Retirement Plans Newsletter |
|
|
| July 6, 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]
Tax Court Rules That 72(t) Payment Plan Not Modified When the IRA Holder Took an Additional Distribution for Education
Excerpt: "Although the IRS sought to assess the 10% early withdrawal penalty, the Court ruled in favor of the taxpayer . . . stating that the extra distribution did not trigger the 10% penalty. This decision may give IRA owners some much-needed flexibility if they need more funds for certain purposes. But only time will tell if the IRS will follow the Tax Court's lead." (Financial Planning)
[Guidance Overview]
IRS Obsoletes Old 403(b) Guidance; Highlights Unique School Guidance
Excerpt: "The public school guidance is particularly noteworthy, because it affects application of the universal availability requirement ('if any employee of an employer can defer, all employees of the employer must be eligible to defer'). The 'employer' of the employees at a public school includes: the school itself, any other educational organization which has power to levy taxes to support the school or to have a significant role in setting or reviewing the school's budget, and all other educational organizations which receive tax funds from the same levy process." (SunGard)
[Guidance Overview]
Investment Consultant Did Not Contract to Monitor Performance of Plans' Investment Managers
Excerpt: "An investment management company hired by a defined benefit plan and a 401(k) plan to provide consulting services did not breach its contract with the plans when it failed to monitor the performance of private investments made by one of the plans' investment managers, according to the U.S. Court of Appeals in San Francisco (CA-9) in Stahly v. Salomon Smith Barney. In addition, no ERISA violation occurred, as the consultant was not an ERISA fiduciary." (Wolters Kluwer)
[Guidance Overview]
WRERA for the Multiemployer Actuary (PDF)
Pages 1, 7-8 of 8 pages. Excerpt: "[The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA)] was signed into law on Dec. 23, 2008, and pension actuaries who practice in the multiemployer world have been analyzing and dissecting it raw for the past few months. . . . WRERA's provisions for multiemployer pension plans allow them some relief from PPA's rules -- but only for 2009 plan years. This relief will give multiemployer plans more time to recover from the market declines incurred in 2008. One of the most important changes was to allow trustees to elect to have the plan's funded status for plan years that begin during the period Oct. 1, 2008, through Sept. 30, 2009, be the same as the plan's funded status for the prior plan year." (American Academy of Actuaries)
[Guidance Overview]
Asset Smoothing Under PPA (PDF)
Page 4 of 8 pages. Excerpt: "The recent abrupt decrease in asset values is going to force the actuaries serving traditional pension plans to reconsider using allowable asset smoothing methods to set minimum funding requirements. Regulations and seminars on asset smoothing over the past two years have omitted a few important concerns, so now is a good time to consider the finer points." (American Academy of Actuaries)
401(k) Balances and Changes Due to Market Volatility, Data to June 30, 2009 (PDF)
1 page. Chart shows 'Change In Average Account Balances (by Age and Tenure) From January 1, 2008 - June 30, 2009 Among 401(k) Participants with Account Balances as of Dec. 31, 2007." (Employee Benefit Research Institute)
Public Pensions: Cooking the Books? Hiding the Truth from Taxpayers?
Excerpt: "Here's a dilemma: You manage a public employee pension plan and your actuary tells you it is significantly underfunded. You don't want to raise contributions. Cutting benefits is out of the question. To be honest, you'd really rather not even admit there's a problem, lest taxpayers get upset. What to do? For the administrators of two Montana pension plans, the answer is obvious: Get a new actuary. Or at least that's the essence of the managers' recent solicitations for actuarial services, which warn that actuaries who favor reporting the full market value of pension liabilities probably shouldn't bother applying." (The Wall Street Journal)
IBM Reinvents the 401(k)
Excerpt: "Back in January 2008, IBM (IBM) replaced the last of its pensions with a new-and-improved 401(k). The plan came with plenty of enticements, befitting a company that earned more than $10 billion on $99 billion in revenue the previous year. There were generous matching contributions, super-low fees, custom-designed portfolios, free access to financial coaches, and more. Even so, critics hammered IBM's move as one more sign of retreat from the secure retirement benefits of the past. Today, hardly anyone is complaining about IBM's 401(k), least of all the participants. The plan is sumptuous compared with offerings from most companies." (BusinessWeek)
Proposal Would Have State Take Over City of Philadelphia Pension Plan
Excerpt: "A proposal circulating in the legislature could result in a state takeover of Philadelphia's municipal pension plan, and officials from the city and the pension board are raising alarms. In response to the faltering economy and difficulty many municipalities expect in meeting their pension obligations, the state Public Employers Retirement Commission is recommending legislation that would move pensions with less than half the assets required to meet long-term obligations into a state-run pension plan. 'The idea of the takeover is really to stop the bleeding,' said James L. McAneny, PERC's executive director. 'The history is that municipalities - not all of them - don't seem to be able to resist increasing benefits in spite of the fact that they can't afford it.'" (The Philadelphia Inquirer)
With Traditional Pension Plans Gone, What's Next?
Excerpt: "[M]ore metro Atlanta workers are joining the ranks of Americans shouldering primary responsibility for saving and investing enough money to fund their retirements. Only 17 percent of private-sector workers nationwide are now covered by traditional pensions in which a company promises its retirees a predictable retirement income no matter what happens in the financial markets. 'It's those people in their 40s and 50s that are going to get caught. They need to start saving and investing,' said Thomas Stone, a former Delta executive who retired before the company froze its pension plan in 2004. Stone, 64, says his own children don't expect to retire on a traditional pension like his. 'It no longer makes sense for a company to take on that kind of obligation.'" (Atlanta Journal-Constitution)
[Opinion]
The System of Participant-Choice 401(k) Plans Represents a Vast Devolution of Investment Decisionmaking
Excerpt: "[I'll make you a bet.] Over the next 10 years, an all-passive, low-fee, target-maturity fund plus a generic glide path will beat the average performance of your participant-choice plan by 100 basis points. If we can't find a way to realistically do better, that's where we're going to wind up -- with active management squeezed out of this business. To avoid that result, we need to prove that real expertise -- delivered via target-maturity funds -- can beat that sort of low-cost, all-beta proposition." (Michael Barry via PLANSPONSOR.com; free registration required)
[Opinion]
ASPPA's Comments Proposing Self-Correction Component Be Added to Voluntary Fiduciary Correction Program for Late Deposit of Employee Contributions
Excerpt: "The American Society of Pension Professionals & Actuaries (ASPPA) is writing to comment on, and request modifications to, the Department of Labor's (DOL) Voluntary Fiduciary Correction Program (VFCP or Program) as it applies to late deposits of elective deferrals. We appreciate the DOL's 2006 update to the Program permitting a summary application for certain corrections of late deposits of elective deferrals, and the DOL's more recent proposed regulation providing a 7-day safe harbor for small plans to use in transmitting elective contributions to an employee benefit plan. We are writing this letter to propose a self-correction component to the Program that would allow employers to correct certain late deposits of elective deferrals in accordance with VFCP methodology without filing an application with the DOL." (American Society of Pension Professionals and Actuaries)
[Opinion]
ASPPA Request for Further Guidance on Issues Affecting 403(b) Plans
6 pages. Excerpt: "The American Society of Pension Professionals & Actuaries (ASPPA) submits this request for additional guidance on issues affecting 403(b) plans for consideration by the Employee Benefits Security Administration of the U.S. Department of Labor (the 'Department'). We believe further guidance is needed to allow plan sponsors and service providers to implement new rules for 403(b) plans and to operate these plans going forward." (American Society of Pension Professionals and Actuaries)
[Opinion]
Faulting Actuaries for the Public Pension Crisis
Excerpt: "A letter that appears in the Summer, 2009 edition of the Enrolled Actuaries Report calling out pension actuaries for abetting the crisis in the funding of public pension plans by allowing politicians free rein to raid these plans was written six months ago. Events since then have substantiated the points made." (NJ.com)
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
Employers Turn to Lobbyists to Navigate Benefits Policy IssuesExcerpt: "In the face of stepped-up activity on workplace law in Washington, employers are increasingly turning to lobbying organizations to help them navigate actual and potential changes in benefits policy." (Workforce Management; free registration required)
IRS Publishes Convenient List of Links to Guidance for Nonbank Trustees and Custodians
Excerpt: "Pursuant to Treas. Reg. §1.408-2(e), an entity that is not a bank (or, in the case of Archer medical savings accounts and health savings accounts, not a bank or an insurance company) must receive IRS approval to serve as a nonbank trustee or custodian of the following types of tax-exempt trusts or accounts . . . ." (Internal Revenue Service)
The Principal Financial Well-Being Index Summary, Second Quarter 2009
Excerpt: "This is one in a series of quarterly studies to identify and track changes in the workplace of small and mid-sized (growing) businesses. . . . Employees and retirees were asked how they think they will do financially twelve months from now as a result of the government's economic stimulus plan. The majority of both employees (60%) and retirees (56%) believe they will be the same financially in twelve months as a result of the government's economic stimulus plan." (Principal Financial Services, Inc.)
Call for Papers: Living to 100 Symposium IV, January 5-7, 2011
Excerpt: "This Call For Papers is addressed to professionals knowledgeable in the subject matter and interested in preparing a high quality paper for the symposium that will advance knowledge in the important area of longevity and its consequences. Collaboration is encouraged and authors may submit more than one paper. . . . The Committee on Living to 100 Research Symposia is seeking papers exploring aging, longevity and the implications thereof. A list of suggested topics is presented [on the target page]. " (Society of Actuaries)
A Review of Judge Sotomayor's Second Circuit ERISA Cases
Excerpt: "Five of the Second Circuit opinions authored by Judge Sonia Sotomayor deal with the Employee Retirement Income Security Act (ERISA). ERISA cases aren't considered as sexy as a lot of employment law cases, but the number of such cases is growing. The U.S. Supreme Court is occasionally asked to consider a case filed under this complicated statute. Getting a sense for how Sotomayor approaches ERISA is, therefore, useful." (M.Lee Smith Publishers)
[Opinion]
The Challenge of Improving the Long-Term Focus of Executive Pay
Excerpt: "A consensus is developing that executive compensation in the U.S. is inadequately linked to long-term company performance, resulting in reckless, short-term decision making. Congress, the Obama administration, and academic commentators have recently embraced dramatic restrictions on the form and holding period of senior executive pay, at least at some companies. A common view, apparently, is that while regulation of the amount of executive pay would do more harm than good, regulation of form and term is desirable. This essay questions that view." (Boston University School of Law via Social Science Research Network)
[Opinion]
Social Security Reform May Happen Now
Excerpt: "Add the possibility of Social Security reform to the continuing likelihood of healthcare reform, and HR leaders have workforce-planning issues of substantial complexity to work through -- including the possibility that workers will remain on the job longer." (Dallas Salisbury via Human Resource Executive Online)
Webcasts and Conferences
146th Meeting of the Advisory Council on Employee Welfare and Pension Benefit Plansin District of Columbia on July 21, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Annual Plan Administration & An Introduction to 401(k) Plan Basic Operation Seminars
in California on August 4, 2009
presented by Actuarial Consultants, Inc.
Webcast: Is Your Firm Prepared to Manage EFAST2 and the 2009 Form 5500 Changes?
Nationwide on August 20, 2009
presented by National Institute of Pension Administrators
(Click to post your webcast or conference)
Press Releases
MetLife Resources Submits Comments On Proposed IRS 403(b) Prototype ProgramMetLife
The Codification is Now Officially the Single Source of Authoritative Nongovernmental U.S. GAAP
Financial Accounting Standards Board (FASB)
(Click to post your press release)
Employee Benefits Jobs
Project Specialist - Administrativefor University of Southern California (U.S.C.)
in CA
Vice President, Defined Contribution Investment Only Sales
for New York Life Retirement Plan Services
in NJ
Pension Analyst
for Milliman
in TX
Senior DC Plan Administrator
for Columbus Retirement Administrators, Inc.
in OH
(Click to post your job opening | View all jobs |
RSS feed of all jobs )
EmployeeBenefitsJobs.com (Sponsor)
(Click on banner to learn more.)
| Where the best employers find the best candidates! |
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too!
Sign-up form is at https://benefitslink.com/newsletter (free).
This email has been published by:
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151
David Rhett Baker, J.D., Editor
Copyright 2009 BenefitsLink.com, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.
Anyone can receive these emails; just have them sign up at this web page: https://benefitslink.com/newsletter/
Other useful links: