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| February 11, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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[Official Guidance]
Text of EBSA FAB 2009-1 with Model Funding Notices for Defined Benefit Plans (PDF)
22 pages. Excerpt: "Use of the models is not mandatory and plans may use other notice forms to satisfy the new annual funding notice content requirements. However, pending further guidance, use of an appropriately completed model notice will, as a matter of Department enforcement policy, satisfy the content requirements of section 101(f) of ERISA." (Employee Benefits Security Administration, U.S. Department of Labor)
[Guidance Overview]
The Employee Plans Compliance Resolution System - Updated And Improved
Excerpt: "The latest IRS updates to EPCRS (Rev. Proc. 2008‑50) became effective January 1, 2009, and result in some very real improvements to the retirement plan correction system. This article analyzes three of those changes: The guidance for correcting specific qualification failures. Correction principles applicable to all types of failures. Procedures for using EPCRS." (Chang, Ruthenberg & Long PC)
[Guidance Overview]
Eliminating or Reducing a Plan's Matching Formula
Excerpt: "An employer may amend a plan to eliminate or reduce a fixed matching contribution mid-year. If a participant has met the allocation conditions as of the date of the amendment, the plan will need to fund the matching formula up to the date of the amendment. However, if a participant has not satisfied the allocation conditions as of the date of the amendment, the employer will not need to fund the match." (SunGard)
[Guidance Overview]
FASB's Final Rules for Financial Reporting of DB Plan Assets
Excerpt: "Fundamental to the new FSP disclosure rules is a set of 'overall objectives.' Reading between the lines, the overall objectives function both as an explanation for certain requirements in the FSP and as a way of clarifying uncertainties that may arise about the detail of disclosure required in any given situation." (JPMorgan Chase & Co.)
[Guidance Overview]
Cash Balance Suit Plaintiff Seeks Dismissal Rehearing
Excerpt: "An employee who had his age discrimination claim against a cash balance plan dismissed has asked a federal judge to reconsider the dismissal in light of the signing of the Lilly Ledbetter Fair Pay Act. Plaintiff Wayne Tomlinson argued that with President Obama's January 29 signing of the Ledbetter bill into law . . ., the U.S. Supreme Court's May 2007 ruling in Ledbetter v. Goodyear Tire & Rubber Co. (which the Ledbetter bill was intended to overturn) should no longer be considered controlling case law . . . ." (PLANSPONSOR.com; free registration required)
EBSA Releases Defined Benefit Disclosure Guidance
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) announced interim guidance pertaining to new requirements that defined benefit plan sponsors must disclose plan funding data to participants. EBSA's Field Assistance Bulletin (FAB) 2009-01 deals with the disclosure mandates contained in amendments to the Employee Retirement Income Security Act (ERISA) made by the Pension Protection Act (PPA)." (planadvisor)
State of Washington Way Behind in Funding the Pension Plans for Retired Workers
Excerpt: "It's a complex system, but the bottom line is that each time the state puts off investing pension money, it owes more later. And it owes a lot now. If the state doesn't make up the difference, the checks sent to him and other retirees could come straight out of the state treasury . . . ." (The Olympian)
PBGC Now Accepting 2009 Premium Filings
Excerpt: "Pension plan sponsors may now file their 2009 estimated flat rate and comprehensive (variable- and final flat-rate) PBGC premiums using the agency's My Plan Administration Account (My PAA) e-filing application. Calendar plans generally must make estimated flat rate premium filings by March 2 (if 500 or more participants in 2008) and comprehensive filings by Oct. 15. But plans reporting fewer than 100 participants in 2008 have until April 30, 2010, to make 2009 premium filings." (Mercer LLC)
Digging Out of Pension Deficits: Setting Your Defined Benefit Game Plan
Excerpt: "While plan sponsors may be more than eager to forget 2008, there remains the unenviable task of digging out of these deficits. In setting their route to recovery, DB plan sponsors need to carefully review available policy choices -- particularly in setting a well-coordinated investment and funding policy that meshes with the needs and constraints of both the sponsor's plan and the enterprise." (Delaware Management Holdings, Inc.)
Lawmaker Reintroduces FERS Sick Leave Bill
Excerpt: "A bill introduced in the House on Tuesday would allow workers in the Federal Employees Retirement System to cash out their unused sick leave upon retirement. The benefit also would apply to employees covered under the Foreign Service Pension System and U.S. Postal Service retirement plan. FERS employees currently cannot count unused sick leave toward their retirement annuity. Employees hired before 1984 are covered under the Civil Service Retirement System and do receive such credit for unused sick leave. The new legislation, introduced by Rep. James Moran, D-Va., would provide FERS employees with a benefit equal to that of their CSRS counterparts, allowing them to add any unused sick leave to the number of years they have worked in the government to determine their annuity at retirement." (GovernmentExecutive.com)
Current Pension Legislative Review and Outlook
Excerpt: "Within this article we highlight current pension policy initiatives under the new Obama administration." (JPMorgan Chase & Co.)
Fewer Companies Adopting Automatic Enrollment Programs in Light of Current Economic Conditions
Excerpt: "According to a new survey by Hewitt Associates, the number of employers adopting premium retirement features, such as automatic enrollment and company matches, has leveled off in response to the economic climate. Instead, companies are focusing their efforts on offering more lower-cost strategies, such as automatic rebalancing and target-date funds in an effort to mitigate immediate cost pressures and stay fiscally responsible." (Wolters Kluwer)
403(b) Regulations: They're Here -- Now What?
