BenefitsLink |
 |
 |
April 23, 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! |
[Official Guidance]
Text of IRS Notice 2009-39: Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
4 pages. Excerpt: "This notice contains updates for interest rates for funding requirements under sections 412(b)(5)(B) and 430(h)(2) of the Code applicable for April 2009, and updates for interest rates for minimum present value determinations under 417(e)(3) of the Code for March 2009." (Internal Revenue Service)
[Guidance Overview]
Deadlines, Extensions and the DFVC Program; EFAST2
Excerpt: "The following FAQs address the issues relating to deadlines, extensions and the Delinquent Filing Voluntary Compliance Program." (SunGard)
[Guidance Overview]
Reducing or Suspending Employer Contributions Can Be a Welcome Relief for Plan Sponsors (PDF)
Page 3 of 5 pages. Excerpt: "However, to do so, an employer must comply with the following rules: The participating employees must be provided with a notice that provides the following information: (i) that the plan will be amended to reduce and/or suspend the matching contributions on a prospective basis and when that amendment will take effect; (ii) how that reduction and/or suspension will affect the participants; and (iii) how the participants can change their current deferrals . . . ." (Reish Luftman Reicher & Cohen)
[Guidance Overview]
Tips on Managing Investment-Related Risks (PDF)
Page 2 of 5 pages. Excerpt: "This article discusses methods of shifting or mitigating liability for investment losses as well as how to ensure that you are meeting your fiduciary duties in doing so. Plan sponsors can delegate investment-related decisions to professionals, and the fiduciaries remain liable only for the prudent selection and monitoring of those providers." (Reish Luftman Reicher & Cohen)
[Guidance Overview]
Some Plan Expenses Can Be Paid from Plan Assets; Some Must Be Paid by the Plan Sponsor (PDF)
Excerpt: "With the bad economy, and its negative impact on the cash flow, we are being asked about ways to reduce costs for 401(k) plans. While the largest cost is usually the matching contributions, the expenses of operating a plan are next. We are working with a number of plan sponsors to transfer the payment of those costs to their plans." (Reish Luftman Reicher & Cohen)
[Guidance Overview]
Reenrollment in a QDIA: A Novel Strategy to Improve Diversification (PDF)
Pages 19- of 36 pages. Excerpt: "The opportunity: Legislative and regulatory changes allow plan sponsors to improve participant portfolio diversification -- a key driver of investment success -- in DC plans. The legal view: Sponsors may choose to reenroll some or all participants in a designated qualified default investment alternative (QDIA), whether or not the plan's investment menu changes. Vanguard conclusion: Plan sponsors can use the QDIA reenrollment strategy to help participants invest for retirement, while also reducing fiduciary liability." (The Vanguard Group, Inc.)
[Guidance Overview]
Second Circuit Rules Bankrupt Companies Must Pay Substantial Pension Termination Fees (PDF)
Excerpt: "In a recent reversal of a Bankrup.tcy Court decision, the U.S. Court of Appeals for the Second Circuit upheld a law which could further burden financially distressed companies attempting to reorganize and exit bankrup.tcy. The Second Circuit ruled that 'termination premiums' owed to the Pension Benefit Guarantee Corp. ('PBGC') are not pre-petition claims which may be discharged under the Bankrup.tcy Code." (Winston & Strawn LLP)
[Guidance Overview]
ERISA Plan Fiduciaries: What 'Prudence' Demands Today
Excerpt: "ERISA fiduciaries are under tremendous pressure today. ERISA litigation, involving excessive-fee and stock-drop claims, continues its upward trend. . . . Even more unsettling is the developing trend of plan fiduciaries to sue each other (e.g., investment managers and trustees) in the wake of continuing investment losses. This recent trend, which is in response to plan funds investing in toxic assets, could even result in participant claims against the same plan fiduciary (typically the plan sponsor) that is trying to recoup the investment losses (typically from the plan's investment manager). As scrutiny of fiduciaries by plan participants and other fiduciaries continues to increase, plan sponsors should take steps to ensure that their retirement plan governance procedures are working to safeguard the plan and its participants." (Towers Perrin)
Text of the ''401(k) Fair Disclosure for Retirement Security Act of 2009'' (PDF)
31 pages. Excerpt: "To amend title I of the Employee Retirement Income Security Act of 1974 to provide special reporting and disclosure rules for individual account plans and to provide a minimum investment option requirement for such plans." (U.S. House of Representatives via American Benefits Council)
Text of the "Savings Recovery Act of 2009" (PDF)
23 pages. Excerpt: "To held rebuild retirement, college, and personal savings." (U.S. House of Representatives via American Benefits Council)
Official Summary of the Savings Recovery Act (PDF)
1 page. (American Benefits Council)
Myths vs. Facts: The 401(k) Fair Disclosure for Retirement Security Act
Excerpt: "Myth: H.R. 1984 will require too much disclosure and will confuse 401(k) participants. Fact: H.R. 1984 would require clear and simple fee disclosure so that workers can make sound investment decisions for themselves. The biggest problem currently facing workers with 401(k) plans is that there is too little disclosure of fees, not too much. Plan participants should be presented with the facts and then be allowed to make their own decisions." (U.S. House of Representatives Committee on Education and Labor)
Making the Case for Employer-Sponsored Retirement Plans: Benefits and Accomplishments (PDF)
13 pages. Excerpt: "This white paper is the first installment in a series developed by The SPARK Institute to demonstrate that employer-sponsored retirement plans, particularly 401(k) plans, are the most effective, secure and viable way for American workers to save and invest to reach their retirement goals. This installment highlights the benefits and accomplishments of employer-sponsored retirement plans and demonstrates their contributions in helping American workers save for retirement." (The SPARK Institute)
New York State Comptroller Bars Placement Agents for Pension Fund Investments
Excerpt: "Comptroller Thomas P. DiNapoli says he has banned intermediaries and lobbyists from helping steer investments from New York State's pension fund. He says the ban includes any person or business paid a fee to help place investments from the fund, which stood at about $122 billion at the end of 2008. State and federal investigators are looking into millions of dollars paid to politically connected placement agents during the tenure of Comptroller Alan Hevesi. The state inquiry has led to three indictments and one guilty plea." (The New York Times; free registration required)
401(k) Plan Investments Under Scrutiny in Congress
Excerpt: "The huge drop in the stock market has focused congressional attention on practices within some 401(k) plans -- practices that can cause people to pay excessive fees and that subject workers to investment choices that are not always in their best interest. The market downturn has highlighted the fact that many Americans are not educated adequately about investment decisions and fumble mutual fund choices." (Chicago Tribune)
Alaska's Lawmakers Differ on State Pension Plan
Excerpt: "As the state's pension debt grows to more than $11 billion, lawmakers are mixed about whether the mess warrants a return to a different benefits system for public employees, including school teachers and municipal workers. . . . Three bills were filed before the start of the legislative session calling for repealing the defined contribution retirement plan and reinstating a defined benefit plan. The issue is convoluted and draws passionate responses from all sides." (Fairbanks Daily News-Miner)
How Plan Funding Levels Should Influence Investment Strategy (PDF)
Pages 14-18 of 36 pages. Excerpt: "Pension investment solutions, like most other portfolio management strategies, are complicated by unavoidable trade-offs. Chief among these for plan sponsors is cost versus volatility: The trade-off for seeking higher asset returns, which can reduce average funding costs, is accepting the potential for higher liability tracking error. The investment decision for pension plans is based on balancing these trade-offs." (The Vanguard Group, Inc.)
GASB Seeks Comments on Pension Accounting and Reporting for Pension Plans (PDF)
Excerpt: "The Governmental Accounting Standards Board (GASB) has issued an Invitation to Comment (ITC) on Pension Accounting and Financial Reporting. The topics considered in the ITC include the process on which pension accounting and financial reporting should focus; recognition of liabilities and expenses; measurement of unfunded pension obligations; the use of actuarial methods; and reporting by government employers in cost-sharing multiple-employer pension plans and reporting by pension plans themselves." (National Conference on Public Employee Retirement Systems)
Pension Buyouts Could Harm Employee-Employer Relationships
Excerpt: "The notion of financial services firms buying out defined benefit pension programs makes government auditors profoundly uneasy, according to a new report. In particular, noted auditors with the U.S. Government Accountability Office (GAO), a pension buyout that makes economic sense may not be worth pursuing because of its potential impact on an employer's relationship with its workforce." (PLANSPONSOR.com; free registration required)
Although Most Americans Sticking with 401(k)s, It Does Not Solve the Savings Crisis
Excerpt: "The problem is bigger than retirement, said Pamela Perun, policy director of the Initiative on Financial Security, The Aspen Institute. She noted that 20% of Americans are 'unbanked' or don't save at all -- not even owning a savings or checking account. She said the employer system plays a valuable role in closing the savings gap, and recent developments such as auto-enrollment into default funds has helped increase participation within retirement plans -- but not every American has access to such a plan. [Peter Brady of the Investment Company Institute] said the approximately 50% of employers who don't offer workplace retirement plans are not random -- meaning, it is predictable that certain demographics of plans, such as lower income jobs, will not provide a retirement plan offering to employees." (planadvisor)
New York Pension Probe Details
Excerpt: "Three brief points on the expanding pension probe . . . ." (Newsday)
401(k) Fee Disclosure Bill Introduced in House
Excerpt: "Representative George Miller, a California democrat, and Representative Rob Andrews, a New Jersey democrat, introduced a 401(k) fee disclosure bill yesterday. If passed in its current form, a worker's quarterly statement would be required to list total contributions, earnings, closing account balance, net return, and all fees subtracted from the account. The total fees taken out of the account would be disclosed as one number in dollars, not as a percentage of the account balance as they typically are now. 'Especially during these troubling economic times, workers need to be able to account for every penny taken from their hard-earned savings,' said Miller, chairman of the house education and labor committee." (U.S. News & World Report)
Testifiers at Hearing Debate Merits of Retirement Plan Fee Disclosure
Excerpt: "The Health, Employment, Labor, and Pensions Subcommittee of the U.S. House Education and Labor Committee held a hearing on Wednesday about fee disclosure to retirement plan participants. The hearing came a day after legislation about full fee disclosure was introduced in the U.S. House . . . . [The target page has links to each testimony.]" (planadvisor)
[Opinion]
Describing the Plan Investment and Funding Policies in Required Notice Is Problematic
Excerpt: "New disclosure requirements for defined-benefit pension plans could pose problems for CFOs not paying close attention, a benefits attorney told CFO.com. Time is running out to get a handle on an amendment to the Pension Protection Act of 2006 that requires plan sponsors to describe an investment policy and a funding policy for their plans, among other new disclosures they must make. The disclosures must be included in notices to plan participants, their beneficiaries, labor organizations, and the Pension Benefit Guaranty Corporation by April 30, except for plans with fewer than 100 participants, which have at least three more months." (CFO.com)
[Opinion]
The Real Issues Underlying 401(k) Litigation
Excerpt: "One of the fundamental shortcomings of the status quo in the 401(k) marketplace is the 'bundled' approach itself, in which most plan expenses (i.e., the vast majority of costs borne by participants) are reflected in mutual fund expense ratios. We see two big problems with this practice." (Interlake Capital Management LLC)
DATAIR Employee Benefit Systems, Inc. (Advert.)
DATAIR’s DB Valuation System Efficient Administration, Discrimination Testing and Proposal software. Updated for PPA’06 Pension Funding Rules:
Schedule SB reports and links to our 5500/PBGC System Links to our systems for FAS 158 and Relative Value reporting. Contact us for details: sales@datair.com or call 1-888-328-2474 (1-888-DATAIR-4) |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Furloughs and Reduced Hours: New Guidance on Cost-Cutting Strategies Other than Layoffs
Excerpt: "Last December, as the recession was beginning to deepen, Littler published an Insight, Furloughs and Reduced Hours: Cost-Cutting Strategies Other Than Layoffs, discussing several alternatives to layoffs, particularly mandatory furloughs of exempt employees, mandatory use of vacation/PTO during furloughs, and reduced workweeks, based on the limited legal precedent available at that time on these subjects. Recently, the U.S. Department of Labor (DOL) issued three opinion letters that address some of these alternatives. This Insight is an update to the December 2008 Insight and provides the latest legal analysis." (Littler Mendelson P.C.)
Consolidating Benefits Administration a Top Priority for Multinationals
Excerpt: "A new report from MetLife says 59% of U.S. corporations with multinational operations consider 'consolidating all benefits administration onto a common platform' to be one of their top priorities - compared with 45% of their peer U.S. domestic-only corporations. 'Managing Global Benefits: Challenges and Opportunities' recognizes that as U.S. companies continue to expand globally, they are being challenged to develop benefits programs for their international workforce that are not only competitive in local communities around the world, but also cost-effective to implement and manage in a wide number of countries." (PLANSPONSOR.com; free registration required)
Fewer Employers Paying the Costs to Relocate an Employee and Are Cutting Their Relocation Budgets
Excerpt: "However, when companies do decide to move an employee, they are more likely to offer incentives such as help finding a job for a spouse. An Atlas Van Lines news release about its survey said respondents expect the trend to continue at least through 2009. 'Relocation is a tough proposition for both employers and employees. Businesses are looking to save costs everywhere, and workers are worried about losing money on their homes and uprooting their families,' said Greg Hoover, president and COO of the moving company, in the announcement.'But companies still need good people, and those willing to relocate are being compensated for their trouble.'" (PLANSPONSOR.com; free registration required)
Webcasts and Conferences
(Click to post your webcast or conference)"What You Don't Know About HCEs and Key Employees" Web Seminar - New Date
Nationwide on May 18, 2009
presented by SunGard Relius
COBRA Provisions in the American Recovery and Reinvestment Act Workshop
in California on May 28, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Group Health Plan Mandates for Rookies: The Basics on the Federal Mandates (Other Than COBRA and HIPAA)
Nationwide on March 26, 2009
presented by EBIA / Thomson Reuters
Maximizing ROI of On-Site Employee Health Clinics
in Illinois on July 29, 2009
presented by World Research Group
Press Releases
(Click to post your press release)U.S. Labor Department Secures Appointment of Independent Fiduciary for Profit Sharing Plan of Defunct Hackensack, New Jersey, Company
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Council Urges House Subcommittee to Reform Health Care by Preserving and Strengthening Voluntary Employer System
American Benefits Council
Pension Rights Center Statement on the Introduction of the 401(k) Fair Disclosure for Retirement Security Act of 2009
Pension Rights Center
The SPARK Institute Makes The Case For Employer-Sponsored Retirement Plans
The SPARK Institute
Mercer Launches Online Retirement Planning Program
Mercer
Employee Benefits Jobs
(Click to post your job opening | View all jobs |
RSS feed of all jobs )
Pension Director
for Segal on behalf of a client
in CA
Retirement System Director, Assistant
for City of Tacoma
in WA
Director of Compliance
for Rapidly expanding Third Party Administration firm
in CA
Defined Benefit Administration Programmer/Consultant
for Winklevoss Technologies
in CT
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
Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too!
Sign-up form is at https://benefitslink.com/newsletter (free).
This email has been published by:
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151
David Rhett Baker, J.D., Editor
Copyright 2009 BenefitsLink.com, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.
Anyone can receive these emails; just have them sign up at this web page: https://benefitslink.com/newsletter/
Other useful links: