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April 2, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
SunGard (Advert.)
EFAST2 – Are you ready to electronically file 5500 forms? Form 5500 must be electronically filed, beginning January 2010. Modifying your existing procedures and routines and helping your clients understand how to collaborate with you electronically are essential to meet the new requirements of the EFAST2 system. SunGard’s Relius Government Forms 5500 Web Client provides you and your clients an efficient and easy way to gather all necessary information and electronically file 5500 forms and schedules. Contact John Latson at 800-326-7235, ext. 1100. |
[Guidance Overview]
IRS Interim Rules on Computing Asset Values to Reflect Expected Earnings
Excerpt: "The interim rules, which may be relied on for years beginning in 2008 and 2009, illustrate the determination of earnings pursuant to an assumed rate of return that may not exceed a prescribed interest rate limit. The IRS Notice also provides automatic IRS approval for a change in a plan's asset valuation method to adopt the asset valuation method authorized under the Worker Act for plan years beginning during 2009." (Wolters Kluwer)
[Guidance Overview]
EFAST2: Attachments and Plan Audits
Excerpt: "Preparing, managing and filing the attachments and the plan audits presents one of the more significant changes in Form 5500 filing and it presents one of the more difficult challenges. The following FAQs address the requirements for including attachments and the plan audit with the Form 5500 filing." (Sungard)
[Guidance Overview]
Many Sections of ERISA Grant Fiduciary Delegating Authority
Excerpt: "There is a widespread misconception even among many otherwise well-informed employee benefits attorneys that sponsors of qualified retirement plans such as 401(k) plans cannot delegate their day-to-day administrative and investment fiduciary responsibilities and liabilities to others. This is not true." (Morningstar)
[Guidance Overview]
401(k) Plan Fees for Employers
Excerpt: "Understanding fees and expenses is important in providing for the services necessary for your plan's operation. This responsibility is ongoing. After careful evaluation during the initial selection, the plan's fees and expenses should be monitored to determine whether they continue to be reasonable. While ERISA does not set a specific level of fees, it does require that fees charged to a plan be 'reasonable.'" (Reuters)
Employees Are Calling for Financial Advice . . . and Reassurance
Excerpt: "Millions of people are fearful about their financial futures and their prospects for retirement. And some of them have places to call for advice, financial planning hot lines provided by their employers or groups they belong to." (The New York Times; free registration required)
Immediate Annuities: The Key to Retirement Income
Excerpt: "It is not unusual for a working person today to expect to spend longer in retirement than she did working! Thus, fewer years are available to garner assets than there will be to spend the same assets in retirement. The actuaries tell us that it is likely that a married couple, with a 10-year disparity in age, where one reaches age 65, have a probability that one of the two will still be alive in 30 years! Thus, the need for longevity planning." (Morningstar)
Hedging Risk in 401(k) Plans with TIPS
Excerpt: "According to California-based PIMCO, an investment management firm, about 48% investment consultants who work with DC plan sponsors reported that their clients are adding or considering [Inflation-Protected Securities (TIPS)] or an annuity product to their plans. TIPS are treasury notes in which the principal increases with inflation and decreases with deflation." (Employee Benefit News; Registration may be required)
Employees -- and Employers -- Feel the Pinch from Shortfalls in Retirement Funding
Excerpt: "The ripple effect of shrinking retirement accounts and under-funded pensions threatens to undermine the broader economy as older Americans delay retirement, local governments raise taxes, and companies challenged with withering pension balances lay off workers in response to the shortfall." (Wharton School of the University of Pennsylvania)
Framing, Reference Points, and Preferences for Life Annuities
Excerpt: "Although rational models of risk-averse consumers have difficulty explaining limited annuity demand, previous research by the authors has found that re-framing the decision in consumption terms rather than investment terms significantly increases the relative attractiveness of life annuities. This paper tests the relative effectiveness of the two framing contexts when different reference points are introduced, testing for loss aversion in both investment and consumption frames. [Originally published November 2008.]" (TIAA-CREF Institute)
Protecting Retirement Accounts from Creditors
Excerpt: "You can start by understanding the exemptions in federal or state laws that may protect your retirement accounts. The good news is that most employer-sponsored plans, including 401(k)'s, are covered by the Employee Retirement Income Security Act, known as Erisa, and are completely protected from creditors -- except when those creditors are former spouses or the I.R.S., said D. James Gehring, a lawyer with Seyfarth Shaw in Chicago." (The New York Times; free registration required)
[Opinion]
AIG Bonus Scandal Adds Insult to Injury of 'Pension Dumping'
Excerpt: "Actually, the defined-benefit pension is one of the only employment promises that employers of non-unionized workplaces are legally obligated to keep. Federal law is supposed to protect pension rights and guarantee that pensions are adequately funded. For the dwindling number of private sector employees who still enjoy one, it's a comforting thought. Too bad it's not true. Do you hear that sawing sound? That's what federal bankrup.tcy courts are doing to the three-legged stool of retirement, as companies divest themselves of the 'legacy costs' of their defined-benefit pension plans." (The Salt Lake Tribune)
[Opinion]
Pension Rights Center Letter to Treasury on Amount of Money Pension Plans Withhold from Pension Checks for Tax Purposes (PDF)
1 page. Excerpt: "The American Recovery and Reinvestment Act of 2009 enacted the Making Work Pay tax credit, which provides working Americans with a tax credit on earned income. In order to facilitate the tax credit, the Internal Revenue Service issued new withholding tables. IRS Publication 15-T states that the new withholding tables apply not only to earned income, but also to pension benefits. However, non-working retirees are ineligible for the Making Work Pay tax credit. If pension plans use the new withholding tables, many retirees receiving pension checks could face an unpleasant surprise when they file their 2009 tax returns and learn that insufficient funds were withheld to cover their tax liabilities. This could even subject some to penalties." (Pension Rights Center)
DATAIR Employee Benefit Systems, Inc. (Advert.)
5500 / PBGC / 1099-R / 5300 / FAS 158 Software from DATAIR DATAIR Pension Reporter System. Easy to use and economical for electronic and paper filing with instant access to forms and instructions. Live, expert support included. Choose from 4 modules:
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Links to Items on Executive Comp, Benefits in General
Today is National Employee Benefits Day
Excerpt: "This year National Employee Benefits Day has a special focus on retirement security. The current economy has made retirement a top concern for many individuals. We encourage you to celebrate the day by educating yourself and your plan participants about the importance of planning now for a secure retirement." (International Foundation of Employee Benefit Plans)
[Guidance Overview]
Stock Awards to Employees in Europe: Changes to Securities Laws
Excerpt: "The European Commission has recognised that the requirement to be listed on an EEA regulated market can lead to unnecessary burdens and costs for companies and in January 2009 it launched a consultation paper proposing, amongst other things, to extend the 'employee share scheme' exemption to all companies making offers under employee share plans to employees resident in the EEA as long as a document is made available containing information on the number and nature of the securities offered and the reasons for and details of the offer." (K&L Gates LLP)
[Guidance Overview]
Possible Challenges to Retroactive Restrictions on Executive Compensation
Excerpt: "Both contractual and constitutional challenges to the application of Section 7001 to existing TARP recipients are available. A suit for declaratory and injunctive relief could be brought now in the U.S. District Court for the District of Columbia. Or a financial institution could sue for damages in the Court of Federal Claims upon complying with the Secretary's new standards. The choice depends on an institution's priorities -- trying to forestall the new standards or being compensated for the harm they cause. Similar legal challenges could be raised to a bonus tax. Additionally, a bonus tax could be challenged as an unconstitutional bill of attainder." (Jones Day)
