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| February 6, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is SunGard
(Click on company name or banner to learn more.)
| EGTRRA Restatement Outsourcing Service |
| Do you have 300 or more defined contribution plans to restate for EGTRRA? Outsource them to us. SunGard’s expert Document Management Services (DMS) staff can work as your "invisible" back office resource to help you through the restatement process. Let us focus on your plan documents, so you can focus on growing your business. Contact Ellen Nasrallah at 800-326-7235, ext. 5968. |
[Official Guidance]
Text of EBSA Guidance On Fiduciary Duties In Response To Abuses Involving The Madoff Investment Firm
4 pages. Excerpt: "[Appropriate steps for fiduciaries] may include (1) requesting disclosures from investment managers, fund managers, and other investment intermediaries regarding the plan’s potential exposure to Madoff-related losses, (2) seeking advice regarding the likelihood of losses due to investments that may be at risk; (3) making appropriate disclosures to other plan fiduciaries and plan participants and beneficiaries; and (4) considering whether the plan has claims that are reasonably likely to lead to recovery of Madoff-related losses that should be asserted against responsible fiduciaries or other intermediaries . . . ." (U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
[Official Guidance]
Text of DOL Announcement of Possible 60-Day Delay for Investment Advice Regs; Withdrawal or Changes Possible (PDF)
Excerpt: "[The DOL] is proposing to extend the effective date for these rules until May 22, 2009 . . . . [T]he Department also solicits comments on issues of law and policy concerning all the provisions of these rules. The purpose of these comments is to assist the Department in its review of these rules. Upon completion of this review, the Department may decide to allow the rules to take effect, issue a further extension, withdraw the rules, or propose amendments. The Department requests comments on each of these possible outcomes. The comment period for this broader purpose will end on March 6, 2009." (Employee Benefits Security Administration, U.S. Department of Labor)
[Guidance Overview]
DOL Provides Guidance for Madoff-Maimed Retirement Plans
Excerpt: "With an expanding list of retirement plans snared by investments tied to Bernard L. Madoff, the Labor Department has published some guidance for plan fiduciaries. . . . Essentially, the guidance boils down to this: once you have determined that plan assets were invested with Madoff entities, and it seems that material losses are likely, 'appropriate steps should be taken to assess and protect the interests of the plan and its participants and beneficiaries.'" (planadvisor)
[Guidance Overview]
New PBGC Regulation Offering Multiemployer Plans Additional Options for Withdrawal Liability (PDF)
4 pages. Excerpt: "The PBGC has published a final regulation that implements changes made by the Pension Protection Act of 2006 (PPA) in withdrawal liability calculations. The new regulation also offers additional options to plans and changes the method of allocating liability following a mass withdrawal." (Cheiron, Inc.)
[Guidance Overview]
The DOL Delay of Final Participant Investment Regulations (PDF)
1 page. Excerpt: "Because of the high likelihood that additional changes could be made to the regulations, further description of the regulations is not appropriate at this time. Once the DOL announces the end of the extension, and publishes any changes to the regulations, we would anticipate preparing a more complete description of the regulations for distribution." (Seyfarth Shaw LLP)
[Guidance Overview]
IRS's Multiemployer Plan Amortization Extension Procedures (PDF)
3 pages. Excerpt: "On November 12, 2008, the IRS issued Revenue Procedure 2008-67 to provide guidance for sponsors of multiemployer plans that want to obtain IRS approval of an amortization period extension under the rules as revised by the Pension Protection Act of 2006 (PPA). Under PPA, an amortization extension can be used to keep a plan out of 'endangered' status but cannot be used to keep a plan out of 'critical' status. The submission and notification rules described in this revenue procedure apply to all amortization period extensions requested for plan years beginning after December 31, 2007." (Prudential Retirement)
[Guidance Overview]
