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May 11, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
DATAIR Employee Benefit Systems, Inc. (Advert.)
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[Official Guidance]
Text of IRS Notice 2009-45: Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
4 pages. Excerpt: "This notice provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code as in effect for plan years beginning before 2008. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates under § 430(h)(2). In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under §417 (e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007." (Internal Revenue Service)
[Guidance Overview]
Plan Sponsor Wins Round One in Lawsuit Against Third-Party Administrator Over Alleged Calculation Mistake
Excerpt: "A federal judge in California has rebuffed demands from JP Morgan Chase and Co. that it dismiss a lawsuit alleging mistakes that could imperil the tax-favored status of a San Francisco law firm's profit sharing/401(k) plan. U.S. District Judge Samuel Conti of the U.S. District Court for the Northern District of California said he was not convinced the statutory time limits for moving forward with the claims from Shartsis Friese LLP had expired by the time the January 2008 case was filed. The law firm's allegations against Chicago-based benefits consulting firm CCA Strategies carry a two or three-year statute of limitations under California law, according to the court." (PLANSPONSOR.com; free registration required)
Examining Social Security Benefits as a Retirement Resource for Near-Retirees, by Race and Ethnicity, Nativity, and Disability Status
Excerpt: "This article analyzes Social Security benefits as a retirement resource for selected subgroups of recent cohorts of near-retirees. The analysis therein examines the distribution of benefits among subgroups by (1) race and ethnicity, (2) nativity, and (3) disability status. We use improved data (actual earnings histories) to produce more accurate measures of benefits. We look at how the average values of several benefit measures, such as Social Security wealth and earnings replacement rates, differ among the selected subgroups and discuss reasons for these differences. This study finds that substantial differences in earnings levels and/or mortality levels among these subgroups interact with Social Security program provisions to produce sizable differences in the values of our benefit measures." (U.S. Social Security Administration via Social Science Research Network)
What Makes a Better Annuity?
Excerpt: "The wide gulf between actual and predicted annuity demand has been well documented. However, a comparable gap exists between the current and ideal annuity market. In a world with costly and limited annuity products, we investigate what types of new annuity products could improve annuity market participation and increase individual welfare. We find that participation gains are most likely for new annuity products that focus on late-life payouts which offer a large price discount relative to their financial market analogues." (Social Science Research Network)
More Companies Freeze Pensions
Excerpt: "The number of companies that have frozen their traditional pension plans has accelerated sharply this year, a trend that will likely continue as companies wrestle with declining profits and poor investment returns. At least 16 companies have announced plans to freeze their pensions so far this year, vs. 18 for all of 2008. Last week, Wells Fargo told its employees that their pension plans will stop accruing benefits July 1." (USA Today)
Older Workers: Recareering in Later Life
Excerpt: "The research concludes that later-life career change seems to be an important part of the retirement process. Many changers later in life appear to be pushed into new lines of work involuntarily following job layoffs or business closings. Others, however, appear to place a high premium on leaving 9-5 work and moving into more flexible positions, even at less pay. Some older workers may change careers in hopes of finding more meaningful jobs that give added purpose to their lives." (AARP)
DOL Brings Fiduciary Series to the Web
Excerpt: "Plan sponsors looking for insights on their fiduciary responsibilities can now get that information from the Labor Department without leaving their desks. The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) will sponsor 'Getting It Right - Know Your Fiduciary Responsibilities' webcasts on May 12 and 13, featuring speakers from the Labor Department. The webcasts are part of the agency's national fiduciary education campaign to increase awareness and understanding of basic responsibilities associated with operating private sector retirement plans. . . . Register for both webcasts at www.dol.gov/ebsa, under Compliance Workshops, Seminars and Webcasts . . . ." (PLANSPONSOR.com; free registration required)
Delta Proposes Retirement Incentive Plan to Cut Pilot Staffing
Excerpt: "Delta Air Lines has proposed to cut pilot staffing by offering incentives for pilot retirements, according to a Delta pilots union memo. Delta management proposed the retirement incentive program to the Air Line Pilots Association at Delta to address 'what management perceives to be a pilot staffing overage,' according to the Friday memo. . . . Delta said it is trying to avoid involuntary job cuts resulting from economic conditions and working with the pilots union 'to ensure we have any flexibility needed' while cutting flight capacity to adjust to demand. Under the terms of the proposal, pilots who are eligible would get a severance payment, retiree travel benefits and medical and dental benefits for a limited time. Eligibility would depend on age and length of service." (The Atlanta Journal-Constitution)
Retirement Savings Plans Can't Afford to Ignore Inflation
