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April 30, 2009 |
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[Official Guidance]
Text of IRS Notice 2009-42: April 30 Deadline Extended to June 30 for Multiemployer Plans to Elect Relief under Sections 204 and 205 of WRERA (PDF)
2 pages. Excerpt: "Some sponsors of multiemployer plans have identified a legitimate need for additional time to make these elections in particular situations. Accordingly, this Notice hereby substitutes 'June 30, 2009' for each reference to 'April 30, 2009' in . . . Notice 2009-31. In addition, if (1) as of the otherwise applicable deadline (i.e., the deadline for a plan as modified by this notice) for making an election under section 204 or 205, a plan sponsor has been unable to reach agreement as to whether to make the election, so that the decision must be resolved through an arbitration process; (2) the plan sponsor makes an election by the otherwise applicable deadline that is contingent on the resolution of the arbitration; and (3) the resolution is to not make an election, then the IRS will automatically approve a request to revoke the election." (Internal Revenue Service)
[Guidance Overview]
Amending Your Plan to Reduce or Eliminate Employer Contributions (PDF)
4 pages. Excerpt: "A common question from employers is whether advance notice must be given to employees when employer contributions are being reduced or discontinued. Beyond the notices . . . for safe-harbor and money purchase pension plans, the regulations do not require advance notice. Nonetheless, M&I does suggest that advance notice is advisable. While 30 days notice is generally sufficient for most employers, a shorter length of time should be long enough to allow employees to change their rate of deferrals prior to the effective date of the change. In any event, employees must be given a summary of material modifications after the change explaining the amendment." (Marshall & Ilsley Trust Company N.A.)
[Guidance Overview]
Workforce Reductions Can Create Retirement Plan Partial Terminations
Excerpt: "During this period of global economic turmoil, many employers are experiencing employee turnover rates that far exceed historic levels. Although often overlooked, substantial reductions in an employer's workforce can result in the partial termination of the employer's retirement plan(s). For the reasons described [in this target document], this is something to be avoided where possible, given that a partial plan termination is costly and administratively burdensome and may lead to class action litigation and plan disqualification." (McGuireWoods LLP)
[Guidance Overview]
Indemnification Provisions: Do They Apply to Excuse a Party's Own Wrongdoing?
Excerpt: "A novel indemnification issue arose in the context of the complex ERISA litigation before U.S. District Court Judge Melinda Harmon in the Texas Southern District. Can a party invoke an indemnification provision in an administrative services agreement as a defense to its own negligence? The facts are quite complex, but unnecessary for comprehending the essential issue at stake here. The litigation is not about the Enron class action settlement, but about mistakes in calculation of entitlement to the settlement funds. In short, the critical issue is responsibility for losses and expenses resulting from Hewitt's mistaken calculations for distribution of the first tranche of the settlement funds, as well as for defense of claims brought against Hewitt by Enron Corp. Savings Plan and the Administrative Committee of the Enron Savings Plan." (Roy Harmon III via Health Plan Law)
[Guidance Overview]
Class-Action Lawsuits Filed Against Country's Biggest Corporations Alleging Payment of Excessive Fees to Mutual Funds in Workers' Retirement Plans
Excerpt: "The court battle continues over the class-action lawsuit against Wal-Mart, alleging excessive fees and conflicts of interest by 401(k) plan fiduciaries. Heavy hitters are lining up on opposing sides: The DOL on behalf of the employees and three large business organizations on the other." (Human Resource Executive Online)
[Guidance Overview]
401(k) Fair Disclosure Bill Is Introduced
Excerpt: "As expected, George Miller (D-CA), Chairman of the House Education & Labor Committee, introduced a bill (H.R. 1984) to impose special reporting and disclosure rules - focused primarily on investment related fees - for individual account plans. The bill is similar to one which the Committee approved in April 2008, but has some notable additions, including the requirement that a plan must include at least one low-cost index fund to be eligible for ERISA § 404(c) protection." (Deloitte via BenefitsLink.com)
[Guidance Overview]
Plant Closing Does Not Interfere with Pension Rights in Violation of ERISA, Court Says
Excerpt: "A plant closing did not violate ERISA Section 510, even though laid-off employees lost the opportunity to work the 30 years needed for full pensions, a federal appeals court has ruled. Among other prohibitions, Section 510 bars employers from discharging employees for the purpose of 'interfering with' their pension rights. Evidence that pension costs were an incidental factor in the employer's decision was insufficient to overcome its legitimate reason for the closing: the plant's overcapacity. The case instructs employers to carefully document the business reasons for employment actions." (Mercer LLC)
Oversight Hearing on the Social Security Administration's Provisions in the American Recovery and Reinvestment Act of 2009
April 28, 2009. Excerpt: "The hearing will focus on the progress made by SSA and other involved agencies in using ARRA resources to replace the NCC; SSA's use of ARRA funding to process recession-driven claims; and the agency's plans for distributing the $250 economic recovery payments to over 50 million recipients." (U.S. House of Representatives Committee on Ways & Means)
401(k) Plan Sponsors Eye Annuities With Caution
