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April 21, 2009 |
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[Guidance Overview]
Suspending the 401(k) Match: The Implications and the Potential Pitfalls
Excerpt: "The US has entered into what may be a prolonged recession, and as a result, many organizations are looking for ways to preserve cash, including suspending or reducing contributions to 401(k) and other defined contribution plans. While suspending matching or nonelective contributions is a relatively easy and immediate way to reduce expenses, this action has a variety of implications and potential pitfalls. This Update takes a look at some of the issues that employers should consider before suspending 401(k) matches." (Mercer LLC)
Federal Retirement Thrift Investment Board Endorses Roth IRA Option for Enrollees
Excerpt: "The Federal Retirement Thrift Investment Board on Monday officially endorsed a proposal to give Thrift Savings Plan participants the option to invest in a Roth Individual Retirement Account, but did not green light a move that would allow the TSP to create additional investment funds." (GovernmentExecutive.com)
Bigger Paycheck Now Could Cost You Next Year at Tax Time
Excerpt: "Most workers should be getting a little extra in their paychecks, thanks to the Making Work Pay credit included in the stimulus bill. Unfortunately, some people might have to pay all or some of the credit back when they file their taxes next year. The credit is equal to 6.2 percent of earned income - from a job or self-employment - up to a maximum of $400 per person per year. A married couple can get up to $800 total, even if only one spouse works. Income limits apply. The credit is good for 2009 and 2010." (San Francisco Chronicle)
Pension Risk and Adoption of Liability-Driven Investment Strategies (PDF)
Excerpt: "This white paper chronicles the impact of the financial crisis on pension funded status, reports on the use of valuable risk management techniques and offers guidance to plan sponsors on how to move forward in these difficult times.'adopted liability-driven (Towers Perrin)
Rethinking Your 401(k) Plan
Excerpt: "Despite a newfound push to bolster retirement savings, annuities are laden with issues that even the proponents quickly acknowledge. For starters, annuities are costly for the average retiree. Plus, they require the psychologically difficult act of handing over a large lump sum to an insurer for good in return for a drip-like monthly payment for life. The current financial crisis has only heightened fears about annuities as confidence in insurers like AIG . . . that back them wavers and the models used to ensure payouts raise questions." (SmartMoney)
White Collar Retirees' Reps of Big Three Auto Makers Expected to Meet with Obama Administration's Auto Task Force
Excerpt: "The meeting is part of an effort by salaried retirees to press the case for preserving their retirement benefits amid the restructuring of Detroit. Unlike union workers and retirees, salaried retirees are often vulnerable in restructurings because their benefit packages are not governed by union contracts and companies often can change terms without consulting their former employees. Representatives of salaried retirees from General Motors Corp., Chrysler LLC, Ford Motor Corp. and supplier Delphi Corp. have been pushing for weeks to get a meeting with the auto task force, which is overseeing the restructuring of GM and Chrysler." (The Wall Street Journal)
Public Funds Including CalPERS Contemplating Riskier Investments with the Backing of Surprising Number of Experts
Excerpt: "On Apr. 15 the $175 billion California Public Employees' Retirement System (CalPERS) said it is looking at buying troubled assets that Citigroup (C) and other financial companies are trying to offload. Two weeks earlier a group of public pension fund managers met with Sheila C. Bair, chairman of the Federal Deposit Insurance Corp., to talk about investing in banks' toxic assets. 'We had more people interested than could fit into the room,' says Orin S. Kramer, chairman of the New Jersey State Investment Council." (BusinessWeek)
Retirement Savings and Household Wealth in 2007 (PDF)
19 pages. Excerpt: "Once every three years, the Board of Governors of the Federal Reserve System collects data on household assets and liabilities through the Survey of Consumer Finances (SCF). The most recent such survey was conducted in 2007, and the survey results were released to the public in February 2009. This CRS report presents data from the 2007 SCF with respect to household ownership of, and balances in, retirement savings accounts." (U.S. Congressional Research Service)
New 403(b) Market Statistics Available
Excerpt: "The [one-page] chart illustrates the distribution of investments in the 403(b) market as of December 31st of each year." (403bwise)
Americans Increasingly Concerned About Retirement Income, According to Poll
Excerpt: "For the first time this decade, a majority of non-retired Americans, 52%, doubt they will have enough money to live comfortably once they retire; only 41% say they will." (Gallup, Inc.)
Retirement Plan Participants Play It Cool Amid Economic Crisis
Excerpt: "The ongoing market crisis hasn't changed the behavior of defined contribution plan participants, according to DC experts. Shlomo Benartzi, professor and co-chair of the behavioral decision-making group at the Anderson School, University of California at Los Angeles, said the data he examined -- which includes fund transfer activity, online balance inquiries and vendor customer call center volume -- all point to plan participants not making rash decisions in the current financial meltdown." (Pensions & Investments)
Stimulus Benefits Could End Up Costing Retirees at Tax Time
Excerpt: "In March, the IRS adjusted withholding tables to reflect the Making Work Pay credit, which is worth up to $400 for single workers, and up to $800 for married taxpayers who file jointly. The adjustments will apply to wages, but they'll also affect the amount withheld from pension payments. And that's a problem, because pension payments are ineligible for the credit, says Mark Luscombe, federal tax analyst for tax publisher CCH." (USA Today)
Tennessee County Could be Liable for $3M in Retirement Benefits' Suit Appeal
Excerpt: "A new estimate indicates a Tennessee county could have to come up with more than $3 million if its appeal of an adverse decision in a suit over retirement payment calculations is unsuccessful. A news article in the Daily Herald said a state court of appeals is considering Maury County's appeal of a 2007 ruling by state Judge Jim T. Hamilton that former county human resources director Shirley Harmon's office 'made a fatal and critical mistake' when calculating the employee benefits." (PLANSPONSOR.com; free registration required)
Catholic Lay Employees' Retirement Benefits Reduced
Excerpt: "J. Timothy Kocab, administrative secretary of the Lay Employees' Retirement Board, has detailed plan benefit reductions 'in order for us to refocus our resources on strengthening the funding position.' The Rhode Island Catholic reports that starting July 1 additional retirement benefits earned in the future will be calculated based on a new reduced formula that will lower annual accrued benefits. In addition, the number of years required for an employee to be vested in the plan will increase from five to 10." (PLANSPONSOR.com; free registration required)
Pension Benefit Information (PBI) (Advert.)
Time is Running Out...PPA Mandatory Funding Notice Deadline is April 30th Missing Addresses? Old Addresses? PBI can provide address information or verify information on file in time to meet the disclosure deadline. P.A.S.S. (Participant Address Search Service) is a low cost solution with guaranteed 24 Hour Turn-Around.
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Links to Items on Executive Comp, Benefits in General
Same-Sex Rights Approved by Washington HouseExcerpt: "After emotional debate, state lawmakers on Wednesday approved an 'everything but marriage' bill granting same-sex domestic partners most of the rights and responsibilities of spouses. The bill, which passed 62-35, now goes to Gov. Chris Gregoire, who said she'll sign it into law. . . . Senate Bill 5688 expands on previous rights and protections lawmakers have approved for domestic partners. The new changes include labor and employment rights, pensions and insurance matters." (The Spokesman-Review)
[Opinion]
BusinessEurope, Nippon Keidandren, FEI Comment to IASB on Employee Benefits
Excerpt: "On April 20, 2009 a joint comment letter was filed by BusinessEurope, Nippon Keidanren and the Committees on Corporate Reporting (CCR) and Benefits Finance (CBF) of Financial Executives International in response to the International Accounting Standards Board's current deliberations on the IASB's Discussion Paper entitled: Preliminary Views on Amendments to IAS 19, Employee Benefits." (Financial Executives International)
Webcasts and Conferences
(Click to post your webcast or conference)Complying With the New COBRA Subsidy: Advanced Administration Issues
Nationwide on April 16, 2009
presented by EBIA / Thomson Reuters
Press Releases
(Click to post your press release)60 Minutes 401(k) Exposé Shows Need for New Retirement Income System
Pension Rights Center
Prudential Retirement Sweeps Top Honors for Retirement Plan Communications
Prudential Financial, Inc.
Benefit Informatics Online Solutions is added to MEDInnovation® to Help Employer Health Plans Control Costs and Manage Risk
Benefit Informatics
RelayHealth Launches FastTrack5010 at WEDI National Conference
RelayHealth
New Web Service Provides Advice for 401k Participants
401kAdvisory
Employee Benefits Jobs
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in IA
Government Reporting Specialist
for New York Life Retirement Plan Services
in MA
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in NY
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