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April 29, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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[Guidance Overview]
Court Dismisses Claims against JPMorgan Cash Balance Plan
Excerpt: "JPMorgan Chase & Co. did not violate the Employee Retirement Income Security Act (ERISA) with its 1989 conversion to a cash balance pension plan and subsequent plan amendments, a court ruled. The U.S. District Court for the Southern District of New York also ruled that JPMorgan's predecessor banks, including Chemical Banking Corporation, did not violate ERISA. Former participant Frank Bilello alleged that the plan's failure to specify a projection method for the accrual of benefits resulted in an accrual that was not 'definitely determinable' in violation of ERISA." (planadvisor)
Determining the Best Investment Choices for 403(b) Plans
Excerpt: "While compliance efforts have led some 403(b) plan sponsors to adjust their investment menu, others have moved forward with existing offerings. There are a number of things plan sponsors should consider when deciding what to do about investments. Speaking at PLANSPONSOR's 2nd annual 403(b) Summit in Orlando, Florida, Phillip Senderowitz, Chief Investment Officer, Chepenik Financial, said that in setting the investment lineup for their plans, sponsors should consider the participants - their range of investment knowledge, risk tolerance, and desire for involvement." (PLANSPONSOR.com; free registration required)
House Republican Leader Boehner Introduces 'Savings Recovery Act'
Excerpt: "House Republican Leader John Boehner (R-OH) along with 21 other senior Republican cosponsors on April 22 introduced the 'Savings Recovery Act' (H.R. 2021) that seeks to help Americans rebuild their retirement, college, and personal savings. . . . H.R. 2021 includes both defined benefit funding relief and defined contribution provisions, as well as provisions addressing 529 college savings plan relief, Social Security earnings penalty, and capital gains and losses. Highlights of the pension and savings provisions [are outlined on the target page]." (The ERISA Industry Committee)
IRS Draft Procedures for Obtaining Opinion Letters for Prototype 403(b) Plans
Excerpt: "The IRS has also posted proposed sample plan language for drafting 403(b) prototype plans on its website. Comments are requested about the draft revenue procedure and sample plan language, and about any other aspect of the 403(b) prototype plan program in general." (Wolters Kluwer)
More 403(b) Guidance on the Way, Key IRS Official Says
Excerpt: "The IRS's Employee Plans (EP) unit will issue more guidance on how to satisfy the requirements for 403(b) plans, EP Tax Law Specialist Robert Architect stated on April 16, 2009 in an IRS phone forum. The IRS will update the EPCRS program to address 403(b) plans, Architect said. The revisions will be issued in the 'near term,' he indicated. Initially, the revised procedures will allow plans to correct operational failures." (Wolters Kluwer)
$346 Median Administration Fee for 401(k) Plans
Excerpt: "The median fee covering administration, recordkeeping, and investment services was $346 per year for the 130 defined contribution plans surveyed by Deloitte and the Investment Company Institute in late 2008. As a percentage of plan assets, the annual median fee was 0.72%, with 10% of the plans reporting fees of 0.35% of assets or less and 10% of the plans reporting fees of 1.72% of assets or greater." (Wolters Kluwer)
10 Myths About 401(k)s - And the Facts (PDF)
5 pages. Excerpt: "Myth No. 1: Thanks to the financial crisis, Americans are bailing out of their 401(k) plans. Fact: Americans are not abandoning their 401(k)s." (Investment Company Institute)
Strange But True: Claim Social Security Now, Claim More Later
Excerpt: "In the past, providing these benefit options for spouses was not particularly valuable, since those who postponed benefits beyond the Full Retirement Age were giving up expected lifetime benefits. With the recent advent of an actuarially fair delayed retirement credit, lifetime benefits are roughly the same whether claimed at the Full Retirement Age or at age 70. As a result, today the availability of benefit options has real value for couples and therefore inevitably increases the cost of the Social Security program . . . ." (Center for Retirement Research at Boston College)
Number of Endangered Multiemployer Plans Quadrupled in Last Year
Excerpt: "A new survey from the International Foundation of Employee Benefit Plans (IFEBP) shows that the number of multiemployer pension plans less than 80% funded has quadrupled in the last year. In 2008, 80% of multiemployer DB plans were certified as safe (in the green zone), while only 11% were endangered or seriously endangered (the yellow or orange zone), and 9% were critical (the red zone). For survey respondents who have calculated their plan status in 2009, only 20% remain in the safe zone, and the majority of plans were either endangered or seriously endangered (41%) or critical (38%), according to an IFEBP announcement." (PLANSPONSOR.com; free registration required)
403(b) Communication Takes on New Education Role
Excerpt: "Retirement plan advisers have an opportunity to help 403(b) plan sponsors reach out to participants in a variety of ways. As many 403(b) plans move to consolidate to a single-vendor platform, the role of education and, therefore, communication is shifting. In the past, education was between vendors as they tried to win over employees, and now it is more about the plan sponsor and the employees . . . . 'Now these education meetings are not a sales pitch,' . . . . The trend of consolidation has provided an opportunity to focus on new education endeavors in 403(b) plans, such as asset allocation . . . ." (planadvisor)
Financial Firms Await Retirement Advice Rules
Excerpt: "The federal government's push to expand retirement-plan advice won't necessarily pull in financial advisers. Some financial institutions are eager to help their representatives provide investment advice to workers. Others are wary of the complex and evolving regulations and are awaiting further guidance from Washington. The Department of Labor is hashing out rules meant to increase access to investment advice for individuals with retirement plans. Members of Congress are also addressing the matter. Rep. Robert Andrews (D-N.J.), for example, introduced a bill last week aimed at ensuring workers receive independent and unconflicted advice." (CNNMoney.com)
Judge Dismisses Most Claims in U.S. Sugar Suit
Excerpt: "A federal court judge has pulled the plug on 12 of 13 counts that were part of a class action lawsuit filed by shareholders of Clewiston-based U.S. Sugar Corp. The suit, filed in January 2008 in West Palm Beach, alleged that some of the company's top executives attempted to deprive shareholders of a chance to sell their stock on two occasions when U.S. Sugar received buyout offers. The 13-count complaint alleged breach of fiduciary duty and violation of Employee Retirement Income Security Act (ERISA) statutes." (South Florida Business Journal via bizjournals.com; free registration required)
University Conference Services (Advert.)
Navigating Uncharted Waters in Retirement Plan Management An economic storm of epic proportions, steep asset declines, tough decisions on matching contributions and heightened potential for fiduciary liability have many plan sponsors feeling as if they are lost at sea. The Boston Mid-Sized Retirement & Pension Plan Management Conference, May 5–8, 2009, brings together an impressive array of plan management experts who delve into the momentous challenges you face and explore solutions for guiding your plan to calmer waters. |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Option Repricing and Exchanges
Excerpt: "Even many privately held-companies have seen the fair market value of their stock decline, causing their outstanding options to be underwater, as well. As a result, those now valueless options no longer serve their incentive purpose, and affected companies are looking for ways to restore those incentives to motivate and retain employees. There are three principal approaches to try to restore those incentives: issue new options (or other incentive awards, such as restricted stock); reprice underwater options (that is, make the exercise price no less than the current fair market value); or offer cash, new options or other incentive awards in exchange for outstanding underwater options (or offer to materially amend terms of the underwater options other than the exercise price -- a material amendment generally is treated the same as an exchange)." (Seyfarth Shaw LLP)
[Guidance Overview]
Executive Compensation 2008: The Year in Review and the Road Ahead (PDF)
17 pages. Excerpt: "[T]he body of this year's letter is intended to provide a sense of what has happened over the last year and to help companies navigate the upcoming year and beyond. The letter comments on the issues companies are facing currently with regard to executive compensation in light of events in 2008 and raises questions intended to create discussion around what companies and directors should be thinking about in 2009 and beyond relating to executive compensation." (Frederic W. Cook, Inc.)
[Opinion]
Many Things Shape and Influence the Composition of Workplace Benefits
Excerpt: "Long established as a kind of 'partnership' of employers, the government, and individual workers, the types of benefits provided, the incentives for providing them, and the perceived benefit in receiving them has varied over time, and between employment sectors. . . . However, these are not normal times and, if rhetoric becomes reality, change could well be the order of the day, with the potential for seismic shifts in the responsibility, costs, and characteristics of benefits long associated with today's workplace. With that in mind, as we compiled this year's Buyer's Guide, I kept thinking about how much -- and what -- things could change." (PLANSPONSOR.com; free registration required)
Webcasts and Conferences
(Click to post your webcast or conference)32nd Annual Conference
in District of Columbia on May 6, 2009
presented by ESOP Association
Employee Benefits and Employment Law Issues in the "Great Recession"
in California on May 21, 2009
presented by Western Pension & Benefits Conference - Orange County Chapter
ERISA Update Seminar
in Florida on June 2, 2009
presented by TRI Pension Services/GrayRobinson, P.A.
Form 5500 Update: Filing Issues for ERISA-Covered Pension and Welfare Plans
in New York on May 28, 2009
presented by WEB (Worldwide Employee Benefits Network ), New York Chapter
Press Releases
(Click to post your press release)79% of Multiemployer Defined Benefit Pension Plans No Longer in Safe Funded Status
International Foundation of Employee Benefit Plans
Employers’ Reform Position Details Their Readiness to Tackle Tough Decisions to Solve Health Care Problem
HR Policy Association
Challenge in Curbing the Spread of Swine Flu: Half of Workforce Lacks Paid Sick Days
Institute for Women's Policy Research (IWPR)
ABA Retirement Funds Names Scarlett Ungurean Executive Director
ABA Retirement Funds
Employee Benefits Jobs
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