BenefitsLink |
 |
 |
| February 4, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is www.ftwilliam.com
(Click on company name or banner to learn more.)
| Need Form 5500 Software for your 2008 filings? |
| Conversion from another vendor is a snap with our innovative 55Autofill feature. With 55Autofill you can download all of your prior year's data into our software - even if you did not use ftwilliam.com in a prior year. We also have extensive error checking and context sensitive help buttons on every question as well as time saving batch and upload features.
Want to learn more? Contact Holly Roussel-Godfrey for more information at sales@ftwilliam.com or call 800.596.0714. Sign up for our demo today for the 2008 forms and see for yourself how ftwilliam.com can make your life easier. |
[Official Guidance]
Disaster Relief Announcement 09-01 Relating to PBGC Deadlines in Response to Wildfires in California
Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to the wildfires that occurred in mid-November 2008, in California." (Pension Benefit Guaranty Corporation)
[Official Guidance]
Disaster Relief Announcement 09-02 Relating to PBGC Deadlines in Response to Severe Storms and Flooding in Hawaii
Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to the severe storms and flooding that occurred on December 10, 2008, in Hawaii." (Pension Benefit Guaranty Corporation)
[Guidance Overview]
Supreme Court Rules on ERISA Plan Beneficiary Designations
Excerpt: "The Kennedy decision is advantageous to plan sponsors and plan administrators, but it requires greater attention on the part of participants. There are steps that plans can take to make the process less prone to error. For example, a plan can provide that divorce automatically revokes beneficiary designations with respect to a divorced spouse. It also behooves plans to review their communications materials to ensure that participants are made aware of the rules that apply to the designation of beneficiaries." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.)
[Guidance Overview]
Trustee's Use of Deposit Accounts of Banking Affiliate for Investment of Bank Collective Investment Funds Does Not Violate ERISA
Excerpt: "A trust company's use of deposit accounts of its banking affiliate for investment of cash of certain bank collective investment funds does not violate ERISA §406(b)(3), according to an EBSA advisory opinion. Moreover, the investment is entitled to the statutory exemption offered to bank deposits under ERISA §408(b)(4)." (Wolters Kluwer)
[Guidance Overview]
District Courts Address Statutory and Contractual Grounds for Imposing Fiduciary Duty to Fund Benefit Plans (PDF)
Pages 2-3 of 5 pages. Excerpt: "Two district courts were asked to address claims that plan fiduciaries breached their fiduciary duties to properly fund their plans, even though the plaintiffs identified no requirement under ERISA's statutory funding rules that had been breached." (Proskauer Rose LLP)
Conflict-Free 401(k) Advice Still Not Foolproof
Excerpt: "Just when the Labor Department thought it had buttoned up the final regulations governing the advice given to 401(k) plan participants, new questions are being asked about conflicts of interest and the quality of the advice. . . . Critics, including House Education and Labor Committee Chairman George Miller (D-Calif.), have long worried that the rules regarding investment advice would lead to conflicts of interest, including situations in which an investment firm was recommending its own mutual funds to participants." (Chicago Tribune)
Federal Employees: Pay and Pension Increases Since 1969, Updated January 8, 2009 (PDF)
Excerpt: "Congress has linked increases in federal pay to the ECI so that wages for federal employees will remain competitive with wages paid by firms in the private sector. Congress has linked COLAs for Social Security and federal retirement benefits to the rate of increase in the prices of goods and services in order to protect retirement income from losing purchasing power through the effects of inflation. In general, wage increases reflect both improvements in the productivity of labor and increases in the general level of prices in the economy. Consequently, when measured over long periods of time, wages tend to rise faster than prices. Because COLAs for retirees do not reflect increases in the productivity of people who are still in the work force, COLAs do not make retirees financially better off. COLAs merely protect retirees from becoming financially worse-off as prices rise over time." (Congressional Research Service)
Capital Loss on ESOP Stock? Maybe
Excerpt: "Q: Can I take a capital loss on my shares in an Employee Stock Ownership Plan (ESOP) if the company was bought out while under bankrup.tcy protection?" (USA TODAY)
Stock Drop Suit Hits Bank of America over Countrywide and Merrill Deals
