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April 16, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
ASPPA (Advert.)
Western Benefits Conference, June 28 – July 1, 2009 Designed with all retirement and benefits professionals in mind, the Western Benefits Conference will cover it all in Denver, Colorado, June 28 – July 1. Over 50 workshops, seven specialty tracks, emerging compliance issues and several networking opportunities provide just a snapshot of the planned agenda. Register Now and Save! |
[Guidance Overview]
IRS's Draft Prototype 403(b) Plan Language (PDF)
1 page. Excerpt: "The Internal Revenue Service has posted on its Web site draft sample language for § 403(b) prototype plans. This is the latest step in the Service's announced process for assisting in the transition to the July 2007 final regulations under § 403(b)." (Sutherland)
[Guidance Overview]
Glossary of Special Voluntary Fiduciary Correction Program Terms (PDF)
3 pages. (Prudential Retirement)
[Guidance Overview]
Eligible Transactions and Corrections Under the VFC Program (PDF)
21 page chart. Excerpt: "Although delinquent participant contributions to insured welfare plans and welfare plan trusts can be corrected under the VFC Program, this document covers only the transactions/correction applicable to retirement plans." (Prudential Retirement)
[Guidance Overview]
DOL's Voluntary Fiduciary Correction Program (PDF)
Excerpt: "In 2000, the Department of Labor (DOL) created the VFC Program. This program allowed plan sponsors and fiduciaries to voluntarily correct certain fiduciary violations and avoid civil and criminal penalties. In 2002, the DOL revised the Program to include a prohibited transaction class exemption to provide excise tax relief for four specific transactions. In April 2005, the DOL made additional changes to simplify the submission process and expand the availability of the Program. In 2006, the DOL made additional changes to the VFC Program, including the addition of two more transactions to the prohibited transaction class exemption. This publication describes the Program as it stands today." (Prudential Retirement)
[Guidance Overview]
Which Expenses Can Be Paid from Plan Assets?
Excerpt: "For our purposes, expenses are divided into two categories: settlor expenses and administrative or fiduciary expenses. The former, settlor expenses, must be paid by the plan sponsor (which is, in legal language, the settlor of the plan). The second category -- administrative or fiduciary -- are obligations of the plan and may be paid with plan assets." (Reish Luftman Reicher & Cohen)
[Guidance Overview]
Rules to Keep in Mind Before Reducing or Suspending Employer Contributions
Excerpt: "For those plans that use safe harbor matching contributions, the Regulation enables an employer to reduce and/or suspend those contributions on a prospective basis. However, to do so, an employer must comply with the following rules . . . ." (Reish Luftman Reicher & Cohen)
Custom Target Date Model Portfolios Enhance Company's 401(k) Plan
Excerpt: "The client offered a diverse selection of fund options in its 401(k) plan rather than entrust the entire plan to a single manager. In keeping with this philosophy, the company didn't want to hand over its asset allocation funds to a single fund family. . . . We constructed a set of five custom Milliman Target Date Model Portfolios for the client, using the best-of-class choices in the existing plan. This would allow the client to take advantage of its strong-performing, highly effective current funds." (Milliman)
Largest Teacher Retirement Wave in History Approaching (PDF)
20 pages. Excerpt: "In a recent survey, NCTAF found that almost 60 percent of Baby Boom teachers said they intend to work after retirement. This echoes the intentions of more than half of the 78 million Boomers in the wider workforce who say that after retirement they 'want jobs now or in the future to help improve the quality of life in their communities.' Yet teachers, like all professionals, want new challenges and opportunities. Seventy percent of the teachers nearing retirement would be interested in staying if they were able to work in new education roles in 'phased or flexible retirement' according to NCTAF's survey." (National Commission on Teaching and America's Future)
National Railroad Retirement Investment Trust Stock Loss May Serve as Lesson
Excerpt: "A special pension fund for railroad workers that was given permission during the Bush administration to invest its assets in the stock market lost more than a third of its value during a recent 18-month period, a loss that could influence an ongoing debate about how to keep government-affiliated retirement programs solvent." (The Boston Globe)
Small Business Owners Worried About Retirement, Committed to Health Care
Excerpt: "Apparently workers aren't the only ones worried about retirement. Forty-one percent of business owners indicated they were on track to save for their own retirement, though that's down 10% from spring 2008. According to the American Express OPEN Small Business Monitor, the number of business owners concerned about saving for retirement has risen to 79% from 73% last spring . . . ." (PLANSPONSOR.com; free registration required)
Defined Benefit Plans: Proposed Plan Buyouts by Financial Firms Pose Potential Risks and Benefits (PDF)
38 pages. Excerpt: "This report addresses the following questions: (1) What is the basic model of proposed sales of frozen DB plans to third-party financial firms and how does it compare with a standard plan termination? (2) What are the potential risks and benefits of plan buyouts for participants, PBGC, plan sponsors, and other stakeholders? To address these questions, GAO reviewed proposed models for plan buyouts and analyzed regulatory and statutory issues associated with terminations and buyouts. GAO also interviewed labor and pension advocacy groups, pension regulatory agencies, and pension experts." (U.S. Government Accountability Office)
Require 401(k) Plans to Offer Fixed-Income Products, Key U.S. Representative Says
Excerpt: "Requiring annuities or other fixed-income products be included as an option in 401(k) plans is being considered by the House Education and Labor Committee, said Rep. Robert Andrews, D-N.J., chairman of the committee's Health, Employment, Labor and Pensions Subcommittee." (Investment Company Institute)
Oklahoma Law Professor to Tackle Tax Issues for IRS; Has Employee Benefits Experience
Excerpt: "[Jon] Forman was picked by Clarissa Potter, IRS acting chief counsel. 'I am grateful for this opportunity to help IRS attorneys write regulations, rulings and briefs,' he said after learning of his selection April 7. 'In addition, I will help the chief counsel with efforts to reform and simplify our tax system.' Forman has taught at the OU College of Law since 1985 and is vice chairman of the Oklahoma Public Employees Retirement System's board of trustees." (NewsOK.com)
[Opinion]
Behavioral Investor Types: The Friendly Follower
Excerpt: "Friendly Followers, the focus of this article, are less emotionally biased than they are cognitively biased when making investment decisions. This should make intuitive sense. Clients who have a high need for security (in other words, a low risk tolerance) do so because emotion is driving this behavior; they get emotional about losing money and get uneasy during times of stress or change. Because Friendly Followers are cognitively biased, they should be advised differently than those who make get highly emotional about their investing. An educationally oriented quantitative approach is usually effective with clients who are less emotional and tend to make cognitive errors; these investors benefit most from information about their biases so they can make better investment decisions." (Morningstar)
[Opinion]
ASPPA College of Pension Actuaries Letter Re: End of Year Valuation and Benefit Restriction Guidance Needed (PDF)
9 pages. Excerpt: "Final regulations should clarify that, in the event that the partial lump sum option required by IRC §436(d) is not normally offered as an immediate distribution option under the plan, the plan will not fail to satisfy IRC §411(a) or IRC §417(e) simply because any partial annuity benefit required by IRC §436(d) does not take into account IRC §417(e) rates and the minimum present value requirement when determining the amount of any optional form payable in satisfaction of the restricted portion of the benefit." (American Society of Pension Professionals & Actuaries)
[Opinion]
Amicus Brief in Braden v. Wal-Mart Dealing with Retirement Plan Fees and Expenses (PDF)
51 pages. Brief of The ERISA Industry Committee, the Chamber of Commerce of the United States of America, and the American Benefits Council as Amici Curiae in Support of Appellees. (American Benefits Council)
DATAIR Employee Benefit Systems, Inc. (Advert.)
Software for Retirement and Cafeteria Plan Documents DATAIR EGTRRA sale! License our Plan Document System before 5/1/09 for a $500 discount. Choose your documents: Retirement Plans: 401(k)/Profit Sharing, 403(b), DB, Cash Balance Cafeteria Plans: 125, HSA, HRA Choose your formats:
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Revisiting Underwater Options
Excerpt: "Unprecedented volatility has been wreaking havoc on equity programs, placing many, if not all, stock options underwater. As a result, many companies are weighing whether to take action on underwater options. This Perspective, the third in Mercer's 'Weathering the Storm' series, provides a framework for evaluating underwater options and determining if actions are appropriate. The article explores different approaches to exchanging underwater options; discusses legal, shareholder approval and communication issues; and highlights findings from Mercer's review of about 50 recent option exchanges." (Mercer LLC)
Executive Retirement Benefits in Tax-Exempt Organizations: Actions for 2009
Excerpt: "Executive compensation could become a flash point for tax-exempt organizations in 2009, as the economic crisis spurs calls for greater accountability. With the new Form 990's expanded disclosures, tax-exempts can expect nonqualified deferred compensation (NQDC) arrangements to receive extra scrutiny. These changes and the prospect of new Section 457(f) rules have many tax-exempts revisiting their NQDC plans and practices. This Perspective offers a checklist of 2009 actions to help tax-exempts ensure that their NQDC arrangements meet today's trends and the organization's executive talent needs." (Mercer LLC)
Rights for Same-Sex Partners Headed for State of Washington Law
Excerpt: "Same-sex domestic partners would have all the rights and benefits that Washington state offers married couples under a bill that passed the state Legislature on Wednesday. After nearly two hours of debate, the House approved the Senate-passed measure on a mostly party-line 62-35 vote. It now goes to Gov. Chris Gregoire, who said she will sign it into law." (AP via Tacoma News, Inc.)
New Publication on Equity Compensation in a Down Market
The NCEO presents excerpts from its new publication Equity Compensation in a Down Market: Repricing, Accounting, ESPP, and Employee Communications Issues, a 63-page issue brief. (National Center for Employee Ownership)
Employee Ownership Update for April 15, 2009
NCEO Executive Director Corey Rosen discusses the results of the NCEO's survey of executive compensation in ESOP companies; the content of the NCEO's new issue brief on equity compensation in a down market; and the Great Game of Business's conference. (National Center for Employee Ownership)
Webcasts and Conferences
(Click to post your webcast or conference)"Wellness: Beyond Savings in Health Care Costs"
in Maryland on May 7, 2009
presented by Worldwide Employee Benefits Network -- Baltimore chapter
401(k) Plans for Rookies: Master the Basics So You Can Handle the Details
Nationwide on May 13, 2009
presented by EBIA / Thomson Reuters
Press Releases
(Click to post your press release)Companies See Fewer Sales Force Reductions In 2009, Watson Wyatt Survey Finds
Watson Wyatt
Former Owner of BB Kids Stores in Massachusetts Agrees to Restore Employee Contributions to SIMPLE IRA Plan to Resolve U.S. Labor Department Lawsuit
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Department of Labor Sues Defunct Arkansas Trucking Company to Protect Participants’ 401(k) Assets
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
ERIC Urges Appeals Court to Uphold District Court Dismissal of 401(k) Excessive Fee Case
ERIC (ERISA Industry Committee)
The ESOP Association Announces 2009 Silver ESOP Award Winners
ESOP Association
Aberdeen Funds Added to CPI Retirement Platform
CPI Qualified Plan Consultants, Inc.
Firm Seeks DOL Clarification of ERISA Fiduciary Rules Against Self-Dealing
Avatar Associates
Employee Benefits Jobs
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