Retirement Plans Newsletter |
|
|
| July 22, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
ASC and the ASC Institute (Advert.)
Create all your Safe Harbor notices in one day with the DGEM system! ASCi’s Automated Document System (DGEM) automatically finds all your Safe Harbor plans, then simultaneously produces the notices with their pre-populated cover letters, eliminating the hassle of mail merges! See how in this one minute video. |
[Guidance Overview]
DOL Provision of 403(b) 5500 Relief
Excerpt: "[T]he IRS has just issued FAB 2009-02 which provides important transition relief for 403(b) plans. Solely for purposes of Form 5500 (including any related audit), the DOL will not regard an annuity or custodial account as a part of an ERISA 403(b) plan if the investment meets the following requirements: the contract or account was issued to a current or former employee before January 1, 2009; the employer ceased to have any obligation to make contributions (including employee salary reduction contributions), and in fact ceased making contributions to the contract or account before January 1, 2009; all of the rights and benefits under the contract or account are legally enforceable against the insurer or custodian by the individual owner of the contract or account without any involvement by the employer; and the individual owner of the contract is fully vested in the contract or account." (SunGard)
[Guidance Overview]
Corporation's Stock Redemption Payments to ESOP Trust Not Deductible
Excerpt: "The U.S. Court of Appeals for the Third Circuit affirmed a district court decision holding that a C corporation was not entitled to deductions under IRC § 404(k)(1) for payments made to its ESOP trust to redeem shares allocated to the accounts of ESOP participants who requested cash payouts upon the termination of their employment. The appeals court concluded that the deduction was disallowed under IRC § 162(k)(1). __________ v. United States, No. 07-3564 (3d Cir. July 13, 2009)." (Deloitte via BenefitsLink.com)
[Guidance Overview]
Five Years of Service is a Permissible 'Normal Retirement Age' for Cash Balance Plan, According to Court
Excerpt: "In what appears to be a case of first impression, the 7th Circuit Court of Appeals ruled that a cash balance plan was permitted to define 'normal retirement age' as the completion of five years of service in order to avoid a 'whip saw' calculation of the participants' lump sum benefits. The case involved plan language that was in effect in 2003 and, therefore, did not address the validity of the 2007 Treasury Regulations that now restrict a plan's ability to define normal retirement age as lower than age 62. The distribution at issue also occurred before August 17, 2006, the effective date of new PPA rules explicitly eliminating the whip saw calculation for certain cash balance plans." (Deloitte via BenefitsLink.com)
The Impact of a Phased Retirement Program: A Case Study
Excerpt: "In this paper we analyze the factors that influence the decision to take up a part-time pension and continue working at the same work place at reduced hours. We do this by using a unique data set from one employer in the governmental sector in Sweden, Stockholm University. The pension scheme is a special part-time pension scheme introduced for state employees in 2003. Employees 61 years and older can apply for a part-time pension up to the age of 65. The employers decide if they will accept or reject the application. They may also encourage employees to apply or discourage them from doing so." (Social Science Research Network)
NCPERS Reply to GASB Invitation to Comment on Pension Accounting and Financial Reporting
Excerpt: "NCPERS kept the focus of its comments on the issues related to Market Value of Liabilities, although the scope of GASB's ITC included other issues related to pension accounting and financial reporting." (National Conference on Public Employee Retirement Systems)
A Supplemental Report on the Impact of the 2008-2009 Financial Crisis (PDF)
11 pages. Excerpt: "Several major themes are apparent from the 2009 results. Overall, it is evident that the financial crisis has impacted aspects of the current mindset and financial outlook of these retirees. Retirees now: Feel less secure after the crisis; Are less confident that they have saved enough for retirement; Have become more conservative and less willing to take risk; Are trying to control spending; Are more likely to have personal financial advisors[.]" (LIMRA, International Foundation for Retirement Education and Society of Actuaries)
Will Retirement Assets Last a Lifetime? (PDF)
90 pages. Excerpt: "This report presents the results of a quantitative research study . . . . It was conducted to better understand how retired individuals with investable assets make decisions about investing their assets and buying financial products." (Society of Actuaries, LIMRA, and International Foundation for Retirement Education)
Pillsbury Law Firm Requests IRS Clarification of Foreign Investment Reporting Rules for Pension Plans (PDF)
3 pages. Excerpt: "In order to diversify their investments, many U.S. qualified retirement plans invest a portion of their trust assets in foreign investment funds. In past years, it has generally been assumed that these investments are not reportable on [the Report of Foreign Bank and Financial Accounts, or 'FBAR'], as long as the plan has a minority interest in the fund. In October 2008, however, the IRS added language to the FBAR instructions stating that 'financial accounts' reportable on FBAR include mutual funds. We understand that certain IRS officials are taking the position that the term 'mutual funds,' for this purpose, includes offshore hedge funds and private equity funds. We believe that this reading is overly broad." (Pillsbury Winthrop Shaw Pittman LLP)
ERISA Requires Environmental, Social and Corporate Governance Considerations, U.N. Report Says
Excerpt: "Pension fund fiduciaries under ERISA are 'arguably required' to integrate environmental, social and corporate governance factors into their regular investment decision-making process, Paul A. Hilton, director of advanced equities research, Calvert Investments, said today at a teleconference on a new United Nations report on such fiduciary responsibility. 'These ESG issue are increasingly becoming very real and material issues that have bottom-line impacts on companies,' Mr. Hilton said . . . . 'And so with that understanding, it's clear, unlike (using only) a simple value approach, an approach that integrates these (factors) as part of the regular investment process is arguably required by any major fiduciary and that certainly holds true' under the Employee Retirement Income Security Act of 1974, Mr. Hilton said . . . ." (Pensions & Investments)
Should You Carry a Mortgage into Retirement?
