Retirement Plans Newsletter |
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| June 2, 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. |
[Official Guidance]
Sixth Circuit Concludes Post-Retirement Benefit Enhancements Are Not Accrued Benefits So Can Be Stopped (PDF)
At p. 6 of 8-page document. Excerpt: In Thornton v. Graphic Comm. Conference of the Int'l Brotherhood of Teamsters Supplemental Ret. & Disability Fund . . . (6th Cir. May 14, 2009), the Sixth Circuit concluded that pension benefit enhancements provided to retirees did not constitute 'accrued benefits' and thus could be eliminated without violating ERISA's anticutback rules. . . . On February 1, 1995, Thornton retired and began receiving retirement benefits from the plan. Over the next four years, the plan was amended on three occasions to award all participants, including Thorton and all other retirees, an increase in benefits. Subsequently, some of the increases were rescinded for participants, including Thorton, who had retired prior to the benefit enhancements becoming effective. . . . The Sixth Circuit's decision is in harmony with previous decisions from the Seventh and Fourth Circuits." (Proskauer Rose)
Indiana State Treasurer Appeals Chrysler Deal; Says Priority for Unsecured Creditors is Unacceptable
Excerpt: "Under the bankrup.tcy plan, money was mostly set aside for secured creditors, but not enough to cover the millions that will be lost by retired State Police officers and teachers in Indiana. . . . Chrysler wants to pay them 29 cents on the dollar. Indiana State Treasurer Richard Mourdock says that's unacceptable. 'This is the first time in American history when secured creditors, Indiana retirees got less than non-secured creditors. That is fundamentally wrong. It is a violation of the law,' he said hours after filing an immediate appeal to the plan." (WTHR.com)
Three Indiana Pension Funds to Appeal Treatment of Bondholders in Chrysler Sale; Case Heads to Court of Appeals
Excerpt: "Chrysler's sale of most of its assets to a group led by Italian automaker Fiat . . . will be appealed to the U.S. Court of Appeals for the Second Circuit, bypassing the lower District Court, a bankrup.tcy court judged ordered on Tuesday." (Reuters)
Protecting Your Social Security and Pension from Creditors
Excerpt: "Federal law says creditors can't take Social Security, veterans, disability and pension benefits to pay a debt. But it happens anyway. . . . Most [bank] account applications . . . include fine print stating the bank maintains the right of 'set off' -- that is, to take money from your checking, savings, or other accounts to repay a debt you owe the bank. But banks aren't allowed to 'set off' exempt funds . . . ." (Ellen E. Schultz in the Wall Street Journal)
Bill Would Take PBGC Directors Out of Investment Manager Hiring Loop
Excerpt: "Sen. Herb Kohl, D-Wis., is planning to introduce legislation later this month that would bar future directors of the Pension Benefit Guaranty Corp. from getting involved in the agency's hiring of money managers." (Pensions & Investments)
Investing After Retirement: Consider TIPS as Part of Diversified Portfolio
Excerpt: "Your portfolio may be safe from losses, but that's no help if it doesn't keep up with the rising cost of living. Economists and investors differ on the outlook for inflation in the near term, but even slow steady price increases can take a toll. . . . For conservative, risk-averse investors who are also worried about the long-term inflation threat, there is one relatively simple solution: Treasury Inflation-Protected Securities, or TIPS, are bonds issued by the federal government that are guaranteed to keep pace with increases in the government-calculated consumer price index." (Business Week)
New Safeguards Are Coming for Money Market Mutual Funds
Excerpt: "Money market funds generally had been viewed as investments that, at a minimum, would preserve an investor's principal. The sudden possibility of losses triggered a run on money market funds. Investors, especially institutional investors, withdrew about $210 billion over two days. At that point, Treasury stepped in to stop the outflow by guaranteeing that investors would receive $1 for each share they held in participating money market funds as of Sept. 19, 2008. The guarantee has been extended until Sept. 18 of this year. By then, the industry says, it can safely expire, in large part because many funds will have adopted ways to make themselves more secure and more liquid, meaning their assets can easily be converted to cash. The proposed new safeguards were developed by the Money Market Working Group created by the Investment Company Institute, the trade association for mutual funds." (AARP)
Retirement Plan Trade Association Opposes Mandatory Index Funds in 401(k) Plans
Excerpt: "Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee, wants to reform 401(k) plans by [requiring] plan providers to offer investors at least one low-cost index fund. . . . [In a white paper, the SPARK Institute said it] 'does not believe that the wholesale use of passively managed funds by legal mandate will reduce plan fees and expenses or that policy makers should unilaterally determine which approach to investing is better for American workers saving for retirement . . . .' " (Financial Planning)
Rethinking Conventional Wisdom About 401(k) Loans: Better In Debt to a Plan Than a Credit Card Company
Excerpt: "Americans could save as much as $5 billion a year -- or $275 per household -- by borrowing from their 401(k) retirement accounts instead of more costly consumer loans, Federal Reserve economists Geng Li and Paul A. Smith conclude in a recent Fed working paper." (Wall Street Journal)
[Opinion]
ASPPA Comments on Proposed 403(b) Prototype Document Program
13 pages. Excerpt: "[T]he proposed program should much more closely mirror the current M&P/volume submitter program. Accordingly, we believe that the §403(b) prototype program needs significant modification from its proposed form. Such changes will assist practitioners (many of whom work in both the §403(b) and §401(a) plan markets) by having consistent procedures and requirements. This consistency will also help the Service staff in reviewing the §403(b) plans since the requirements will be similar to the §401(a) program. Although we appreciate the goal of keeping the §403(b) program simple, the quest for simplicity under the draft revenue procedure will undermine the functionality of the program." (ASPPA (American Society of Pension Professionals and Actuaries))
[Opinion]
American Benefits Council Comments on Proposed 403(b) Prototype Document Program (PDF)
3 pages. Excerpt: "The Council believes that some minor changes to the prototype program [proposed in IRS Announcement 2009-34] will make it much more effective and usable by its 403(b) plan sponsor members. . . . [T]he Council recommends a few changes below that would address a wider variety of common plan designs than would be permitted under the original proposal." (American Benefits Council)
[Opinion]
American Benefits Council Comments on H.R. 1988, the 'Conflicted Investment Advice Prohibition Act of 2009' (PDF)
3 pages. Excerpt: "The Conflicted Investment Advice Prohibition Act of 2009 (H.R. 1988) repeals the investment advice provision enacted in the Pension Protection Act of 2006 ('PPA'). The bill also prohibits several investment advice practices that existed prior to PPA and that do not involve conflicted advice. This document examines the non-PPA effect of H.R. 1988 [particularly 'SunAmerica' arrangements]." (American Benefits Council)
The Center for Due Diligence (CFDD) (Advert.)
