Retirement Plans Newsletter |
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| May 27, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
AIRE LLC (Advert.)
Enrolled Retirement Plan Agent (ERPA) Exams Open Retirement plan practitioners who seek the new Internal Revenue Service Enrolled Retirement Plan Agent designation and who now are ineligible to act as clients agents pursuant to IRS Form 2848 may register now. Register by July 6, 2009 and take the examination up to August 31, 2009. Get valuable resources to prepare for the ERPA special enrollment examination at www.airellc.org. |
[Guidance Overview]
New IRS Regulations Allowing Safe Harbor 401(k) Plans to Suspend Non-Elective Contributions
Excerpt: "Under the proposed regulations, plan sponsors that incur a 'substantial business hardship' may reduce or suspend safe harbor non-elective contributions during a plan year under the following conditions: Eligible employees are provided a notice of the reduction or suspension. The reduction or suspension is not effective until the later of 30 days after employees are notified or the date the amendment is adopted. Eligible employees are given a reasonable opportunity prior to the reduction or suspension to change their deferral elections. The plan is amended to provide that the actual deferral percentage/actual contribution percentage (ADP/ACP) test(s) will be satisfied (using current-year testing) for the entire plan year in which the reduction or suspension occurs. The plan satisfies the safe harbor non-elective contribution requirement through the effective date of the reduction or suspension." (Towers Perrin)
[Guidance Overview]
IRS Allows Safe Harbor Plans to Suspend Nonelective Contributions (PDF)
2 pages. (Milliman)
[Guidance Overview]
PBGC Semiannual Regulatory Agenda Addresses USERRA Benefits
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) has released its semiannual regulatory agenda for Spring 2009, which outlines regulations that have been selected for amendment during the next year, as well as any regulations that have been recently finalized." (Wolters Kluwer)
[Guidance Overview]
IRS Provides Online Copy of Internal Controls Questionnaire Used During Audits
Excerpt: "The posting of these questionnaires is helpful to plan sponsors because they now have a 'heads up' as to what to anticipate in an IRS examination and can use these questionnaires to be better prepared. Please note that, while the IRS has stated informally that it no longer asks for a copy of formal or informal self-audits conducted by the plan sponsor, some of the questions that the IRS asks in its questionnaires does appear to be aimed at extracting information that would normally be obtained from such audits, i.e. 'Do you know of any operation or form failures with the plan' and 'What are the failures and how many years did it occur?'" (Attorney B. Janell Grenier via Benefitsblog.com)
[Guidance Overview]
Adjusting to the Brave New World of 403(b) for Plan Sponsors (PDF)
55 slides. Regulatory Compliance, Fiduciary Due Diligence, and Trends in the 403(b) Industry. (Morgan, Lewis & Bockius LLP)
Continental Says Pilots Got Sham Divorces
Excerpt: "Excerpt: 'Continental Airlines is suing nine pilots that it says got sham divorces so their ex-spouses could collect their retirement benefits while they kept flying. The airline said the pilots -- seven men and two women -- got divorces but concealed that from children and friends, then remarried their spouses after getting the money. The company said it paid out $10 million to $11 million in suspicious pension distributions.'" (AP via The New York Times; free registration required)
Indiana State Treasurer Says Pension Funds Being 'Ripped Off' by Chrysler Bankrup.tcy
Excerpt: "State Treasurer Richard Mourdock says the state cannot allow its 'retired police officers and teachers to be ripped off by the federal government.' Speaking about the filing of an objection with the bankrup.tcy court handling the Chrysler LLC proceedings on behalf of the Indiana State Police Pension Trust, Indiana State Teachers' Retirement Fund and the Major Moves Construction Fund, Mourdock says the proposed restructuring seeks to pay billions of dollars to unsecured Chrysler creditors, while paying secured creditors only 29 cents on the dollar, according to The (Munster) Times." (PLANSPONSOR.com; free registration required)
Target-Date Fund Adoption in 2008
4 pages. Excerpt: "The growing use of target-date funds in retirement plans continues to reshape participant investment patterns. Get the latest information on how these funds are being used in Vanguard retirement plans and the resulting impact on these plans and their participants in a new publication from the Vanguard Center for Retirement Research." (The Vanguard Group, Inc.)
State of the Massachusetts Pension System 2009 (PDF)
20 pages. Excerpt: "The purpose of this report is to provide an overview of the public pension systems in Massachusetts, particularly in relation to the funding, investment, and benefit structure under which those systems operate. Perhaps most importantly at the outset we have attempted to place the impact of the investment experience in 2008 in context and to set forth the condition of the systems as that year began, as well as to estimate the state of the systems in the wake of that unprecedented calamity. The final sections of the report are devoted to addressing some of the myths that persist with respect to the level of benefits and financing of Massachusetts retirement systems." (Commonwealth of Massachusetts Public Employee Retirement Administration Commission)
House Bill Proposes Delay of Mandatory Pension Distributions
Excerpt: "U.S. House Representative F. James Sensenbrenner Jr. has introduced legislation (HR 2637) that, if passed, would delay the mandatory withdrawal of retirement savings through 2010 and raise the mandatory withdrawal age to 75. . . . Given the current market, late last year, Congress passed, and the President signed into law, the Worker, Retiree, and Employer Recovery Act into law, which suspended all RMDs from IRAs, 401(k)s and 403(b)s for 2009. However, the RMD rules will return next year in full force. This proposed bill would extend the suspension of RMDs through 2010. The legislation also permanently raises the mandatory withdrawal age to 75." (International Foundation of Employee Benefit Plans)
Under the Hood of 'Target Retirement Date' ETFs
Excerpt: "Target retirement date ETFs are the ultimate in a passive, buy-and-hold [investment] strategy. An investor simply selects the fund that corresponds to his or her intended retirement date (e.g., 2035 fund) and allows the ETF managers to do the rest. I should note that this concept is not altogether new - anyone with a 401(k) knows of numerous mutual funds operating under the same premise - but is a relatively new concept in the ETF industry." (Seeking Alpha)
Boost 401(k) Plan Participation: Avoid Returning Funds to Highly Compensated Employees
Excerpt: "[M]any highly compensated executives are less than thrilled when they have to take back money they have already contributed to their company's 401(k) retirement plan because it fails to meet non-discrimination rules. Failure typically occurs when the gap between what highly compensated employees defer on average and what non-highly compensated employees defer on average exceeds IRS guidelines. Unfortunately, this is happening with growing frequency. The 401(k) Profit Sharing Council of America (PSCA) reported that 58% of all non-safe harbor plans failed their non-discrimination test in 2008, an increase of 20% from the previous year." (planadvisor)
Strange But True: Claim and Suspend Social Security Benefits
Excerpt: "For those thinking of re-entering the workforce, Social Security provides for higher benefits later in exchange for withholding benefits while they are employed. For those under the Full Retirement Age (currently 66), this adjustment is accomplished automatically through the annual retirement earnings test. For those over the Full Retirement Age, the adjustment can be made through the voluntary option of 'claim and suspend.' The 'claim and suspend' strategy also enhances the claiming options of one-earner couples. For example, a husband who reaches the Full Retirement Age may elect to claim and immediately suspend benefits, allowing his wife to receive a spousal benefit based on his earnings record. The husband is then free to continue working and receive delayed retirement credits, which increases not only his monthly benefit but also his wife's survivor benefit. By using 'claim and suspend' in this way, the couple can enhance the value of their lifetime benefits..." (Center for Retirement Research at Boston College)
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Links to Items on Executive Comp, Benefits in General
Bill to Require 'Say on Pay' Introduced in Senate (PDF)2 pages. Excerpt: "Companies [would be required to] give shareholders an annual non-binding vote on executive compensation as disclosed in the proxy statement pursuant to SEC compensation disclosure rules (i.e., 'Say on Pay'). Say on Pay is currently required for companies that received financial assistance under the Troubled Asset Relief Program (TARP) and filed their proxy statements after February 17, 2009. In the prior Congress Say on Pay legislation was passed by the House of Representatives, and Say on Pay provisions were included in Senate bills introduced by then Senators Clinton and Obama. A number of non-TARP companies have announced voluntary adoption of Say on Pay." (Frederic W. Cook & Co., Inc.)
FASB Going to Codification System on July 1, 2009
Excerpt: "The U.S. Financial Accounting Standards Board (FASB) is expected to institute a major change in the way accounting standards are organized on July 1, 2009. The FASB Accounting Standards Codification (TM) is expected to become the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles (GAAP). After final approval by the FASB only one level of authoritative GAAP will exist, other than guidance issued by the Securities and Exchange Commission (SEC). All other literature will be non-authoritative. . . . While the FASB Codification is designed to make it much easier to research accounting issues, the transition to use of the Codification will require some effort and training. The FASB offers a free online tutorial, weekly alerts and an archived Webcast. In addition, Codification training opportunities are offered through professional accounting organizations such as the American Institute of Certified Public Accountants (AICPA)." (International Foundation of Employee Benefit Plans)
Webcasts and Conferences
ERISA Advisory Council Meetingin District of Columbia on June 11, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
(Click to post your webcast or conference)
Press Releases
U.S. Labor Department Obtains Judgment Appointing Independent Fiduciary to Oversee Abandoned 401(k) Plan of Defunct Minneapolis EmployerU.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Great-West Retirement Services Appoints New Regional Sales Director
Great-West Retirement Services
(Click to post your press release)
Employee Benefits Jobs
Pension Administratorfor Jordan & Associates
in CA
Defined Benefit Plans Unit Leader
for Southern California Pipe Trades Administrative Corporation
in CA
Benefits Coordinator
for Akin Gump Strauss Hauer & Feld LLP
in DC
Retirement Plan Case Design / Illustration Specialist
for The Guardian Insurance Company
in NY
Senior Technical Consultant
for Multnomah Group, Inc.
in OR
Retirement Specialist
for Municipal Employees' Retirement System of Michigan
in MI
Client Relationship Manager - Chicago, Minneapolis or St. Louis
for Transamerica Retirement Services
in IL, MN, MO
(Click to post your job opening | View all jobs |
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