Excerpt: "This Issue in Brief considers whether households should use retirement or non-retirement wealth to pay down their mortgage. It first shows that it is unlikely that many retired households will be able to earn a return on risk-free investments such as bank certificates of deposit, Treasury bills, and Treasury bonds that will exceed the cost of their mortgage. Liquidity considerations aside, households holding such assets will generally be better off using them to pay down their mortgage. It then considers and (for most households) rejects the argument that households should retain their mortgage because they can earn a higher expected return in stocks and other risky assets. It concludes with practical advice for most households." (Center for Retirement Research at Boston College)
CalPERS Expected to Report Losing Nearly One-Quarter of Investment Portfolio
Excerpt: "The estimated $56.8-billion drop at the U.S.' largest pension fund, the second annual loss in a row, would have a huge effect on what state and local governments must shell out to support retirees." (Los Angeles Times)
[Opinion]
On Capitol Hill: Retirement Plans Under the Microscope
Excerpt: "A fundamental reshaping of the financial services industry is underway and retirement plans are being scrutinized closely. What does this mean for plan sponsors in the near term? According to Ann Combs, head of Vanguard Strategic Retirement Consulting, 2009 is likely to be a year of debate and discussion on retirement plan issues. 'The main focus right now is elsewhere -- on health care reform, energy issues, and dealing with the economy. So, while bills may move through committees and possibly even pass the House, it's unlikely that legislation affecting retirement plans will be enacted until at least 2010,' Ms. Combs said." (The Vanguard Group, Inc.)
[Opinion]
American Benefits Council Testimony before ERISA Advisory Council Working Group on Approaches to Retirement Security in the U.S. (PDF)
11 pages. Excerpt: "One area about which we and our member companies are extremely concerned when it comes to the future stability of the employer-sponsored system is fiduciary liability. Anxiety about meeting fiduciary obligations and about the increasing prevalence and therefore risk of fiduciary litigation, with its attendant drain on time and resources, dominates the conversations we have with our plan sponsor members. Plan sponsors are particularly concerned in this regard with defined contribution plans given the increasing litigation faced by 401(k) plan sponsors. The market and economic conditions of the past 12 months -- and the attendant declines in participant account balances -- have only exacerbated this worry about defined contribution plan fiduciary vulnerability." (American Benefits Council)
[Opinion]
ERISA As an Explanation for Drop in Securities Class Actions
Excerpt: "[F]irst developed in this law review article back in 2006: What's Up on Stock Drops? Moench Revisited, 39 John Marshall L. Rev. 605 (2006) which] points out what I have often felt: ERISA breach of fiduciary class actions are easier to win than the securities class actions." (Workplace Prof Blog)
DATAIR Employee Benefit Systems, Inc. (Advert.)
DATAIR 5500 / PBGC / 1099-R / 5300 / FAS 158 Software Pension Reporter System. Easy to use and economical electronic and paper filing. Full instructions and expert support. Choose from 4 modules: * Annual Reporting Series: EFAST 5500-series, PBGC Premium-series, SAR, and 5500 electronic filing * 1099-R Series: with related forms and 1099 electronic filing/Service Bureau * Qualification & Termination: 5300/5310-series and PBGC 500/600-series forms * FAS 132/158: Audit Letter, Worksheets, Schedules sales@datair.com or call 1-888-324-2474 |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]SEC's Proposed Additional Proxy Disclosure Rules
Excerpt: "On July 1, 2009, the Securities and Exchange Commission (SEC) voted to propose rules that would require additional disclosure in annual reports and proxy statements regarding the relationship of a company's overall compensation policies to risk, director and nominee qualifications, company leadership structure, and the potential conflicts of interest of compensation consultants, among other things. The proposed rules were made available on July 10, 2009. The SEC is expected to act on the rules prior to the 2010 proxy season. [The target page is a summary of the proposed rules]." (Wilson Sonsini Goodrich & Rosati)
[Guidance Overview]
Proposed New Rules Governing Disclosure of Revenue Sharing and Other Compensation Arrangements Relating to Investment Company Securities (PDF)
3 pages. Excerpt: "As part of the ongoing process of developing a consolidated FINRA rulebook, FINRA has issued Regulatory Notice 09-34 requesting comment on new Rule 2341 regarding the disclosure of compensation arrangements relating to the distribution and sale of investment company securities. Proposed Rule 2341 would replace NASD Rule 2830 and, in doing so, would attempt once again to address the controversial area of revenue sharing disclosure." (Paul, Hastings, Janofsky & Walker LLP)
[Guidance Overview]
Treasury Proposes Legislation to Congress for Say-on-Pay and Compensation Committee Independence (PDF)
Excerpt: "On July 16, 2009, as part of the Investor Protection Act of 2009, the U.S. Treasury Department delivered proposed legislation to Congress that is consistent with the Obama Administration's efforts to reform corporate governance and executive compensation practices. The proposed legislation, which applies to all publicly traded companies, includes (1) a non-binding 'Say-on-Pay' vote for shareholders at each annual meeting and in connection with every change-in-control transaction, and (2) measures to tighten the standards of independence required of compensation committees." (Frederic W. Cook & Co., Inc.)
[Guidance Overview]
Requirements for Correction of 409A Operational Failures Pursuant to IRS Notice 2008-113 (PDF)
8-page overview. Excerpt: "This article outlines operational failures that may cause a failure of Section 409A and discusses whether such failures may be corrected under Notice 2008-113 and what the consequences are of the failure and its correction. First, however, there is one important Section 409A failure that cannot be corrected under Notice 2008-113, document failure . . . ." (M Benefit Solutions)
[Guidance Overview]
Abuse of Discretion Named Top Hat Dispute Standard
Excerpt: "A federal appellate court has ruled that a benefits decision by an administrator of a top hat non-qualified deferred compensation plan should be scrutinized on appeal for any potential abuse of discretion. The decision by the 9th U.S. Circuit Court of Appeals came in a dispute between the prior and current wives of a participant over who would be named by the plan as the designated surviving spouse beneficiary for Robert Sznewajs, a former U.S. Bancorp executive." (PLANSPONSOR.com; free registration required)
Protecting Non-Qualified Plan Benefits: A Supplemental Unemployment Benefits Plan Strategy
Excerpt: "For decades, employers, executives, and their counsel have grappled with the issue of protecting non-qualified plan promises. Over the last two months alone, I have blogged several times on this issue. Recently, we have been exploring the use of a Supplemental Unemployment Benefits (SUB) plan to provide a source of post-termination income on a fully-protected basis. Of course, severance benefits are not the same as other non-qualified plan benefits, but they could be structured to serve a similar purpose." (Michael Melbinger via Winston & Strawn LLP)
Proposed SEC Pay and Corporate Governance Disclosure Changes
Excerpt: "Proposed changes to SEC's disclosure rules would require new details about companies' pay and governance policies. Under the proposal, companies where a material risk/reward relationship exists would have to discuss their overall approach to employee compensation and risk management. Other changes would expand disclosures about compensation consultants, director nominees and leadership structure and require using the full grant-date fair value of equity awards in the summary and director compensation tables. Companies also would face shorter deadlines for reporting proxy vote results." (Mercer LLC)
EEOC Addresses Employment Discrimination Waivers
Excerpt: "New EEOC guidance helps employees and employers understand waivers of employment discrimination claims, which are often part of employee severance plans. The guidance spells out in Q&A format the requirements for valid waivers, including ADEA waivers; provides a checklist to aid employees deciding whether to sign waivers; and contains sample language that may be a useful starting point for employers drafting waiver agreements. The guidance responds to the recent spike in layoffs and the potential for charges of age discrimination." (Mercer LLC)
Webcasts and Conferences
Preparing for the Roth 2.0 Market - Roth IRA Fundamentals RevisitedNationwide on August 4, 2009
presented by Convergent Retirement Plan Solutions, LLC
Reducing Medicare Marketing Costs While Boosting Enrollment
Nationwide on August 12, 2009
presented by MCOL
Webinar: Investing Self-Directed Retirement Accounts into Pass-Through Entities
Nationwide on August 12, 2009
presented by Winstead PC
(Click to post your webcast or conference)
Press Releases
Segal and Sibson Communications Practices Receive Multiple AwardsThe Segal Company
Segal Announces 2009 Study of State Employee Health Benefits
The Segal Company
Gilsbar Celebrates 50 Years of Thought Leading Benefit Solutions
Gilsbar, Inc.
NBCH Releases Report on Health Plans’ Performance for Cardiovascular Disease Care and Prevention
National Business Coalition on Health
National Business Coalition on Health Announces Conference Speakers for November 8-10 Annual Conference
National Business Coalition on Health
ACI Specialty Benefits Acquires Leverage Life from O/E Learning
ACI Specialty Benefits Corporation
(Click to post your press release)
Employee Benefits Jobs
TPA Administratorfor Thesco Retirement Planning Services, LLC
in NY
Manager, Client Transition
for Prudential Financial
in CT
Financial Operations Specialist
for ExpertPlan, Inc.
in NJ
Benefits Specialist
for City of Naperville
in IL
(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: