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April 24, 2009


Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy.

SunGard (Advert.)

EGTRRA Restatement Outsourcing Services (clickable image)

EGTRRA Restatement Outsourcing Services

Do you have 300 or more defined contribution plans to restate for EGTRRA? Outsource them to us. SunGard's expert Document Management Services (DMS) staff can work as your "invisible" back office resource to help you through the restatement process. Let us focus on your plan documents, so you can focus on growing your business. Contact Ellen Nasrallah at 800-326-7235, ext. 5968.


[Guidance Overview]
Thoughts on Properly Delegating Fiduciary Duties (PDF)

Excerpt: "Recognizing the high anxiety of today's ERISA fiduciaries, some plan service providers are offering to 'share the fiduciary load' by stating in their service agreements that they are co-fiduciaries. But what does that really mean? As we will explain . . ., co-fiduciary status is, at best, a half measure." (Aspen Publishers via Jones Day)


[Guidance Overview]
Hard Times Mean More 401(k) Hardship Distributions

Excerpt: "[This is an overview of what constitutes a hardship and how] they should be administered. Hardship distributions from a 401(k) plan can be permitted under two general rules: safe harbor rules and general rules for an immediate and heavy financial need . . . ." (National Benefit Services, Inc.)


Potential Pension Glitch for Retirees: Consider Adjusting Your Withholding, or You Could Be in for a Tax Surprise
Excerpt: "[Rebecca Davis, staff attorney for the Pension Rights Center] and Pension Rights Center director Karen Ferguson wrote Treasury Secretary Timothy Geithner asking him to direct the IRS to clarify that the new withholding tables do not apply to traditional employer-sponsored pension plans. That would keep the employers from withholding too much from pension checks. So far, Geithner has not responded.' (AARP)


Auto Retirees Brace for Hardship: Pension and Health Benefits May Suffer Under Bankrup.tcy
Excerpt: "If the GM pension plans are terminated, they would be at least $20 billion underfunded, according to the government's Pension Benefit Guaranty Corp. The federal agency would insure about $4 billion of that gap, leaving the GM pension plans with $100 billion in obligations and only $84 billion in assets. Likewise, if the Chrysler pension plans are terminated, they would be at least $9 billion underfunded, according to the agency, which would insure about $2 billion of that. This would leave the Chrysler pension plans with $28 billion in obligations and only $20 billion of assets, according to the pension agency." (The Washington Post; free registration required)


Economic Crisis Prompts Many Companies to Suspend Contributions to Employee Savings Plans
Excerpt: "Since October 2008, more than 170 employers have announced plans to reduce or suspend matching contributions to their employee savings plans as a cost-cutting measure. . . . Suspending contributions during tough financial times is not unheard of -- there were several such suspensions in 2003. Today, however, this cost-cutting measure is becoming more and more prevalent among large companies. In a Watson Wyatt survey on recent changes to HR programs during this economic crisis, /1/ 52 percent of responding companies said they had laid off employees, 42 percent had implemented a salary freeze or pay reduction strategy, and 12 percent had suspended or reduced their matching contribution to their DC plan -- compared with 3 percent when the survey was conducted in December 2008. Many companies made their decisions after their year-end fiscal results underscored the need for action." (Watson Wyatt Worldwide)


What the 2008 Stock Market Crash Means for Retirement Security
Excerpt: "The one-third drop in the S&P 500 index between year-end 2007 and 2008 raises concerns about retirement security since Americans now hold more equities through their retirement plans. Those near retirement will fare the worst because they have no time to recoup their losses. Midcareer workers will fare better because they have more time to rebuild their wealth. They may even gain income if they buy stocks at low prices and get above-average rates of return. High-income groups will be the most affected because they are most likely to have financial assets and to be invested in the stock market." (The Urban Institute)


Funding Public Pension Plans
Excerpt: "At the outset, this paper reviews the operation and funding status of state and local government pension plans. Next, this paper discusses the major financial, accounting, and legal issues that relate to the funding of state and local government pension plans. Finally, this paper considers how to ensure that public employees will have adequate retirement benefits now and in the future." (John Marshall Law Review via Social Science Research Network)


Lifetime Asset Allocations: Methodologies for Target Maturity Funds (PDF)
47 pages. Excerpt: "The creation of robust lifetime asset allocation solutions begins with an analysis of the changing risks investors face throughout their lifetimes. During the accumulation phase, investors are primarily concerned with expense risk, savings risk, mortality risk, and market risk. During the decumulation phase, or retirement phase, the primary risks are expense risk, longevity risk, bequest risk, and market risk. Just as the nature and magnitude of these risks evolve over time, so do the methods for controlling them. The changing nature of these risks is closely related to the size of the investor's financial and human capital." (Ibbotson Associates)


Plight of Carmakers Could Affect All Pension Plans
Excerpt: "Decisions that the government will make soon on the future of General Motors and Chrysler could accelerate the decline of traditional pension plans, which have sheltered generations of workers from an impoverished old age. Pension experts predict that a government takeover of the two giant plans would spur other auto companies and all types of manufacturers to abandon such benefits for competitive reasons." (The New York Times; free registration required)


