Retirement Plans Newsletter |
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| July 21, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
International Foundation of Employee Benefit Plans (Advert.)
What Rick Wellner, CEBS, says about International Foundation membership: "We became members of the Foundation because of our commitment to the Foundation’s educational content. We leverage our membership in many ways: We use the library for research, the Certificate Series for training, CEBS classes to credential our folks and E-learning courses to get our associates up and running quickly. If there is any kind of article or research in the employee benefits field, we know where to go to get it. You really need to be part of the Foundation if you’re in the employee benefit market." |
[Guidance Overview]
Managing Participant-Directed Plans: QDIAs and Other Options Under ERISA Section 404(c)
12 pages. Excerpt: "To help address plan fiduciaries' concerns about how to invest participants' retirement funds that are undirected and to help plan fiduciaries make decisions that benefit participants over the long term Congress added new provisions to ERISA section 404(c) in the Pension Protection Act of 2006 (PPA) that give plan fiduciaries options when participants fail to provide investment instructions, including: A safe harbor for investing contributions and retirement funds in 'qualified default investment alternatives' (QDIAs); Protection for 'mapping' balances in participant's plan accounts from one investment option in a plan's investment line-up to another 'reasonably similar' investment Fiduciary protection during 'blackout' periods. This paper describes ERISA section 404(c) and the new provisions added by the PPA, including related regulations and other guidance from the Department of Labor (DOL). It also offers some approaches plan fiduciaries may consider when applying the new provisions." (Principal Financial Services, Inc.)
[Guidance Overview]
Discretionary Authority: Limited to Claims Decisions or Extended to All Plan Interpretations?
Excerpt: "As I read the facts, once the offset method was deemed an impermissible cutback the problem arose as to fashioning a remedy that would take the place of the prohibited phantom account method. So I don't see the petitioner changing its rationale so much as attempting to renew its interpretation of the plan provisions in a manner that implements the plan provisions forbidding duplication of benefits but in a way that does not constitute a cut back." (Roy Harmon III via Health Plan Law)
[Guidance Overview]
DOL Provision of Form 5500 Reporting Relief for 403(b) Plans
Excerpt: "The U.S. Department of Labor (DOL) has provided transitional relief for administrators of 403(b) plans that make good faith efforts to transition for the 2009 plan year to the Employee Retirement Income Security Act's (ERISA) generally applicable annual reporting requirements. In Field Assistance Bulletin 2009-02, the DOL said the relief is limited to the Form 5500 annual reporting requirements, including the requirement for large plans to include as part of their annual report the report of an independent qualified public accountant." (planadvisor)
1199 S.E.I.U. Health Workers Forgo Raises to Bolster Pension Fund
Excerpt: "Facing a crisis in its pension fund, 1199, New York's giant health care union, reached an innovative settlement on Monday that calls for forgoing nearly a billion dollars in raises for 145,000 union members so that hospitals can increase their pension contributions to safeguard future retirement benefits. The union, formally called 1199 S.E.I.U. United Healthcare Workers East, agreed to a wage freeze for next year, but also -- in a move that parallels Mayor Michael R. Bloomberg's proposal for municipal employees -- accepted less generous pensions for future hires." (The New York Times; free registration required)
9th Circuit Gives Participants Second Chance in Company Stock Suit
Excerpt: "The 9th U.S. Circuit Court of Appeals has ruled that former participants in Amgen Inc.'s retirement plans should be given another chance to state their case of breach of fiduciary duty over the offering of company stock as an investment in the plans." (PLANSPONSOR.com; free registration required)
Delphi Retirees Aim Lawsuit at 4 Executives As Fiduciaries of Pension Plan
Excerpt: "Delphi retirees have sued not the Troy-based supplier, but instead targeted four directors and executives directly responsible for the administration of the pension plan for what amounts to conflict of interest. 'That defendants have, in fact, failed to guard the participants' and fiduciaries' interests, to the benefit of corporate interests,' according to the complaint filed in the federal district court in Detroit. Principal defendants are retirement plan trustees and more specifically those 'fiduciaries' vested with the powers and responsibilities for administering the plan." (The Oakland Press)
NAVA Is Now the Insured Retirement Institute
Excerpt: "NAVA Inc. today changed its name to the Insured Retirement Institute, completing a rebranding mission it started this summer. Rather than chiefly representing the variable annuities industry, the Washington-based institute said that it will reach out to advisers and their clients through the group's distributor members, acting as a source of information via webcasts, consumer brochures and research." (Investment News; free registration required)
Third Circuit Denies Company's Claim for ESOP Dividend Deduction
Excerpt: "No deduction is allowed for amounts paid by a company to redeem stock when ESOP participants terminate employment, the US Court of Appeals for the Third Circuit has ruled (Conopco v. US). The company made the redemption payments 'in connection with the reacquisition of its stock,' the court said, so the deduction was prohibited by Code Section 162(k). The decision is consistent with a recent Eighth Circuit case but conflicts with a 2003 Ninth Circuit ruling. The cases involve tax years before 2006, when the IRS issued final regulations barring deductions in this situation." (Mercer LLC)
FTC Identity Theft 'Red Flags' Rule Generally Won't Apply to 401(k) Plan Loans
Excerpt: "401(k) plans that offer participant loans generally will not be subject to a Federal Trade Commission (FTC) identity theft prevention rule, according to informal comments to BNA by an FTC attorney. Offering plan loans is reportedly not the type of conduct that makes the employer a 'creditor' under the rule. Even if an employer is a 'financial institution' or 'creditor' subject to the rule for other reasons, 401(k) plan accounts need not be included. The FTC issued frequently asked questions on the 'red flags' rule in June, and additional FAQs may more explicitly address plan loans." (Mercer LLC)
California Public Pension Benefit Calculus Draws New Scrutiny
Excerpt: "A California dustup over large pension payments is shining a spotlight on the practice of spiking -- increasing a salary just before retirement and boosting the lifelong payout. . . . The practice is getting more attention amid growing concerns about the sustainability of guaranteed pension payouts for public employees after brutal market losses last year in public pension funds. . . . While it happens nationwide, pension spiking has been especially prevalent in California, which some attribute to favorable terms negotiated by powerful unions." (The Wall Street Journal)
[Opinion]
Public-Sector Pensions: Accounting, Funding, Promises
Excerpt: "In the private sector, companies are required to discount their liabilities by the yield on AA corporate bonds; the rate reflects the cost of their borrowing and allows for the possibility that the company defaults on its promise. Although companies may default, it seems odd for a government to make pension promises and then use accounting methods that assume it may fail to keep them. In America, for example, state and local pension benefits are guaranteed by law in many states. That suggests the discount rate should be the Treasury bond yield, considered the risk-free rate." (The Economist Newspaper Limited)
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]Elimination of Pensioner Death Benefit Did not Violate ERISA
Excerpt: "The 10th U.S. Circuit Court of Appeals has upheld a district court's ruling that Qwest Communications did not violate the Employee Retirement Income Security Act when it amended its Death Benefit Plan, eliminating the Pensioner Death Benefit component. The appellate court agreed with the district court's conclusion that 'the Pensioner Death Benefit d[id] not meet ERISA's definition of a pension benefit because it d[id] not provide 'retirement income to employees,' or 'result in a deferral of income.'' The district court also rejected plaintiffs' argument that the Pensioner Death Benefit was a 'retirement-type subsidy' under ERISA's anti-cutback provision." (PLANSPONSOR.com; free registration required)
[Guidance Overview]
Assessing and Avoiding Risk of Adverse Tax Consequences for Partnerships Under the 'Golden Parachute' Payment Rules
Excerpt: "Internal Revenue Code Section 280G denies an income tax deduction for, and Code Section 4999 imposes a nondeductible 20 percent excise tax on, certain compensatory payments (excess parachute payments) to 'disqualified individuals' that are contingent upon a change in the ownership or control, or ownership of a substantial portion of the assets (a change in control), of a corporation.' (Winston & Strawn LLP)
[Guidance Overview]
SEC's Proposed Amendments to Enhance Compensation and Corporate Governance Disclosure (PDF)
6 pages. Excerpt: "The proposed amendments would require a new section in the Compensation Discussion and Analysis (CD&A) covering compensation policies and practices for employees (not limited to named executive officers) if risks associated with those policies and practices could have a material effect on the company. The proposed amendments would also change the method of disclosing the value of stock and option awards in the Summary Compensation Table (SCT) and the Director Compensation Table. Further, the proposed amendments would require new disclosures regarding a company's leadership structure, the board's role in the risk management process, director and nominee qualifications and involvement in legal proceedings, and additional services performed by compensation consultants and their affiliates and associated fees." (Buck Consultants)
Nonqualified Deferred Compensation: Understanding Plan Sponsor and Plan Participant Expectations
12 pages. Excerpt: "As is typical with other workplace retirement savings programs, such as qualified defined contribution and defined benefit plans, participant satisfaction with nonqualified deferred compensation plans is lower than that of plan sponsors. While this is not cause for immediate concern on the part of plan sponsors, it is important that they understand the key drivers of satisfaction for plan participants. Record keepers that offer the ability to deliver quality plan information and reporting, investment options and information, and easy-to-understand education and communications can raise the perceived value of this important employee benefit among participants." (Principal Financial Services, Inc.)
Economy Ratchets Up Value of Effective Education at Open Enrollment
Excerpt: "Economic pressures will make the upcoming open-enrollment season very different from recent years for employers and their employees. Brokers and their clients that can effectively address this year's unique challenges will find that achieving strong employee participation in benefits offerings does not need to be an uphill battle." (Employee Benefit Adviser; free registration required)
Webcasts and Conferences
No-Cost Webinar: Cut Costs and Improve Employee Productivity with Self-Service Enrollment SolutionNationwide on July 23, 2009
presented by Benefit Software Inc.
No-Cost Webinar: Improve Employee Morale with Printed or Online Total Rewards Statements
Nationwide on July 23, 2009
presented by Benefit Software Inc.
No-Cost Webinar: Learn How to Prepare Total Rewards Statements In-house on Your Own PC
Nationwide on August 5, 2009
presented by Benefit Software Inc.
(Click to post your webcast or conference)
Press Releases
CFDD Launches Web-Hosted Plan Sponsor RFP Tool For Advisor EvaluationCenter for Due Diligence
Web Site and Toll-free Line Will Help Unemployed Workers Appeal Denials of COBRA Premium Assistance Under Recovery Act
U.S. Department of Health & Human Services
UNIFI Companies Retirement Plans Enters RIA and Fee-Based Market
UNIFI Companies Retirement Plans
(Click to post your press release)
Employee Benefits Jobs
Defined Benefit Calculation Analystfor Diversified Investment Advisors, Inc.
in MA
Vice President, Group Benefits Sales / Business Development
for Sapers & Wallack, Inc
in MA
(Click to post your job opening | View all jobs |
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EmployeeBenefitsJobs.com (Sponsor)
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