Retirement Plans Newsletter |
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| June 11, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
Complying with ERISA's Fidelity Bonding Requirements (PDF)
4 pages. Excerpt: "This Fidelity Bond Update answers common questions about ERISA's fidelity bonding requirements that The Segal Company frequently receives from our clients. In light of relatively recent guidance from the Department of Labor (DOL) in its Field Assistance Bulletin (FAB) No. 2008-04, The Segal Company is now able to give more specific answers than in previous issues of Fidelity Bond Update." (The Segal Group, Inc.)
[Guidance Overview]
DOL's Webcast Tomorrow Featuring the Form 5500 Electronic Filing Requirements
Excerpt: "Tomorrow there will be a DOL webcast on the new Form 5500 electronic filing requirements which will go into effect for the 2009 plan year (for filings in 2010). I would highly recommend that practitioners and fiduciaries listen in for the following reasons: (1) These webcasts are free to the public and generally contain great information that might not otherwise be available. (2) At yesterday's Mid-Atlantic Pension Liaison Meeting that I attended in Washington, D.C., Michael Auerbach, Chief of the Division of Accounting Services for EBSA, gave a great overview of these new rules. Practitioners seemed surprised at the impact these rules will have on a number of aspects of the current 5500 process. A couple of the surprises are as follows . . . ." (ERISA Fiduciary Guidebook)
Pension 'Perfect Storm' Could Derail Retirement Plans, Global Study Finds
Excerpt: "Unless people prepare for it properly in advance, a perfect storm of demographic and financial trends could derail people's retirement plans, a global survey from HSBC Insurance finds. In its fifth annual Future of Retirement study, HSBC's It's Time to Prepare finds 9% of the 15,000 people it surveyed in 15 countries expect to delay their retirement because of the economic downturn and only 19% intend to retire as they had previously planned. Many are doing the opposite of what they should be doing: 17% are reducing retirement savings or have stopped saving for retirement altogether." (The National Post Company)
Advisory Committee on Tax Exempt and Government Entities' Eighth Report (PDF)
283 pages. Excerpt: "This year there are four (4) reports on the following topics: Exempt Organizations: Recommendations to Improve the Tax Rules Governing International Grantmaking; International Pension Issues in a Global Economy: A Survey and Assessment of IRS' Role in Breaking Down the Barriers; Record Retention Requirements for Tax-Exempt Bonds and Tax Credit Bonds: A Specific Proposal for Published Guidance; Federal-State-Local Government Compliance Verification Checklist for Public Employers" (Internal Revenue Service)
Text of Defined Contribution Plan Fee Transparency Act of 2009, H.R. 2779 (PDF)
26 pages. Excerpt: "To amend the Internal Revenue Code of 1986 to provide transparency with respect to fees and expenses charged to participant-directed defined contribution plans, and to improve participant communication." (U.S. House of Representatives via American Benefits Council)
Official Summary of Defined Contribution Plan Fee Transparency Act, H.R. 2779 (PDF)
2 pages. Excerpt: "Adds new Section 4980H to the Internal Revenue Code requiring notice to plan participants and taxes for failure to comply." (Rep. Richard Neal via American Benefits Council)
Key Revisions to Prior Version of Defined Contribution Plan Fee Transparency Act (PDF)
1 page. (Rep. Richard Neal via American Benefits Council)
Massachusetts House and Senate Agree on Plan to Curb State Pension Excesses
Excerpt: "State lawmakers agreed today to end some of the most egregious pension abuses that have plagued the Massachusetts state retirement system for decades, cutting a deal to eliminate sweetheart provisions, tighten the rules, and -- they hope -- repair some of the damage inflicted on Beacon Hill by a series of pension controversies. The House and Senate are expected to vote Thursday on the provisions, and the governor vowed to quickly sign the bill. The moves followed a recent series of Globe stories that revealed how public officials had enriched themselves by exploiting special provisions in state pension law." (The Boston Globe)
Many 401(k) Sponsors Suspending Matching Contributions Are Funding Defined Benefit Pension Plans (PDF)
Pages 12- of 20 pages. Excerpt: "A review by the Employee Benefit Research Institute of 251 401(k) plan sponsors that have suspended matching contributions for their approximately 4.4 million workers finds that those employing 50 percent of the workers also maintained an open defined benefit plan. An additional 16 percent of workers were with employers that were still obligated to fund a frozen defined benefit plan. Further, 8 percent of the workers were with an employer that had both an open and a frozen defined benefit plan that carried funding obligations." (Employee Benefit Research Institute)
Retirement-Planning Software Needs Overhaul
Excerpt: "In the past year, improbable financial events became all too real, calling into question some commonly-held beliefs about retirement planning -- and forcing a closer look at software tools that use probability models as a basis for helping people prepare for retirement. These days, savers, retirees and advisers are looking in the rearview mirror, questioning the value of software that failed to live up to its billing. Likewise, firms -- perhaps validating the notion that such software failed -- are rolling out new versions of their retirement-planning tools in hopes of meeting the needs of savers in a world where nothing is guaranteed." (MarketWatch)
Target-Date Funds in the Spotlight: An Overview
Excerpt: "Employers . . . cannot rely entirely on the fact that under Department of Labor rules, target-date funds are qualified default investment alternatives (QDIA's) in a company's 401(k) plan. They are still liable as fiduciaries in choosing an appropriate set of target date funds for employees in the fund." (Mind Over Market)
[Opinion]
Groom Comments on Proposed IRS 403(b) Prototype Plan Program
Excerpt: "On behalf of Diversified Investment Advisors, Groom Law Group has submitted comments to the IRS detailing ways in which the proposed IRS prototype procedure for 403(b) plans in IRS Announcement 2009-34 could be improved, including allowing vesting schedules for employer contributions and certain church-specific provisions. We also commented on several points in which the language in the proposed List of Required Modifications that accompanied the Notice could be clarified and made more useful." (Groom Law Group)
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Links to Items on Executive Comp, Benefits in General
[Official Guidance]Text of Interim Final Regs on TARP Standards for Executive Compensation and Corporate Governance (PDF)
123 pages; this version was announced by the Department of the Treasury to the public in a press release on June 10. The press release includes an overview of the rules; it is online at http://www.treas.gov/press/releases/tg165.htm (Internal Revenue Service)
Obama Administration to Unveil 'Say on Pay' Measure
Excerpt: "Administration officials have suggested legislation to give shareholders and federal securities regulators more of a say on executive compensation at publicly traded companies." (PLANSPONSOR.com; free registration required)
Health Benefits Costs 7% of Total Private Employer Compensation Costs
Excerpt: "Employer costs for employee compensation averaged $29.39 per hour worked in March 2009, the U.S. Department of Labor's Bureau of Labor Statistics reported." (PLANSPONSOR.com; free registration required)
Eighth Circuit Instructs District Courts on Attorneys' Fees
Excerpt: "This recent Eight Circuit case--Pendleton v. QuickTrip Corporation--is an ERISA 510 case that did not make it past a Motion for Summary Judgement. However, the case is noteworthy for the court's discussion of attorneys' fees . . . ." (Attorney B. Janell Grenier via Benefitsblog.com)
[Opinion]
Protecting Non-Qualified Deferred Compensation: The Secular Trust
Excerpt: "[In addition to economic conditions and the complexities of 409A, other factors aiding the] resurgence in the use of secular trusts are: Rev. Rul. 2007-48, which coherently laid out the tax rules that apply to each party under a secular trust. The certainty of taxation is an important objective for companies and executives alike (and trustees too). The likelihood of rising income and social security tax rates in the future (maybe accelerating income into 2009 is not such a bad idea?), and The difficult economy (a secular trust is the only way to protect non-qualified plan benefits from the claims of creditors)." (Michael Melbinger via Winston & Strawn LLP)
Press Releases
PBGC Protects Pensions at Milacron Inc.Pension Benefit Guaranty Corporation (PBGC)
Chrysler Pension Plans Continue Under New Company Sponsorship
Pension Benefit Guaranty Corporation (PBGC)
Americans Show Support for Several Health Coverage Options, But Their Views Could Change as More Details Emerge
Employee Benefit Research Institute (EBRI)
New Tool Simplifies Reporting Fair Value Measurement of Retirement Plan Assets
Principal Financial Group
Statement by Treasury Secretary Tim Geithner on Compensation
U.S. Treasury Department
SouthWest Benefits Association Elects New Board of Directors
SouthWest Benefits Association
Interim Final Rule on TARP Standards for Compensation and Corporate Governance
U.S. Department of Treasury
CEFEX Acknowledges 63 Certifications
Centre for Fiduciary Excellence (CEFEX)
Workplace Benefits Association Offers White Paper: "Best Practices to Prepare for National Health Care Reform"
Workplace Benefits Association
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Employee Benefits Jobs
Actuarial Consultantfor Tepfer Consulting Group, Ltd.
in IL
Client Service Manager
for Ascensus
in PA
Enrolled Actuary and/or Defined Benefit Administrator
for Midsize Consulting and Administration Firm
in TX
Defined Benefit Business Analyst
for Enterprise Iron
in ANY STATE
Junior Pension Administrator/Service Associate
for The Senex Group, Woodland Hills, California
in CA
Senior Defined Contribution Consultant
for Tepfer Consulting Group, Ltd.
in IL
Plan Administrator
for A Third Party Administrator
in PA
Consulting (Retirement) Actuary
for Segal
in MA
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