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May 5, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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[Official Guidance]
Disaster Relief Announcement 09-07 Relating to PBGC Deadlines in Response to Severe Storms and Flooding in Georgia
Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to the severe storms and flooding that occurred on March 26, 2009, in Georgia." (Pension Benefit Guaranty Corporation)
[Official Guidance]
Disaster Relief Announcement 09-08 Relating to PBGC Deadlines in Response to Severe Storms and Flooding in Indiana
Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to the severe storms and flooding that occurred on March 8, 2009, in Indiana." (Pension Benefit Guaranty Corporation)
[Official Guidance]
Annual Funding Notice for Defined Benefit Pension Plans
Excerpt: "You may have recently received an Annual Funding Notice (AFN) from the administrator of your ongoing defined benefit pension plan. The Pension Protection Act of 2006 requires that employers send an AFN each year to all participants and beneficiaries in defined benefit pension plans. Your receipt of the AFN does not mean that your plan is terminating or that it has been trusteed by the PBGC." (Pension Benefit Guaranty Corporation)
[Official Guidance]
Listing of IRS Published Guidance for January-April 2009
The target page links to guidance published by the Service relating to retirement plans: Treasury Regulations; Revenue Rulings; Revenue Procedures; Notices; and, Announcements. (Internal Revenue Service)
[Guidance Overview]
Consider Paying Expenses from the Retirement Plan Trust
Excerpt: "The general rule is that costs of administering the plan and communicating with participants may be paid by the retirement plan. Costs of plan design must be paid by the company. It is a prohibited transaction for the retirement plan to pay an expense that should have been borne by the company, such as a plan design change study. Examples of expenses that may be paid by the plan include audit fees, fees for preparing communication materials such as summary plan descriptions, and fees for legal advice regarding plan operation. Examples of fees that may not be paid from the retirement plan include fees paid for a study to redesign retirement plan benefits or fees to consider plan options in implementing a new law change." (Poyner Spruill LLP)
[Guidance Overview]
ERISA Statutory Exemption for Cross-Trading Now Effective (PDF)
Pages 7-8 of 9 pages. Excerpt: "Before the Pension Protection Act of 2006 (PPA) was enacted, it was generally a prohibited transaction for an investment adviser of the assets of a plan subject to ERISA (including the adviser of a fund holding ERISA plan assets), to cause this fund to engage in a transaction with another client of the adviser (or with another fund advised by the adviser). The PPA added a section to ERISA to provide a statutory exemption from the cross-trading prohibition. Effective February 4, 2009, the Department of Labor has finalized regulations that, among other matters, specify the content of the written policies and procedures required to be adopted by an adviser and disclosed to a plan fiduciary prior to the fiduciary's authorization of the adviser's cross-trading program." (Drinker Biddle Reath LLP)
Managing Inflation Risk in Target Date Funds
Excerpt: "Specifically, this paper explores the challenge of translating the need for individual inflation protection into a pooled fund vehicle, such as forging an effective link between individual investor objectives and appropriate fiduciary decisions on behalf of the entire investor pool. This analysis is an extension of previous target date research in our Ready! Fire! Aim? series, in which we discuss target date investing as a balance between maximizing upside potential while minimizing the risk of downside outcomes. As fiduciaries, we believe that an appropriate target date strategy will place more emphasis on downside protection, and we see inflation risk, which is really the risk of negative real returns, as part of this challenge." (JPMorgan Chase & Co.)
Insurance to Protect 401(k)s: How to Make It Work
Excerpt: "If ever there were a product whose time has come, this would seem to be it: a guarantee that you won't lose the money you've amassed in your 401(k) as you near retirement, whatever happens with the market. And you can convert that money into a stream of paychecks that will last your entire life. Life insurers, money managers and consultants are testing just such an idea and trying to figure out how to make it workable on a large scale. But these guarantees face lots of roadblocks. For one thing, insurers can't promise too much, or they risk damaging their own financial health. What's more, insurers may have to work hard to gain the trust of big employers, who fear they will end up footing the bill for these plans if the insurers go under." (The Wall Street Journal)
The Case for Employer-Sponsored Retirement Plans: Coverage, Participation and Retirement Security (PDF)
21 pages. Excerpt: "This [paper] examines issues related to coverage of American workers by employer-sponsored retirement plans and certain tax benefits associated with these plans. The paper also examines the retirement security and readiness of workers who save through employer-sponsored plans." (The SPARK Institute)
Retirement at the Tipping Point: The Year That Changed Everything (PDF)
20 pages. Excerpt: "This study examines the new retirement fears, hopes, attitudes, advice, and plans among four generations of Americans. In addition, we examine several major changes over the past year by comparing insights from this survey with results from Rethinking Retirement, a survey Age Wave conducted in collaboration with Charles Schwab Corporation and Harris Interactive exactly one year earlier. The following report summarizes the key findings of our latest study. We discovered anxiety and uncertainty, and shifting plans and lives, but also a renewed focus on what is most important, and a surprisingly optimistic outlook as the purpose of retirement is re-visioned." (Age Wave)
12(b)-1 Fee Reform Still Urgent Issue
Excerpt: "The Securities and Exchange Commission plans to re-examine the issue of 12(b)-1 fee reform, Chairman Mary Schapiro pledged today at the Mutual Fund Directors Forum Annual Policy Conference in Washington.'I am absolutely committed to a meaningful and open-minded review of Rule 12(b)-1,' she told 170 independent mutual fund directors who attended the conference." (Investment News; free registration required)
401(k) Reform on the Horizon? Q&A with Rep. Miller
Excerpt: "Rep. George Miller, a California Democrat and chairman of the House Education and Labor Committee wants to reform 401(k) plans. His efforts have taken on increased urgency as many investors have taken hits of 20 to 30 percent on their 401(k) account balances over the last year. A key concern is that 401(k) providers do not clearly spell out the fees they charged to manage the investments and administer the accounts. The lack of clear disclosure makes it difficult for your employer to comparison shop to offer you the best plan. It also makes it more difficult for you to chose among the various mutual funds offered in your plan. Without this knowledge, you may be paying too much, costing yourself thousands of dollars." (Syracuse Online LLC)
Social Security: Ten Facts that Matter
6 pages. Excerpt: "This Fact Sheet discusses ten important facts regarding Social Security and its future: Social Security insurance protects all age groups. Social Security provides a retirement benefit that is guaranteed for life and is adjusted to keep pace with inflation. Social Security benefits are adequately funded for another 32 years. Social Security is the principal source of family income for nearly half of older Americans. Social Security keeps older Americans out of poverty. Social Security benefits are progressive. Social Security is crucial for women. Social Security provides critical income support to minorities. Trust fund assets earned interest at 5.1 percent in 2008, and the cost of administering Social Security is minimal. Social Security is the foundation of workers' retirement security, but it was never intended to be the only source." (AARP)
Why Raising the Social Security Retirement Age Is Not the Answer for Reform (PDF)
21 pages. Excerpt: "Raising the earliest eligibility age may seem to be a solution to the problem of inadequate retirement incomes. Delaying retirement would increase early retirees' monthly benefits while keeping lifetime benefits the same. However, raising the early retirement age would disproportionately hurt lower-income workers and minorities, many of whom have little choice but to stop working in their early 60s due to poor health and job prospects. These workers have not seen significant gains in life expectancy and typically spend fewer years in retirement. Furthermore, raising the early retirement age would do nothing to improve the system's finances because it does not change retirees' lifetime benefits." (Economic Policy Institute)
401(k)s Hit by Withdrawal Freezes: Investors Cry Foul as Some Funds Close Exits
Excerpt: "The withdrawal restrictions are limiting investment options for plan participants and employers at a key time in the markets. The timing is inconvenient for the number of workers . . . who are laid off and find their savings inaccessible. Though 401(k) plans revolutionized the retirement-savings landscape by putting investment decisions in the hands of individuals, the restrictions show that plan participants aren't always in the driver's seat. Individual investors mightn't even be aware of some behind-the-scenes maneuvers causing liquidity problems in their retirement plans. Many funds offered in 401(k) plans lend their portfolio holdings to other investors, receiving in exchange collateral that they invest in normally safe, liquid holdings." (The Wall Street Journal)
Repairing Fractures in Some Long-Held Assumptions About Investing and Planning for Retirement
Excerpt: "[A]s employees see prospects dimming for affordable retirement, more may request -- and more employers may approve -- retirement in stepped-down phases over several years. Phased retirement is just one possible retirement system change that experts say could emerge from the current financial crisis. Others include greater use of so-called hybrid or cash balance retirement plans; they could provide insulation from stock market swings that can whipsaw 401(k) accounts. In fact, some critics contend that 401(k) accounts' vulnerability to turbulence in the markets is a fundamental flaw in their design." (Society for Human Resource Management)
[Opinion]
Who Ran Away With Your 401(k)?
