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May 4, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
ASPPA (Advert.)
The ERISA Outline Book – 2009 edition Make sure you have the most up-to-date version available to provide you with the information you need on a daily basis. The 2009 edition is a six-volume asset that includes all the PPA guidance issued in 2008, revised EPCRS procedures, the latest ERISA litigation cases and all notices , rulings and other guidance from DOL, IRS and PBGC issued in 2008. The ERISA Outline Book also serves as recommended reading for the ERPA Exam! Order your 2009 edition NOW! |
[Guidance Overview]
AT&T Did Not Improperly Delay QDRO Payment
Excerpt: "The U.S. District Court for the Eastern District of Missouri has found that AT&T Inc.'s pension plan administrator did not act improperly by not immediately paying lump-sum benefits to an employee's ex-wife under two domestic relations orders. According to the court opinion, neither the first domestic relations order (DRO) nor an amended DRO entitled Sigrid V. Green to the immediate payment of pension benefits. The court determined Green was entitled to a calculated portion of her ex-husband's pension benefits on the earlier of his retirement date, even if he has not yet retired, or when he elects to start receiving benefits." (PLANSPONSOR.com; free registration required)
New York Attorney General Announces Multi-State Effort on Pension Abuse
Excerpt: "New York Attorney General Andrew M. Cuomo has announced a multi-state cooperation in revealing pension fund abuses. 'I just held a briefing with 100 individuals from 36 Attorneys General's Offices to discuss findings of our ongoing pension fund investigation. We decided to create a multi-state task force to explore pension fund abuse so states can share vital information to prosecute wrongdoing and facilitate nationwide reform,' Cuomo said. He added that the task force will allow for a unified, efficient method of gathering information." (PLANSPONSOR.com; free registration required)
New York Attorney General Expands Pension Pay-to-Play Probe
Excerpt: "New York Attorney General Andrew Cuomo says he's issuing subpoenas to more than 100 investment firms and their agents in his probe of an influence-peddling scandal affecting some of the nation's biggest public pension funds. The investigation now touching on several states will look at individuals and companies who make or receive improper payments during lucrative business dealings with state and city pension funds. State and federal law requires most securities brokers to be licensed, but Cuomo is looking to see how many unlicensed agents may be involved in pension investment deals." (AP via Forbes.com)
Inertia and Retirement Savings: Participant Behavior in 2008, Plus Q1 2009
Excerpt: "A study from the Vanguard Center for Retirement Research reveals that participants' tendency to avoid making investment decisions can sometimes be beneficial. During the 2008 market decline, this inclination toward inertia meant that most participants didn't overreact to the economic turmoil. Find out how this impacted their accounts and how it may affect their financial futures." (The Vanguard Group, Inc.)
Not All Target-Date Portfolios Are Created Equal (PDF)
10 pages. Excerpt: "Even with education, participants tend to make naive and/or emotional choices when creating an investment strategy, resulting in an asset allocation that is less than optimal. Risk-based lifestyle portfolios, target-date portfolios, and managed portfolios have offered potential ways to address this challenge. Final qualified default investment alternatives regulations cemented each of these solidly as viable options for plan sponsors. Target-date funds, which provide a cost-effective, one-stop shopping approach but still offer a level of personalization, are arguably one of the most elegant solutions." (Arnerich Massena & Associates, Inc.)
