Retirement Plans Newsletter |
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| July 28, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
SunGard's Relius Education (Advert.)
2009 Chicago Advanced Pension Conference Early bird discount expires August 3. With a new administration in Washington, and a tough economy, change is the only constant for retirement plan practitioners. Attend this conference and stay current. Our agenda reflects the latest updates, including EFAST2, 403(b) plans, plan design issues, DOL/IRS corrections, restatement pitfalls and perspectives, automatic enrollment under the new rules, and more. Plus, "Ask the Experts" workshop, concurrent sessions, and over 900 minutes of CE credits. Register today. |
[Guidance Overview]
DOL's Form 5500 and Audit Relief for 403(b) Plans
Excerpt: "Specifically, a 403(b) plan now does not need to treat annuity contracts and custodial accounts as part of the plan assets of a 403(b) plan if all of the following are met . . . ." (Seyfarth Shaw LLP)
[Guidance Overview]
IRS Requires Use of Most Recent Form 5307 for Determination Letter Applications
Excerpt: "Form 5307 determination letter applications for adopting employers of pre-approved plans, postmarked on or after August 1, 2009, must be submitted using the most recent version of Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans (Rev. March 2008), according to the IRS Employee Plans News. The IRS stated that it will return applications that are filed using an earlier version of Form 5307 to the applicant." (Wolters Kluwer)
[Guidance Overview]
DOL Avoids a 403(b) Train Wreck With FAB 2009-2. A Learning Opportunity For the IRS?
Excerpt: "The 2009 Plan Year for 403(b) Plans has been recognized as a 'Transitional Year.' This means that if an annuity contract or custodial account to EITHER a former employee or current employee: was issued before January 1, 2009; had all contributions, or rights to contributions, to it cease prior to 1/1/09; has all of the rights enforceable against the insurer without involvement by the employer; and holds only fully vested amounts, assets in that contract will be excludible from the 2009 Form 5500 and 5500-SF. Even better, those former employees owning those contracts will not need to be counted as participants toward that 100 participant threshold for large plans." (Giller & Calhoun, LLC)
[Guidance Overview]
Another Question is Answered in the 401(k) Plans Q&A Column
Can an employer decide to make a safe harbor matching contribution only for employees who are still working at year-end? For example, if an employee leaves her company after four months of the year, can a plan be designed to make that employee ineligible for her four months' worth of matching contribution? (BenefitsLink.com)
Investing in Retirement Accounts: Analyzing Influences on Choice
Excerpt: "This regression analysis empirically identifies influences on household asset allocations in retirement accounts. Among the statistically significant factors, the equity share in DC accounts is positively associated with household net worth, equity share in nonretirement savings, company stock holdings, investment choices, education level, risk tolerance and financial planning horizon. These insights should help plan sponsors and policymakers design plans and programs to help DC plan participants make more effective investment choices.' (Watson Wyatt Worldwide)
Distributional Effects of Raising the Social Security Taxable Maximum (PDF)
8 pages. Excerpt: "This policy brief analyzes the effects on taxpayers and Social Security beneficiaries of either eliminating the taxable maximum (tax max) for Social Security or raising it to a level so that 90 percent of all Old-Age, Survivors, and Disability Insurance (OASDI)-covered earnings would be subject to the payroll tax. Under both scenarios it is possible to either calculate benefits based on the current-law tax max (no max and max 90) or to credit the new taxable amounts toward benefits (no max plus benefits and max 90 plus benefits)." (U.S. Social Security Administration)
Federal Retiree Rehire Provision Survives Senate Filibuster
Excerpt: "A measure allowing federal agencies to rehire retirees without a cut in annuity payments passed the U.S. Senate last week as part of the Defense Authorization bill. Govexec.com reports that after an amendment to the Defense authorization bill that would have allowed federal employees under the Federal Employees Retirement System (FERS) to get credit in their pension calculation for unused sick leave was withdrawn . . ., Senator Susan Collins (R-Maine) offered the language dealing with rehiring federal retirees as a separate amendment, which was approved by voice vote." (PLANSPONSOR.com; free registration required)
Unprecedented Times for DC Plans: How Have Members, Employers and Governments Reacted?
Excerpt: "Defined contribution (DC) plans worldwide have seen steep declines in assets -- even for members using target-date or life-cycle funds. Some officials view this as a watershed moment for DC plans and advocate radical action. Others suggest that the market crisis is so far-reaching and unprecedented that no financial arrangement could escape unscathed. This issue of DC Connections reviews life-cycle funds, examines governments' and DC plan participants' reactions, discusses emerging trends in several countries, and attempts to address the key question: What have we learned from this experience?" (Mercer LLC)
Pension Plans Can Eliminate Retiree Death Benefits, Appellate Courts Rule
Excerpt: "Pension plan sponsors considering eliminating ancillary retiree death benefits to save costs or ease compliance with accelerated distribution restrictions can take comfort from two federal appeals court decisions. In cases involving similar facts, the courts upheld pension plan amendments removing lump sum retiree death benefits, finding the benefits were not protected by ERISA's anti-cutback rules or contractually vested." (Mercer LLC)
Morningstar Launches Directory of Retirement Plan Service Providers
Excerpt: "The Web-based Morningstar Retirement Plan Service Directory allows users to screen across Form 5500 filings that plan sponsors make with the Department of Labor to find aggregate data about service provider assets, fees, and number of plans served, according to a press release. The directory includes information on more than 5,000 investment managers, consultants, recordkeepers, actuaries, and other providers." (planadvisor)
[Opinion]
Ending Pay to Play for Public Pension Funds
Excerpt: "The nation's public employees have a very large pool of money -- about $2.2 trillion -- that must be invested wisely to cover their retirement. So it makes sense that anybody who wants to help invest that money -- and make the fabulous profits that go along with such assistance -- should not be writing campaign checks to state treasurers or comptrollers or other officials who manage the funds." (The New York Times; free registration required)
ASPPA (Advert.)
DOL Speaks: The 2009 Employee Benefits Conference –September 14-15,2009 ASPPA and the U.S. Labor Department EBSA co-sponsor this conference, which focuses exclusively on ERISA Title 1 issues. Get the latest information about ERISA regulatory and legislative issues; DOL audit enforcement, retirement plan and group health-plan issues; fiduciary matters, the fundamentals of managing an ERISA plan and more. There also will be information about he Pension Protection Act. Register now. Washington Hilton Hotel /1919 Connecticut Street, NW / Washington, DC. |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Opinion from a District Court on QDROs: Their Statutory Basis, Their Purpose, and How They Should Be Structured
Excerpt: "Notably, the court weighs in a very sensible manner on the never ending question of whether, under ERISA, the divorce decree at issue must comply exactly with the requirements imposed by ERISA to qualify as a QDRO or whether instead, as in horse shoes, close enough counts. In this circuit, close enough is usually good enough, and courts tend to enforce the divorce decree so long as the court is convinced it can accurately ascertain the intent and purpose of the agreement from the decree, regardless of whether the exact detailed requirements that ERISA imposes to qualify as a QDRO have been met." (Stephen Rosenberg of The McCormack Firm, LLC)
[Guidance Overview]
EEOC's Guidance on Waivers of Discrimination Claims
Excerpt: "The technical assistance document is directed primarily toward employees and includes a checklist of steps employees should take when they are offered severance benefits in exchange for a waiver of claims. It states that in order for a waiver of discrimination claims to be valid, it must: Be knowingly and voluntarily signed by the employee; Provide consideration, such as additional compensation, in exchange for the waiver; Not require the employee to waive rights that may arise after the date the waiver is signed; Not require the employee to waive other claims that may not be waived as a matter of law, such as claims for unemployment compensation, workers' compensation benefits, claims for health insurance benefits under COBRA, or claims with regard to vested benefits under a retirement plan governed by ERISA; Otherwise comply with applicable state and federal laws[.]" (Faegre & Benson)
[Guidance Overview]
IRC Section 409: Newly Effective Rules Governing Foreign Deferred Compensation Arrangements Present Operational Challenges (PDF)
7 pages. Excerpt: "After a brief refresher on deferred compensation in the post-409A landscape, this article will lay out the general applicability of IRC Section 409A to US taxpayers participating in a foreign deferred compensation plan, as well as the numerous exemptions available under applicable IRS regulations (the Final Regulations). Finally, we will offer a few ideas to assist multinational companies in determining which, if any, of their plans might be considered 'nonqualified deferred compensation' within the meaning of IRC Section 409A, and how to coordinate efforts between local benefits delivery staff and service providers to avoid running afoul of IRC Section 409A." (Aspen Publishers via K&L Gates LLP)
Senators Propose Curbing Deductions for Stock Options
Excerpt: "A bill (S 1491) from Sens. Carl Levin, D-MI, and John McCain, R-AZ, would require companies to deduct stock options in the same year and in the same amount as the options are expensed on the company's books. It would also eliminate the tax-favored treatment of options under Code Section 162(m). Levin said deductions for options far exceed the expense reported to shareholders and are costing the government billions in lost revenue." (Mercer LLC)
Starbucks to Match 401k but Health Benefits Costlier for Employees
Excerpt: "Starbucks Corp . . . will make discretionary matching contributions to 401(k) retirement plans for its 2009 plan year but employees will face higher health-care costs, Chief Executive Howard Schultz said in a memo to employees on Monday. Starbucks, known for its generous health-care benefits, said those costs have risen sharply over the past several years on skyrocketing U.S. health care expenses. In the memo, Schultz said the company now spends 'almost as much on health care for our partners as we do on the green coffee we buy.'" (Reuters via The New York Times; free registration required)
Webcasts and Conferences
2009 Web/Telephone Seminar: 72(t) PaymentsNationwide on September 24, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Conversions and Recharacterizations
Nationwide on September 17, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Direct Rollover and Other Portability Issues
Nationwide on September 10, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Handling IRA Legal Issues
Nationwide on September 15, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Introduction to QRPs
Nationwide on September 3, 2009
presented by Ascensus
2009 Web/Telephone Seminar: IRA Contributions
Nationwide on September 29, 2009
presented by Ascensus
2009 Web/Telephone Seminar: SIMPLE Plans
Nationwide on September 22, 2009
presented by Ascensus
Beyond COBRA: Offering More Comprehensive Post-Employment Benefits
Nationwide on August 20, 2009
presented by TRI-AD
Comparative Effectiveness: Implications for Plans, Providers and Other Stakeholders
Nationwide on August 25, 2009
presented by MCOL
HIPAA Privacy and Security: Train Your Entire Team in 60 Minutes Webcast
Nationwide on July 30, 2009
presented by International Foundation of Employee Benefit Plans
(Click to post your webcast or conference)
Press Releases
Towers Perrin Launches Health Care Reform WebsiteTowers Perrin
Morningstar Launches National Retirement Plan Service Directory
Morningstar, Inc.
Economy Affecting Employee Benefits
Colonial Life
(Click to post your press release)
EmployeeBenefitsJobs.com (Sponsor)
(Click on banner to learn more.)
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Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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