Retirement Plans Newsletter |
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| May 29, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
Towers Perrin U.S. Legislative Tracking Charts -- Retirement and Executive Compensation -- Updated May 28, 2009 (PDF)
8 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
IRS's Online Internal Controls Questionnaire: A Helpful Tool for Monitoring Fiduciaries
Excerpt: "The DOL holds that fiduciaries have a duty under ERISA to monitor their service providers who are involved in plan administration. The IRS has recently posted on their website an Internal Controls Questionnaire [at http://www.irs.gov/retirement/article/0,,id=206492,00.html] which fiduciaries might find useful as a tool in determining whether their service providers have practices and procedures in place which will ensure compliance with plan terms and the statutory provisions of ERISA." (ERISA Fiduciary Guidebook)
Have an Idea of What a Universal, Secure, and Adequate Retirement System Should Look Like?
Excerpt: "Submit your proposal to the Retirement USA initiative using the form [on the target page]. Please use the space below each principle to tell us how your proposal incorporates the Retirement USA principles." (Retirement USA)
Morningstar to Rate Target-Date Fund Families
Excerpt: "While Morningstar currently assigns its popular star ratings -- which are based on risk-adjusted returns -- to individual target-date funds, the new rating system will apply to a fund company's entire target-date lineup. The firm plans to issue ratings for 20 target-date fund families in the third quarter of this year. The fund families can earn a maximum of 20 points in each of five categories: people, meaning the fund managers and board; parent company, which will examine the fund company's corporate culture and any regulatory issues; performance; portfolio holdings; and price. Morningstar will also offer a four-page research report on each target-date lineup." (The Wall Street Journal)
How Investment Losses Affect Retirement Plans
Excerpt: "Among all age groups, those who suffered the greatest investment losses are also the most likely to consider delaying retirement. Less than a third (29 percent) of employees who lost less than 20 percent of their savings plan to work longer than originally planned, compared to 42 percent of those who lost between 20 and 40 percent of their nest egg and 59 percent of Americans who lost 40 percent or more of their life savings." (U.S. News & World Report)
Indiana Pension Funds Won't Get Chrysler Case Moved to District Court
Excerpt: "In a second legal defeat, a U.S. federal judge denied a request by a group of Indiana public funds to delay bankrupt automaker Chrysler LLC's sale hearing and remove the bankrup.tcy case to district court. Reuters reports that on Tuesday, U.S. District Judge Thomas Griesa denied a motion by The Indiana State Teachers' Retirement Fund, Indiana State Police Pension Trust, and Indiana Major Moves Construction Fund that the government did not have the authority to provide funds to Chrysler for its proposed sale. Griesa also denied a request to prevent Chrysler's scheduled sale hearing in bankrup.tcy court on Wednesday from going forward." (PLANSPONSOR.com; free registration required)
[Opinion]
A Change to Retirement Savings That We Need
Excerpt: "Raquel Pichardo-Allison talks to David C. John, co-author of President Barack Obama's proposal to offer automatic savings plan enrollment, about America's changing attitude towards retirement security[.]" (Global Pensions)
[Opinion]
The Case for 'Distributed Custodial Accounts' from Terminated 403(b) Plans
Excerpt: "The draconian position taken by the IRS in drawing a distinction between an individually owned annuity and a custodial account is hard to understand. From a strictly statutory view, it seems to have little support. The language of 403(b)(7) is unambiguous: 'for purposes of this tilte, amounts paid by an employer described in paragraph (1)(A) to a custodial account which satisfies the provisions of 401(f) shall be treated as amounts contributed by him for an annuity contract for his employee....'" (Giller & Calhoun, LLC)
[Opinion]
BrightScope's Response to the ICI on Fee Study
Excerpt: "ICI's response makes it clear that there are still several major fundamental differences between how the ICI calculates fees and how its critics calculate fees which is evidenced by the gap between the ICI's 0.72% median fee and the 3% fee number used by its critics. While the ICI's response clarified some areas of concern, it does not resolve the most important issues." (BrightScope Inc.)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Towers Perrin U.S. Legislative Tracking Charts -- Human Resources -- Updated May 28, 2009 (PDF)
6 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
[Guidance Overview]
California Supreme Court Upholds Ban on Same-S.ex Marriage, but Recognizes Marriages Performed in 2008
Excerpt: "From an employee benefits perspective, the immediate impact of the court's ruling is that approximately 18,000 same-s.ex marriages have been ruled valid (unlike the same-s.ex marriages performed in San Francisco in 2004). As a result, employers will need to review their employee benefit plans to determine whether changes are necessary or desirable in light of the fact that spousal benefits may be provided indefinitely to a limited number of same-s.ex couples." (McDermott Will & Emery)
[Guidance Overview]
Alternatives to Non-Qualified Deferred Compensation
Excerpt: "Before we continue our ongoing discussion of issues relating to the protection of non-qualified deferred compensation, let's take another step back.* The first strategy for both executives and employers should be to make absolutely certain that they have maximized the benefits provided under their qualified retirement plans (pension, 401(k), ESOP or other). Qualified plans are still the last, best tax sheltered vehicle available." (Winston & Strawn LLP)
[Guidance Overview]
Fundamental Change in Executive Compensation Practices
