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| January 7, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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| ASC's 5500 forms package utilizes the latest .NET technology to make this often burdensome task a snap. You can quickly produce: DOL/IRS Form 5500 and associated schedules; Summary Annual Reports (SAR); Other related forms (such as Form 5558). ASC provides a full line of retirement plan automation products and services. Learn more today! info@asc-net.com |
[Guidance Overview]
How the Worker, Retiree, and Employer Recovery Act of 2008 Affects DB and DC Plans
Excerpt: "This new Act provides funding relief for defined benefit (DB) plans in response to the current economic crisis, contains a 2009 waiver of required minimum distributions for defined contribution (DC) plans and individual retirement accounts, and makes technical corrections to the Pension Protection Act that will affect the administration of DB and DC plans." (The Vanguard Group, Inc.)
[Guidance Overview]
Podcast: Pension Plan Funding Relief Legislation
Excerpt: "This podcast examines the some of the important provisions of the Worker, Retiree and Employer Recovery Act of 2008, which was signed into law by President Bush on December 23. The legislation provides funding relief for sponsors of defined benefit pension plans, along with some technical corrections to the Pension Protection Act. Hear a Q&A session with Towers Perrin expert Mike Archer, a senior consultant in the firm's Retirement practice." (Towers Perrin)
[Guidance Overview]
Implied Employer Consent Increases Early Retirement Equalisation Costs
Excerpt: "In light of Foster Wheeler and other recent cases, employers should identify whether their schemes have been effectively equalised and, where they have not, take immediate steps to do so, to limit the extent of future liability. Foster Wheeler is the latest in a line of recent cases which highlight the failure of some defined benefit pension schemes to have properly equalised their retirement ages as between male and female members following the Barber judgment of 17 May 1990." (McDermott Will & Emery)
[Guidance Overview]
PBGC Waives 2008 Reporting Requirements Under ERISA §4010 for Certain Controlled Groups
Excerpt: "The waiver does not apply if: (1) any member of the controlled group fails to make a required installment or other required payment to a plan and, as a result, the conditions for imposition of a lien described in ERISA §303(k) and Code Sec. 430(k) have been met during the information year, and the required installment or other required payment is not made within ten days of its due date; or (2) any plan maintained by a member of the controlled group has been granted one or more minimum funding waivers under ERISA §302(c) and Code Sec. 412(c) totaling in excess of $1 million, and as of the plan year ending within the information year, any portion of the waiver is outstanding." (Wolters Kluwer)
Questions 403(b) Participants May be Asking
Excerpt: "As 403(b) plan sponsors and advisers have prepared for new Internal Revenue Services regulations in effect as of January 1, no doubt communications with participants about the new environment have begun, but have you told them everything? Aside from the list of providers they are offered in their plans and new procedures for loan and distribution requests, participants may have many more questions to assure them that the plan and their assets are being administered appropriately and about how best to take advantage of this retirement savings vehicle. Security Benefit, a provider of consulting and administrative services, has come up with a list of questions you should be prepared to answer . . . ." (PLANSPONSOR.com; free registration required)
Analysis: Lump-Sum Distributions and Retirement Income Security (Updated 1/7/2009) (PDF)
18 pages. Excerpt: "Lump-sum distributions that are spent rather than saved can reduce future retirement income. If the lump-sum distributions received between 1980 and 2006 that were not rolled over had instead been invested in retirement accounts that earned the average annual rate of return on AAA-rated corporate bonds, they would have grown to a median value of $8,800 by 2006. In that year, the median age of those who had not rolled over their distributions was 44. If this amount were to remain invested until the recipient reached age 65 and earned an average annual rate of return of 6%, it would grow to a value of $29,900. With this amount, a 65 year-old man could at current interest rates purchase a level, single-life annuity that would pay $220 in monthly income for life." (Congressional Research Service, U.S. Library of Congress)
Can the Bottom Third of the Workforce Work Longer?