PBGC Taking Over Carmakers' Pension Plans Could 'pose Considerable Financial Uncertainty,' According to GAO Report
Excerpt: "Should General Motors and Chrysler be pushed into bankrup.tcy and are unable to support retirees' pension plans it could create an unprecedented strain on the government-sponsored corporation that guarantees those benefits. A report from the nonpartisan General Accounting Office released today noted that GM's and Chrysler's plans are currently underfunded by about $29 billion . . . ." (Detroit Free Press)


[Opinion]
Benchmark Financial Services Affidavit in Support of Asset Freeze in Fairfield Madoff Lawsuit

Excerpt: "[Benchmark Financial Services] is unique in investigating securities and money management abuses, primarily on behalf of pension funds. . . . Within this area of specialization (investment management), Benchmark has focused on conflicts of interest and self-dealing involving investment consultants retained by pensions to provide objective, expert advice regarding asset allocation, manager selection and performance monitoring." (DealBook via Scribd)


[Opinion]
GOP Savings Recovery Act Helps Americans Rebuild Their Savings

The Website offers information on the House Republican Savings Solutions Group and The Savings Recovery Act. (Office of the House Republican Leader)


[Opinion]
The Parts of the 401(k) Disaster Story 60 Minutes Didn't Report

Excerpt: "Steve Kroft's '60 Minutes' report Sunday, '401-K Recession,' good as it was, covered only a small portion of the whole retirees-are-now-officially-screwed story. It's a fascinating and infuriating story, with far too many angles for a 13-minute segment. . . . The whole sordid 401(k) saga largely involves big corporations dumping their pension plans and pushing 401(k)'s and then brazenly gaming the bankrup.tcy laws. The story has, sadly, largely gone unnoticed and unreported these past few months during the stock-market meltdown and housing/bank scandals." (The Huffington Post)



Deloitte Consulting LLP (Advert.)

8th Annual 401(k) Benchmarking Survey (clickable image)

8th Annual 401(k) Benchmarking Survey

In these unprecedented economic times, organizations are focused on controlling costs without losing sight of their long-term business, total rewards and talent strategies. Total rewards programs, especially 401(k) plans, are top of mind for employers − and employees − alike. Against this challenging backdrop, this year’s 401(k) survey promises to provide meaningful insights for plan sponsors.

Deadline: April 30th. Participants receive a complimentary copy of the survey findings. Responses are completely confidential.


Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
Employee Benefits in an Excess Benefit Transaction Analysis

Excerpt: "The IRS has recently stepped up scrutiny of the compensation paid to key employees and insiders of tax-exempt organizations and has the authority to levy significant excise tax penalties if it finds that an organization pays excessive compensation. As a result, it is critical that boards of directors fully comply with the complex set of rules under Section 4958 of the Internal Revenue Code (the 'Code') to avoid these penalties. One of the most challenging aspects of these rules is to identify and value the total compensation paid to the organization's key employees and determine that such compensation is reasonable and appropriate. The employee benefits provided to such individuals can be an important part of this compensation analysis and should not be overlooked." (McGuireWoods LLP)


U.S. Said to Seek a Chrysler Plan for Bankrup.tcy
Excerpt: "The Treasury Department is directing Chrysler to prepare a Chapter 11 bankrup.tcy filing as soon as next week, people with direct knowledge of the talks said Thursday. . . . The Obama administration has told Chrysler it will provide up to $6 billion in new financing, on top of the $4 billion in loans it has already given the company, if Chrysler can complete a deal by next Thursday with a cost structure that gives it a chance of survival. The creditors have so far balked at the terms suggested by the Treasury. But the negotiations have taken a new direction. Treasury now has an agreement in principle with the U.A.W., whose members' pensions and retiree health care benefits would be protected in the event of a bankrup.tcy filing, said the people with knowledge of the discussions, who asked for anonymity because they were not authorized to discuss the case." (The New York Times; free registration required)



Webcasts and Conferences

(Click to post your webcast or conference)

Form 5500 and Benefit Plan Audit Updates
Nationwide on May 14, 2009
presented by ASPPA (American Society of Pension Professionals & Actuaries)

New COBRA Premium Subsidy - Multiemployer Plan Issues Webcast
Nationwide on April 30, 2009
presented by International Foundation of Employee Benefit Plans

The Changing Shape of Employee Benefits – How the Recession is Affecting Benefits and What’s Next Webinar
Nationwide on May 7, 2009
presented by BNA, Inc.

Web Seminar - "Found Money" in Your Health & Welfare Benefit Plans: What to Ask from Your Outsourced Benefits Administrator
Nationwide on May 7, 2009
presented by TRI-AD


Press Releases

(Click to post your press release)

Guilty Plea In Health Care Fraud Scheme
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Self-Funding Healthcare Conference Hosted by Private Employer in Kansas City
Savvy Self-Funding Healthcare Conference & Expo

ING Launches Next Phase of Marketing Campaign Focused on Your Retirement Number
ING Retirement Services


Employee Benefits Jobs

(Click to post your job opening | View all jobs | RSS feed for jobs RSS feed of all jobs )

Accountant/Employee Benefits Administrator
for McPhillips, Roberts & Deans, PLC
in VA



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