Excerpt: "It started with the 1974 Employee Retirement Income Security Act, the law ostensibly designed to ensure that workers could collect the retirement benefits they'd earned. ERISA brought some important reforms -- including establishing the federal Pension Benefit Guaranty Corporation (PBGC) to help workers whose pensions went bust -- but it also was riddled with favors to business. And in the decades since, legions of lobbyists have helped create numerous new loopholes, exemptions, and special deals. The result is two separate and unequal pension systems: Executives get the equivalent of antebellum mansions, while workers get leaky shacks liable to collapse at the first harsh economic wind. Here are 10 of the key ways in which it happened. (Be warned: This stuff gets a bit technical. Washington is full of people who are very well paid to figure out insanely complex ways to take money from you and me.)" (Mother Jones and the Foundation for National Progress)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]What TARP Means for the Future of Executive Pay
Excerpt: "Although TARP companies now must comply with new and significant restrictions on executive compensation, our focus is on the potential impact of the legislation on the broader universe of companies. Almost all of the provisions discussed here apply to an organization's 'senior executive officers' (SEOs) - basically the CEO, CFO, and the three highest compensated other executive officers; many also apply to other highly compensated employees." (Hay Group)
The Wall Street Journal/Hay Group 2008 CEO Compensation Study
Excerpt: "The results from this year's The Wall Street Journal / Hay Group CEO Compensation Study reflect [the economic situation]. During a year in which companies overall lost significant shareholder value and made significantly less money than in the previous year, these organizations also dialed back their pay practices, reducing compensation levels and planning on more cutbacks for 2009. Hay Group's 2008 study focused on the primary elements of CEO compensation for 200 companies with more than $5 billion in annual revenue that filed their proxy statements between October 2008 and the end of March 2009." (Hay Group)
An Action Plan for Executive Compensation Committees
Excerpt: "The current economic turmoil is impacting executive compensation in unforeseen ways. Corporate boards - and particularly their compensation committees - should use this time of economic uncertainty to critically assess their executive compensation programs. Outlined [in this document] is our proposed compensation committee action plan that can serve as a starting point to discuss current executive compensation issues." (Hay Group)
IRS Solicits Recommendations for 2009-2010 Guidance Priority List
Excerpt: "In Notice 2009-43, the Department of Treasury and Internal Revenue Service (IRS) invite public comment on recommendations for inclusion on the 2009-2010 Guidance Priority List. The list is used to identify and prioritize tax issues to be addressed, to focus resources on important tax administration items, to increase voluntary compliance and to clarify areas of tax law. Priority list recommendations are reviewed and selected based on: whether the recommendation resolves significant issues relevant to many taxpayers; whether guidance is deemed appropriate for public involvement; whether the recommendation promotes sound tax administration; whether the guidance can be drafted to be easily understood and applied; whether the recommendation can be applied uniformly; and whether the recommended guidance reduces controversy and lessens either the taxpayer or IRS burden. Recommendations should be submitted by May 31, 2009, however recommendations can be made throughout the year." (International Foundation of Employee Benefit Plans)
Webcasts and Conferences
(Click to post your webcast or conference)2009 PenServ Annual Conference
in Texas on August 4, 2009
presented by PenServ, Inc.
COBRA Provisions in the American Recovery and Reinvestment Act Workshop
in Alaska on May 26, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Recent Changes to the ADA and What You Need to Do Now Smartcast
Nationwide on May 19, 2009
presented by Davidson Marketing Group -- FutureOffice Network
The Intersection of Organizational Design and Compensation
Nationwide on May 13, 2009
presented by Buck Consultants, an ACS Company
The Obama Scorecard: First 100 Days’ Impact on Employee Benefits
in Illinois on May 28, 2009
presented by WEB - Chicago West
Understanding Your Fiduciary Responsibilities Under ERISA Workshop
in Alaska on May 27, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Press Releases
(Click to post your press release)Diversified Investment Advisors Introduces New Retirement Plan Review Tool
Diversified Investment Advisors
Partnership for Peak Healthcare Performance Provides First Reports to Doctors on Level of Diabetes Care
Dallas-Fort Worth Business Group on Health
ftwilliam.com Announces Improvements To Its Welfare Document System
ftwilliam.com
The SPARK Institute Defends 401(k) Plans, Recommends Changes To Increase Coverage And Participation
The SPARK Institute
RelayHealth’s PatientCompass Receives Prestigious “Peer Reviewed by HFMA” Designation for Third Consecutive Year
RelayHealth
Employee Benefits Jobs
(Click to post your job opening | View all jobs |
RSS feed of all jobs )
Sr. Account Manager - Retirement Plan Services
for Precept
in CA
DC/401(k) Plan Administrator
for Benefit Planning, Inc., a large TPA firm in the Los Angeles area
in CA
Defined Benefits Administration Consultant (Supervisor)
for Buck Consultants
in OH
Trust Administrator
for New York Life Retirement Plan Services
in NJ
EmployeeBenefitsJobs.com (Sponsor)
(Click on banner to learn more.)
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