Excerpt: "A Bank of America (BoA) employee has hit the financial services giant with a stock drop suit alleging the company's acquisitions of Countrywide Financial Corp. and Merrill Lynch left BoA exposed to 'toxic' subprime mortgage-related assets. BoA employee Vernon C. Dailey's suit, which seeks class action status, charged that the plan kept company stock as a 401(k) investment option beyond the point when it was still prudent to do so." (PLANSPONSOR.com; free registration required)
Minneapolis Pension Fund Seeking Merger with State Fund to Stay Solvent
Excerpt: "Faced with going broke in as few as six years, a closed Minneapolis pension fund with thousands of retired city employees is seeking a merger with a statewide public employees pension fund -- and soon. The merger proposal won endorsement from a City Council committee on Tuesday, which said it wants other closed funds for city cops and firefighters to merge with their state plan too." (Star Tribune)
Judge Holds Employer Liable for Missing Plan Contributions
Excerpt: "A federal judge has ruled that the owner of a now-defunct Michigan construction firm is personally liable for $24,900 in unpaid retirement savings contributions for the four years before the company folded. U.S. District Judge Patrick J. Duggan of the U.S. District Court for the Eastern District of Michigan made the ruling in a participant lawsuit against LDS Contractors Inc., owned by Frank Donagrandi, who agreed to contribute 10% of plaintiff Paul Safran's salary to a defined contribution plan." (PLANSPONSOR.com; free registration required)
Disclosure Not the Only Issue with 401(k) Plan Fees
Excerpt: "While clear and complete disclosure of fees and costs can help 401(k) plan sponsors ensure that plan fees are not unreasonable for participants, disclosure alone is not sufficient. So assert researchers for the Center for Retirement Research at Boston College in a new Issue in Brief. The researchers conclude that the structure of fees commonly used in 401(k) plans tends to transfer wealth among participants and can reduce the returns that participants earn on their savings." (PLANSPONSOR.com; free registration required)
The Structure of 401(k) Fees
Excerpt: "Increasingly, people are depending on 401(k) and similar defined contribution plans sponsored by their employers for their retirement income. As a result, participants in these plans also are paying more of their plans' costs, ranging from administration and sales expenses to the cost of managing investments. These costs can take a substantial toll on retirement savings. Over a 30-year career, for example, paying an annual fee of 50 basis points can reduce the purchasing power of savings at the time of retirement by one-eighth." (Center for Retirement Research at Boston College)
DB Plans That Are Not Required to Provide Annual Funding Notice Must Provide Summary Annual Report
Excerpt: "The annual funding notice replaces the summary annual report (SAR) for most defined benefit (DB) plans. But it appears that, thanks to a PPA technical correction in WRERA, those plans not required to provide an annual funding notice because they are exempt from ERISA Title IV must still provide a SAR." (Mercer LLC)
Fidelity 401(k) Balances Down 27 Percent
Excerpt: "Fidelity Investments, the world's biggest mutual fund firm, began a round of job cuts today as part of a plan to reduce its work force by 7 percent. Company revenue dropped sharply because of last year's stock market plunge. Some customers also shifted funds into safer investments with lower fees. Interestingly, the giant 401(k) provider reported 10 percent retirement plan growth last year. The number of participants in 401(k)s, 403(b)s, and other workplace savings plans increased by 5 percent to over 14.2 million customers in about 19,000 plans. Here's a look at how the average Fidelity 401(k) participant fared last year." (U.S. News & World Report)
5 Ways Your 401(k) May Be Changed in 2009
Excerpt: "'The continued bleak economic outlook is forcing many companies to make difficult decisions with respect to their retirement benefits,' says Pamela Hess, director of retirement research at Hewitt Associates. 'Companies are increasingly focusing on less expensive initiatives to encourage their employees to stay in the plan and contribute in a way that minimizes future risks.' Here is a look at how your employer is likely to alter your 401(k) this year." (U.S. News & World Report)
[Opinion]
'Automatic IRAs' Would Make Retirement Saving Easier
Excerpt: "Editor's note: This is one policy proposal in a symposium that appears in the February 9. 2009, issue of National Review. Specific policy ideas from the symposium will continue to appear on National Review Online throughout the week." (National Review)
ASPPA (Sponsor)
(Click on company name or banner to learn more.)