Excerpt: "In a Webcast sponsored by the National Association of Government Defined Contribution Administrators (NAGDCA), Pam Everhart, SVP, External Policy Development and Client Advocacy, Fidelity Investments, noted that the new 403(b) regulations and guidance that followed spelled out the rules clearly, but did not offer much on HOW to comply with the rules." (PLANSPONSOR.com; free registration required)
Is Your Pension Still Safe If Your Company Goes Bankrupt?
Excerpt: "Don't confuse your company's finances with those of its pension plan. They are entirely separate. For example, GM's pension plan appears to be well funded for now. Meanwhile, ExxonMobil, which posted the largest corporate profit in history last year, has the most underfunded pension of all the companies in Standard & Poor's 500-stock index. However, Exxon-Mobil can easily afford to dip into its hefty cash reserves to bring its plan up to adequate funding levels. Many other plan sponsors cannot -- and that is the root of the current pension-funding crisis." (Kiplinger.com)
[Opinion]
A Wish List for Retirement Plan Participants
Excerpt: "[The needs and desires of retirement plan participants] this season are as varied and complicated as the places they work, the tasks they perform, and the places they live. Nonetheless, and in the spirit of the holiday season just past, here are some 'presents' that I hope participants find on their retirement plan menus during 2009 . . . ." (PLANSPONSOR.com; free registration required)
DATAIR Employee Benefit Systems, Inc. (Sponsor)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]
Saving on Employee Benefit Costs While Gauging the Pitfalls Involved
Excerpt: "If you are seriously questioning whether your company can afford to continue providing some or all of these types of benefits or must balance the scale, be mindful of the Do's and Don'ts of making benefits changes." (Chang, Ruthenberg & Long PC)
[Guidance Overview]
Restrictions on Executive Compensation Under Emergency Economic Stabilization Act
Excerpt: "With the release of this new set of rules, there are now three sets of rules on executive compensation restrictions, each applying to an entity depending on the type of assistance such entity is receiving from the government. The three categories are entities participating in already announced programs, such as the Capital Purchase Program (CPP) and Term Asset-Backed Securities Loan Facility (TALF); entities participating in 'future generally available access programs'; and entities receiving 'exceptional assistance.'" (McDermott Will & Emery)
[Guidance Overview]
IRS Guidance on Application of IRC Section 457A to Non-Qualified Deferred Compensation Plans from Offshore Funds
Excerpt: "On January 8, the Internal Revenue Service (IRS) issued interim guidance on the application of recently enacted Section 457A of the Internal Revenue Code. Section 457A imposes immediate taxation, and in certain circumstances a 20 percent penalty plus interest, on deferred compensation arrangements maintained by certain partnerships and corporations." (Faegre & Benson)
[Guidance Overview]
Monthly Regulatory Round-Up on Executive Compensation, January 2009 (PDF)
5 pages. Excerpt: "The Monthly Regulatory Round-Up is a high-level summary of legal and regulatory developments that occurred during January 2009 that may be relevant to large employers. Developments are sorted according to federal legislative developments, federal regulatory guidance, other developments (e.g., significant litigation, studies, select state law developments)." (Towers Perrin)
Executive Compensation Reconsidered
Excerpt: "This Perspective, the second in a series, identifies guiding principles, key action steps and specific design elements to achieve fair, reasonable and effective executive compensation." (Mercer LLC)
IRS Undecided About 409A Plan Document Correction Program, Practitioners Told
Excerpt: "A program for correcting plan document violations is 'not necessarily the next step' the government will take as it develops a voluntary correction program for Code Sec. 409A violations, an IRS official told practitioners on January 27, 2009. The government is still trying to determine whether it is feasible to have a document correction program, Stephen Tackney, IRS senior counsel, Executive Compensation Branch, Associate Chief Counsel (Tax Exempt and Government Entities), indicated at a D.C. Bar Taxation Section program." (Wolters Kluwer)
Maximizing the Productivity of Older Workers (PDF)
6 pages. Excerpt: "This InsightOut will: Explore the characteristics and implications of an aging workforce; Offer strategies for maximizing the contributions of older workers (and indirectly, workers of all ages); Pose situation-specific questions employers can use to assess the potential impact on their organizations and formulate a relevant response." (Buck Consultants)
Online Employee Benefits Podcasts: Mercer Select HRadio
Audio content from Mercer Select (www.mercerselect.com), including news headlines and features on key topics affecting employers' retirement, health, compensation and HR programs (Mercer LLC)
Newly Posted Events
2009 PenServ IRA Academy
in Texas on May 4, 2009
presented by PenServ, Inc.
A Fast Benefits Start to 2009 Webinar
Nationwide on March 4, 2009
presented by Ogletree Deakins
Executive Compensation Disclosure Update – 2009 Proxy Season, Part 1 Webcast
Nationwide on February 19, 2009
presented by BNA, Inc.
Newly Posted Press Releases
U.S. Labor Department Sues Upstate New York Auto Supply Company And Official For Alleged Violations Of Federal Employee Benefits Law
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Employee Benefits Security Administration Releases Field Assistance Bulletin on New Annual Funding Notice Requirements
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Lack of Pension Funding Relief in Stimulus Bill Will Harm Recovery and Jobs
ERIC (ERISA Industry Committee)
RolloverSystems Introduces New 401k Tools
RolloverSystems
CUNA Mutual Group Again Receives Top Rankings in 401kExchange Survey
CUNA Mutual Group
Newly Posted or Renewed Job Openings
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Defined Benefit Client Consultant
for Prudential Financial
in CT
Account Manager - Benefits
for Woodruff-Sawyer & Co.
in CA
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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