Retirement Plans Newsletter |
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| September 11, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Official Guidance]
Daniels-Hall v. National Education Association: Brief of Secretary of Labor As Amicus Curiae in Support of Defendants (PDF)
28 pages. Excerpt: "The Secretary of Labor has primary authority to interpret and enforce the fiduciary, reporting and disclosure provisions of Title I of the Employee Retirement Income Security Act of 1974 ('ERISA'), 29 U.S.C. § 1001 et seq. She submits this brief pursuant to this Court's July 14, 2009 order inviting the Department of Labor ('Department') to file an amicus brief on a question that may be answered primarily by reference to the Secretary's regulations and interpretations of Title I of ERISA, namely: Whether, in the subject case, the National Education Association was legally capable of establishing a plan subject to Title I of ERISA offering 26 U.S.C. [Internal Revenue Code] § 403(b) annuities." (U.S. Department of Labor)
[Guidance Overview]
New IRS Model Rollover Notices
Excerpt: "President Obama has launched a new Retirement and Savings Initiative. As part of this Initiative, the IRS has announced a package of guidance aimed at making it easier to save. Included is an updated safe-harbor rollover explanation. The purpose is to encourage rollovers by providing a clear explanation of the rules." (Warner Norcross & Judd LLP)
[Guidance Overview]
IRS Illustrates Means for Correcting Failure to Automatically Enroll Employees
Excerpt: "The prescribed corrective mechanisms, as illustrated by the IRS, require the employer to make a corrective contribution of 50% of the missed deferral (adjusted for earnings) for the affected employee. However, the calculation of the amount of the missed deferral varies in accordance with the circumstances of the automatic enrollment failure." (Wolters Kluwer)
[Guidance Overview]
Third Circuit Applies Arbaugh Test to Find Jurisdiction Under LMRA Section 301
Excerpt: "The Third Circuit found another context in which Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) applied to relax the jurisdictional nexus of a federal claim with the elements of a cause of action. In this instance, the jurisdictional issue arose over the application of section 301 of the Labor Management Relations Act ('LMRA'), 29 U.S.C. § 185. The arrangement at issue was an agreement by a union to indemnify an employer for the employer's withdrawal liability to a pension plan under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 ('ERISA'), and the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. §§ 1381-1461 ('MPPAA'). The indemnification agreement was entered into to facilitate an asset sale by the employer to another entity." (Roy Harmon III via Health Plan Law)
[Guidance Overview]
Are ERISA Fiduciaries Entitled to Deference in Interpretation of ERISA Subrogation & Reimbursement Provisions?
Excerpt: "Frommert v. Conkright, 535 F.3d 111 (2nd Cir 07/24/2008), cert. granted June 29, 2009, could have implications for ERISA subrogation and reimbursement cases. (Ross Runkel's lawmemo.com sets up the issues and case background [at http://www.lawmemo.com/supreme/case/Conkright/].)" (Roy Harmon III via Health Plan Law)
[Guidance Overview]
401(k) Fee Litigation September 2009 Update
Links to both an outline and a chart are available from the target page. Excerpt: "The focus of these lawsuits against the plan sponsors has evolved over time to include broader challenges to, among other things, the plan sponsors' selection of actively managed mutual funds as plan investment options. In addition to the lawsuits against plan sponsors, lawsuits have been brought against 401(k) plan service providers. These cases typically are based on allegations that the service providers are 'functional fiduciaries' under ERISA." (Groom Law Group)
Webcast: How Defined Benefit Plans Affect Corporate Finances
Excerpt: "Bring up the topic of DB plans today and it seems that what comes to mind are the risks, costs, and volatility associated with them -- and their impact on the health of your organization. In this webcast, Kimberly Stockton, investment analyst in Vanguard Investment Counseling & Research, guides you through a process that allows you to evaluate the risk of your plan in the context of its effects on your company. The process will help you arrive at an asset allocation whose dollar impact and risk to your financials can be accommodated by your organization." (The Vanguard Group, Inc.)
