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April 8, 2009 |
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www.ftwilliam.com (Advert.)
What you need to know about EFAST II On April 22nd, ftwilliam.com will provide a preview of the new EFAST II filing system. We will review registration requirements for plan sponsors and electronic confirmation of filings by DOL. Attendees will also learn how the ftwilliam.com 5500 software will leverage the EFAST II system to provide new features such as workflow management and client portal capabilities. Stop by our website and sign up for our webinar today www.ftwilliam.com! |
[Guidance Overview]
Reduction of Required DB Plan Contributions for 2009; Large Increase Looms for 2010
Excerpt: "The IRS is allowing defined benefit (DB) plans to use a reasonable interpretation in selecting a yield curve for determining a plan's liabilities for funding purposes. The guidance, which appeared in a March 31, 2009, special edition of Employee Plans News, says that 'for a calendar year plan with a January 1, 2009 valuation date, the IRS will not challenge the use of the monthly yield curve for January 2009, or any one of the four months immediately preceding January 2009.'" (Watson Wyatt Worldwide)
[Guidance Overview]
This Year's Benefit Plan Audit Headache: FAS 157
Excerpt: "The FASB Statement of Financial Accounting Standards No. 157, Fair Value Measurements ('FAS 157') establishes a framework for measuring fair value and expands disclosures about fair value measurements in the notes to a plan's financial statements. As a practical matter, FAS 157 must be implemented for all plans that prepare financial statements, without regard to whether the auditor is engaged to perform a full scope or limited scope audit. FAS 157 applies for fiscal years beginning after November 15, 2007." (form5500help.com)
[Guidance Overview]
401(k) Corrective Distributions Must Be Reported on Form 1099-R As Taxable to Recipient in Year of Distribution
Excerpt: "Beginning in 2009, corrective distributions must be reported on Form 1099-R as taxable to the recipient in the year of distribution. The payer, the IRS explains, must complete Form 1099-R by: Stating the amount of the distribution in Box 1; Reporting the taxable amount of the distribution in Box 29; and Classifying the distribution as taxable in the year distributed by using Code 8 in Box 7." (Wolters Kluwer)
[Guidance Overview]
IRS's Final Regulations on Automatic Contribution Arrangements (PDF)
Excerpt: "On February 24, 2009, the IRS released final regulations relating to automatic contribution arrangements (also known as automatic enrollment) in individual account defined contribution plans. The final regulations adopt many of the provisions in the proposed regulations, but also include new provisions." (Buck Consultants)
GM Bankrup.tcy Would Expose $13.5 Billion Pension Liability
Excerpt: "A General Motors bankrup.tcy could become a nightmare for the federal government's Pension Benefit Guaranty Corp. As much as $13.5 billion in unfunded pension liabilities could be dumped onto the U.S. agency that takes over troubled pension plans." (Workforce Management; free registration required)
Market Volatility Leaves Many Wondering About Safe 401(k) Plan Investments
Excerpt: "When Congress three years ago passed the Pension Protection Act, which among other things gave 401(k) plan sponsors approval to automatically enroll employees into target-date funds, regulators and industry experts alike agreed that these investment options were safe enough for employees to stay invested for the entire course of their careers. But after months of severe market volatility, experts and regulators are wondering whether these qualified default investment alternatives, or QDIAs, are the most appropriate investment options for all 401(k) plan participants." (Workforce Management; free registration required)
Default Investment Rule for Automatic Enrollments Should Have Permitted Fixed-Income Insurance Safe Harbor, Says Insurance Trade Association
Excerpt: "Shortly before the first signs of the stock market collapse, the Bush administration made a crucial decision that has propelled an estimated one to two million workers into stock-heavy retirement funds. Many of the funds in which workers were automatically enrolled dropped more than 25 percent last year, while a more conservative investment strategy rejected by the Bush administration would have resulted in a gain of 4.7 percent." (The Boston Globe)
Improving the 401(k) System During Tough Times
Excerpt: "Policy measures to improve and expand the 401(k) account program are being proposed at a time when investor confidence in the system is plummeting. . . . [Rep.] Robert E. Andrews (D-NJ) said that four proposed changes could profoundly improve the system. Andrews, who is chairman of the House Subcommittee on Health, Employment, Labor and Pensions, said the first proposed change would be to have qualified, independent investment advice. The second change would be legislation promoting unbundled fee disclosure, the congressman said. 'How much are you paying those who are managing your money and what are you getting for that service?' he said." (On Wall Street)
Safe-Harbor 401(k) Plans Force U.S. Companies to Pay to Play
Excerpt: "'As long as we make small companies contribute in the worst of times, a lot won't have' retirement savings plans, said David Wray, president of the Profit-Sharing/401k Council of America in Chicago. 'They're so close to the margin that a 3 percent contribution can make or break these guys. They can't put their company at risk just because they want this benefit.' Companies with fewer than 250 employees are considering liquidating their so-called safe-harbor 401(k) plans as earnings deteriorate in what may be the worst U.S. recession in 70 years . . . ." (Bloomberg L.P.)
Nearly Two-Thirds of Surveyed Participants Say Their Retirement Confidence Has Declined in Past Twelve Months
Excerpt: "[H]alf of surveyed participants said that the recent financial turmoil has 'caused me to think a lot more about my retirement income,' according to a new study sponsored by Barclays Global Investors (BGI), and conducted by Boston Research Group. However, the online study, '401(k) Participant Attitudes, Behavior, and Intentions,' based on the results of a survey conducted in March 2009 by The Boston Research Group that included the perspectives of a thousand current 401(k) plan participants, found that the greatest impact on retirement confidence was among participants who were already concerned about their prospects." (planadvisor)
Class Action Sought in State Street Suit Filed on Behalf of a 401(k) Plan
Excerpt: "State Street Corp., along with SSgA and two other subsidiaries were named today in a federal lawsuit seeking class-action status, claiming the firms breached their fiduciary responsibilities in the management of its securities lending program for retirement plans. The suit, filed on behalf of the Fishman Haygood Phelps Walmsley Willis & Swanson LLP 401(k) plan, New Orleans, claims institutional investors suffered losses from imprudent investment of the cash collateral pools that support the securities lending program connected with SSgA's collective trusts." (Pensions & Investments)
Nevada State Employees Oppose Effort to Trim or Eliminate Pension
Excerpt: "The so-called SAGE Commission unanimously recommended: That the retirement age for most government workers be raised to 60, and 35 years of service be required to qualify for early retirement with a lower pension; that pensions be calculated from base pay only; that the calculation formula itself be changed to reduce costs; and that the new provisions apply only to employees hired after January 2010." (Las Vegas Review-Journal)
[Opinion]
Trade Association Advocates Temporary Relief for Employers from 401(k) Safe Harbor Contribution Requirement (PDF) (PDF)
2 pages. Excerpt: "The SPARK Institute is writing to request relief for certain sponsors of safe harbor 401(k) plans who, due to the current downturn in economic conditions, are unable to make the three percent non-elective contributions required under Internal Revenue Code (the 'Code') Section 401(k)(12) for the entire year." (The Spark Institute)
[Opinion]
403(b) Written Plan Considerations
Excerpt: "One of the most significant changes made to 403(b) plans in the final 403(b) regulations is the written plan requirement. . . . The final 403(b) regulations do not impose a specific formula for the written plan. To the contrary, they acknowledge that the requirement can be satisfied with a collection of documents, sometimes referred to as the 'paper clip' approach, a helpful alternative for many plans, such as public sector plans for which many provisions are contained in state statutes, regulations and administrative rules." (PLANSPONSOR.com; free registration required)
BeneCom Associates, LLC (Advert.)
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Links to Items on Executive Comp, Benefits in General
Employer Could Not Offset Deferred Comp Payments by Unpaid Personal Loans to Execs; A Lesson in Plan DraftingExcerpt: "Another recent court decision highlighting imperfections in plan drafting just came across my desk, albeit, from October 2008. In Maynard v. Merrill Lynch & Co., 44 EBC 1133 (M.D. FL 2008), a federal district court held that Merrill Lynch could not offset two former executive's benefits under its non-qualified pension plan by amounts the executives owed from personal loans they had taken from the company. Even if this decision is overturned on appeal, it teaches two very important lessons in plan drafting . . . ." (Michael S. Melbinger via Winston & Strawn LLP)
Vermont Is Fourth State to Legalize Same-Sex Marriage
Excerpt: "The Associated Press reports that the state legislature voted Tuesday to override Governor James Douglas' veto of a bill allowing g.ays and les.bians to marry. The vote was 23-5 to override in the state Senate and 100-49 to override in the House." (PLANSPONSOR.com; free registration required)
White Paper Touts Advantages of Improved Benefits Communication
Excerpt: "A new white paper released by Colonial Life suggests a strong benefits communication plan can lead to greater employee satisfaction and a stronger bottom line for businesses. Colonial Life contends that employers who discount the value of communication risk wasting their company's considerable human capital investment. According to a press release, the report shows that employers can expect to realize key business and competitive advantages when they implement a strong benefits communication and education program, including decreased turnover, enhanced recruiting, increased enrollments, reduced benefits administration, more engaged and loyal employees, and improved productivity." (PLANSPONSOR.com; free registration required)
Webcasts and Conferences
(Click to post your webcast or conference)2009 SPARK National Conference
in District of Columbia on June 14, 2009
presented by SPARK -- Society of Professional Asset-Managers and Record Keepers
Implementing the New COBRA Premium Subsidy Rules: Delving Into the Details
in Illinois on April 14, 2009
presented by Neal, Gerber & Eisenberg LLP
Long-Term Incentive Plan Update in an Economic Downturn Webcast
Nationwide on April 23, 2009
presented by International Foundation of Employee Benefit Plans
Managing an ESOP Company in Challenging Economic Times: Workout Situations and Bankruptcy: Things You Need to Know to Survive Recorded Webcast
Nationwide on April 9, 2009
presented by Morgan Lewis & Bockius LLP
NIPA Business Management Education Webcast: Cash Balance Plans as a Business Alternative
Nationwide on May 12, 2009
presented by National Institute of Pension Administrators
Southern Employee Benefits Conference 40th Anniversary Annual Educational Conference
in North Carolina on May 13, 2009
presented by Southern Employee Benefits Conference
The Proxy Season: What We've Seen and Learned
Nationwide on April 22, 2009
presented by Buck Consultants, an ACS Company
What You Need to Know About Fee Disclosures (60-Minute Power Series) Webcast
Nationwide on April 21, 2009
presented by International Foundation of Employee Benefit Plans
Press Releases
(Click to post your press release)U.S. Labor Department Recovers Funds for Company 401(k) Plan from Fairfield, Connecticut, Employer
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Unum Maintains Market Leadership in Group Long Term Care
Unum
Lincoln Financial Group Announces Family Care Reimbursement Benefit Rider on LTD Policies
Lincoln Financial Group
401kDIRECT Announces New EFT Program
401kDIRECT
Where's SEC and Congress?
ReviewMy401k.com
Short-Term Medical Insurance Offers COBRA Alternative
Health Plan Administrators
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