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March 16, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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www.ftwilliam.com (Adv.)
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What's Your TCO for Your Plan Document and Forms Software? The amount you spend on software licensing fees is just one item you need in order to calculate your Total Cost of Ownership (TCO). If you use software that runs on your computers you may spend thousands more each year on hardware, database, hardware maintenance and IT staff. With ftwilliam.com's advanced application service provider technology, software licensing fees are ALL you pay. You can't afford NOT to check us out. Find out more at www.ftwilliam.com or call 800.596.0714. |
[Official Guidance]
Final PBGC Regs; PPA 2006 Amendments to ERISA Reporting Rules Pertaining to DB Plan Funding (PDF)
Excerpt: "The amendments implement the provisions of the Pension Protection Act of 2006 . . . which changed the standards for determining which persons are required to report under section 4010 (Authority to Require Certain Information) of [ERISA] and made other changes to the reporting requirements. . . . [T]he final rule [also] waives reporting in certain cases for controlled groups with aggregate plan underfunding of $15 million or less, modifies the standards for determining which plans are exempt from the actuarial information requirements, revises the actuarial information requirements to conform with other PPA 2006 changes, and provides other clarifications." (Pension Benefit Guaranty Corporation)
[Guidance Overview]
Fed and FTC Regulation of Retirement Plan Loans to Participants: Going and Coming? (PDF)
3 pages. Excerpt: "In addition to the governing rules under ERISA and the Internal Revenue Code, participant loans provided by retirement plans have long been subject to certain consumer credit rules primarily intended for very different credit arrangements. Just as plans are being relieved of compliance with one such set of rules, however, a new set of requirements may possibly become applicable." (sutherland)
[Guidance Overview]
Certifying a Pension Plan's Funded Status (PDF)
2 pages. (Milliman)
[Guidance Overview]
Phased Retirement Initiative
Excerpt: "HR Policy Association, in partnership with the American Benefits Council, EBRI and Watson Wyatt Worldwide, has launched a Phased Retirement website that includes a toolkit [http://www.hrpolicy.org/pr_toolkit.aspx] to guide employers in retaining older workers with skills and experience that the company does not want to lose. 'Even though many older workers are delaying their retirement now because of the downturn, companies still have individual situations where a phased retirement program can be helpful,' said Ian Ziskin, Corporate Vice President & Chief Human Resources and Administrative Officer of Northrop Grumman." (HR Policy Association)
[Guidance Overview]
Investment Advice for Participants: Prohibited Transactions and Level Fee Advice (PDF)
Excerpt: "This is the second in a series of bulletins regarding the Department of Labor's (DOL) regulation on investment advice for participants. . . . This bulletin looks at the application of the regulation to 'pure' level fee investment advisers." (Reish Luftman Reicher & Cohen)
[Guidance Overview]
PBGC Updates Reporting Rule
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) said Friday it will publish a final rule that amends its regulation on Annual Financial and Actuarial Information Reporting (29 CFR part 4010). The final rule implements Pension Protection Act of 2006 changes to Employee Retirement Income Security Act (ERISA) section 4010 and makes other modifications and clarifications to the reporting requirements." (PLANSPONSOR.com; free registration required)
[Guidance Overview]
Plan Loans Exempt from Truth-in-Lending Disclosure Requirements
Excerpt: "The Federal Reserve System's Board of Governors has amended Regulation Z to exempt most retirement plan loans from the disclosure requirement of the federal Truth-in-Lending Act." (PLANSPONSOR.com; free registration required)
Collective Funds, or Collective Trust Funds, Could Take a Place on the 401(k) Investment Menu
Excerpt: "Collective funds now offer the same trading flexibility as mutual funds and, with an increased scrutiny on fees and fee disclosures, they can offer plan sponsors a truly cost-effective alternative. That said, their full potential will likely only be realized once certain myths and misunderstandings about collective trust funds are dispelled . . . ." (PLANSPONSOR.com; free registration required)
401(k) Plans Need Fixes, Advocates Tell Lawmakers
Excerpt: "U.S. lawmakers should reform retirement plans after 401(k) and Individual Retirement Accounts lost more than $2 trillion in value since October 2007, a group of consumer and labor groups said. The new consumer-labor group, 'Retirement USA,' backed by the Pension Rights Center, the Service Employees International Union and the Economic Policy Institute, said the flagging economy has highlighted the inadequacies of 401(k) plans and increased the need for alternatives such as government-managed funds run with professional oversight." (Bloomberg L.P.)
Retirement Fund Risk Solutions (PDF)
2 pages. Excerpt: "The magnitude of investment and interest-rate risk embedded in pension plans is substantial. An analysis of 300 major companies . . . indicates a combined risk of more than $700 billion in the aggregate if plan assets underperform and discount rates decline meaningfully." (Towers Perrin)
Rosy Projections of Pensions' Investment Earnings?
Excerpt: "Ed Mendel of Capitol Weekly writes that public pension funds' rosy forecasts pose problems . . . ." (Leo Kolivakis)
Proposed Rhode Island State Pension Revisions Include Hybrid Plan
Excerpt: "A Rhode Island state House study commission has endorsed the building blocks for a new and less expensive retirement package for state employees and teachers. The commission's proposal would put anyone hired after July 1 into a hybrid plan that includes a reduced version of the defined benefit plan that currently pays state retirees up to 80% of their earnings at retirement and a 401(k)-style plan, according to the Providence Journal. In addition, it would establish age 65 as the minimum age for retirement." (PLANSPONSOR.com; free registration required)
Labor Supply Elasticity and Social Security Reform
Excerpt: "Previous literature on social security reform has used a variety of period utility functions and calibrated values for the intertemporal elasticity of substitution (IES) in labor. In this paper, we extensively study various preferences and values for IES in a general equilibrium model with overlapping generations. We calibrate the model to key U.S. macroeconomic indicators and document how social security reform impacts the economy under different preferences." (Center for Retirement Research at Boston College)
Accounting for the Heterogeneity in Retirement Wealth
Excerpt: "This paper studies a quantitative dynamic general equilibrium life-cycle model where parents and their children are linked by bequests, both voluntary and accidental, and by the transmission of earnings ability. This model is able to match very well the empirical observation that households with similar lifetime earnings hold very different amounts of wealth at retirement. Earnings heterogeneity and borrowing constraints are essential in generating the variation in wealth at retirement among low lifetime earnings households, while inheritance heterogeneity helps to generate the heterogeneity in wealth at retirement among high lifetime earnings households." (Center for Retirement Research at Boston College)
Controversy Brews over Investment Advice Regs
Excerpt: "Comment letters flowing into the U.S. Department of Labor (DoL) over the recently postponed investment advice regulations make it clear that the issue is red hot with controversy. The DoL recently gave the public until last week to comment on its final rules for providing investment advice to participants." (planadvisor)
Many 401(k) Participants Are Doing Nothing about Investments
Excerpt: "When it comes to do-it-yourself retirement savings, inertia has frequently been a 401(k) investor's best friend. Their lack of initiative has spared them from their natural inclination to buy high and sell low. These days, 'numb' may offer more insight into their behavior than inertia. Call it what you may, the result is an outcome most professional investment advisers would say is an inappropriate retirement investing strategy, even in these perilous times." (Pittsburgh Post-Gazette)
[Opinion]
Human Resource Challenges This Year
Excerpt: "Against the background of economic turmoil, March has been a busy month for discussions about retirement-plan changes. For HR leaders, challenges implicit in all of the talk is that both employers and employees may be required to spend more on retirement programs at a time when both groups are trying to spend less." (Dallas Salisbury via Human Resource Executive Online)
[Opinion]
How Employers and Mutual Fund Advisers Prospered as Workers' Dreams of Retirement Security Evaporated
Excerpt: "An analysis of economic self-interest related to the providers of services to defined contribution retirement plans and plan sponsors reveals that many of the problematic investment options, practices and arrangements within plans can be readily explained as benefitting all parties except participants. The 'informational advantage' that sponsors and providers enjoy over participants permits this state of affairs to endure. While the impact of economic self-interest and the informational advantage on defined contribution plans may seem remote, it is real. Recent studies confirm that plan design (almost always controlled by providers), does matter and can influence participant behavior and investment returns." (Benchmark Financial Services, Inc.)
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ASPPA (Adv.)
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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]A Five-Year Long Lesson in Plan Drafting for Stock Options
Excerpt: "[The case of AT&T v. Lillis] took another turn last week as the Delaware Supreme Court ruled that a state trial court had properly considered AT&T's admissions in its pleadings that stock options of former directors and officers that were cashed out after a merger between AT&T Wireless Services Inc. and Cingular Wireless LLC may have included the future time value of those options." (Michael S. Melbinger via Winston & Strawn LLP)
[Guidance Overview]
Underwater Stock Options - What are the Alternatives?
Excerpt: "The recent economic downturn has left a significant number of options far out-of-the-money (underwater). Some awards are so deep underwater that it might be unlikely for these options to become in-the money again before expiration. Seventy-two percent of the companies in the Fortune 500 are facing the challenge of underwater options, based on Equilar's analysis of average exercise prices in mid-December of 2008. Two broad schools of thought have emerged on the strategic compensation direction best suited for navigating this obstacle: Leave the current awards unchanged, reflecting returns to shareholders. Exchange underwater options for new options or another form of compensation of value to the employee to address top talent retention problems." (Deloitte Development LLC)
Employee Ownership Update for March 13, 2009
NCEO Executive Director Corey Rosen discusses a new survey of what companies plan to do with equity compensation; how ESOPs are still a good idea for employee retirement security; a newly endowed chair for employee ownership that has been established at Rutgers; and applying for the Principal 10 Best Companies for Financial Security award. (National Center for Employee Ownership)
Newly Posted Press Releases
(Post Yours!)Reporting Requirements Under ERISA Section 4010 - Final Rule
Pension Benefit Guaranty Corporation (PBGC)
Former Corporate Benefits Manager of Hitachi America Pleads Guilty To Defrauding Health Care Plan of More Than Six Million Dollars
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
The Retirement Advantage Hires New Sales Reps for Midwest & Western Regions
The Retirement Advantage, Inc.
Fiduciary Benchmarks Launches 401(k) Retirement Plan Data Portal
Fiduciary Benchmarks, Inc.
Alliance Benefit Group Carolinas Creates Advisor Service Team
Alliance Benefit Group Carolinas, LLC
New Managing Member Named at Benefit Plans Plus
Benefit Plans Plus
Tampa TPA Awarded Accredited Investment Fiduciary (AIF) Designation From fi360
American Pension Services, LLC
Newly Posted or Renewed Job Openings
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Benefits Analyst/Retirement Plan Administrator - Job #s20090302
for Perkins Coie LLP
in WA
Second Vice President, Investment Specialist
for New York Life Retirement Plan Services
in MA
COBRA Administrator
for Sentinel Financial Group
in MA
Wealth Management Consultants
for Sentinel Financial Group
in MA
Associate General Counsel - ERISA/Employee Benefits
for UnitedHealth Group
in MN
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EmployeeBenefitsJobs.com (Adv.)
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Where the best employers find the best candidates! |
Handy Links:
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- Using the Web for Employee Benefits Research (hypertext article)
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