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May 12, 2009 |
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ASPPA (Advert.)
Western Benefits Conference, June 28 – July 1, 2009 Designed with all retirement and benefits professionals in mind, the Western Benefits Conference will cover it all in Denver, Colorado, June 28 – July 1. Over 50 workshops, seven specialty tracks, emerging compliance issues and several networking opportunities provide just a snapshot of the planned agenda. Register Now and Save! |
Public Pension Funds Scurrying to Cut Off Future Pay-to-Play Action
Excerpt: "Public pension fund executives from Oklahoma to Washington state are probing their managers' relationships with third-party marketers and placement agents as a result of the pay-to-play scandal in New York. Public plans nationwide are doing everything from banning placement agents to beefing up disclosure policies that now will include third-party marketers used by investment managers and consultants. A number of plans are going further, investigating relationships between consultants and alternative investment managers named but not charged in the New York criminal indictments." (Workforce Management; free registration required)
GAO Reports on Proposal to Allow Buyouts of Pension Plans
Excerpt: "Asked to identify a basic model for the proposed sale of frozen pension plans to third-party financial firms and to identify the risks and benefits associated with such a proposal, the GAO concluded that buyouts would provide plan sponsors who seek to shed pension liability with greater flexibility and potential costs savings when compared to the sole current alternative of plan termination. However, the GAO also said buyouts would offer participants few advantages for benefit protection beyond that already provided under ERISA, and would raise risks that are difficult to quantify." (Deloitte via BenefitsLink.com)
The Public Pension Fund Time Bomb
Excerpt: "To better understand this ticking time bomb it helps to focus on a single state, and New Jersey makes a compelling case study. For one thing, its situation is dire. In June 2008 the state estimated that the plan - one of the nation's largest, covering teachers, state employees, firefighters, and police - had $34 billion less than it needed to meet its obligations. Since then the market value of the plan has dropped from $82 billion to $56 billion (a new estimate of underfunding is due in July). Also, New Jersey is in some ways ahead of the pack in trying to deal with the crisis - Gov. Jon Corzine, a Democrat, made addressing the problem a central theme of his 2005 campaign - and the obstacles it is encountering shed light on the hard choices facing other states." (CNNMoney.com)
401(k) Auto Enrollment Not in Obama Fiscal 2010 Budget
Excerpt: "A proposal that would require automatic enrollment of participants in existing 401(k) plans was not included in President Barack Obama's fiscal 2010 budget, said Ed Ferrigno, vice president of the Profit Sharing/401(k) Council of America. . . . 'What this action does is preserve the ability of employers to design plans that work for the business and the workforce,' Ferrigno said. 'Our main concern was that any plan-design mandate would freeze plan innovation in its tracks.'" (Workforce Management; free registration required)
Measuring Social Security's True Liability
Excerpt: "Underestimating Social Security Net Benefits to Current Workers by Not Adjusting for Real Wage Growth. According to our study, the trustees have made two valuation mistakes in calculating Social Security's unfunded liabilities. The first mistake involves failing to account for risk with respect to initial benefit awards as well as future tax payments. The trustees' calculations assume that wage growth will be fairly constant from year to year. Social Security benefits are based on a worker's covered earnings history with an adjustment for economy-wide average wage growth. Payroll taxes are collected as a percentage of an individual's earnings (up to a limit on taxable wages). Thus, the system's liabilities and tax receipts are largely dependent on wage growth." (National Center for Policy Analysis)
Funding Status of Many Multiemployer Plans Hurt by Investment Losses in 2008
Excerpt: "In 2008, 80.2% of 237 multiemployer defined benefit plans were at least 80% funded (in safe status); while 11.0% were 65%-80% funded (in endangered status) and 8.9% were less than 65% funded (in critical status). For 2009, funded status decreased significantly: 20.7% were in safe status; 41.4% were in endangered status; and 37.9% were in critical status." (Wolters Kluwer)
New Milestone in Death of Traditional Pensions, But Hybrid Plans May Grow
Excerpt: "More than half of Fortune 100 companies now offer only a 401(k) or other defined-contribution plan to new employees, the first time a majority of the nation's 100 largest firms does not offer a traditional pension, according to an annual survey released Monday by consulting firm Watson Wyatt." (MarketWatch)
Pension Plans After the Meltdown (PDF)
8 pages. Excerpt: "Companies whose funding levels fall below 75% in 2009 may be considered 'at risk' for 2010 and have higher required contribution levels. They must also pay higher variable premiums to the Pension Benefit Guaranty Corporation. In addition, companies that sponsor at-risk plans face significant penalties for funding any nonqualified deferred compensation -- potentially undermining executive reward programs." (Towers Perrin)
[Opinion]
403(b) Sponsor Role in Participant Investment Education
Excerpt: "Now that the IRS final 403(b) regulations are generally effective, public school and 501(c)(3) organizations are more involved in the operation of their 403(b) plans. However, the role of a '403(b) sponsor' is still evolving, including whether an employer's new hands-on role translates to employee education and information about product vendors under their 403(b) plan." (PLANSPONSOR.com; free registration required)
[Opinion]
ERISA Challenges for Non-ERISA 403(b) Plans
Excerpt: "Despite some helpful efforts by the DOL to provide guidance (e.g., Field Assistance Bulletin 2007-02), there are still significant obstacles for the employer that wants to maintain a non-ERISA 403(b) arrangement. Under the 403(b) regulations, the employer is responsible to make certain that the program remains in compliance with the tax rules, but its efforts to meet this responsibility can then cause it to fall out of the DOL safe harbor. [Originally posted March 9, 2009.]" (Giller & Calhoun, LLC)
DATAIR Employee Benefit Systems, Inc. (Advert.)
DC/401(k) Administration Software from DATAIR DATAIR’s Defined Contribution System for Allocations, Discrimination Testing, and Proposals. Handles New Comparability Plans, Sole Proprietorships, 401(k) and 403(b) plans. Live, expert support. DATAIR’s DC/401(k) System includes: * Downloads from many allocated account fund providers * Automated loan processing * Flexible data import/export * Interface with DATAIR’s 5500/1099R system. Contact sales@datair.com or call 1-888-328-2474 (1-888-DATAIR-4) |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Plant Closings Can Raise Claims of ERISA 'Interference'
Excerpt: "The Sixth Circuit affirmed that employees who are fired or laid-off as a group - such as in a plant closing - are covered by ERISA § 510, and can bring suit if they believe the discharge was made for the purpose of interfering with their 'attainment of rights' under an employee benefit plan." (Deloitte via BenefitsLink.com)
[Guidance Overview]
Two More Circuits Change Their Standard of Review Analysis Based on Supreme Court's Glenn Decision
Excerpt: "EBIA Comment: The circuit courts continue to adjust their standard of review analysis in response to the Glenn decision. It may be difficult to predict whether the Glenn analysis would change the outcome in a particular case, but it clearly seems to have that potential." (Employee Benefits Institute of America)
[Guidance Overview]
The Impact of Disability on Non-Qualified Deferred Compensation Under Code Section 409A
Excerpt: "This article examines the interrelationship between disability and the rules of Section 409A and discusses potential pitfalls that may be avoided with proper examination and drafting of a plan's disability definitions and procedures. Internal Revenue Code Section 409A allows 'disability' to be a payment trigger for deferred compensation, with disability defined under stringent standards set forth in the final regulations under Section 409A. Even if disability is not a payment trigger as such, the occurrence of a disability may impact the timing of payments made under a separation from service trigger. Additionally, a disability may affect vesting or other aspects of the operation of a deferred compensation arrangement, which may have implications under Section 409A. [Originally published March 23, 2009.]" (Faegre & Benson)
Annual Checkup for Social Security and Medicare
Excerpt: "The financial health of the government's two biggest benefit programs may have slipped over the past year, reflecting the deep recession that has already bitten into other areas of the budget. The trustees for Social Security and Medicare are scheduled to provide their annual report on the finances of both programs on Tuesday. In advance of the release, many private analysts said they expected both programs could run out of cash sooner than last predicted." (AP via The New York Times; free registration required)
The Emerging New Workforce: Employment and Labor Law Solutions for Contract Workers, Temporaries, and Flex-Workers (PDF)
51 pages. Excerpt: "The purpose of this Report is to provide employers with the tools to prepare now for the employment and labor law challenges they will likely face when the post-recession workforce emerges. Littler predicts that 'contingent workers' will constitute, on average, a full 50% of the new source of workers to whom employers will turn as the recession ends. The result of this trend will be that contingent workers will make up approximately 25% of the total workforce, and this percentage will continue to increase." (Littler Mendelson P.C.)
Companies' Cost-Cutting Plans Slow in Anticipation of Eventual Economic Recovery, According to New Survey
Excerpt: "U.S. employers' efforts to battle the recession through cost-cutting actions such as layoffs, hiring freezes and salary freezes may have finally peaked." (Watson Wyatt Worldwide)
Webcasts and Conferences
(Click to post your webcast or conference)A First Look at Approved 403(b) Prototypes
Nationwide on May 27, 2009
presented by SunGard Relius
Adjusting to the Brave New World of 403(b) Webcast
Nationwide on May 13, 2009
presented by Cammack LaRhette Consulting
DOL And SEC To Hold Joint Hearing To Examine Target Date Funds
in District of Columbia on June 18, 2009
presented by U.S. Department of Labor
Fiduciary Duty and Avoiding Conflicts of Interest Under ERISA Webcast
Nationwide on May 21, 2009
presented by Reish Luftman Reicher & Cohen
Press Releases
(Click to post your press release)Majority of Fortune 100 Companies Offer Only Defined Contribution Plans to New Salaried Employees, Watson Wyatt Analysis Finds
Watson Wyatt
PSCA Says President's Budget Preserves Plan Innovation
Profit Sharing/401(k) Council of America (PSCA)
Longevity Should Have a Prominent Place in Any Retirement Plan
Prudential Financial, Inc.
Retiree Medical Benefit Funding Alternatives for Employers
Dietrich & Associates, Inc.
Actuarial Consultants, Inc. Passes Stringent Test For Retirement Plan Recordkeepers
Roland|Criss Fiduciary Services
ING Announces Intention to File As a Section 403(b) Prototype Plan Sponsor
ING Retirement Services
Employee Benefits Jobs
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Senior Defined Benefit Data Analyst
for Diversified Investment Advisors, Inc.
in MA
Plan Consultant
for Diversified Investment Advisors
in NY
Retirement Compliance Consultant-AVP
for Merrill Lynch
in NJ
Employee Benefits Service Coordinator
for Growing Financial Services Firm
in TX
Participant Communications Development Account Manager
for New York Life Retirement Plan Services
in MA
Retirement Plan Trust Associate
for Trust Company of Illinois
in IL
Account Manager - Group Insurance
for The Plexus Groupe
in IL
EmployeeBenefitsJobs.com (Sponsor)
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