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April 6, 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. Please contact 800-326-7235, ext. 1100. |
[Guidance Overview]
Sixth Circuit Holds that Plant-Closure Decision Did Not Interfere with ERISA-Protected Pension Rights
Excerpt: "This Sixth Circuit decision provides employers with a timely reminder during difficult economic times. [The TRW case] reminds employers considering plant closings or other discharges that where pension costs are involved that it may be fairly easy for discharged employees to establish a presumption of ERISA discrimination. Hence, during the planning stages, it is essential that an employer consider whether it will be able to produce evidence supporting a legitimate, non-discriminatory reason for the discharges." (Porter Wright Morris & Arthur LLP)
[Guidance Overview]
The Nonspouse Beneficiary Change to the Law
Excerpt: "The recently passed Workers, Retiree and Employer Recovery Act of 2008 (WRERA) made several technical corrections to the PPA, one of these corrections being that all qualified plans must permit a non-spouse beneficiary the ability to rollover to an inherited IRA for plan years beginning after December 31, 2009. By way of background, this is a change of a change." (McKay Hochman Co.)
[Guidance Overview]
Guidance on Notice and Election Procedures for Significantly Underfunded Multiemployer Plans
Excerpt: "The guidance also contains information on special notice requirements for plans in neither endangered nor critical status as a result of a freeze election. In addition, the IRS describes the effect of a WRERA election on Form 5500, Schedule MB, and Schedule R filings." (Wolters Kluwer)
[Guidance Overview]
Legality of 'Whipsaw' Lump Sum Calculation Under Cash Balance Plan Can Be Challenged in Court
Excerpt: "A former employee who challenged the calculation of her lump sum distribution under a cash balance plan was not required to exhaust her administrative remedies under the plan because an appeal would have been futile. This was the decision of the Sixth Circuit U.S. Court of Appeals in Durand v. The Hanover Insurance Group, Inc. and The Allmerica Financial Cash Balance Pension Plan (No. 07-6468)." (Wolters Kluwer)
[Guidance Overview]
Excess Deferrals After April 15
Excerpt: "The 'double taxation' occurs since the participant who exceeds the 402(g) limit (including catch-up, if eligible) must pay tax on the excess deferral in the year it is originally deferred; and then, in the year in which the excess deferral is ultimately distributed. (See Tax Code Regulations 1.402(g)-1(e)(8)(iii)) For 2008, there is an excess deferral of $1,600 with a loss of $540 for a net of $1,060 . . . ." (McKay Hochman Co.)
$1T Hit to Public Employee Pensions Could Cost Taxpayers and Workers
Excerpt: "Massive investment losses sustained by public pension funds are pressuring state lawmakers from New Mexico to New York to spend more taxpayer money to shore up their programs, boost the retirement age for newly hired government workers and seek more from employee paychecks. Pensions need $270 billion in additional contributions over the next four years, and more than $100 billion annually for two decades hence, according to the Center for Retirement Research at Boston College." (AP via The New York Times; free registration required)
South Carolina Can Use Stimulus Cash for Pension Fund
Excerpt: "The Obama administration has given South Carolina Gov. Mark Sanford permission to use a portion of the state's expected $2.8 billion in federal stimulus money to help reduce the liabilities of the $27 billion South Carolina Retirement System." (Workforce Management; free registration required)
Behavioral Biases in Annuity Choice: An Experiment
Excerpt: "We conduct a neutral-context laboratory experiment to systematically investigate the role of the hit-by-bus concern in explaining the annuitization puzzle: the low rate of retirement-asset annuitization relative to the predictions of standard models. We vary endowed asset (annuity vs. stock of wealth vs. no explicit endowment), and find a strong endowment effect. Furthermore, we find that the ordering of survival risks matters. Compared to a frame in which a single draw from a known distribution determines survival outcome, annuity choice is lower when subjects must sequentially survive early periods to reach periods in which the annuity dominates." (Williams College via Social Science Research Network)
Retirement Nest Eggs and Asset Allocation
Excerpt: "[F]or the first time since Hewitt Associates began tracking 401(k) accounts in 1997, American workers in February held less than half of their 401(k) money in stocks. Instead, most of their nest eggs now sit in fixed-income and cash instruments, including stable-value, bond and money market funds, according to Hewitt, the employee benefits consulting firm. The proportion of 401(k) money in stocks fell to slightly less than 48 percent in February, down from 53 percent at the start of the year and 69 percent in 2007." (The New York Times; free registration required)
Investment Options for the Latter Retirement Years
Excerpt: "According to a recent consumer retirement study by McKinsey, 61% of defined-contribution participants said they were interested in an investment option that provides guaranteed income in retirement. Jason Scott, head of the retiree research center at Palo Alto (Calif.)-based Financial Engines, the investment adviser founded by Nobel Prize-winning economist Bill Sharpe, argues that the simplest, least expensive way to get that guaranteed income is with a relatively new product known as longevity insurance." (BusinessWeek)
Fixing Expat Retirement Benefits
