2008 Waives RMDs for 2009 and Includes Anticipated PPA Technical Corrections

Excerpt: "We have only highlighted the more significant PPA technical corrections affecting 401(k) plans: Other changes include clarification of the combined plans deduction limit, amendments to conform the definition of a one-person retirement plan under the Code and ERISA, and clarification that QDIA protection is available for beneficiaries, as well as for participants. Plan sponsors and their advisors will want to review the Recovery Act carefully to understand the many clarifications and amendments that affect their plans." (Employee Benefits Institute of America)

[Guidance Overview]
President Signs the Worker, Retiree, and Employer Recovery Act of 2008

Excerpt: "On December 23, 2008, the President signed the Worker, Retiree, and Employer Recovery Act of 2008 (Recovery Act), which provides much needed funding relief to pension plans in light of the current economic crisis. The Recovery Act also temporarily suspends the age 70˝ required minimum distribution rules for participants in 401(k), 403(b), and other defined contribution plans; clarifies rules on nonspouse beneficiary rollovers; and extends favorable tax treatment for health care premiums paid by government retirement plans on behalf of retired public safety officers. A brief description of the Recovery Act's major elements is set forth [in the target document]." (Ballard Spahr Andrews & Ingersoll, LLP)

IRS 2009 Version of Publication 15-B: Employer's Tax Guide to Fringe Benefits
Excerpt: "Publication 15-B, which is a supplement to IRS Publication 15 (more commonly known as Circular E), provides a useful reference for employers on the employment tax treatment of fringe benefits. But it is important to remember that this publication doesn't provide full coverage of the many rules applicable to the fringe benefits it summarizes. Publication 15-B does refer readers to other IRS publications, guidance, or websites, however, for more detailed coverage of certain aspects of these fringe benefits." (Employee Benefits Institute of America)

Newly Posted Press Releases
(Post Yours!)

IASB and FASB Announce Membership of Financial Crisis Advisory Group
Financial Accounting Standards Board (FASB)

Firm Offers Complementary 403(b) Action Plan Workbook
Benefit Plans Plus

Public Retirement Benefit Payments Reach Record $168 Billion
U.S. Census Bureau

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Benefits Broker - Life and Health
for CheckPoint HR
in NJ, NY

Deputy Regional Director
for U.S. Department of Labor, Employee Benefits Security Administration
in NY

Account Executive -- DC Plans
for Retirement Management Services, LLC
in KY

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