Beneficiary Designation Under Plan Trumps Divorce Decree Waiver (PDF)
Excerpt: "In Kennedy v. DuPont Savings and Investment Plan, the Supreme Court ruled that a spouse's waiver of her right to pension benefits in a divorce decree did not invalidate the participant's beneficiary designation made in accordance with the terms of the plan." (Buck Consultants)
[Guidance Overview]
PBGC Clarification on How to Make Funding-Related Determinations for Reportable Events in 2009
Excerpt: "Addressing the misfit resulting from PPA's modification of the way variable rate premiums are determined, PBGC issued a Technical Update clarifying how to apply the advance reporting threshold test and the funding-based waivers under the reportable events regulation for event years beginning in 2009. In determining the assets, vested benefits and unfunded vested benefits, the values for the preceding plan year as determined under the 2008 PBGC premium regulations are to be used. PBGC Technical Update 09-1 (01/09/09)." (Deloitte LLP via BenefitsLink.com)
[Guidance Overview]
Multiemployer Defined Benefit Plans in a Time of Crisis: Keeping a Long-Term Perspective (PDF)
6 pages. Excerpt: "The following are among the issues related to the content of this NewsLetter that Trustees should consider: Weighing the advantages and disadvantages of the relief options available in the Worker, Retiree and Employer Recovery Act of 2008, Revisiting the actuarial asset valuation methodology used, Evaluating the effect of potential plan design changes, Assessing the employment outlook, Creating pension funding parameters for plans that are fortunate enough to be in the green zone, Performing deterministic or stochastic projections, and Preparing 'crisis' communications to educate participants about their plan." (The Segal Group, Inc.)
At Least 40 Employers Have Stopped Contributing to Their Employees' Defined-Contribution Plans
Excerpt: "On a day like Monday, when five big companies reported a total of at least 57,000 layoffs, it was easy to see why CFOs might want to stop providing a match to employees' 401(k) savings. In many cases, it's an easy way to cut a cost worth 2 percent or 3 percent of your payroll without having to give employees more than a week's notice. What's more, cutting out the matching funds an employer contributes to a 401(k) wouldn't be unexpected in these tough times. And in lieu of a layoff, the elimination of the match can seem almost merciful." (CFO.com)
ERISA Advisory Council Report on Phased Retirement
Excerpt: "The Council established a special working group (the 'Working Group') to examine the issues facing employers who wish to create phased retirement plans, the issues facing employees who wish to take part in phased retirement programs, and the various legal and regulatory obstacles to the implementation of a phased retirement arrangement. The Working Group examined whether there were any actions needed to facilitate an improved system of phased retirement." (U.S. Employee Benefits Security Administration)
The Aftermath of the Cash Balance Controversy: Defining Age Discrimination for Traditional Defined Benefit Pensions
Excerpt: "The appellate decisions upholding cash balance pensions against the claim of age discrimination are unconvincing. Nevertheless, these decisions reach the proper result as a matter of pension policy. These decisions read the statutory term 'benefit accrual' as meaning employer contributions for purposes of measuring for age-based pension discrimination in the defined benefit context. However unpersuasive this reading may be as a textual matter, it reaches a sound outcome in terms of pension policy. In particular, this reading of the pension age discrimination statutes enables employers sponsoring traditional, annuity-paying defined benefit pensions to control their costs by decreasing the annual growth of the accrued benefits earned by older employees." (Benjamin N. Cardozo School of Law via Social Science Research Network)
Ford May Need to Put $4 Billion Into Pension, Spurring Aid Bid
Excerpt: "The collapsing stock market left the fund with a $4.1 billion deficit for its projected obligations, after 2007's $3 billion surplus, Ford said in its fourth-quarter financial results. That may force an infusion of money starting next year, according to the viability plan filed with Congress in December. Diverting money to the retirement program would add to the strain on the only Detroit automaker not relying on U.S. aid." (Bloomberg L.P.)
