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April 9, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
ASPPA (Advert.)
Stay Up To Date at the 2009 Mid-Atlantic Benefits Conference, April 29-30, 2009 Get the most for your time and money with ASPPA and the IRS at the 2009 Mid-Atlantic Benefits Conference. Designed to provide you with the most up to date information governing retirement plans, this conference includes sessions covering 401(k) plans in 2009, plan documentation, EGTRRA restatements and PPA Interim Amendments. Join other employee benefit professionals this year in Washington, DC by registering now and locking in early savings discounts. Save even more by attending the DOL Speaks: The 2009 Employee Benefits Conference too. For additional information go to www.asppa.org/mabc |
[Guidance Overview]
New Rules Amendment to Truth in Lending Act to Exclude Plan Loans (PDF)
2 pages. Excerpt: "On December 18, 2008, the Federal Reserve Board (the 'Board') approved final rules amending Regulation Z, which implements the Truth in Lending Act ('TILA'). The Board amended Regulation Z to exempt plan loans taken from employer-sponsored retirement plans qualified under section 401(a) of the Internal Revenue Code (the 'Code'), tax-sheltered annuities under section 403(b) of the Code, or government-sponsored deferred compensation arrangements under section 457(b) of the Code, from the TILA requirements. However, the exemption only applies if the loan proceeds are comprised of fully-vested funds from the participant's account and are made in compliance with the Code. The final rules are effective July 1, 2010." (Snell & Wilmer LLP)
[Guidance Overview]
Plan Loans to Be Exempt from Truth-in-Lending Disclosures Beginning in July 2010
Excerpt: "Qualified plans that make loans to participants will, effective July 1, 2010, no longer be required to make detailed disclosures under the Truth in Lending Act. In providing an exemption from governing Regulation Z, the Federal Reserve has acknowledged the inherent differences between commercial loans and plan loans, in which payments of interest and principal are reinvested in the participant's account and the loan is not subject to finance charges imposed by a third party." (Wolters Kluwer)
[Guidance Overview]
Slimmed-Down Lockheed Martin 401(k) Fees Case Allowed to Proceed
Excerpt: "A federal judge in Illinois has ruled that employees challenging the fee levels in Lockheed Martin's 401(k) plans can proceed as a class action on claims the company didn't properly monitor plan fees and that it did not properly administer the Stable Value Fund. U.S. District Judge Michael J. Reagan of the U.S. District Court for the Southern District of Illinois ruled that as many as 100,000 employees could be part of the class in the excessive fee fiduciary breach suit." (PLANSPONSOR.com; free registration required)
[Guidance Overview]
Calendar Year Pension Plans' Last-Minute Funding Relief
Excerpt: "Just before the bell, the IRS issued much-needed relief for pension plans in calculating their minimum required contributions. Released on March 31, the deadline by which many calendar year plans were required to have an actuary's certification of the plan's funded percentage, the relief provides greater flexibility for plans that use the corporate bond yield curve in determining benefit liabilities. The IRS announced that, until final regulations are issued, it will not challenge the use of a monthly yield curve for any applicable month (i.e., the month containing the valuation date and the four preceding months)." (Deloitte via BenefitsLink.com)
Public Pension Plan Asset Allocations (PDF)
At page 2. Excerpt: "This analysis examines the volatility in employer contribution rates caused by the high-return/high-risk investment portfolios adopted by many public-sector pension plans in recent years, and whether plan sponsors will increase fixed income investments in order to reduce volatility. It appears that, in the short run, a significant shift toward a lower return investment policy in return for reduced volatility in employer contributions is unlikely to occur because of plan sponsors' expected high returns from risky assets, their current ability to use high discount rates, and the tendency of investment managers to not deviate from peer group investments." (Employee Benefit Research Institute)
How Much Do Households Really Lose by Claiming Social Security at Age 62?
Excerpt: "Using numerical optimization techniques, we illustrate that for plausible preference parameters, the optimal age for non-liquidity constrained single individuals and married men to claim benefit is between 67 and 70. We calculate that Social Security Equivalent Income, the amount by which benefits payable at suboptimal ages must be increased so that a household is indifferent between claiming at those ages and the optimal combination of ages, can be as high as 19.0 percent." (Center for Retirement Research at Boston College)
Should Public Pension Funds Go with the Government's Programs to Clean Up Toxic Assets?
Excerpt: "On Apr. 3, a group of public pension fund managers met with Sheila C. Bair, chairman of the Federal Deposit Insurance Corp., to talk about the toxic assets burdening large banks. The FDIC, along with the U.S. Treasury, is looking for investors to buy up those troubled assets in a program called the Public-Private Investment Program for Legacy Assets (PPIP). At the table with Bair were representatives of several large local funds, including the New York City pension plan, the Connecticut plan, and New Jersey's pension plan. Representatives from at least a half-dozen other big plans from California to Florida joined in by telephone." (BusinessWeek)
Financial Institutions Sponsoring 401(k)s May Need Identity Theft Program for Participant Loans
Excerpt: "401(k) plans offering participant loans may be subject to a Federal Trade Commission (FTC) identity theft prevention rule if the sponsoring employer is a 'financial institution' or 'creditor,' according to new comments from FTC staff to the law firm White & Case LLP. The 'red flags' rule requires creditors to adopt programs by May 1 to respond to identity theft warning signs." (Mercer LLC)
New Income Tax Withholding Table May Cause Under-Withholding on Pension Payments
Excerpt: "New reduced IRS income tax withholding tables implementing the stimulus law's 'Making Work Pay' tax credit must be used for pension payments beginning April 1, 2009, even though pensions are not eligible for the credit. This may lead to a retiree or beneficiary owing additional taxes at year-end." (Mercer LLC)
Under Bankrup.tcy, GM Pensions Would Be at Risk
Excerpt: "As the biggest U.S. automaker teeters near bankrup.tcy, workers and retirees like Black are bracing for what may be $16 billion in pension losses if the Pension Benefit Guaranty Corp. has to take over the plans, according to the agency. As many as half of GM's 670,000 pension-plan participants might see their benefits trimmed if that happened, an actuary familiar with the company's retirement programs estimates." (Bloomberg L.P.)
Entrepreneurs Financing Start-Ups from Retirement Accounts: The 'Rollover As Business Start-Ups'
Excerpt: "The Internal Revenue Service has recently expressed concerns about the technique. This method of financing start-ups has been around--and controversial--for some time. Forbes first looked at the pros and cons of using retirement accounts to finance businesses in 2004. Our advice: Entrepreneurs interested in the method should split their IRAs into two, one to invest in the new business and the other to manage a diversified retirement portfolio separate from the new business and associated risks." (Forbes.com)
DATAIR Employee Benefit Systems, Inc. (Advert.)
DC/401(k) Administration Software from DATAIR DATAIR’s Defined Contribution System for Allocations, Discrimination Testing, and Proposals. Handles New Comparability Plans, Sole Proprietorships, 401(k) and 403(b) plans. Live, expert support. DATAIR’s DC/401(k) System includes
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Links to Items on Executive Comp, Benefits in General
Ex-Deloitte Executive Loses Bid to Dismiss Trading CaseExcerpt: "U.S. accounting firm Deloitte & Touche LLP won a court ruling on Wednesday allowing it to proceed with efforts to recover compensation from a long-time former audit partner it accuses of improperly trading in client stocks. . . . [Flanagan's] lawyers had asked the Delaware court to dismiss Deloitte's claims against him, arguing that some compensation was protected by the U.S. Employee Retirement Income Security Act (ERISA) and that Deloitte failed to state an actual claim of damages." (Reuters via Forbes.com)
Boston Globe Staff Surprised by Size of Demand for Pay and Benefit Cuts
Excerpt: "Boston Globe employees reacted with a mix of resignation and anger Wednesday on learning of the pay and benefit cuts and the lost job security that The New York Times Company wants them to accept as the price of keeping the money-losing Globe in business." (The New York Times; free registration required)
Principal Freezing Rates on Several Employee Benefits for More Than 30,000 of Its Customers with 50 or Fewer Employees
Excerpt: "Principal's move stands out because such rates have been trending up for about a decade -- and the rate freeze could help the company retain customers. Cost is probably the biggest reason employers consider switching benefit providers, said Paul Fronstin, a senior research associate with the Employee Benefit Research Institute of Washington, D.C." (The Des Moines Register)
Anheuser-Busch to Freeze Pension and Ask Retirees to Contribute More for Health Benefits
Excerpt: "Anheuser-Busch plans to freeze its pension plan for salaried employees, eliminate retiree health coverage for new employees and ask retirees to contribute more to their health benefits. The brewer said defined contribution plans, or 401(k)s, are preferred over defined benefit plans, or pension plans, 'because they provide more predictable cash flows and expense for the company,' James Brickey, vice president of people, told salaried employees in an internal memo Wednesday." (St. Louis Business Journal via bizjournals.com; free registration required)
Webcasts and Conferences
(Click to post your webcast or conference)27th Annual Creative Pensions & Benefits Seminar
in Ohio on May 1, 2009
presented by Ohio State University Office of Continuing Education (CEd), The
Act Now On New Cobra Rules In Stimulus Plan - Part II Recorded Webcast
Nationwide on April 10, 2009
presented by DLA Piper LLP
Cincinnati Employee Benefits Conference
in Ohio on June 11, 2009
presented by Cincinnati Bar Association
The New Healthcare Reform Package
in Colorado on April 14, 2009
presented by Western Pension and Benefits Conference-Denver Chapter
Press Releases
(Click to post your press release)Milliman Study Indicates First Gain in Pension Funded Status Since July
Milliman USA
Prescription Solutions Provides Innovative Real-Time, Multi-Provider and Multi-Pharmacy Intervention Program to Prevent Dangerous Drug Interactions
Prescription Solutions
First Mercantile Adds to National Sales Team
First Mercantile
Employee Benefits Jobs
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International Employee Benefits - Account Assistant
for Woodruff-Sawyer & Co.
in CA
EmployeeBenefitsJobs.com (Sponsor)
(Click on banner to learn more.)
| Where the best employers find the best candidates! |
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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