Retirement Plans Newsletter |
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| June 8, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
Towers Perrin Monthly Retirement Regulatory Round-Up, May 2009 (PDF)
Towers Perrin Monthly Retirement Regulatory Round-Up, May 20094 pages. Excerpt: "The Monthly Regulatory Round-Up is a high-level summary of legal and regulatory developments that occurred during May 2009 that may be relevant to large employers. Developments are sorted according to federal legislative developments, federal regulatory guidance, other developments (e.g., significant litigation, studies, select state law developments)." (Towers Perrin)
Supreme Court Asked to Delay Chrysler Sale
Excerpt: "Indiana pension funds and consumer groups asked the U.S. Supreme Court on Sunday to stop the sale of bankrupt automaker Chrysler LLC to a group led by Italian carmaker Fiat SpA while they challenge the deal. The separate requests, which moved the legal battle to the nation's highest court, were filed after a U.S. appeals court in New York approved Chrysler's sale to a group led by Fiat, a union-aligned trust and the U.S. and Canadian governments." (Reuters via The New York Times; free registration required)
Court Gives Indiana Funds More Time to Appeal Chrysler Sale
Excerpt: "A federal appeals court approved the sale of Chrysler assets to Fiat but kept the deal on hold until Monday to allow a possible appeal to the Supreme Court, the Wall Street Journal reports. The 2nd U.S. Circuit Court of Appeals heard an appeal filed by a group of Indiana state pension and investment funds, which had sought to block the deal (see Court Agrees to Hear Indiana Funds' Chrysler Appeal). The carmaker's proposed restructuring seeks to pay billions of dollars to unsecured Chrysler creditors, while paying secured creditors only 29 cents on the dollar." (PLANSPONSOR.com; free registration required)
Second Circuit Stays Chrysler Sale Until 4 p.m. Today; Indiana Pension Funds Take Challenge to Justice Ruth Bader Ginsberg Acting as Circuit Justice
Excerpt: "'The case of In re Chrysler LLC, Debtor has the potential to produce the most significant Supreme Court ruling on the government's power to deal with economic crisis since the Court struck down major parts of President Franklin Roosevelt's New Deal, in Schechter Poultry Corp. v. U.S. in 1935 and U.S. v. Butler in 1936. But the Supreme Court will not actually rule on any of the basic legal challenges unless it first puts the Chrysler sale on hold, and then agrees to hear and decide the case itself. It has no legal obligation to do either.'" (Attorney B. Janell Grenier via Benefitsblog.com)
Results from Survey of Calendar-Year Plans' 2009 Zone Status and Freeze Elections, Spring 2009 (PDF)
4 pages. Excerpt: "The market downturn has had a dramatic impact on the zone status of multiemployer pension plans. The [survey] found that, compared to one year earlier, many more plans are now in the red zone and the yellow zone while the number of plans in the green zone has dropped precipitously. In addition, the survey found that the average PPA'06 funded percentage for calendar-year plans declined. The survey also reports the number of calendar-year plans that elected to freeze their zone status, as allowed by the Worker, Retiree and Employer Recovery Act of 2008." (The Segal Group, Inc.)
New York Governor and Public Employee Unions Agree on Limits for New Pensions
Excerpt: "Gov. David A. Paterson and the state's public employee unions announced an agreement on Friday that would reduce pension benefits for future public employees and save the state billions of dollars in an attempt to control ballooning costs for retirees. To win their support for the deal, the governor provided the unions with significant incentives and backed off earlier demands for concessions from current employees." (The New York Times; free registration required)
New Working Paper from Federal Reserve Suggests Borrowing from 401(k) Fund May Not Be So Bad
Excerpt: "A new government report breaks from conventional wisdom and casts doubt on some long-held beliefs about the negative effects of borrowing from a 401(k) fund. Shifting expensive consumer debt to defined-contribution plans may make sense for some workers." (Human Resource Executive Online)
Key Issues 401(k) Plan Fiduciaries Need to Know (PDF)
2 pages. Excerpt: "Here is an outline of some of the issues that plan fiduciaries must consider in selecting and monitoring investment options and the costs associated with the management of plan investments." (Kelley Drye & Warren LLP)
Target-Date Funds Favored by Hands-Off Investors
Excerpt: "What recent events have taught us . . . is that all target-date funds aren't alike, even if they have similar names. The funds need better disclosures and workers need more information on how the investments work and their risks. And investors must remember that while these funds make most of the decisions for us, we can never be too complacent or too hands-off." (The Baltimore Sun)
Can You Count on Monthly Pension Checks from Your Former Employer? Five Things You Need to Know
Excerpt: "If you're entitled to a pension, you might be wondering how your plan is faring. The numbers alone suggest there's reason for concern: In 2008 assets in private defined-benefit plans fell an average of 26%, according to Watson Wyatt management consulting. That has left many plans below their legal funding target." (CNNMoney.com)
Administration Explores 'R Bond' As Option for Retirement Accounts