Union Pension Plans Hurt Workers, Study Shows
Excerpt: "Unlike non-union plans, collectively bargained pensions are often underfunded, lack portability and cannot respond quickly to market forces, according to the authors of a new study. Although labor unions often promote defined benefits plans for recruiting purposes, many of these plans are under severe financial pressure and place workers at a disadvantage, according to Diana Furchtgott-Roth, a senior fellow with the Hudson Institute and her colleague Andrew Brown." (The Washington Examiner)
Retirement Plan Trends Report: The Total View, 2009
78 pages. Excerpt: "The Total View 2009 includes an annual review, report card and forecast to compare retirement plans with industry benchmarks, and a new analysis section that provides additional insight into the potential meaning of the trends contained in the report. This version of The Total View is particularly valuable because it reports on retirement savings behavior during a time of unprecedented market volatility." (Principal Financial Services, Inc.)
Retirement and Savings Benefits 4% of Employer Compensation Costs
Excerpt: "Employers spent an average of $1.29 for employee retirement and savings plans for every hour worked in June 2009, accounting for 4.4% of total compensation, the U.S. Department of Labor's Bureau of Labor Statistics reported. In June, average costs in private industry for retirement and savings benefits were 95 cents per hour worked, or 3.4% of total compensation. The average cost per hour worked for defined benefit plans was 41 cents (1.5% of total compensation), while the average cost for defined contribution plans was 53 cents (1.9% of total compensation)." (PLANSPONSOR.com; free registration required)
Court Finds Ledbetter Act Revives Age-Bias Claim Arising from Cash Balance Conversion
Excerpt: "An active pension plan participant's age-bias challenge to a cash balance conversion may be timely, even though filed years after the plan change, a federal court has ruled (Tomlinson v. El Paso Corp.). The suit alleges that a 'wearaway' period after the conversion discriminated against older employees. Last Jan. 21, the court had held that the claim was not filed soon enough after the conversion. Now the court has overturned its own ruling in the wake of the Jan. 29 enactment of the Lilly Ledbetter Fair Pay Act. The new ruling addresses only the timeliness, not the merits, of the claim." (Mercer LLC)
Pomeroy Bill Would Give Pension Plans More Time to Amortize Recent Losses -- at a Cost
Excerpt: "Funding relief legislation proposed by Rep. Earl Pomeroy, D-ND, would allow more time to amortize losses from the financial crisis if sponsors of single-employer pension plans provide minimum benefits or contributions under qualified plans or freeze executive benefits under nonqualified deferred compensation plans. Though prospects for enactment are uncertain, the bill is welcome news to single-employer and multiemployer plan sponsors seeking short-term and more long-lasting relief. [I addition to the text of Pomeroy's discussion draft for the pension funding relief bill, the target page links to a section-by-section summary of Pomeroy's discussion draft.]" (Mercer LLC)
Employers Selecting Employee Benefit Plan Auditor for Form 5500 Reporting Are Aided by DOL Webpage
Excerpt: "General guidelines for an employer selecting an auditor for its employee benefit plan -- including auditor licensure requirements, what employers should know about an audit, and considerations when reviewing the audit report -- are available on a DOL webpage. These guidelines may be useful to employers sponsoring ERISA-covered 403(b) plans that are subject to expanded reporting requirements effective for the 2009 plan year." (Mercer LLC)
Social Security Reform: How Different Options Might Affect Future Funding (PDF)
Pages 13-18 of 20 pages. Excerpt: "This article analyzes various potential reform provisions that have been widely discussed that would affect the benefit levels and program revenues of Social Security. This analysis also discusses the potential impact of these provisions on the financial status of the OASDI program. The provisions discussed are those that would: Lower the scheduled increase in future benefit levels by changes to the benefit formula. Change the contribution and benefit base (amount of earnings that are taxable and used for the calculation of benefits under OASDI) and the taxation of benefits. Increase the retirement age. All of these approaches have been part of various comprehensive reform proposals over the last two decades." (Employee Benefit Research Institute)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Common 409A Problems After the Transition Period
Excerpt: "Code Section 409A, passed by American Jobs Creation Act of 2004, consisted of only about 2,700 words. The 409A regulations, finalized in April, 2007, were approximately 110,000 words long. And now that the reasonable, good faith transition period is over beginning January 1, 2009, every one of those words is fully in effect. Given the onerous penalties involved in any 409A compliance failure, most employers are working hard to avoid errors. However, some of the more complex rules of the 409A regulations are continuing to create plan design and drafting issues for employers. The attached article will discuss a selected few of those issues so that employers can be aware of them to avoid them in the future and take necessary corrective steps with existing plans." (Journal of Pension Planning and Compliance via Groom Law Group)
Senate to Take Up Bill on Say-on-Pay and Compensation Committees as Congress Returns from Recess
Excerpt: "On July 31, 2009, the House of Representatives, with the support of the Obama Administration, passed H.R. 3269, the Corporate and Financial Institution Compensation Fairness Act of 2009, proposed legislation that would require all publicly traded companies to seek a nonbinding "say-on-pay" vote of shareholders on executive compensation packages annually and in acquisition transactions. The bill would also result in the establishment of new independence standards for compensation committees. The legislation is now before the Senate, which reconvenes this week after the congressional August recess. Although a similar bill passed the House last year but failed to gain Senate approval, many observers believe that some form of this legislation will be enacted this year." (Perkins Coie)
Chart: Wages and Benefits by Occupational Group, June 2009
Excerpt: "In June 2009, private industry employer compensation costs averaged $27.42 per hour worked. Wages and salaries averaged $19.39 per hour (70.7 percent), while benefits averaged $8.02 (29.3 percent)." (U.S. Bureau of Labor Statistics)
How Do Voluntary Plans Affect Engagement?
