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| February 17, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is ASPPA
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| 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:
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[Guidance Overview]
Required Minimum Distribution Relief: A Nightmare for Employers
Excerpt: "In an effort to cushion the blow to retirement savings inflicted by the stock market crash, former President Bush signed the Worker, Retiree and Employer Recovery Act of 2008 ('WRERA' or the 'Act') on December 23, 2008. Although the Act provides some much-needed funding relief for sponsors of defined benefit plans, its attempt to help retirees under defined contribution plans will leave the sponsors of those plans reaching for a bottle of aspirin." (Spencer Fane Britt & Browne LLP)
[Guidance Overview]
Seventh Circuit Ruling on Fiduciary Duties Related to 401(k) Fees (PDF)
3 pages. Excerpt: "A bit of good news for sponsors of 401(k) plans was provided by the Seventh Circuit in Hecker v. Deere & Co., Nos. 07-3605 & 08-1224 (7th Cir. Feb. 12, 2009), the first appellate decision to address the duties of fiduciaries to control fees. Hecker will reduce, at least until legislation is passed or regulations finally approved, the litigation pressure on employers sponsoring 401(k) plans due to fees charged to participants. Hecker suggests that to be safe, a plan should have multiple options and an investment portal." (Thompson Hine LLP)
[Guidance Overview]
DOL's Guidance for Pension Funding Disclosures (PDF)
2 pages. (Milliman)
[Guidance Overview]
401(k) Plan Corrective Distributions for 2009
Excerpt: "It is an annual ritual that during the first few months of each new calendar year, 401(k) plan administrators calculate and complete corrective distributions for failed ADP and ACP tests for the prior plan year (typically the calendar year), and excess deferrals for the prior calendar year. That process necessitates a review of the rules governing these corrective distributions. The purpose of this technical update is to review the rules, including recent law changes, relating to 401(k) plan corrective distributions." (SunGard)
[Guidance Overview]
403(b) Compliance Picture Getting Clearer
Excerpt: "The new 403(b) compliance picture seems to be getting clearer. Much needed light was provided on the new regulations at the February 6, 2009 Tax-Exempt and Government Entities Joint Council Meeting in Baltimore attended by senior IRS officials and tax practitioners. . . . Here are some highlights of what the IRS had to say about compliance issues. Plan sponsors were urged to use the extension of time to have the plan document in place by year-end constructively." (The Retirement Plan Blog)
That Relief on the 403(b) Written Plan - It May be Better than You Thought
Excerpt: "In a Webcast sponsored by the Southeastern Association of School Business Officials, with support from VALIC, Robert J. Architect, Senior Tax Law Specialist, Internal Revenue Service, cleared up some confusion about the IRS' relief on the written plan document requirement for 403(b) plans - and it is good news for sponsors." (PLANSPONSOR.com; free registration required)
Portfolio Choice in Retirement: Health Risk and the Demand for Annuities, Housing and Risky Assets
Excerpt: "This paper develops a consumption and portfolio-choice model of a retiree who allocates wealth among four assets: a riskless bond, a risky asset, a real annuity, and housing. Unlike previous studies that treat health expenditures as exogenous negative income shocks, this paper builds on the Grossman model to endogenize health expenditures as investments in health." (Center for Retirement Research at Boston College)
EBSA's Proposed Extension of Effective/Applicability Date for Investment Advice Final Regs
Excerpt: "The Employee Benefits Security Administration (EBSA) has issued a proposed extension of the effective date and applicability date of final regulations allowing fiduciary advisers to provide individualized investment advice to participants and beneficiaries of 401(k) plans and IRAs. The final regulations are effective and apply to transactions occurring on or after March 23, 2009. EBSA proposes to extend for 60 days the effective and applicability date consistent with the January 20, 2009 memorandum from Rahm Emanuel, Chief of Staff for President Obama, directing all government agencies to consider extending the effective date of regulations already published in the Federal Register, which have not yet taken effect. Thus, the new effective and applicability date would be May 22, 2009." (Wolters Kluwer)
Analysis of Teacher Retirement Benefits
Excerpt: "Robert Costrell and Michael Podgursky find that when measured as a percent of earnings, employer contributions to retirement benefits are substantially higher for public school teachers than for private-sector professionals and that the difference has doubled since March 2004. They dispute the claim of Economic Policy Institute (EPI) researchers Lawrence Mishel and Richard Rothstein that employer contributions are no higher for teachers. The authors predict that changes in public sector accounting rules and the economic crisis are likely to have significant effects on structure and funding of teacher pensions." (Hoover Institution)
Audio: Frozen Pensions and Falling Stocks: What Will Happen to Retirees' Incomes?
Panel program held at The Urban Institute on February 3, 2009. Excerpt: "Our panel of experts will bring us up to date on how employers are adjusting their retirement plans to this changing economic environment, how recent and prospective changes in pension offers and market values will affect workers' retirement, and how policymakers might respond to improve financial security for new and future retirees." (The Urban Institute)
PBGC Braces for Recession
Excerpt: "'Every time the economy bounces around, everybody acts like everything is going to collapse and that they should worry about the PBGC, and then things come back,' says Dallas Salisbury, president of the Employee Benefit Research Institute in Washington. Others who pore over the PBGC annual reports predict a bailout is inevitable. 'Barring some absolutely phenomenal gains in the market or what PBGC's new or future investment strategy comes up with, the PBGC will need taxpayer money at some point in time,' said David John, a pensions expert at the conservative Heritage Foundation. For now, the PBGC, which is awaiting a new boss, will remain on the Government Accountability Office's 'high risk' watch list for the seventh consecutive year because of worries that the economic crisis could mean more pension plan terminations and swell the PBGC's deficit." (AP via Google)
ASPPA (Sponsor)
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| The ERISA Outline Book – 2009 edition |
| Make sure you have the most up-to-date version available to provide you with the information you need on a daily basis. The 2009 edition is a six-volume asset that includes all the PPA guidance issued in 2008, revised EPCRS procedures, the latest ERISA litigation cases and all notices , rulings and other guidance from DOL, IRS and PBGC issued in 2008. The ERISA Outline Book also serves as recommended reading for the ERPA Exam! Order your 2009 edition NOW! |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]
Executive Compensation Rules in Stimulus Bill and Treasury Guidance (PDF)
5 pages. Excerpt: "The Act comes on the heels of new TARP executive compensation restrictions announced by the Obama Administration on February 4th. [This document] is a summary of the notable restrictions in the Act and those imposed by the Obama Administration. While both sets of rules only apply to TARP recipients, there is considerable concern that future legislation may apply some of these restrictions to companies not accepting TARP funds. As discussed . . ., the Administration plans to look into executive compensation reforms for all financial institutions, not just those receiving TARP funds. And key Congressmen have expressed interest in applying some of these rules more broadly." (Groom Law Group)
[Guidance Overview]
Securing the Tax Deduction Under Section 162(m): Addressing Revenue Ruling 2008-13 (PDF)
Pages 7-9 of 15 pages. Excerpt: "In 2008, the Internal Revenue Service (IRS) released Revenue Ruling 2008-13, limiting the scope of the section 162(m) performance-based compensation exemption. While this Revenue Ruling affirms the surprising and controversial position taken by the IRS in a private letter ruling issued in September 2007 (but only publicly released in February 2008), it does provide useful transition relief. Under Revenue Ruling 2008-13, if performance-based compensation is also payable upon termination of employment (i) by the company without 'cause,' (ii) by the employee for 'good reason,' or (iii) due to voluntary retirement, then any such payments will not be deductible as performance-based compensation under section 162(m) -- even if no such termination event occurs and the performance conditions are satisfied." (The Hay Group)
[Guidance Overview]
What the Board of Directors Should Know About the Compensation Committee (PDF)
Pages 5-7 of 15 pages. Excerpt: "While most of the attention on executive compensation has focused on CEOs, it really is the compensation committee of the board of directors that is responsible for the ultimate executive pay decisions. However, even the most responsible and diligent committee may make certain compensation decisions it later regrets, including ones that have been forgotten until exposed in a less than favorable light. Following several recent high profile severance payments, some compensation committee members were quoted as not really understanding the nuances of certain severance and change-in-control programs or the size of the cumulative awards." (The Hay Group)
[Guidance Overview]
Stock Grant Approaches in a Volatile Market (PDF)
Pages 1-5 of 15 pages. Excerpt: "The steep drop in many companies' share prices during 2008 has challenged traditional methods of determining the appropriate level of executives' equity incentive awards. Compensation committees must review their reward methodologies to ensure they are effectively balancing award competitiveness, effective share usage, and reasonableness and fairness to shareholders." (The Hay Group)
Newly Posted Events
403(b) Regulations: They're Here...Now What? Webcast
Nationwide on February 20, 2009
presented by AMR Management Services
Complimentary Webcast: Proposed Changes to COBRA and Other Health Reform Legislation
Nationwide on February 25, 2009
presented by Buck Consultants, an ACS Company
Newly Posted Press Releases
Spencer’s Benefits Reports Begins Collecting Data For COBRA Continuation Of Coverage Survey
Wolters Kluwer Law & Business
Newly Posted or Renewed Job Openings
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Retirement Plan Administrator
for Firm in South Kansas City
in MO
Account Manager
for Nova 401(k) Associates
in TX
Distribution Specialist
for Nova 401(k) Associates
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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