| The ASPPA 401(k) SUMMIT – Make your appointment Now! |
Make an appointment for yourself March 22-24 to attend The ASPPA 401(k) SUMMIT. Join the experts in San Diego and attend sessions that will highlight:
|
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]
IRS Guidance on Section 457A Foreign Deferred Compensation Rules (PDF)
5 pages. Excerpt: "New Code section 457A, which imposes substantial restrictions on the use of nonqualified deferred compensation arrangements sponsored by certain foreign entities, was included as part of the financial bailout legislation (Pub. L. No. 110-343) enacted last fall. . . . Under the new provision, compensation deferred under a nonqualified plan of certain nonqualified foreign entities is taxed at the time of vesting - i.e., the deferred amounts are includable in income when such amounts are no longer subject to a 'substantial risk of forfeiture' - even if they are not yet payable. The Treasury Department and Internal Revenue Service recently released Notice 2009-8 (the 'Notice,' Jan. 26 IRS Bulletin), which provides interim guidance interpreting Code section 457A." (Groom Law Group)
U.S. Plans to Curb Executive Pay for Bailout Recipients
Excerpt: "The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, according to people familiar with the plan. Under new rules to be announced by the Treasury Department Wednesday, executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends." (The New York Times; free registration required)
New York Judge Says Same-Sex Spouse Gets Husband's Estate
Excerpt: "A judge has issued New York state's first ruling that the survivor of a legal same-sex marriage is entitled to inherit a dead spouse's estate. Manhattan Surrogate Court Judge Kristin Booth Glen ruled that J. Craig Leiby was 'the surviving spouse' and sole heir of H. Kenneth Ranftle." (AP via Yahoo! News)
2009 Revenue Procedures for Employee Plans
Excerpt: "The IRS has updated its annual revenue procedures for employee plans: Rev. Proc. 2009-4 addresses procedures for furnishing rulings and information letters; Rev. Proc. 2009-5 discusses the process of providing technical advice on employee plan issues to IRS area managers and appeals offices; Rev. Proc. 2009-6 updates procedures for issuing determination letters on a retirement plan's qualified status; and Rev. Proc. 2009-8 lists related user fees for employee plans and exempt organizations. The revenue procedures appear in Internal Revenue Bulletin 2009-1." (Mercer LLC)
[Opinion]
Secunda on [No] ERISA Remedies
Excerpt: "Paul Secunda (Marquette) has just posted on SSRN his article (forthcoming Hofstra LELJ) Sorry, No Remedy: Intersectionality and the Grand Irony of ERISA. Here's the abstract: Congress enacted the Employee Retiree Income Security Act of 1974 (ERISA or Act) to protect employees' retirement and welfare benefits. Nevertheless, the Act has been interpreted by the U.S Supreme Court over the years to be in essence an Employers' Security Act, with employers using ERISA to shield themselves against employee benefit-related claims." (Workplace Prof Blog)
Newly Posted Events
Employee Benefits in Mergers and Acquisitions: Benefits in Transactions During Troubled Times
in New York on April 24, 2009
presented by ABA Joint Committee on Employee Benefits
PEBA's International Series: Managing Global Issues in 2009
in Pennsylvania on February 18, 2009
presented by PEBA --Penjerdel Employee Benefits & Compensation Assn.
Retirement Plans in a Troubled Economy Seminar - NEW in March 2009
Nationwide on March 19, 2009
presented by SunGard Relius
The 23rd Annual National Institute on ERISA Basics
in Illinois on June 10, 2009
presented by ABA Joint Committee on Employee Benefits
Newly Posted Press Releases
Great-West Retirement Services Appoints New Regional Sales Directors
Great-West Retirement Services
Putnam Names New Lead of DC Business
Putnam Investments
Fiduciary Risk Assessment and PlanTools Merge
Fiduciary Risk Assessment LLC
Firm Announces Launch of System Designed to Engage Employees in Their 401k Plans
vWise Inc.
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs |
RSS Feed )
Daily Record Keeping Associate
for Alliance Benefit Group of Michigan
in MI
Plan Administrator
for DR Pension Services, LLC
in CT, MA, ME, NH, NY, RI, VT
Sr. Clinical Programs Advisor
for NRECA
in VA
Pension Administrator
for The Benefits Consulting Group, Inc.
in IL
Benefits Compliance Manager
for Kaiser Permanente
in CA
Compliance Specialist - Account Manager
for Third Party Administrator
in NC
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too!
Sign-up form is at https://benefitslink.com/newsletter (free).
This newsletter is sent to you each workday except federal holidays.
This email has been published by:
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151
David Rhett Baker, J.D., Editor
Copyright 2009 BenefitsLink.com, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.
Anyone can receive these emails; just have them sign up at this web page: https://benefitslink.com/newsletter/
Other useful links: