Retirement Plans Newsletter |
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| June 25, 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. |
[Guidance Overview]
IRS Allows Struggling Employers to Reduce or Suspend Nonelective Contributions to 401(k) Plans
Excerpt: "Under regulations proposed by the IRS, an employer undergoing a substantial business hardship can reduce or suspend 401(k) safe harbor nonelective contributions during a plan year. The rules give employers an alternative to terminating their safe harbor plans. The regulations are proposed to be effective for amendments adopted after May 18, 2009, but employers may rely on the proposed regulations for guidance in the meantime. If the final regulations are more restrictive than those proposed, the stricter provisions will not be made retroactive." (Watson Wyatt Worldwide)
SEC Proposes Money Market Funds Improvements
Excerpt: "The Securities and Exchange Commission (SEC) has voted unanimously to propose rule amendments designed to significantly strengthen the regulatory framework for money market funds to increase their resilience to economic stresses and reduce the risks of runs on the funds. According to an SEC press release, the proposed amendments would, among other things: Require that money market funds have certain minimum percentages of their assets in cash or securities that can be readily converted to cash, to pay redeeming investors." (PLANSPONSOR.com; free registration required)
House Committee Approves Bill That Restricts 401(k) Advice to Independent Advisers
Excerpt: "Today's bill merged two proposals that were introduced this year: one made by Rep. Rob Andrews, D-N.J., focused on conflicted investment advice, the other sponsored by the committee's chairman, Rep. George Miller, D-Calif., would have required increased disclosure of fees and expenses in 401(k) plans. The new bill incorporates a proposal to provide corporate plan sponsors with temporary relief from making required contributions to their traditional defined benefit pension plans." (Investment News; free registration required)
How Will the Stock Market Collapse Affect Retirement Incomes?
Excerpt: "Urban Institute projections suggest the stock market collapse will have small effects on most Americans' retirement incomes. It's estimated that 37 percent of Americans born between 1941 and 1965 owned no stocks when the market crashed in 2008 and that income from assets will account for a small share of retirement income, even for those with stocks. For most retirees, Social Security provides the majority of income. Had Social Security been invested in private accounts with equities, the impact of the crash would have been much larger -- positive or negative, depending on one's birth cohort and on future market performance." (Urban Institute)
Managing Risks in a Market Meltdown: Effects on Portfolios and Retirement (PDF)
11 pages. Excerpt: "Among various outcomes, the current environment has the potential to wreak havoc with an individual's retirement savings and thus their plans for retirement. A recent TIAA-CREF Institute survey of TIAA-CREF participants age 50 and older found that a substantial minority have delayed their planned date of retirement and changed how they plan to live once retired as a result of developments in the financial markets. This in turn means that managing retirement patterns on campus, already a challenge for many colleges and universities, only becomes more challenging. On April 24, 2009, the TIAA-CREF Institute [held a symposium] to discuss addressing the challenges raised by the dramatic drops in financial markets for both individuals and colleges and universities; in particular, issues related to risk management in individuals' retirement portfolios and managing and facilitating employee retirements." (TIAA-CREF Institute)
House Lawmakers Revive Federal Retirement Reforms That Were Stripped Out of Tobacco Legislation
Excerpt: "H.R. 2990, which would allow veterans receiving disability benefits from the Veterans Affairs Department to receive full retirement benefits from the Defense Department, included a provision that would let employees in the Federal Employee Retirement System count unused sick leave toward their pensions. The House, which approved the bill under a suspension of the rules, plans to roll H.R. 2990 into the fiscal 2010 Defense authorization bill." (GovernmentExecutive.com)
Median Cost for Defined Contribution Plans Now Exceeds Cost for Defined Benefit Plans
Excerpt: "In 2008, the median cost as a percentage of revenue for defined contribution plans sponsored by the Standard & Poor's 500 companies has exceeded the median cost for defined benefit plans (.39% versus .38%), for the first time. The median cost for defined contribution plans has remained steady over the last four years (.37% in 2005-2007) while the median cost for defined benefit plans has declined from .51% in 2005, .46% in 2006, and .42% in 2007. According to Mercer, the reason for the decline in defined benefit costs is a reflection of freezing of accruals, closure of plans to new participants, or other cutbacks." (Wolters Kluwer)
Most Small Employers Would Face Low Costs to Implement Automatic IRAs
Excerpt: "This report finds that most employers would likely face low costs to implement a system of automatic individual retirement accounts (IRAs). Automatic IRAs can be designed to integrate into existing business payroll systems in a way that will minimize an employer's responsibilities. Most small employers will have only small incremental costs to modify their payroll processing systems in order to facilitate enrollment in Automatic IRAs and withholding of Automatic IRA contributions. The widespread adoption of automated payroll systems, including within the small business sector, and the ability of those system providers to build the Automatic IRA into their services, will make this new employee benefit relatively simple to implement." (AARP)
RothRetirement.com Site Educates on the 2010 Roth IRA Conversion Option
Excerpt: "Convergent Retirement Plan Solutions of Brainerd, Minnesota, and Archimedes Systems, of Waltham, Massachusetts, have jointly launched a Web site, RothRetirement.com, to help educate consumers about the 2010 Roth IRA conversion. A news release said the site includes a library of short educational clips on the 2010 Roth IRA conversion, a compendium of nearly 100 frequently asked questions, a consumer version of the Roth IRA Conversion Optimizer calculator, and links to additional online Roth articles and resources. [The site is available at http://www.rothretirement.com]" (PLANSPONSOR.com; free registration required)
Business Group Presses Los Angeles City Council for Details on Early-Retirement Proposal
Excerpt: "Two days before the Los Angeles City Council is expected to vote on an early retirement package for thousands of workers, the city's largest business organization warned the proposal would contribute to a 'massively unfunded and unsustainable' pension liability. The Los Angeles Area Chamber of Commerce sent Mayor Antonio Villaraigosa and the City Council a letter demanding that taxpayers receive more information on the financial consequences of the proposed five-year labor agreement with the Coalition of L.A. City Unions, which represents 22,000 workers." (Los Angeles Times)
An Understanding of the Two-Hat Dilemma Is Essential to All Aspects of Fiduciary Responsibility
Excerpt: "There is an interesting article entitled 'Two-Hat Issues for Trustees' in the June 2009 Benefits & Compensation Digest. Although the piece deals with multiemployer trust funds in the private sector, many of the issues are common to public fund trustees (employee-elected vs. employer-appointed). What, then, is the two-hat issue, sometimes referred as the two-hat dilemma? A union official or employer wears the hat of a trustee when sitting on the board of a fund. His duty to participants and beneficiaries is often at odds with the trustee's loyalties to the entity (union or employer) that appointed the trustee. An understanding of the two-hat dilemma is essential to all aspects of fiduciary responsibility." (Cypen & Cypen)
Company-Sponsored Retirement Plans More Important Than Ever
2 pages. (Hewitt Associates)
Regulators Eye Target-Date Funds As Retirement Plan Investment Option
Excerpt: "One new option that some plans are beginning to offer is a target date fund with insurance protection built in. The funds are more expensive, and their value still fluctuates with the market, but in exchange for the higher price tag investors receive a certain level of guaranteed retirement income. Should an employee's savings be wiped out due to a market meltdown just before retirement, for example, the insurance would kick in to provide the annuity income." (CFO.com)
[Opinion]
Joint-Trade Letter Concerning H.R. 1988, 'The Conflicted Investment Advice Prohibition Act of 2009' (PDF)
2 pages. Excerpt: "Under ERISA, anyone providing investment advice to a plan or its participants or beneficiaries is already a fiduciary and subject to the highest standards of duty. There is no evidence of a violation of these standards, and Representative Andrews has not presented evidence of any problems with the current system. HR 1988 is not necessary. By establishing new barriers for firms who are well-qualified to provide advice, it will result in fewer American workers, including baby-boomers approaching retirement, receiving critically important investment advice." (U.S. Chamber of Commerce)
DATAIR Employee Benefit Systems, Inc. (Advert.)
DATAIR’s DB Valuation System DB Administration, Discrimination Testing and Proposal software with Multiple Plan and Cash Balance Plan handling. PPA’06 Pension Funding. * Funding Target and Target Normal Cost with 3-rate segments * 404(o) Cushion; 430 minimum and 404(o) maximum contributions * Funding Target Attainment Percentages (FTAPs) Schedule SB reports and links to our 5500/PBGC System, and our FAS 158 and Termination Calculation reporting systems. sales@datair.com or call 1-888-328-2474 |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Correcting FICA Errors
Excerpt: "Correcting an employment tax error that is discovered in the year in which the error occurs is generally a simple process. However, employers often discover such errors after the close of the calendar year in which they paid the wages to an employee. The process for correcting those errors is confusing and often leads to further mistakes. The mechanical process for making adjustments to wages and related taxes varies depending on whether there is a correction to FICA taxes or to income tax withholding, whether the error is identified before or after the close of the calendar year of the wage payment, and whether there is an overpayment or underpayment of taxes." (American Institute of Certified Public Accountants)
Workscape's Annual Benefits Study: 2009 Results
Excerpt: "Employees across a range of companies and industries have a newfound appreciation of benefits and organizations have been increasingly able to partner with employees to control rising health benefit costs in a number of different ways, according to the latest findings of a survey of 787 HR professionals conducted by Workscape, Inc., a leading provider of outsourced benefits and talent management solutions, and Workforce Management. [Target page requires registration to receive the survey via email.]" (Workscape)
Public and Private Sector Compensation: What is Affordable in This Recession and Beyond? (PDF)
Excerpt: "On February 26, 2009, the Federal Reserve Bank of Chicago and The Civic Federation hosted a forum to examine the differences in wages and benefits between the public sector and private sector and to discuss best practices in work force sustainability." (The Federal Reserve Bank of Chicago)
Improving Consumer Financial Literacy under the New Regulatory System
June 25, 2009. Witness List is on the target page. (U.S. House of Representatives Committee on Financial Services, Subcommittee on Financial Institutions and Consumer Credit)
Webcasts and Conferences
403(b)Plan Design ConceptsNationwide on October 15, 2009
presented by McKay Hochman Co.
403(b)Series
Nationwide on September 10, 2009
presented by McKay Hochman Co.
COBRA ARRA Compliance Webcast Archived Webcast
Nationwide on June 26, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Distributions, Hardships, Loans
Nationwide on October 1, 2009
presented by McKay Hochman Co.
Document Restatement
Nationwide on July 23, 2009
presented by McKay Hochman Co.
Fiduciary Responsibilities
Nationwide on August 27, 2009
presented by McKay Hochman Co.
How to Reduce Costs and Improve Employee Productivity with Online Enrollment Solutions - No-Cost Web Seminar
Nationwide on July 10, 2009
presented by Benefit Software Inc.
No-Cost Web Seminar Shows How You can Prepare Total Compensation Benefit Statements In-house on Your Own PC
Nationwide on July 8, 2009
presented by Benefit Software Inc.
No-cost Webinar: Discover How to Improve Employee Understanding and Appreciation for Their Employer-paid Benefits and Retain Employees
Nationwide on July 9, 2009
presented by Benefit Software Inc.
Plan Document Requirements, Employer Eligibility, Types of 403(b)s
Nationwide on September 10, 2009
presented by McKay Hochman Co.
Qualified Plan Parity, ERISA v. Non-ERISA, Plan Terminations
Nationwide on September 17, 2009
presented by McKay Hochman Co.
Retirement Income Symposium
in Illinois on October 19, 2009
presented by Summit Business Media
Transfers, Contract Exchanges, RMD Regs.
Nationwide on October 8, 2009
presented by McKay Hochman Co.
Universal Availability, Catch-up Coordination, Post-Severance Compensation
Nationwide on September 24, 2009
presented by McKay Hochman Co.
(Click to post your webcast or conference)
Press Releases
Stable Value Funds Could Carry Considerable RiskWatson Wyatt
PBGC Assumes Francisco Mendoza Inc. Pension Plan
Pension Benefit Guaranty Corporation (PBGC)
U.S. Labor Department Action Means $164,000 in 401(k) Plan Assets Will be Distributed to Workers in Mondsview, Minn.
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Council Applauds Chairman Miller for Inclusion of Defined Benefit Funding Relief Provisions in Retirement Savings Legislation, Applauds Rep. Pomeroy for Development of Comprehensive Relief Measure
American Benefits Council
CUNA Mutual Group Acquisition Doubles Retirement Business
CPI Qualified Plan Consultants, Inc.
Investment Advisor Is Certified For Fiduciary Excellence
Centre for Fiduciary Excellence (CEFEX)
Recordkeeper Is Certified To Industry Best Practices
Centre for Fiduciary Excellence (CEFEX)
EZ-GASB - The Low-Cost Alternative
Lockstone Advisors, LLC
(Click to post your press release)
Employee Benefits Jobs
Benefits Administrator - Pension Plansfor Con-way Enterprise Services (part of Con-way Inc., in Portland, Oregon)
in OR
Benefits Advisor
for Dell Inc.
in TX
(Click to post your job opening | View all jobs |
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EmployeeBenefitsJobs.com (Sponsor)
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