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| March 3, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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[Guidance Overview]
403(b) Plans to File Full Form 5500 Beginning with the 2009 Plan Year
Excerpt: "Beginning with the 2009 plan year, 403(b) plans that are subject to Title I of ERISA, and have 100 or more eligible employees on the first day of the plan year, must file a full annual report on Form 5500. . . . Plans with fewer than 100 participants continue to have less onerous reporting requirements under certain circumstances: Instead of filing Form 5500, small plans may file Form 5500-SF (Short Form), a two-page form with no attached schedules, if (1) the assets are invested solely in secure assets that are held or issued by regulated financial institutions and have a fair market value that is easily determinable, and (2) the plan meets the audit waiver conditions . . . ." (PLANSPONSOR.com; free registration required)
An Update on 401(k) Plans: Insights from the 2007 Survey of Consumer Finances
Excerpt: "Of course, the 2007 SCF reflects a world that no longer exists. Interviews were conducted during the late summer and early fall when the Dow Jones was at 14,000 (the peak was October 9, 2007) and housing prices were only slightly off their peak. While the economic crisis had already begun, its effects were not yet visible. Since the time of the interviews, the stock market has imploded, reducing the value of equities in 401(k) and IRAs by about $2 trillion." (Center for Retirement Research at Boston College)
The Effects of Changing the Pension System Late in the Game
Excerpt: "This paper assesses the impact of a dramatic reform of the Dutch pension system on mental health, savings behavior and retirement expectations of workers nearing retirement age. The reform means that public sector workers born on January 1, 1950 or later face a substantial reduction in their pension rights while workers born before this threshold date may still retire under the old, more generous rules." (Institute for the Study of Labor via Social Science Research Network)
Cohort Changes in the Retirement Resources of Older Women (PDF)
Excerpt: "This article uses different sources of U.S. data to focus on the retirement resources of women aged 55-64. By comparing the resources for this age group in 2004 to their counterparts in 1994 and 1984, this analysis provides some indication of changes in the retirement preparedness of three different cohorts of women. Our findings indicate that notable changes have occurred with women's pathways into retirement that are due to increased education and lifetime work experience. As a consequence, there are marked differences in potential retirement outcomes. We find that women aged 55-64 today are better prepared in several respects than their counterparts of the same age 10 or 20 years ago." (U.S. Social Security Administration)
Characteristics of Mutual Fund Investors, 2008 (PDF)
12 pages. Excerpt: "Almost all mutual fund investors were focused on retirement saving. Saving for retirement was one of the household's financial goals for 95 percent of mutual fund-owning households, and more than three-quarters indicated that retirement saving was their household's primary financial goal." (Investment Company Institute)
The Quick Fix for Pension Funds, Pension Obligation Bonds, Becomes a Future Albatross for Taxpayers
Excerpt: "Public pension funds across the U.S. are hiding the size of a crisis that's been looming for years. Retirement plans play accounting games with numbers, giving the illusion that the funds are healthy. The paper alchemy gives governors and legislators the easy choice to contribute too little or nothing to the funds, year after year. The misleading numbers posted by retirement fund administrators help mask this reality: Public pensions in the U.S. had total liabilities of $2.9 trillion as of Dec. 16, according to the Center for Retirement Research at Boston College. Their total assets are about 30 percent less than that, at $2 trillion. With stock market losses this year, public pensions in the U.S. are now underfunded by more than $1 trillion." (Bloomberg L.P.)
Are Participants Really Cutting Back on Savings?
Excerpt: "A new study casts doubt on reports that the softening economy and tumultuous markets are having a significant impact on participant savings rates. The new study, by the Vanguard Center for Retirement Research, acknowledges that last year 3.1% of 1.3 million participants in defined contribution plans administered by Vanguard stopped making contributions, and that was up by 0.7% from the prior year. Additionally, the study acknowledges that, in any given year a small percentage of active participants ceases contributing, and that the economic and market downturn in 2008 appears to have raised that rate slightly." (PLANSPONSOR.com; free registration required)
Markets Put Employers on Defensive About 401(k) Plans
Excerpt: "Now, more than ever, workers have every right to question the merits of the 401(k) system -- and the basic tenets for forming a so-called fundamentally sound investment portfolio. Workers lost billions of dollars in their retirement accounts last year. And no portfolio -- no matter how diverse -- held up amid an unforgiving economic environment. At the same time, many plan sponsors have been forced to stop matching their workers' 401(k) contributions in a bid to conserve cash and shore up their businesses. It's a new perfect storm of sorts, as many workers have become skittish of equity markets while also losing one of the premier incentives for participating in their 401(k) plans: free money." (Workforce Management; free registration required)
[Opinion]
Social Security and Entitlements Help Business
Excerpt: "The bottom line is that cutting entitlements, as some advocate, would hurt business. At a time when the economy is under severe stress, shrinking a system that helps millions and bolsters the economy would be catastrophic. . . . The economy would be far worse off if 'entitlement' programs did not continue to put billions of dollars into the hands of consumers, thereby bolstering business. Consumer purchasing power drives roughly two-thirds of the American economy. Entitlements supply a substantial chunk of it. In fiscal year 2008, Social Security paid 51 million recipients benefits totaling $607 billion, most of it quickly spent. (A small portion goes to income taxes which are recycled into the Social Security Trust Fund.)" (Merton C. Bernstein via TheStreet.com)
[Opinion]
Written Testimony: Promoting Economic Security at Older Ages through Workforce Development
Sent to U.S. Senate Special Committee on Aging for February 25, 2009, hearing. Excerpt: "The 2008-2009 collapse in the stock market wiped out trillions of dollars in retirement account wealth and forced millions of boomers to rethink their retirement plans. Working longer is commonly seen as the key solution to the retirement financing dilemma. However, poor job prospects prevent many older people with limited education from working into later life. This testimony for the Senate Special Committee on Aging argues that Congress could improve the economic security of these older adults in retirement and in the years leading up to retirement by increasing government-funded employment and training services." (The Urban Institute)
ASPPA (Sponsor)
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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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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]
The American Recovery and Reinvestment Act of 2009 and Its Impact on Employers (PDF)
25 pages. Excerpt: "[ARRA] includes a number of provisions that will have an impact on employers' compensation and benefits practices. [This Hewitt Special Report] outlines additional details concerning key human resources (HR) provisions in ARRA, including: COBRA Premium Assistance for Involuntarily Terminated Employees and Their Families; Additional Health and Benefit Provisions, including health information privacy, health information technology, comparative effectiveness research, and transit benefit parity provisions; Tax and Employment Provisions Affecting HR, including various tax, unemployment insurance, H-1B, and whistleblower provisions; and New Executive Compensation Standards for financial institutions participating in the federal Troubled Asset Relief Program (TARP)." (Hewitt Associates)
[Guidance Overview]
Stimulus Act's New Restrictions on Executive Compensation (PDF)
7 pages. Excerpt: "Unlike prospective guidelines that had been issued by Treasury on February 4, 2009, these new restrictions are applicable to the approximately 360 companies that had already entered into a program under TARP, as well as companies that receive new funds from Treasury. Many believe that the new law's executive compensation provisions will serve as an incentive for companies currently under TARP to exit out of the program by returning funds to Treasury." (Buck Consultants)
Hot Trend: Companies Freezing Executive Pay
Excerpt: "In a dramatic shift since last fall, companies are moving more aggressively to freeze executive salaries and substantially reduce bonuses and stock-based awards. According to a survey of 400 managers by compensation consultancy Pearl Meyer & Partners, half said their companies have implemented or are 'strongly considering' imposing an executive salary freeze -- nearly three times as many as in a similar survey in November. Among those expecting to give raises, fewer than 6% expect to boost salaries more than 5%." (Financial Week)
EBRI Databook on Employee Benefits
Excerpt: "The EBRI Databook on Employee Benefits is maintained on-line and updated when new data is available. The date next to each chapter link indicates when data and/or links were last updated in that chapter. The EBRI Databook on Employee Benefits includes data from dozens of sources to provide a comprehensive analysis of how the employee benefits system works, who and what its various functions affect, and its relationship with the U.S. economy. The EBRI Databook includes over 400 tables and charts presenting vital statistics on the employee benefit system." (Employee Benefit Research Institute)
Finnish-Based Nokia Is Offering a Voluntary Approach to Job Loss
Excerpt: "Nokia today announced a series of voluntary measures for 'reducing personnel-related costs' during the global economic crisis, starting with an unusual deal called the Voluntary Resignation Package. The new package is available for Nokia employees worldwide, except for direct labor and senior executives. . . . The Finnish phone maker is also now urging its workers to make wider use of short-term unpaid leaves and sabbaticals. Also during 2009, the company will encourage employees not to 'cash in' their holiday time off for cash compensation, 'but to take their holiday as time off, as it is intended,' Nokia said in a statement." (BetaNews)
UAW Members Approve Concessions at Key Ford Plant
Excerpt: "United Auto Workers members at a key Ford Motor Co. assembly plant have approved a new concessionary agreement by a wide margin, according to a posting Monday, March 2, on the Web site of UAW Local 900 in Wayne, Michigan. . . . About 42,000 UAW-represented workers at Ford's U.S. operations have until March 9 to vote on the contract. The new agreement calls on workers to give up lump-sum bonuses and cost-of-living raises over the next two years. It also limits overtime pay and supplemental unemployment benefits." (Workforce Management; free registration required)
Suit Seeks to Force Government to Extend Benefits to Same-Sex Couples
Excerpt: "The legal advocacy group that successfully argued for sex-same marriage in Massachusetts intends to file suit here on Tuesday seeking some federal benefits for spouses in such marriages. The target is the Defense of Marriage Act, passed by Congress in 1996, which prohibits the federal government from recognizing same-sex marriage. That law denies federal benefits, like Social Security survivors' payments, to spouses in such marriages." (The New York Times; free registration required)
Benefit Plan Oversight During a Recessionary Economy
Excerpt: "During this current recessionary economic cycle, most general counsel are focused on maintaining their companies' core business. While keeping the organization competitive, or even functional, during this unprecedented phase of American business, GCs must not overlook the qualified benefit plan review. Consistent review of the qualified benefit plans will provide a better standard of review if a decision is challenged in court, offer structure for the plan fiduciary to implement his Employee Retirement Income Security Act duties, and afford the opportunity to address any administrative or operational challenges before being audited by the Internal Revenue Service or the Department of Labor." (Law.com)
Newly Posted Events
2009 Web/Telephone Seminar: Advanced HSAs
Nationwide on April 28, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Basic IRAs
Nationwide on April 9, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Coverdell Education Savings Accounts
Nationwide on April 7, 2009
presented by Ascensus
2009 Web/Telephone Seminar: HSA Basics
Nationwide on April 21, 2009
presented by Ascensus
2009 Web/Telephone Seminar: IRA Excess Contributions
Nationwide on April 16, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Selecting the Best 401(k) Plan Design
Nationwide on April 14, 2009
presented by Ascensus
Newly Posted Press Releases
Craig Hoffman Named ASPPA General Counsel and Director of Regulatory Affairs
American Society of Pension Professionals & Actuaries (ASPPA)
UNIFI Retirement Targets $3-$20 Million Plan Market
UNIFI Companies Retirement Plans
HHS Choice Sebelius Reflects Obama Commitment to Quality, Affordable Health Care for All Americans
United Food and Commercial Workers (UFCW)
Newly Posted or Renewed Job Openings
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Benefits Administrator
for The Edge Group
in TX
Senior Actuarial Consultant
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in OH
Sales Professional
for Hill, Chesson & Woody
in NC
Plan Administrator
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in CO
EmployeeBenefitsJobs.com (Sponsor)
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