Retirement Plans Newsletter |
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| June 10, 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. |
Investment Risk Considerations for Pre-Retirees and Retirees
Excerpt: "Investors who are nearing retirement -- or already in retirement -- face a special challenge when it comes to investment risk: They may need to maintain more exposure to the stock market than they think." (The Vanguard Group, Inc.)
Fiduciary Duty to 'Assess and Protect' Plan Interests
Excerpt: "It has been reported that there were many ERISA-covered retirement plans impacted by the Madoff-Ponzi scheme. As a result, the DOL issued a notice back in February . . . indicating that fiduciaries of ERISA plans should take 'appropriate steps' to 'assess and protect the interests of the plan and its participants and beneficiaries.' The DOL then went on to include in the notice a list of 'appropriate steps' for fiduciaries to take in fulfilling their duty to 'assess and protect' the interests of plan participants. One of those steps included filing and asserting claims against the bankrup.tcy estate." (ERISA Fiduciary Guidebook)
Update on Participant Behavior Through First Quarter 2009 (PDF)
4 pages. Excerpt: "This note extends our analysis of participant behavior during volatile markets through the first quarter of 2009, and should be read in conjunction with our prior report. [See Vanguard, 2009, Inertia and Retirement Savings: Participant Behavior in 2008, Vanguard Center for Retirement Research, vanguard.com/retirementresearch.] Despite high levels of volatility in the first quarter of 2009, most plan participants made no changes to their retirement savings and investment program, continuing the trend observed during 2008." (The Vanguard Group, Inc.)
Official Summary of Retirement Security Needs Lifetime Pay Act, H.R. 2748 (PDF)
1 page. Excerpt: "The Retirement Security Needs Lifetime Pay Act contains three provisions to encourage retirees to receive some of their retirement savings in the form of guaranteed lifetime income payments. The bill (1) excludes from income a portion of lifetime income payments received from IRAs, qualified retirement plans (other than defined benefit plans), and non-qualified annuities; (2) excludes the value of longevity insurance from amounts subject to required minimum distributions (RMDs); and (3) clarifies the taxation of payments from deferred annuity contracts that are partially annuitized." (U.S. House of Representatives via American Benefits Council)
Text of Retirement Security Needs Lifetime Pay Act, H.R. 2748 (PDF)
Excerpt: "To amend the Internal Revenue Code of 1986 to encourage guaranteed lifetime income payments by excluding from income a portion of such payments." (U.S. House of Representatives via American Benefits Council)
IASB Proposes Clarification of Accounting for Prepaid Pension Contributions
Excerpt: "The IASB has proposed changes to IFRIC 14, IAS 19--The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction, to clarify how much of an asset may be recognized for prepaid minimum required contributions to pension plans. As proposed, an employer reporting under IAS that sponsors a US qualified pension plan with ongoing accruals could apparently recognize an asset equal to the greater of the plan's surplus or its credit balance. Whether this was the intended result is unclear, so further revisions of the proposal are possible. The comment deadline is July 27, 2009." (Mercer LLC)
Legislation Provides Incentives for Annuitizing Retirement Plan Distributions
Excerpt: "Bipartisan legislation has been introduced to give workers a new incentive to annuitize, rather than spend, their retirement savings. U.S. Representatives Earl Pomeroy (D-North Dakota) and Ginny Brown-Waite (R-Florida) today introduced The Retirement Security Needs Lifetime Pay Act, which provides tax incentives for workers to annuitize part of their retirement savings. The Retirement Security Needs Lifetime Pay Act, H.R. 2748, would encourage workers to annuitize some of their retirement savings by providing a 50% tax exclusion for up $10,000 of lifetime annuity payments annually." (PLANSPONSOR.com; free registration required)
IRS and DOL Priorities: Spring 2009 Regulatory Agenda
Excerpt: "In the first Semiannual Regulatory Agenda released during the Obama Administration, the Department of Labor and the Internal Revenue Service list their priorities for the coming year." (Deloitte via BenefitsLink.com)
Dropping Your 401(k) Match? Watch Employees Drop the Plan
Excerpt: "[W]hen organizations stop matching employee contributions, employees often stop contributing. In fact, workers are less likely to even join a 401(k) plan if there's no employer match. A Fidelity Investments report showed that about 30% of employees who participate in a workplace retirement plan contribute only the amount they need to get the full employer match." (Business Management Daily)
Milliman Study Indicates Decline in Pension Funding Status in May (PDF)
2 pages. Excerpt: "Milliman, Inc. . . . released the latest update to the Milliman 100 Pension Funding Index, which consists of 100 of the nation's largest defined benefit pension plans. In May, pensions experienced declines in funded status due to liability increases of roughly $30 billion, which offset modest asset gains of $20 billion. The decline in funding status followed two consecutive months of improvement." (Milliman)
Risk Pooling and the Market Crash: Lessons from Can.ada's Pension Plan
Excerpt: "The challenge is to capture the higher expected returns equities offer in a way that provides reasonably secure and reliable incomes in retirement. One approach would make individual retirement accounts more secure and reliable through the use of mandates, defaults, guarantees, or risk-sharing arrangements. This brief offers a different approach, examining the Can.ada Pension Plan (CPP) and how it manages the risk that comes with investing retirement savings in equities..." (Center for Retirement Research at Boston College)
SEC Requests Data from Two Dozen Firms in Pension Investigation
Excerpt: "The U.S. Securities and Exchange Commission is seeking information from more than two dozen pension funds, placement agents and other companies as it steps up an investigation into whether money managers made improper payments to win business. 'The SEC is interested in finders' fees and other payments,' spokesman John Nester said late yesterday. The SEC contacted pension-fund managers, agents that line up business for investment advisers and 'other intermediaries,' he said." (Bloomberg L.P.)
[Opinion]
Time to Drop DROPs? Alice-in-Wonderland Math Can't Work for Deferred Option Retirement Plans
Excerpt: "The mere existence of a DROP plan should signal that something is wrong with the pension plan. The idea of providing incentives to seniority workers to keep them in service -- because their pension plan encourages a life of leisure well before age 60 -- is a signal that the pension benefit is simply too rich. But early retirement plans with full lifetime benefits are simply not sustainable in today's world of increased longevity, shrunken government budgets and underwater pension fund portfolios. While most workers in the private sector must now toil until or beyond age 65 because their 401(k) accounts are insufficient to retire, the public sector continues to act as if nothing has changed in the world around them. Further sweetening the pot with what some might call a bribe to remain working is a Mad-Hatter-meets-Rube-Goldberg scheme." (Governing.com)
TIAA-CREF (Advert.)
TIAA-CREF Compliance Coordinator Is your plan operating in line with 403(b) regulations?
TIAA-CREF is dedicated to providing you specialized, consultative guidance to help you manage your plan in the most efficient way possible. Our online Compliance Coordinator helps you monitor employee loan and hardship withdrawals across multiple plans and investment providers. It’s easy to implement – no IT work required – and saves you time by simplifying data collection and by providing comprehensive reporting. |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]A Sidebar to Journal of Accountancy Article: 'Executive Compensation: What's Reasonable?'
Excerpt: "[In the 1983 decision by the Ninth Circuit Court of Appeals in Elliotts Inc. v. Commissioner, t]he court considered a company's profitability to be persuasive when it can be attributed to the proven capability and efforts of an owner/employee. The court considered five factors in determining the nature and quality of that person's services: his or her role in the company (position, duties, hours worked and general importance to the company's success); an external comparison (what similarly situated corporations pay for similar services); the character and condition of the company (sales, net income and capital value in light of complexities of the business and general economic conditions); conflicts of interest (whether the relationship between the company and the owner/employee might bias the salary level); and internal consistency (comparing the owner/employee's pay to that of other employees)." (American Institute of Certified Public Accountants)
Executive Compensation: What's Reasonable?
Excerpt: "One factor in determining reasonable compensation that has gained prominence in some circuits, particularly the Seventh, is the value of the employee's contributions as reflected in the return on equity (ROE) of a hypothetical independent investor in the corporation, and the effect of that compensation on ROE. These are calculations CPAs are well-equipped to assist companies in making." (American Institute of Certified Public Accountants)
SEC Updates Executive Pay Disclosure Guidance, Considers Rule Changes
Excerpt: "New SEC Compliance & Disclosure Interpretations (C&DIs) clarify executive pay disclosures under Regulation S-K -- and contain some surprises. Issues addressed include how to fill out the Summary Compensation Table for NEOs serving fewer than three years, when to report tax gross-ups, whether to disclose life insurance proceeds, and how to calculate and report various equity incentives. In recent remarks, the SEC chair indicates the commission also is considering a variety of changes to expand and revise its executive pay disclosure rules." (Mercer LLC)
White House to Appoint Pay Czar, Issue Guidance on TARP Restrictions
Excerpt: "The Obama administration is expected to soon appoint Kenneth Feinberg to oversee executive pay curbs that apply to companies participating in the Troubled Assets Relief Program (TARP). As 'special master for compensation,' Feinberg will play a large role in the implementation of impending guidance on the complex TARP pay restrictions, which apply to incentive pay that encourages 'unnecessary and excessive' risks, golden parachutes, tax deductions for pay, clawbacks and bonuses." (Mercer LLC)
Webcasts and Conferences
"ERPA Test Review - Part I" Web Seminar - July 2009 onlyNationwide on July 14, 2009
presented by SunGard Relius
"ERPA Test Review - Part II" Web Seminar - July only
Nationwide on July 28, 2009
presented by SunGard Relius
Benefit Statement Software No-Cost Web Seminar
Nationwide on June 17, 2009
presented by Benefit Software Inc.
ERPA Bootcamp
in Illinois on June 26, 2009
presented by The Center for Tax Law and Employee Benefits at The John Marshall Law School in Chicago
Online Benefits Enrollment No-Cost Web Seminar
Nationwide on June 11, 2009
presented by Benefit Software Inc.
Total Rewards No-Cost Web Seminar
Nationwide on June 11, 2009
presented by Benefit Software Inc.
(Click to post your webcast or conference)
Press Releases
Wasserstein Consulting Uses Fringe Facts® Communicator to Help Clients Bolster Employee Confidence in Volatile EconomyBenefit Software Inc.
Diversified Investment Advisors Introduces Retirement Readiness Report
Diversified Investment Advisors
Nonqualified Deferred Compensation Plans as Popular as Ever, According to 2008 MullinTBG/PLANSPONSOR Survey
Prudential Financial, Inc.
ASR Applauds the Introduction of Comprehensive Retirement Security Legislation in the U.S. House
Americans for Secure Retirement (ASR)
The Standard Launches Absence Management Services
The Standard
Charles Schwab Releases Data on Employer and Worker 401(k) Behavior
Charles Schwab Corporation
(Click to post your press release)
Employee Benefits Jobs
Defined Contribution Analyst Ifor The Standard
in OH
Tead Lead II RP Administration
for The Standard
in OR
Defined Contribution Analyst I
for The Standard
in OR
Account Manager I - SRS
for The Standard
in OR
Senior 401(k) Analyst
for Nationwide healthcare company located in North Houston
in TX
Manager, Mutual Fund Services
for Wilmington Trust Company
in AZ
(Click to post your job opening | View all jobs |
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EmployeeBenefitsJobs.com (Sponsor)
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