Excerpt: "Prices dropped last year. But we still need to invest to protect ourselves from inflation. That's why our retirement plan investing needs an inflation 'tilt.' . . . Cutting the expense of investing through index funds alone won't solve the inflation problem. In addition to cutting expenses, we have to invest a portion of our money in assets that give us a hedge against inflation: Treasury Inflation Protected Securities, real estate investment trusts and energy companies." (The Dallas Morning News)
[Opinion]
Securing Social Security: Lessons for the Next Debate
Excerpt: "This commentary suggests ways of making the upcoming debate on Social Security reform more productive than some past efforts. Participants must be open to a range of solutions, financing must be transparent, and effects on disabled workers must be addressed. Reform efforts must acknowledge the changing economic environment, including increasing wage inequality, and shifting individual and family demographics. Guaranteed inflation-protected benefits are crucial, and the sacrifices necessary to balance the system should be shared across generations[.]" (The Urban Institute)
[Opinion]
Brief Analysis of Socially Responsible Investing
Excerpt: "Socially responsible investing (SRI) is the practice of choosing stocks, bonds or mutual funds based on political, religious or social values. This investment strategy can be hazardous to an individual's portfolio, and if followed by state and local employee pension funds can adversely affect thousands of people's retirement incomes." (National Center for Policy Analysis)
[Opinion]
Group Letter to Treasury Secretary Urging Pension Funding Relief (PDF)
Excerpt: "[F]or business reasons, it is critical that companies be permitted to elect the segment rates for 2010 and thereafter. In fact, based on discussions with several large companies, it appears that a significant percentage of plan sponsors may be so concerned about the possibility of being locked into using the full yield curve that they are considering not electing it for 2009, despite the great short-term advantages of doing so." (American Benefits Council)
[Opinion]
How a 'Universal' Fiduciary Standard Would Change How Financial Advisers Do Business
Excerpt: "[N]ow that regulatory reform is a front-burner issue, and a virtual consensus has formed on the need for a consistent or 'universal' fiduciary standard to apply to all investment advisers, it is clear that not everyone is operating under the same assumptions as to what a 'universal' fiduciary standard would entail. There is a very real possibility that the effort to harmonize the regulations governing broker-dealer representatives and investment advisers will involve lowering fiduciary requirements for investment advisers to minimize the extent to which the standard for brokers must be raised." (Investment News; free registration required)
EmployeeBenefitsJobs.com (Advert.)
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Links to Items on Executive Comp, Benefits in General
The Hidden Peril of Deferred-Compensation PlansExcerpt: "Here's a nightmare for you: Imagine waking up one morning to discover that your employer is bankrupt and the money you have set aside in your deferred compensation plan belongs to the company's creditors. Unfortunately, this possibility is a real one for employees of companies like Chrysler. A 401(k) plan is safe from those your company owes money. But creditors can -- and will -- go after deferred-compensation plans, which allow high-level employees and many others earning more than $100,000 to $200,000 or so annually to contribute money, which then grows on a tax-deferred basis for use later. And if a company goes bankrupt, employees may end up with nothing." (The New York Times; free registration required)
Hay Group's May 2009 'The Executive Edition' (PDF)
12 pages. Excerpt: "The Executive Edition is Hay Group's executive compensation publication offering real-world examples of how companies design and implement executive packages to attract, retain, and motivate key personnel. In this issue: The Wall Street Journal/ Hay Group 2008 CEO compensation study; What TARP means for the future of executive pay; An action plan for compensation committees; Executive pay for sustainable performance: restoring investor trust in financial services institutions; Bonus banking: a better way to reward?" (Hay Group)
House Veterans' Affairs Committee Approves Bills on USERRA Changes
Excerpt: "The U.S. House Veterans' Affairs Committee has approved two bills that address employment rights for veterans." (International Foundation of Employee Benefit Plans)
Webcasts and Conferences
(Click to post your webcast or conference)"Form 5500 for Welfare Plans: EFAST & EFAST 2" - A Two-Part Web Seminar
Nationwide on June 3, 2009
presented by SunGard Relius
How to Fix a Broken Plan
in Massachusetts on May 14, 2009
presented by ASPPA Benefits Council (ABC) of New England
Webcast: Managing Participant Disclosures - A Review of Current Disclosure Requirements and How to Best Meet Them
Nationwide on June 17, 2009
presented by National Institute of Pension Administrators
Press Releases
(Click to post your press release)PBGC Protects Pension Plan at LandAmerica Financial Group
Pension Benefit Guaranty Corporation (PBGC)
Milliman Study Indicates Second Consecutive Month of Pension Gains
Milliman USA
Millions of Dollars in Unclaimed Retirement Benefits
PenChecks, Inc.
New Benefit Plan Will Cut Premiums for Employees Who Stay Healthy and Fit
Carolinas HealthCare System
Employee Benefits Jobs
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Pension Consultants/Administrators
for Northern & Central NJ Mid-Size Pension Consulting Firm
in NJ
Retirement Plan Specialist
for Diversified Investment Advisors
in MN
Pension Administrator
for Growing Financial Services Firm
in NY
Pension Manager
for UFCW & Employers Trust Health and Retirement Benefits
in CA
Regional Sales Consultant
for Gallagher Retirement Services
in NJ, PA
Trust Administrator II - Employee Benefits
for Hancock Bank
in MS
ERISA Paralegal/Plan Document Specialist
for Pension Consulting and Administration Firm
in PA
EmployeeBenefitsJobs.com (Sponsor)
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