Excerpt: "Given the stock market's volatility, [a number of 401(k) plan sponsors are] seriously discussing adding an annuity option to their 401 (k) plans. With most employees' 401(k) accounts decimated, the idea of providing guaranteed post-retirement income seems attractive, experts say. But while many companies are talking about these offerings, very few employers are actually adding them to their plans. Only 8 percent of 401(k) plans allow participants to roll over their account balances to an annuity upon retirement, according to Hewitt Associates' '2009 Hot Topics in Retirement.' Twenty-two percent expect to add this option to their plans in 2009." (Workforce Management; free registration required)
Intranet Posting of Form 5500 Pension Information Required for 2008 Plan Year
Excerpt: "Defined benefit plan sponsors will be required to post Form 5500 actuarial information (Schedule SB or MB) on their internal website for employees starting later this year. The Pension Protection Act requirement is effective for the 2008 plan year even though Form 5500 e-filings are not required until the 2009 plan year. Pending further guidance, calendar-year plans filing the 2008 Form 5500 in July 2009 would be well-advised to post the required information on their intranet by October. Posting is not required if a plan sponsor doesn't maintain an intranet site for employee communications." (Mercer LLC)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Abbott Labs Accused of Benefits Interference in Class Action Suit
Excerpt: "Plaintiffs in a class action lawsuit allege Abbott Laboratories cheated workers out of their retirement benefits when the company spun off its hospital products business. The Chicago Sun-Times reports that the lawsuit stems from Abbott Laboratories' 2004 spinoff of its hospital products unit into a separate company, Hospira, which is also named in the suit. Workers claim they were assured by Abbott they would have a comparable benefits package at Hospira, but they did not. After the spinoff, Hospira dropped retiree health insurance benefits, and workers' Abbott pension benefits were frozen. Alleged wrongdoing by Abbott and Hospira cost former Abbott workers 'well in excess of $200 million,' contends plaintiffs' attorney Steve Sprenger, according to the Sun-Times." (PLANSPONSOR.com; free registration required)
Chrysler Bankrup.tcy Plan Is Announced
Excerpt: "Chrysler, the third-largest American auto company, will seek bankrup.tcy protection and enter an alliance with the Italian automaker Fiat, the White House announced Thursday. . . . On Wednesday, union members approved contract changes with Chrysler that will mean pay and benefit cuts, and their contract is expected to remain in effect during the bankrup.tcy." (The New York Times; free registration required)
OPM Announces New Governmentwide Telework Policy
Excerpt: "Office of Personnel Management Director John Berry on Wednesday announced a broad new telework plan for employees, in part to deal with growing concern over the spread of swine flu in the United States. Berry, who said President Obama and the Cabinet are committed to expanding telework, met with department secretaries this week to discuss the importance of the practice as a continuity of operations measure in the face of the global disease." (GovernmentExecutive.com)
Engaging the 21st Century Multi-Generational Workforce: Findings from the Age & Generations Study (PDF)
33 pages. Excerpt: "Major findings from this study include: Older workers are more likely to have higher levels of engagement than younger workers. Employees reporting better physical and mental health are more likely to have higher levels of engagement than those with poorer physical and mental health. Employees who are satisfied with the training and development opportunities available to them are more likely to have higher levels of engagement than those who are not satisfied. Employees working in teams that have a culture supportive of workplace flexibility are more likely to have higher levels of engagement. The investment that employers make in their benefits programs also contributes to the level of the engagement of their workforce, specifically, employers who offer health insurance for the family members of full-time employees, life insurance, and employer-contributions to the employees' defined contribution plans are more likely to have higher levels of engagement." (The Sloan Center on Aging & Work at Boston College)
Webcasts and Conferences
(Click to post your webcast or conference)ftwilliam.com Administration Software 'Sneak Peek'
Nationwide on June 2, 2009
presented by ftwilliam.com
Press Releases
(Click to post your press release)Hewitt to Offer Prudential's IncomeFlex Target Solution
Hewitt Associates LLC
PBGC Protects Pension Plans at Niagara Falls Memorial Medical Center
Pension Benefit Guaranty Corporation (PBGC)
ExpertPlan Hires EVP of Sales, Marketing and Business Development
ExpertPlan
U.S. Department of Labor Sues Former West Palm Beach, Florida, Tile and Flooring Distributor to Restore SIMPLE IRA Assets
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Labor Department Sues to Appoint Independent Fiduciaries for Profit-sharing Plans Abandoned by Two Defunct Binghamton, New York, Companies
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Wells Fargo's Institutional Retirement to Acquire Comerica's DC and Recordkeeping Business
Wells Fargo
Fiduciary360 Names Kristina Fausti Director of Legal and Regulatory Affairs; Was Special Counsel at SEC
Fiduciary360 (fi360)
Video: Genworth Financial Reveals Best Places in America for Long Term Care
Genworth Financial, Inc.
NIRS Announces Retirement Academic Advisory Board
National Institute on Retirement Security
Benefit Express Reduces Client Health Care Costs by Auditing Dependents
Benefit Express
EmployeeBenefitsJobs.com (Sponsor)
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