CFDD October 5-7, 2009 Advisor Conference ADAPT, SURVIVE & PROSPER: A Bull Market In Broker of Record Changes The CFDD’s Advisor Conference is an all business event designed to help retirement plan advisors adapt to unprecedented challenges. Distinguished by accomplished advisor attendance and rich content, the advisor-centric conference has become the industry’s premier networking and educational event. To benefit from unbiased guidance, LIMIT liability, IMPROVE investment returns, generate NEW business, PARTICIPATE in broker of record consolidation and CUSTOMIZE your own QDIA Asset Allocation Solutions, register at a discount NOW! Click HERE for more information. |
Links to Items on Executive Comp, Benefits in General
The Battle Over Executive Compensation and What It Means for YouExcerpt: "In a worst-case scenario, some or all of the compensation provisions in TARP would be extended to all public companies (see 'Laying Out the TARP' at the end of this article). While that's a long shot, even the possibility has many people raising a battle cry. 'If companies don't get out in front of this issue now, with their compensation committees leading the charge, the government will get in and make things worse,' says Ben W. Heineman Jr., former General Electric senior vice president and general counsel . . . ." (CFO Magazine)
[Opinion]
GM Pension and Healthcare Promises Sucked It Down the Drain; Here Comes California
Excerpt: "[A]mong the obligations that caused GM to file for bankrup.tcy, two are directly related to worker entitlements. In 2003, GM sold $13.5 billion in bonds -- one of the biggest debt offerings ever -- and plowed the money into its pension fund. Then, in 2007, after the UAW went on strike, GM agreed to funnel more than $30 billion into a special trust for retiree health care. Both the pension bond and the retiree-trust obligation helped topple GM into Chapter 11 bankrup.tcy. Of course, they weren't the only causes." (Roger Lowenstein on Bloomberg.com)
Webcasts and Conferences
401(k) Plan Current DevelopmentsNationwide on June 16, 2009
presented by SunGard Relius
Current Issues & Fiduciary Responsibility
in Illinois on June 8, 2009
presented by ASPPA Benefits Council of Chicago
Form 5500 for Welfare Plans: EFAST and EFAST2 - A Two-Part Program
Nationwide on June 3, 2009
presented by SunGard Relius
Form 5500 for Welfare Plans: EFAST and EFAST2 - A Two-Part Program
Nationwide on June 3, 2009
presented by SunGard Relius
Fundamentals of 401(k) and Other Qualified Plans - 7 cities in June and July 2009
Nationwide on June 3, 2009
presented by SunGard Relius
The NTSAA 403(b) Compliance Resolution Summit
in Texas on June 23, 2009
presented by National Tax Sheltered Accounts Association
(Click to post your webcast or conference)
Press Releases
GM Pension Plans Remain Ongoing During Company BankruptcyPension Benefit Guaranty Corporation (PBGC)
The SPARK Institute Comments on and Commends Internal Revenue Service for 403(b) Plans Prototype Program
SPARK Institute
Aon Consulting Leads the Way on 2009 List of Employee Benefits Power Brokers
Aon Consulting
New Book Offers Innovative Approach for Leveraging Employee Benefits to Maximize Business Results
MetLife
NTSAA Comments on Proposed Prototype Provisions Language
National Tax Sheltered Accounts Association
John Hancock Launches New Retirement Income Solution
John Hancock Life Insurance Company
Arnerich Massena Hires New Director of Wealth Management
Arnerich Massena & Associates
CheckPoint HR’s Donny Sheinwald Awarded Accredited Investment Fiduciary (AIF) Designation
CheckPoint HR
(Click to post your press release)
Employee Benefits Jobs
Pension Administrator/ Consultantfor PenServ, Inc.
in NY
Defined Contribution Client Service Manager
for SEI
in PA
Defined Contribution Administrator
for Eastern PA TPA Firm
in PA
Manager/Senior Retirement Plan Administrator
for Katz, Sapper & Miller
in IN
Daily Record Keeping Specialist
for AKT Retirement Plans Services
in OR
Plan Consultant Opportunity
for Weaver Partners, Inc.
in ANY STATE
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