Auto-Enrollment Boosts 401(k) Participation
Excerpt: "Studies have shown that [automatic enrollment] has increased plan participation from a national average of approximately 75% of eligible employees to between 85% and 95%. Dramatic increases have been seen among groups of employees with the lowest participation rates. Until now, employers have focused automatic enrollment on new hires. The next generation of automatic enrollment is to enroll existing employees who are not in the plan. It can be a powerful way to help these employees save for retirement." (Employee Benefit News)
Survey Findings: Hot Topics in Retirement 2009
Excerpt: "Hewitt Associates surveyed employers to learn their likely areas of focus and action in 2009 regarding the design, management, and delivery of their defined contribution, defined benefit, and retiree medical plans for their active, salaried U.S. employees. Responses from more than 140 employers provide a preview of the changes likely to take place in the retirement landscape in 2009." (Hewitt Consulting)
For Risk-Averse 401(k) Participants, the Usual Havens of Money-Market, Stable-Value and Short-Term Bond Funds Pose New Risks
Excerpt: "[A]ll of these supposedly stodgy investments have come under serious strain in the financial crisis. In September, a money-market fund that held Lehman Brothers debt fell below the sacrosanct $1 level, sparking massive withdrawals from certain money funds. In recent months, at least two stable-value funds have dished up losses to retirement-plan investors. And a number of short-term bond funds posted large declines last year as mortgage-related holdings hit the skids. 'There's no vehicle that's absolutely safe in today's world,' says Mike Francis, president and chief investment officer of Francis Investment Counsel LLC, a retirement-plan consulting firm in Pewaukee, Wis." (The Wall Street Journal)
Pension Lobbyists Wary of Investment Advice Change
Excerpt: "Pension and financial industry lobbyists are concerned that, along with slamming the door on the Bush administration's effort to loosen the advice regulations, Mr. Andrews' bill also could undermine existing advice arrangements offered under the DOL's SunAmerica advisory opinion. Under the SunAmerica opinion, mutual funds can offer advice to plan participants when that advice is generated by a computer model created by an independent third party, such as Financial Engines or Ibbotson Associates." (Pensions & Investments)
Stable-Value Funds Continue to Offer Positive Returns to Participants
Excerpt: "'Stable-value funds can be a silver lining in the cloud that is now hovering above the heads of employees and their 401(k) plans, particularly those who may have seen their balance dip dramatically over the last six months,' says Cynthia Mallett, Vice President, Product and Market Strategies, for MetLife's Institutional Business division. Sponsors and participants seem to be attracted by that silver lining. In December, when Prudential Retirement held a Web seminar on stable value, more than 800 plan sponsors called in to participate." (PLANSPONSOR.com; free registration required)
Social Security Benefits Not Expected to Rise in '10
Excerpt: "For the first time in more than three decades, Social Security recipients will not get any increase in their benefits next year, federal forecasts show. The absence of a cost-of-living adjustment, calculated under a formula set by law, will be a shock to older Americans already hit by plummeting home values, investment losses and rising health costs." (The New York Times; free registration required)
DATAIR Employee Benefit Systems, Inc. (Advert.)
5500 / PBGC / 1099-R / 5300 / FAS 158 Software from DATAIR DATAIR Pension Reporter System. Easy to use and economical for electronic and paper filing with instant access to forms and instructions. Live, expert support included. Choose from 4 modules:
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]The Supreme Court, Suffolk Superior Court and Ed Zelinsky, All Commenting on the Breadth of ERISA Preemption
Excerpt: "Two interesting things worth passing along this week on the topic of ERISA preemption, both reinforcing its breadth. The first is this well-written analysis of preemption out of the state trial court in Massachusetts, unusual for the reason that, normally, if ERISA preemption exists, the case ends up by original or removal jurisdiction in federal court; you seldom see a state trial judge write extensively on this subject as a result. Moreover, you don't always see any judge write this well and accurately on the subject . . . ." (Stephen Rosenberg of The McCormack Firm, LLC)
[Guidance Overview]
Section 510 Claims Defeated by Causation Defense
Excerpt: "Giordano v. Thomson, 2009 U.S. App. LEXIS 8887 (2d Cir. Apr. 27, 2009), which I reviewed today on erisaboard.com, reveals a few interesting points about executive severance compensation disputes. The facts are colorful and the rather short opinion is worth the time it takes to read." (Roy Harmon III via Health Plan Law)
HR Technology and Service Delivery in the Current Economic Crisis: Selected Findings from Watson Wyatt's 2009 HR Technology Trends Survey (PDF)
6 pages. (Watson Wyatt Worldwide)
Compensation Costs in Private Industry Up 1.9 Percent from March 2008 to March 2009
Excerpt: "In private industry, compensation costs rose 1.9 percent in the year ended March 2009, significantly less than the increase for the year ended March 2008, which was 3.2 percent. Private industry wages and salaries decelerated to a 2.0-percent increase for the year ended March 2009. In March 2008, the increase in wages and salaries was 3.2 percent. Benefit costs increased 1.6 percent for the 12-month period ended March 2009. For the year ended March 2008, the increase in benefit costs was 3.2 percent." (U.S. Bureau of Labor Statistics)
The Nation's Long-Term Fiscal Outlook: March 2009 Update (PDF)
15 pages. Excerpt: "The new President, the new Congress, and the American people have been understandably focused on addressing problems with financial markets and responding to the economic downturn. However, the nation will need to apply the same level of intensity to the nation's long-term fiscal challenge. . . . GAO's updated simulations continue to show escalating and persistent debt that illustrates the long-term fiscal outlook is unsustainable. By 2025, debt held by the public under the Alternative simulation exceeds the historical high reached in the aftermath of World War II." (U.S. Government Accountability Office)
Bankrup.tcy Reality Sets in for Chrysler and Workers
Excerpt: "About 1,800 Chrysler retirees were shocked to discover that their benefit payments were voided Friday morning. . . . The problem affected people who have a supplemental pension, which is not insured by the Pension Benefit Guaranty Corp. Because that portion is backed only by Chrysler, it becomes part of Chrysler's asset base in the bankrup.tcy." (Detroit Free Press)
Chrysler Bankrup.tcy Could Lower Pension Benefits in the Future
Excerpt: "The Chrysler bankrup.tcy filing Thursday, April 30, could result in lower federally guaranteed pension benefits for Chrysler employees and retirees if the financially troubled automaker later jettisons its massively underfunded plans. In a new question-and-answer guide about Chrysler's pension plans, the federal Pension Benefit Guaranty Corp. notes that a bankrup.tcy filing can result in a reduction of benefits if plans are later taken over by the PBGC. For example, under law, the PBGC does not guarantee benefits earned after a bankrup.tcy filing. The PBGC provides in its guide an example of a company that filed for bankrup.tcy on July 1, 2009." (Workforce Management; free registration required)
Chrysler Plans to Leave 8 Factories in Bankrup.tcy
Excerpt: "'While some facilities may eventually close, none other than Newark and St. Louis South are scheduled for closure in the near term,' Max Gates, a Chrysler spokesman, said in an e-mailed statement today. 'Virtually all of the labor associated with these facilities will be offered employment with the new company.' The Fiat alliance will create or preserve more than 5,000 manufacturing jobs, Chrysler said in a statement. All union-represented workers still have the option of taking a buyout or early retirement incentive of as much as $75,000 and a $25,000 car voucher under a previously announced plan that expires May 26, Gates said." (Bloomberg L.P.)
At Chrysler and GM, It's Not Employee Ownership
As part of their efforts to recover, General Motors and Chrysler are pursuing agreements with the UAW to provide the union with company stock to help fund retiree health-care trusts. NCEO Executive Director Corey Rosen explains that although many articles in the press say that employees will now be owners of General Motors and Chrysler through this plan, what is being proposed is not really employee ownership in any meaningful sense. (National Center for Employee Ownership)
Webcasts and Conferences
(Click to post your webcast or conference)Benchmarking: How Competitive Is Your Benefits Package?
in Georgia on May 21, 2009
presented by WEB (Worldwide Employee Benefit Network) Atlanta Chapter
Web Seminar - "Found Money" in Your 401(k) Plans: What Fees Are Reasonable?
Nationwide on May 21, 2009
presented by TRI-AD
Press Releases
(Click to post your press release)Executive Benefits and A.R.I.S. Announce the 2009 Seminar "The American Recovery and Reinvestment Act of 2009"
Executive Benefits Design Group
RSM McGladrey and McGladrey & Pullen LLP Announce Major Expansion of Employee Benefits Plan Practice in New York
RSM McGladrey, Inc.
P&A Retirement Plan Services Breaks The ETF Barrier
P&A Group
Employee Benefits Jobs
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DC/401(k) Plan Administrator
for The Benefit Shop, LLC near San Antonio, TX
in TX
Consultant - DC - 401k
for Los Angeles (San Fernando Valley) Third Party Administrator
in CA
Pension Administrator
for Primark Benefits
in CA
EmployeeBenefitsJobs.com (Sponsor)
(Click on banner to learn more.)
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