Excerpt: "Oftentimes, assignees' retirement plans are frozen while they are on assignment, and upon return, the retirement plans would pick up where they left off. During the assignment period, the assignees (1) may be able to participate in the host country plans, (2) they may lose all opportunities to earn retirement benefits, or (3) they may defer income while on assignment. It is often the older, experienced workforce that companies are trying to send on assignment -- a workforce population that is obviously more concerned with their retirement." (Human Resource Executive Online)
Improved Economy Should Mean Companies Will Reinstate 401(k) Matches
Excerpt: "Thirty-four percent of U.S. employers have reduced or eliminated matching contributions to their defined-contribution retirement plans, such as 401(k)s, since January 2008, according to a report last month by the Spectrem Group, a consulting firm. Over the next year, 29 percent of companies intend to reduce or eliminate matching contributions, it said." (The Dallas Morning News)
Summary of 'The Savings for American Families' Future Act of 2009' (PDF)
1 page. Excerpt: "The bill would change the current tax credit that encourages low- and moderate-income families and individuals to save for retirement. Currently, taxpayers who contribute to an individual retirement account (IRA) or to an employer-sponsored plan that is qualified under §401, §403 or §457 of the tax code can receive a nonrefundable tax credit of up to $1,000. This credit is in addition to the tax deduction for contributing to a traditional IRA or to an employer-sponsored retirement plan." (American Benefits Council)
Labor Department and SEC to Probe Target Date Funds
Excerpt: "The Department of Labor is set to begin an 'immediate review' of target date funds -- one that could lead to new regulations placed on the all-in-one investment strategies. In a March 26 letter sent to the Senate Special Committee on Aging, Labor Secretary Hilda Solis said that the department will begin examining target date funds to determine if these popular 401(k) options are potentially exposing investors to too much unknown equity risk. She added that the Labor Department will coordinate its review with the staff of the Securities and Exchange Commission." (Investment News; free registration required)
'Hidden' Public Employee Pension Fiasco May Foment Another $1 Trillion Bailout
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." (Bloomberg L.P.)
Let's Set a Target, and Date, for Fixing Target-Date Funds
Excerpt: "Congress, somewhat belatedly, is looking more closely at target-date funds as default investments in retirement plans. One question is whether it should dictate investment-mix parameters -- or at least make it clearer that a 2010 'retirement' fund is actually a 2035 'death' fund." (The Wall Street Journal)
Treasury Officials Give Money Market Intervention Effort Five More Months
Excerpt: "The U.S. Treasury Department has extended its intervention efforts to support money market funds for five more months, the agency announced. A news release said the extension of the Money Market Funds Guarantee Program . . . from its originally scheduled expiration of April 30 to September 18, 2009 was being carried out 'in order to support ongoing stability in financial markets.'" (PLANSPONSOR.com; free registration required)
Investing Pros Take Divergent Retirement Account Approaches
Excerpt: "If you're thinking about how to rearrange your 401(k), you're in good company. The pros do the same thing. Here's how three investment experts are positioning their own retirement accounts." (USA Today)
U.S. Congressman Proposes Updates to Saver's Credit
Excerpt: "U.S. Congressman Earl Pomeroy (D-North Dakota) has introduced legislation that would make changes to the Saver's Credit. According to a Pomeroy press release, The Savings for American Families' Future Act would change the current Saver's Credit, created by Congress in 2002, to make it refundable and require that the credit be paid only into the taxpayer's retirement accounts. The bill would also expand the number of families and individuals who would be able to use the full Saver's Credit by more than doubling the existing income limits for the full credit." (PLANSPONSOR.com; free registration required)
San Diego Takes Police Union to Court Over Retirement Program
Excerpt: "The city is following through on a year-old plan to take its police union to court over a controversial retirement program. The deferred retirement option program, or DROP, allows employees to collect their pensions while still employed and receiving a full salary. The program is closed to new hires, but San Diego Mayor Jerry Sanders wants to close it to existing employees who have not signed up. The Police Officers Association says it is a vested benefit." (San Diego Union-Tribune)
Illinois Enacts Post-Blagojevich Reform of Public Worker Pension Boards
Excerpt: "Less than 24 hours after the indictment of Rod R. Blagojevich, Gov. Patrick J. Quinn signed legislation on Friday providing for a major overhaul in the administration of state investment and pension boards that oversee retirement assets of teachers and other public employees." (The New York Times; free registration required)
This May Be Right Time to Switch Your IRA to a Roth
Excerpt: "If you've got enough cash in the bank, this may be a great time to convert your traditional individual retirement account to a Roth IRA, which offers some significant tax advantages. 'I think this is the best time ever,' says Ed Slott, a Rockville Centre, N.Y., accountant nationally known for his expertise on retirement plan issues. Three key factors are currently combining to make conversion attractive, he says: A battered stock market, today's lower family incomes, and the likelihood of higher tax rates in the future." (The boston Globe)
University Conference Services (Advert.)
Navigating Uncharted Waters in Retirement Plan Management An economic storm of epic proportions, steep asset declines, tough decisions on matching contributions and heightened potential for fiduciary liability have many plan sponsors feeling as if they are lost at sea. The Boston Mid-Sized Retirement & Pension Plan Management Conference, May 5–8, 2009, brings together an impressive array of plan management experts who delve into the momentous challenges you face and explore solutions for guiding your plan to calmer waters. |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]
Judge OKs Adviser Deferred Compensation Settlement
Excerpt: "A federal judge in New Jersey has approved a $1-million settlement to a long-standing legal battle waged by a group of former Prudential Financial advisers over whether they had been denied deferred compensation benefits. U.S. Magistrate Judge Mark Falk of the U.S. District Court for the District of New Jersey, in an order approving the deal, noted that an out-of-court disposition of the case is best because it would avoid having to face a potentially unsympathetic jury mad at Wall Street over the nation's financial downturn." (PLANSPONSOR.com; free registration required)
EBSA Requests Extensions of Information Collection Relating to Plan Assets, Summary Annual Reports, Terminated Individual Account Plans, and National Medical Support Notices
Excerpt: "The Employee Benefits Security Administration (EBSA) has issued four separate notices requesting the extension of existing information collection deadlines. The notices relate to the definition of plan assets with respect to participant contributions, the national medical support notice, summary annual reports, and the termination of individual account plans. Comments on the extensions are due by May 26." (International Foundation of Employee Benefit Plans)
WSJ Special Section on Employee Benefits
Produced in cooperation with the Employee Benefit Research Institute and the International Foundation of Employee Benefit Plans, the section includes the following titles: Tough Responsibilities in a Tough Era --Entrusted with overseeing retirement and health care benefits to employees at a time when both are under siege, few jobs today are more taxing than that of the employee benefits manager; The Future of Retirement Plans; In Tough Economic Times, Employers Turn to Value-Based Health Care; and, A Tax Cap on Health Benefits? Remember Sec. 89 (Dow Jones & Company, Inc.)
Webcasts and Conferences
(Click to post your webcast or conference)"Documented Confusion: Understanding Restatement Procedures" Archived Web Seminar
Nationwide on April 3, 2009
presented by SunGard Relius
2009 Western Pension & Benefits Conference Spring Conference
in Arizona on May 12, 2009
presented by Western Pension & Benefits Conference - Phoenix Chapter
COBRA Provisions in the American Recovery and Reinvestment Act Workshop
in Massachusetts on April 23, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
COBRA Subsidy Part II: New Guidance Issued by the IRS Webcast
Nationwide on April 9, 2009
presented by Trucker Huss
DC Plan Terminations And Orphaned Plans
Nationwide on April 21, 2009
presented by ASPPA (American Society of Pension Professionals & Actuaries)
Form 5500 Workshop, April - May 2009 in 16 Cities
Nationwide on April 23, 2009
presented by SunGard Relius
Remote Patient Management Issues and Trends
Nationwide on May 7, 2009
presented by MCOL
The HITECH Act: Implications for HIPAA-Covered Entities and Business Associates (Webinar Recording)
Nationwide on April 6, 2009
presented by Nixon Peabody LLP
Press Releases
(Click to post your press release)U.S. Department of Labor Obtains Consent Judgment Requiring Defunct Greensboro, North Carolina, Wholesaler and Retailer to Restore Pension Funds
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Department of Labor to Host Second Webcast on COBRA Subsidy and Notices
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Financial and Health Burdens of Chronic Disease Grow Between 2003 and 2007
Robert Wood Johnson Foundation
Employee Benefits Jobs
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Pension Administrator/Consultant
for PenServ, Inc.
in NY
Account Manager
for The Standard
in
Senior Benefits Analyst – Retirement Plans
for Sodexo USA
in MD
Employee Benefits/Executive Compensation Paralegal
for International Law Firm -- Chicago Office
in IL
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