Excerpt: "Companies need to rethink how to effectively utilize compensation alternatives, as they are pressed to strike the right balance between appropriately motivating and rewarding individuals (who are in large part the key drivers to enhancing long-term shareholder value) on the one hand, and encouraging sound management decisions that do not foster 'unnecessary and excessive risk taking,' on the other hand. This Commentary highlights some executive compensation practices that may need to be reconsidered." (Jones Day)
[Guidance Overview]
Recent Economic Recovery Legislation Contains Significant New Executive Compensation Requirements (PDF)
3 pages. Excerpt: "The new provisions require a covered institution's Chief Executive Officer and Chief Financial Officer (or equivalents) to certify in writing that the institution has complied with the . . . requirements, as applicable. Publicly-traded companies must file this certification with the SEC along with the company's annual securities filings. Private companies must file the certification with the Secretary." (Winston & Strawn LLP)
An Executive Compensation Plan for the Long-Term
Excerpt: "[N]ew Wharton research suggests that a compensation structure based on long-term escrow accounts could be better -- at least for a company's future -- than the common practice of rewarding short-term changes in share price. Wharton finance professor Alex Edmans and a group of colleagues propose linking an executive's compensation to the performance of the firm over a longer horizon. Their method also takes into account changing conditions within the firm." (The Wharton School of the University of Pennsylvania)
Treatment of Federal Employees' Domestic Partners
Excerpt: "Secretary of State Hillary Clinton plans to announce that she will grant the domestic partners of g.ay and les.bian diplomats many of the same rights and protections as the spouses of heterose.xual Foreign Service officers. But there are limits to what she can promise. Clinton can open the door to diplomatic passports, emergency evacuations, medical clinics and language classes, and she can offer preferential consideration for certain jobs. But she can't extend coveted benefits such as membership in the Federal Employees Health Benefits Program to domestic partners. The State Department situation illustrates a challenge for agency heads who want to put g.ay and les.bian employees and their partners on equal footing with their straight counterparts. Agency leaders can make some changes, but sweeping reforms to the benefits system will require legislative action." (GovernmentExecutive.com)
Nevada Legislature Approves Bill Cutting Benefits to Public Employees
Excerpt: "A bill that saves the state millions of dollars by cutting public employee retirement and health care benefits won approval Thursday night on votes of 19-2 in the Senate and 41-0 in the Assembly. . . . During hearings on SB427, both Republican and Democrats said benefit reductions were necessary to guarantee the continued solvency of the Public Employees Retirement System and the Public Employees Benefits Program." (Las Vegas Review-Journal)
EBSA Semiannual Regulatory Agenda Addresses Mental Health Parity
Excerpt: "The Employee Benefits Security Administration (EBSA) has released its semiannual regulatory agenda, which outlines regulations that have been selected for review or development during the next year, as well as any regulations that have been finalized during the last six months. . . . [Among t]he prerule and proposed rule EBSA agenda items are . . . The review of the plan assets-participant contributions regulation in accordance with section 610 of the Regulatory Flexibility Act; The development of regulatory guidance pursuant to ERISA §712, as amended by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (P.L. 110-343) . . . ." (Wolters Kluwer)
Delta Pilots Union OKs Buyout Plan
Excerpt: "Delta Air Lines Inc. and its pilots union have come to a tentative agreement on an early retirement program to eliminate an unspecified number positions. In a Wednesday memo to pilots, Delta pilots union chairman Lee Moak said eligible pilots who elect to retire could receive up to nine month pay and benefits as part of an early-exit program." (Atlanta Business Chronicle via bizjournals.com; free registration required)
[Opinion]
Interplay of Bankrup.tcy Laws and ERISA Fiduciary Law
Excerpt: "The Bankrup.tcy Case Blog has an interesting post . . . about how federal courts are split over the issue of whether fiduciary status under ERISA carries over into the federal bankrup.tcy laws. Excerpt: The federal courts are currently split on the issue of whether the functional definition of 'fiduciary' used in ERISA constitutes a 'fiduciary' for purposes of the section 523(a)(4) discharge exception when the ERISA fiduciary fails to comply with ERISA obligations." (ERISA Fiduciary Guidebook)
Webcasts and Conferences
Same-S.ex Marriage and Employee Benefits: Responding to Recent Developments in California and Other States WebcastNationwide on June 4, 2009
presented by Trucker Huss
Specialty Drugs: What You Need to Know to Manage Cost and Utilization Webcast
Nationwide on June 11, 2009
presented by International Foundation of Employee Benefit Plans
(Click to post your webcast or conference)
Press Releases
Transamerica Retirement Services Expands Executive TeamTransamerica Retirement Services
ftwilliam.com Releases Sample Amendment to Suspend Safe Harbor Nonelective Contributions
ftwilliam.com
Morningstar Announces New Target-Date Fund Series Rating and Research Reports
Morningstar, Inc.
New Online Tool Offers Access to City and County Retiree Benefit Data
Center for State and Local Government Excellence
Voters Urged to Support Budding Moves to Include Long Term Care in National Health Reform
LTC Financial Partners
Conceive Magazine Publishes 3rd Annual Listing of America's Most Fertility- and Adoption-Friendly Workplaces
Conceive Magazine
(Click to post your press release)
Employee Benefits Jobs
Regional Vice President - Retirement Plansfor Nationwide Retirement Solutions
in IL, OH
HR Communications Sr. Consultant/Team Leader
for Segal
in IL
Retirement and Institutional Trust Services Relationship Manager
for Bank of Oklahoma
in OK
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