Excerpt: "Tangible benefits associated with increased employee engagement and enablement resulted in revenue growth that was 4.5 times greater than the lowest-performing organizations in those two areas, as well as 54% higher customer satisfaction scores. Moreover, there was a total reduction in voluntary turnover of 54% when comparing the best and worst performers on employee engagement and enablement." (Employee Benefit Adviser; free registration required)
[Opinion]
U.S. Supreme Court to Hear Case on Executive Compensation
Excerpt: "Earlier this year, the U.S. Supreme Court agreed to hear an appeal of Jones v. Harris Associates L.P., 527 F.3d 627 (7th Cir. 2008). . . . At the risk of stating the obvious, let me be crystal clear about the potential importance of this case: The entire system of board responsibility and liability for executive compensation decisions, based on the business judgment rule as it now is, could be upended based on the Supreme Court's decision in this case. The Supreme Court has scheduled oral arguments in this case for November 2, 2009. Rest assured that this Blog will keep you apprised of developments in this case and analyze the Supreme Court's decision as soon as it is published." (Michael Melbinger via Winston & Strawn LLP)
Webcasts and Conferences
"EFAST2: The Future of Form 5500" in Denverin Colorado on October 7, 2009
presented by SunGard Relius
"EFAST2: The Future of Form 5500" in Minneapolis
in Minnesota on October 8, 2009
presented by SunGard Relius
"ERISA Workshop" in Denver
in Colorado on October 8, 2009
presented by SunGard Relius
"ERISA Workshop" in Minneapolis
in California on October 9, 2009
presented by SunGard Relius
"Plan Forms, Notices, and Amendments: Streamlined, Effective, Timely" in Denver
in Colorado on October 7, 2009
presented by SunGard Relius
"Plan Forms, Notices, and Amendments: Streamlined, Effective, Timely" in Minneapolis
in Minnesota on October 8, 2009
presented by SunGard Relius
Integrated Delivery Systems: Positioning for the Future
Nationwide on September 30, 2009
presented by MCOL
Introduction to DBK Plans
Nationwide on October 29, 2009
presented by Qualified Pension Consulting, Inc.
The Golden Carrot: Uncovering the Key Competencies of Return to Work Coordinators
Nationwide on September 29, 2009
presented by Liberty Mutual
(Click to post your webcast or conference)
Press Releases
U.S. Labor Department Sues to Appoint Independent Fiduciary for 401(k) Plan Abandoned by Buffalo, New York, EmployerU.S. Department of Labor, Employee Benefits Security Administration (EBSA)
New Liberty Mutual Website And Guide Gives HR Managers The Tools To Better Manage Group Life Programs
Liberty Mutual
Goldleaf Partners Names Benefits Administrator To Its Chandler, AZ Location
Goldleaf Partners
(Click to post your press release)
Employee Benefits Jobs
Senior Plan Consultantfor Scholz, Klein & Friends Enlightened Retirement Group, Inc.
in TX
Plan Administrator/Trust Accountant
for Thomas F. Barrett, Inc.
in MD
Case Manager
for MandMarblestone Group
in PA
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Handy Links:
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- Employee Benefits Library
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