Excerpt: "This brief addresses the question of whether men in the bottom third of the educational distribution - a proxy for earnings levels - can be expected to work longer. The first section describes the employment patterns of men and the change in employment patterns since the early 1960s. The second section examines the primary factors that might explain the decline in employment among older low-skill workers - changes in availability of alternative sources of income (Social Security disability and retirement benefits and the advent of the Supplemental Security Income program), changes in the composition of labor demand, and changes in health. The concluding section assesses the implications for retirement income policy." (Center for Retirement Research at Boston College)
Taxpayers Can Expect No Relief for 2008 Required Minimum Distributions, Treasury Letter Confirms
Excerpt: "CCH Note: Some members of Congress did not press for suspension of 2008 RMDs in the Worker, Retiree, and Employer Recovery Act of 2008 under the assumption that the Treasury and IRS would take care of 2008 RMDs administratively. The Act suspends RMDs for 2009 only. Now, the Treasury and IRS, after considering the matter, have decided that they must pass on giving any 2008 relief. Whether Congress can provide relief retroactively in an economic stimulus bill slated for January 2009 remains questionable. Likely, this will remain a developing story that will not end with the Treasury letter." (Wolters Kluwer)
Funding Public Pension Plans (PDF)
3 pages. Excerpt: "For mature public plans that are less than 60 percent funded, the amortization payment should be based on a descending period, with a minimum payment of the interest on the unfunded actuarial accrued liability (UAAL). As a starting point for discussion, consideration should be given to requiring an overriding minimum contribution (OMC) and a recommended contribution that is the greater of the amount determined using traditional actuarial methods and the OMC." (Contingencies)
Guide to Assessing and Rebalancing Your 401(k) After 2008 Losses
Excerpt: "For most workers, investing for retirement isn't optional. It's something you have to do because you won't get a traditional pension. As you survey the smoking wreckage of your 401(k) retirement plan, you're probably wondering: What should I do now? There's no one correct answer. But to get past some of last year's devastating financial losses, you'll need to make some adjustments. You'll need to work through the psychological effects of your losses. You'll need to make some adjustments to your portfolio. And you may even want to make a few speculative bets on the stock market's recovery. Just be sure you don't speculate with money you'll need anytime soon." (USA TODAY)
SSA Rolls Out Retire Online Campaign
Excerpt: "Michael J. Astrue, Commissioner of Social Security, and Patty Duke, yesterday unveiled Social Security's new online retirement application and launched the agency's Retire Online campaign. Featuring cousins Patty and Cathy Lane from the hit 1960's sitcom, 'The Patty Duke Show,' the campaign has been developed to 'let Americans know that it's now easier than ever to retire online.' 'Social Security's new online retirement application can be completed in as little as 15 minutes from the comfort of your home or office,' Commissioner Astrue said. 'Filing online means there's no need to drive to a local Social Security office or wait for an appointment with a Social Security representative. . . .'" (PLANSPONSOR.com; free registration required)
Pension Perk Costs Philadelphia - or Maybe Not - a Boon or a Boondoggle?
Excerpt: "Imagine for a moment a perk that, since 1999, has either cost the city's pension fund $141 million or saved it $125 million. No one knows for sure. Imagine also that it was designed primarily to persuade non-uniformed employees to retire earlier, but may have had the opposite effect. Finally, imagine that the elected officials who decide whether it is a good deal for taxpayers personally enjoy its benefits. There is just such a program. It's called the Deferred Retirement Option Plan. DROP allows city workers to accrue pension payouts while still working so that when they finally retire, they leave with 'a pot of money,' as one pension official described it." (The Philadelphia Inquirer)
Ford's ESOP Problems are Beginning to Look a Lot Like the Tribune Co.'s ESOP Problems
Excerpt: "Just before the end of last year, Ford Motor Company moved to dismiss a case brought by participants of Ford's employee stock ownership plan (ESOP) on the ground that participants failed to state a viable claim for relief. Participants claim that the ESOP's investments in Ford company stock were imprudent. U.S. District Judge Stephen J. Murphy favored the argument made by the ESOP participants. He noted in his opinion that 'while ERISA does provide an exemption from diversification rules for ESOPs, it does so while still requiring that the plan sponsor act with prudence when investing in company stock.'" (InjuryBoard.com)
Defense Industry Analysts See Steady U.S. Spending and Pension Cost Issues
Excerpt: "The Obama administration is unlikely to make radical defense spending changes in the near term, but some programs, such as Future Combat Systems and missile defense, could see cuts, and pension expenses might become a bigger problem than previously thought, said analysts from Macquarie Capital during a conference call on the 2009 outlook for aerospace and defense." (Army Times Publishing Company)
New Company Retirement Plan Investment Stock Suit Filed Against Boston Scientific
Excerpt: "A former employee of Boston Scientific Corp., who dropped out of a previous lawsuit before it was dismissed, has filed a new lawsuit alleging the company breached its fiduciary duties by offering company stock as a retirement plan investment option. Former employee Robert Hochstadtvwas originally a lead plaintiff in the previous suit along with Douglas Fletcher and Michael Lowe, but he dropped out of the suit before a review by U.S. District Judge Joseph Tauro of the U.S. District Court for the District of Massachusetts. In dismissing the previous case, Tauro ruled that because Fletcher and Lowe sold more stock than they purchased during the time period when they claimed the company's stock price was artificially inflated, they likely were not financially injured by any potential misdeed by the employer and therefore, lacked constitutional standing . . . ." (planadvisor)
[Opinion]
The Sad State of 401(k) Fee Disclosure and What You Can Do about It
Excerpt: "Generally speaking, the economics of retirement plans is screwed up and has been for years. Despite the fact that just about every 401(k) provider I now meet claims to have been a long-time proponent of full disclosure, the retirement plan industry has really fallen short of providing clear and easy-to-understand information. As a result, fees have come under intense scrutiny over the past year and become a major hot-button issue. This is a good thing because the issue of fees has a major impact on both fiduciaries and participants." (Greenspring Wealth Management, Inc.)
ASPPA (Sponsor)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]
Reference Guide to 2009 Retirement, Health and Welfare Plan Limits, Social Security and Medicare Changes (PDF)
Excerpt: "[The guide includes] a Table of Retirement Plan Limits from 1990 to Present. Plan administrators must concern themselves with a broad array of annual limits and thresholds that affect a variety of employee benefits. This Reference Guide consolidates these limits to give plan administrators quick access to this information. Page 1 lists updated limits and other cost-of-living adjusted numbers affecting retirement plans. Page 2 lists 2009 health, welfare and fringe benefit plan limits and 2009 figures needed to determine Social Security benefits and contributions. Page 3 lists 2009 Medicare premiums. Page 4 provides key retirement plan-related annual limits from 1990 to 2009. Page 5 provides the 2009 covered compensation tables." (Hay Group)
UAW Will Seek Worker Approval for Contract Changes
Excerpt: "UAW president Ron Gettelfinger said Tuesday, January 6, that the union would seek rank-and-file approval for any changes it makes to labor agreements to help the Detroit Three comply with provisions of the federal bailout. The UAW's bargaining team from the General Motors department was scheduled to begin discussing their negotiating strategies Tuesday, Gettelfinger said in an interview with Automotive News. The union's bargaining teams from Ford Motor Co. and Chrysler will begin meeting later this week, he said." (Workforce Management; free registration required)
Obama's Retirement Agenda: Many Proposals Will Be Weighed
Excerpt: "'We can expect a very quick start for the new administration and the new Congress in terms of pursuing their agenda,' said Frank McArdle, head of Hewitt Associates' Washington, D.C., office during a recent Webcast on how the Obama Administration and the 111th Congress will deal with healthcare and retirement issues. . . . Plus, said McArdle, 'There are also going to be significant tax policies that could directly or indirectly affect tax-favored employee benefits.' Executive compensation, too, will be 'in the forefront throughout 2009 with a variety of proposals likely to be enacted,' McArdle said. Obama has also promised an economic stimulus bill. 'That's of interest not only for how it will help the economy, businesses, and workers but for other provisions it might carry related to employee benefits,' McArdle noted. 'For example, right now for those of you who sponsor defined benefit plans there are a number of proposals to try and get temporary relief from the big increases in contributions that are now required because of the economic downturn and volatility." (Investment Advisor)
Newly Posted Events
A Washington Update
in California on February 12, 2009
presented by Western Pension & Benefits Conference - Orange County Chapter
FMLA Update: New Regulations, New Notices, New Procedures Webcast
Nationwide on January 22, 2009
presented by International Foundation of Employee Benefit Plans
Plan Audits: Practical Ideas for Plan Sponsors
in California on January 15, 2009
presented by Western Pension & Benefits Conference - Orange County Chapter
Qualified Transportation Plans: Design and Compliance Issues (Including the New Bicycle Commuting Benefit)
Nationwide on January 29, 2009
presented by EBIA / Thomson Reuters
The ABCs of Pension Law
in California on January 21, 2009
presented by Western Pension & Benefits Conference - Orange County Chapter
Top Ten COBRA Mistakes: How to Identify, Correct, and Prevent the Big Problems
Nationwide on January 15, 2009
presented by EBIA / Thomson Reuters
Newly Posted Press Releases
Chicago Contractor Indicted For Stealing From Union Employee Benefit Plans
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Department Of Labor Sues Former Employee Leasing Company In Brentwood, Tennessee, To Protect Workers’ 401(k) Plan Assets
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Department Of Labor Sues To Protect Participants Of Defunct New Jersey Company’s Employee Benefit Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Labor Department Sues Defunct Memphis, Tennessee, Heating And Air Conditioning Maintenance Company For Abandoning 401(k) Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Department Of Labor Sues Corporate Parent Of Academic Financial Services And Trustees To Restore Losses To Tampa 401(k) Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Treasury Announces Results of High School Financial Literacy Challenge
U.S. Treasury Department
Newly Posted or Renewed Job Openings
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Global Retirement Benefits Manager
for JELD-WEN, inc.
in OR
Actuary
for Swerdlin and Company
in GA
Manager, Corporate Benefit Programs
for McDonald's Corporation
in IL
Defined Benefit Actuary I
for The Standard
in MA, OH
Retirement Services Consultant
for CUNA Mutual Group
in WI
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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