Executive Pay: Perception and Reality
Excerpt: "As the economy tanks and rank-and-file workers lose income, security and jobs, executive pay has again become the focal point of public anger. The pay gap between the most affluent executives and the average worker yawns wide. Last year, Standard & Poor's (S&P) 500 chief executive officers averaged $10.5 million a year, 344 times the annual pay of typical U.S. workers." (Society for Human Resource Management)
Tongue-in-Cheek: Top Ten Ways To Celebrate National Employee Benefits Day 2009
Excerpt: "1. Put a new twist on childhood games: Salary-Freeze Tag, Dodge Calls, Underfunded Pension Pickle, Benefits Manager in the Middle. 2. Demonstrate your social media savvy: Tweet all of your SPD updates; be sure to use plenty of emoticons. 3. Investigate the latest investment vehicles: shoe boxes, mattresses and piggy banks. [Numbers 4-10 are even better.]" (International Foundation of Employee Benefit Plans)
Tough Times Demand Smart Solutions in Employee Benefits Packages
Excerpt: "Economically challenging times require creative solutions, especially among small and midsize employers who, despite budget constraints, are trying to offer comprehensive benefits packages that adequately protect their workforce. With the help of brokers and advisers, employers are finding that creative benefits solutions - a strategic mix of employer-sponsored plan designs and added voluntary plans - can close coverage gaps and still be affordable." (Employee Benefit Adviser; Registration may be required)
New Edition of The ESOP Communications Sourcebook
The NCEO provides excerpts from the new edition of its book The ESOP Communications Sourcebook, which provides articles on communicating the plan to employees; sample communication documents; case studies; samples of what successful companies are doing; PowerPoint presentations and recorded Webinars to use; and more. The new edition includes much more electronic resources on its accompanying CD, plus new articles on communicating in a downturn and on what must be communicated. (National Center for Employee Ownership)
Employee Ownership Update for April 1, 2009
NCEO Executive Director Corey Rosen discusses FASB's reconsideration of whether ESOP-held shares that are mandatorily redeemable upon the occurrence of an event certain to occur are liabilities; French executives who gave up stock options; cash incentives; and, as an April 1 special, a new system that attaches to the ear and detects brain wave patterns in executives in response to various pay systems. (National Center for Employee Ownership)
[Opinion]
An Essay on Social Insurance and Sharing Risks in a New Era of Responsibility (PDF)
6 pages. Excerpt: "In his inaugural address, our new president spoke of a 'new era of responsibility.' After hearing the language of personal responsibility for so many years, it may have been a little jarring to some to hear President Obama use the term. But the President was defining 'responsibility' to mean more than just responsibility for ourselves; he was defining it to encompass the responsibilities that we owe each other - that is, the social contract that binds us to each other. One important aspect of the social contract -- my focus in what follows -- is the sharing of risk." (National Academy of Social Insurance)
Webcasts and Conferences
(Click to post your webcast or conference)COBRA Under the American Recovery and Reinvestment Act of 2009 – Second Compliance Assistance Webcast
Nationwide on April 6, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
FutureOffice Network Presents April Smartcast: New COBRA Updates
Nationwide on April 21, 2009
presented by Davidson Marketing Group -- FutureOffice Network
What's New in 401(k)s?
in Michigan on April 22, 2009
presented by International Society of CEBS - West Michigan Chapter
Press Releases
(Click to post your press release)Hewitt Integrates Financial Engines Service into Administration Solution
Hewitt Associates LLC
U.S. Labor Department Asks Court To Distribute Profit-sharing Plan Assets Of Closed Chesterfield, Michigan, Company
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Labor Department Obtains Appointment Of Independent Fiduciary To Oversee Abandoned Oklahoma 401(k) Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Fidelity Introduces Online Technology Evaluation Tool for RIAs
Fidelity Investments
BrightScope Reports Strong Response from Plan Sponsors
BrightScope
Employee Benefits Jobs
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Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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