Excerpt: "Officials in the Obama administration are moving quickly to develop the investment infrastructure behind the president's proposal for mandatory automatic enrollment in individual retirement accounts, which could be supported by the creation of Treasury-issued retirement bonds. J. Mark Iwry, deputy assistant secretary for retirement and health policy at the Department of the Treasury, said that administration officials are exploring some 'conservative' options for investing the assets of 78 million Americans that he estimates could be automatically enrolled in this 'universal' workplace retirement system." (Investment News; free registration required)
[Opinion]
American Benefits Council Proposed Modification of H.R. 1988, The Conflicted Investment Advice Prohibition Act of 2009 (PDF)
Excerpt: "H.R. 1988 is easily modified to achieve its intended purpose through a very simple amendment. Under such amendment, the following would be inserted on page 23 between lines 12 and 13: '(E) This paragraph shall not apply to investment advice provided to a plan or to a participant or beneficiary if such advice . . . ." (American Benefits Council)
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. |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]State of Wisconsin Wins Same-S.ex Benefit Denial Challenge
Excerpt: "While the state of Wisconsin won a victory in an American Civil Liberties Union (ACLU) legal battle over benefits for same-s.ex partners of state employees, a state judge used his ruling to assert that the practice of denying the same-s.ex benefits is unconstitutional. Dane County Circuit Judge David Flanagan said despite his belief that the state benefits practice is not constitutional, he was nonetheless bound by a 1992 state appellate decision upholding their validity." (PLANSPONSOR.com; free registration required)
[Guidance Overview]
Monthly Regulatory Round-Up on Executive Compensation, May 2009 (PDF)
Monthly Regulatory Round-Up on Executive Compensation, May 2009 3 pages. Excerpt: "The Monthly Regulatory Round-Up is a high-level summary of legal and regulatory developments that occurred during May 2009 that may be relevant to large employers. Developments are sorted according to federal legislative developments, federal regulatory guidance, other developments (e.g., significant litigation, studies, select state law developments)." (Towers Perrin)
[Guidance Overview]
IRS Says Treasury's Acquisition of Equity Under TARP Not a Change of Control for Section 409A (PDF)
Excerpt: "The IRS has issued Notice 2009-49, which clarifies that for purposes of Internal Revenue Code Section 409A, an acquisition by the Treasury Department of preferred stock, common stock, warrants or other equity rights in a financial institution or other entity under the Emergency Economic Stabilization Act of 2008 (a 'Treasury EESA Equity Acquisition Transaction') is not considered a change in ownership or effective control, or a change in ownership of a substantial portion of the assets of the corporation. Therefore, it is not a permissible payment event under Section 409A." (Buck Consultants)
Gliche in the 409A Regulations Created by EESA
Excerpt: "The Treasury could not have foreseen that it would have to carve out an exception under the 409A change in control rules for the federal government acquiring interests in financial institutions. Hence the issuance of Notice 2009-49 announcing future changes to the 409A regulations . . . ." (Attorney B. Janell Grenier via Benefitsblog.com)
New Hampshire Employers Have Time to Prepare for Same-S.ex Marriage Issues
Excerpt: "Employers in New Hampshire have a good six months to adjust their benefit plans to accommodate the new law Gov. John Lynch (D) signed on June 3 allowing same-s.ex marriage in that state. The law takes effect on Jan. 1, 2010. This makes New Hampshire the sixth state in which same-s.ex marriage is legal, joining Massachusetts, Connecticut, Iowa, Maine and Vermont." (Thompson Publishing Group)
Interesting Preemption Case Cites Glenn
Excerpt: "Don't miss this Sixth Circuit case--American Council of Life Insurers v. Ross [linked on target page]--holding that ERISA does not preempt a Michigan state law which prohibits insurers from including the Firestone discretionary language in insurance policies. The case is particularly noteworthy because the court cites the Glenn case in support of its decision that the state law should not be preempted . . . ." (Attorney B. Janell Grenier via Benefitsblog.com)
Arizona Lawmakers Could Kill Domestic Partner Benefits Rule
Excerpt: "Arizona state lawmakers are moving to strip the domestic partners of state and university employees of the health insurance coverage they gained just a year ago, according to a news report. The Arizona Daily Star reported that a provision in the state budget would legally define 'dependents' of state employees who are entitled to coverage as a spouse or a child younger than 19 -- or younger than 23 if a full-time student." (PLANSPONSOR.com; free registration required)
Webcasts and Conferences
"What You Don't Know About HCEs and Key Employees" Archived Web SeminarNationwide on June 6, 2009
presented by SunGard Relius
Getting Ready for the 2009 Form 5500 and Electronic Filing Webcast
Nationwide on June 11, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Health Benefits Laws: Compliance Assistance Seminar
in Ohio on July 15, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
(Click to post your webcast or conference)
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