[Opinion]
NFL and Retirees Remain in Tussle on Benefits
Excerpt: "For the past couple of years, it has become public knowledge that a select group of retired NFL players have been struggling physically and economically since putting their playing days behind them. It is a serious matter, covering a complex and vast number of interrelated issues, rife with conflicts of interest. . . . But in this particular case, there has been dissent from numerous camps. The question remains as to whether there is a solution to help make those former NFL players whole again, to some extent legally, but moreover, whether there is any moral obligation to ill and/or financially-strapped former players by the NFL, the National Football League Players Association (NFLPA), or even individual players." (Sports Central)
University Conference Services (Sponsor)
(Click on company name or banner to learn more.)
| Find Your Way Out of Today’s Plan Management Maze |
| Many plan sponsors are feeling lost in a maze of uncertainty. Volatile financial markets, a battered economy and a changing regulatory environment seem to obscure the pathway to effective plan management. The San Francisco Mid-Sized Retirement & Pension Plan Management Conference, March 10–13, 2009, is the ideal place to explore the issues, hear what plan management experts have to say and gain new ideas you can implement immediately. |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]
IRS Clarification of Rules for Tax Deadline Postponement Due to Military Service or Federally Declared Disaster
Excerpt: "The IRS has issued final regulations, amending existing regulations under Code Sec. 7508A , to clarify rules relating to the postponement of certain tax-related acts by reason of service in a combat zone or a federally declared disaster. The regulations are effective on January 15, 2009." (Wolters Kluwer)
What's Wrong With the President's New Executive Compensation Plan
Excerpt: "I recently asked Jesse Brill, the chairman of CompensationStandards.com, and one of the most cogent -- and persistent -- voices for returning sanity to executive compensation, for his 'take' on President Obama's plan to cap compensation at $500,000 for executives whose companies accept money from the Troubled Asset Relief Program, or TARP. Not surprisingly, Mr. Brill found a few holes in the plan, which he lays out for us here at Executive Suite." (The New York Times; free registration required)
Wall Street Finds Ways Around Executive Pay Caps
Excerpt: "President Obama moved Wednesday to rein in the pay of executives whose companies get taxpayer bailout money -- putting a $500,000 cap on annual compensation, limiting 'golden parachutes' to departing bigwigs and requiring corporate boards to adopt policies on luxury expenditures such as lavish entertainment and parties. Corporate watchdogs applauded the intent of the new measures, but compensation experts cautioned that abundant loopholes -- and crafty lawyers -- could undermine any lasting effect." (Los Angeles Times)
[Guidance Overview]
Announcement of New Restrictions on Executive Compensation for Financial Institutions Receiving Government Assistance (PDF)
Excerpt: "On February 4, the White House and the U.S. Department of Treasury (the Treasury Department) issued a press release announcing new guidelines on executive pay for financial institutions receiving government assistance under the Troubled Assets Relief Program. The press release is available online at http://www.ustreas.gov/press/releases/tg15.htm. We expect that in the coming weeks additional guidance regarding the application and scope of the guidelines will be issued, and that guidance will have a material effect on how the guidelines are interpreted and administered." (Morgan, Lewis & Bockius LLP)
[Guidance Overview]
President Obama's Proposed New Restrictions on Executive Compensation
Excerpt: "On February 4, 2009 President Obama and the Treasury Department proposed new restrictions on executive compensation. This isn't even in the form of draft legislation yet. It is just a lengthy press release, so it is a bit difficult to determine some of the precise boundaries. However, it is important to note that the proposal creates, in effect, three different categories of financial institutions, with different rules and limits applicable to each." (Michael S. Melbinger via Winston & Strawn LLP)
[Guidance Overview]
New Restrictions on Executive Compensation from Treasury Department
Excerpt: "Responding to widespread public outcry over perceived mismanagement of the TARP program, the Treasury Department has issued new guidelines on executive compensation for financial institutions that receive government assistance. Most of the proposed guidelines do not apply retroactively to Treasury investments through existing programs, such as the Capital Purchase Program and the Term Asset-Backed Securities Loan Facility. In the words of the Treasury, the new measures are 'designed to ensure that public funds are directed only toward the public interest in strengthening our economy by stabilizing our financial system and not toward inappropriate private gain.' Treasury also expects the new guidelines to more closely align the interests of executives with the interests of both shareholders and taxpayers." (Kilpatrick Stockton LLP)
[Guidance Overview]
K&L Gates Practical Guidebook to the Executive Compensation Disclosure Rules
Excerpt: "This guidebook includes the entire rules (organized according to subject matter), useful reference materials such as SEC adopting releases and interpretative materials and 'practice pointers' highlighting issues companies should keep in mind as they prepare the executive compensation disclosures required in their annual proxy statement. [The PDF files are large and could take time to download, depending on connection speed.]" (K&L Gates LLP)
[Guidance Overview]
New IRC Section 457A: Unanswered Questions Abound
Excerpt: "New IRC section 457A imposes more restrictive income timing rules on nonqualified deferred compensation from 'tax indifferent' entities, effective for amounts deferred that are attributable to services rendered after December 31, 2008. This article discusses some of the issues that employers face as they try to understand how IRC section 457A will apply to their own particular compensation arrangements." (Deloitte LLP via BenefitsLink.com)
Softening the Blow of Bad Benefits News for Employees
Excerpt: "EBN: What are the common communication mistakes employers make when announcing to their workforce a cutback or reduction in benefits? {Dennis] Ackley: A common mistake is communicating too soon with too little information ... or waiting too long and telling employees what they've already heard. The key goal is not to get the bad news out as soon as possible; it's to implement the changes with as little disruption as possible." (Employee Benefit News; free registration required)
Federal Judge Rules Denial of Health Coverage to Same-Sex Spouse Unconstitutional
Excerpt: "A federal judge has deemed unconstitutional the government's denial of healthcare coverage and other benefits to the same-sex spouse of a Los Angeles public defender, calling into question the validity of the 1996 Defense of Marriage Act. 9th U.S. Circuit Court of Appeals Judge Stephen Reinhardt said the federal government's refusal to grant spousal benefits to Tony Sears, the husband of deputy federal public defender Brad Levenson, amounted to unlawful discrimination on the basis of sex and se.xual orientation." (Los Angeles Times)
Google Offers to Exchange Employee Options
Excerpt: "Google employees will have a chance to exchange underwater stock options for new, at-the-money options under a program intended to increase retention. Several features of Google's offer are far more generous than typical option exchanges -- for example, a one-for-one exchange ratio and no minimum out-of-the-money amount for determining option eligibility. While Google's program is receiving much attention, it may not serve as a model for other companies with underwater options -- at least if their shareholders must approve the option exchange." (Mercer LLC)
Newly Posted Events
ERPA Test Review Web Seminar - Part 1: Compliance and Operational Issues - Archived Web Seminar
Nationwide on February 6, 2009
presented by SunGard Relius
ERPA Test Review Web Seminar - Part 2: Plan Document, Reporting, and Distribution Issues - Archived Web Seminar
Nationwide on February 6, 2009
presented by SunGard Relius
Five Reasons Why You Haven't Been Able to Cut Your Health Care Spending Webcast
Nationwide on February 19, 2009
presented by International Foundation of Employee Benefit Plans
Retirement Plans in a Troubled Economy Seminar - NEW in March 2009 - 9 cities
Nationwide on March 19, 2009
presented by SunGard Relius
Newly Posted Press Releases
Little-known Provision in Federal Pension Program May Prevent Some From Getting Benefits
Pension Rights Center
Flexible New Combinations of Products Enable Small Businesses to Offer
MetLife
Employee Weight Loss Programs Offered By Half of Employers Who Provide Wellness Programs
International Foundation of Employee Benefit Plans
Social(k)'s SRI Retirement Plans Increase in 2008
Social(k)
The SPARK Institute Answers More Technical Questions Regarding 403(b) Plans Information Sharing
The SPARK Institute
Invesco Aim Launches New Benchmarking and 401k Plan Review Tool
Invesco Aim
Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs |
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Defined Contribution Relationship Consultant
for The Douglas Group
in FL
Senior Manager Global Benefits
for Discover Financial Services
in IL
Retirement Plan Administration Specialist
for Third Party Administrative Firm
in KS, MO
Defined Contribution Plan Administrator
for Benefit Administration
in GA
Fund Operations Analyst
for Administaff
in TX
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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