Retirement Plans Newsletter |
|
|
| September 17, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
ASPPA (Advert.)
Attention all Retirement Plan Professionals! The 2009 ASPPA Annual Conference (November 1 – 4) is bigger and better than ever. Join 1,600 of your peers at the exquisite Gaylord National Resort and Conference Center on the historic Potomac River. Take advantage of over 60 interactive workshops presented by nationally renowned experts and top practitioners from all facets of the retirement plan industry, including representatives from the IRS and DOL. Advance your knowledge. Enhance your credibility. Expand your network of like-minded professionals! This is the industry’s top venue for all retirement plan professionals - - with up to 24 hours of ASPPA CE credit, ERPA CPE credit and core/non-core JBEA credit hours for Enrolled Actuaries, including professionalism credits. In this rapidly changing environment, it’s never been more important to attend. Register today and stay at the top of your game! |
[Guidance Overview]
Early Returns in 401(k) Fee Cases Favor Defendants
Excerpt: "The fact that defendants are thus far winning these cases does not mean that fiduciaries need not be concerned with fees under 401(k) plans. What the courts seem to be saying thus far is that they will not micromanage 401(k) plans or second-guess fiduciary decisions that appear reasonable, even if not perfect. The best evidence for a fiduciary in these cases and future cases, however, is a well-documented record showing that the fiduciaries understood the basic factors affecting fees, were aware of the alternatives they could choose, and made rational decisions that were in the interests of the plans and their participants." (O'Melveny & Myers LLP)
Employment and Retirement Trends for Older Workers (Updated) (PDF)
19 pages; updated version is dated September 16, 2009. Excerpt: "As more workers reach retirement age, employers may try to induce some of them to remain on the job, perhaps on a part-time basis. This is sometimes referred to as 'phased retirement.' Several approaches to phased retirement -- job sharing, reduced work schedules, and rehiring retired workers on a part-time or temporary basis -- can be accommodated under current law. The Pension Protection Act of 2006 (P.L. 109-280) allows pension plans to begin paying benefits to workers who have not yet separated from their employers at the earlier of age 62 or the pension plan's normal retirement age, which in most plans is 65. Some employers would like to be able to pay partial pension distributions to workers who have reached the pension plan's early retirement age, even if it is earlier than age 62. This would require a change in federal law." (Congressional Research Service, U.S. Library of Congress)
Pension and Retirement Plan Enactments in 2009 State Legislatures (PDF)
34 pages. Excerpt: "The principal theme in pension legislation in 2009 was the need to make future pension costs manageable in the light of states' straitened fiscal circumstances and the losses most retirement trust funds have experienced. Few benefit increases were enacted, and reductions in various forms appeared in a number of states. Some states enacted early retirement incentives with the goal of reducing the size of the state workforce. Some states protected employees who will be subject to mandatory furlough days (required days off without pay) from loss of retirement benefits for those days." (National Conference on Public Employment Retirement Systems)
Americans Agree on How to Fix Social Security, According to Survey
Excerpt: "A survey conducted jointly by the Rockefeller Foundation and the National Academy of Social Insurance found that 90% of Americans are concerned about the program's ability to pay benefits for the next generation. Because these same people believe strongly that workers should have financial security in their retirement, most want Social Security's finances strengthened. . . . The most striking finding in the survey is that most Americans are willing to pay higher payroll taxes to preserve the Social Security program. When asked to respond to the statement: 'It is critical that we preserve Social Security for future generations, even if it means increasing working Americans' contributions to Social Security,' 77% of those surveyed said they agreed . . . ." (Economic Policy Institute)
Kansas Public Employees Retirement System Facing Bankrup.tcy If Changes Not Made, Report Says
Excerpt: "A report released yesterday by the Center for Applied Economics at the University of Kansas School of Business reveals that unless drastic changes are made to the structure of KPERS, the Kansas Public Employees Retirement System, the system will be unable to pay out promised benefits, and the shortfall -- as much as $10 billion -- will fall onto taxpayers' shoulders. . . . The report said that though the recession has added to the decline of KPERS, the public pension fund was headed for bankrup.tcy before the recession because of structural problems. One main cause for concern is the level of unfunded liability within KPERS. Unfunded liability refers to the difference between promised benefits and the benefits that will be collected. These unfunded liabilities are thought of as a debt. The report concludes that 'KPERS is bankrupt under current operating assumptions' and points out that when utilizing the market value of assets, the total unfunded actuarial liabilities have more than doubled within the last year from $4.8 billion to $10.25 billion. Based on current data, these unfunded actuarial liabilities are expected to continue to increase." (Kansas Liberty)
401(k) Fixes for All Age Groups
Excerpt: "A recent study by Financial Engines, a company that provides advice to retirement-plan participants, found that investors with as few as five years until retirement can recover their 2008 losses by making modest increases in savings and working two or three more years. Young investors, meanwhile, have much to gain, because they're years from retirement and are able to invest at bargain-basement prices. Here's a look at how investors in different age groups can rehabilitate their 401(k) plans . . . ." (USA TODAY)
Report Suggests Florida Public Pension Could Use More Governance
Excerpt: "A new staff report about plan governance at U.S. public pension programs recommended Florida get an annual independent auditor to examine its state pension fund. A Miami Herald news account said the staff report, presented to the state Cabinet this week, asserted that the Sunshine State's program has fewer people overseeing it than most other states, and that annual independent audits may improve public confidence in investment decisions. The document was the result of a study of governance at the State Board of Administration (SBA), which oversees more than $110 billion in assets for the pension fund and other state accounts." (PLANSPONSOR.com; free registration required)
Los Angeles City Council Moves Ahead on Furlough and Layoff Plan Leaving Early Retirement Option in Question
Excerpt: "Still failing to reach a deal with city unions in contract talks Wednesday, the City Council asked officials to start drafting plans to lay off 926 workers and furlough thousands of others, while continuing to consider an early retirement program. But the action sets up a possible veto from Mayor Antonio Villaraigosa, who said he believes he has no choice but to block the Early Retirement Incentive Program. 'We are in a rapidly deteriorating financial circumstance,' Villaraigosa said at a late afternoon news conference. 'The reality is we cannot continue as we have. Originally, the plan would have saved $111 million. Now it will save only $12 million.'" (Los Angeles Newspaper Group)
Experts Pin Hopes on Labor Department for Retirement Plan Fee Disclosure Regulations
Excerpt: "In June, the House Education and Labor Committee approved the 401(k) Fair Disclosure and Pension Security Act, which among other things requires 401(k) plans to disclose how much plan participants are paying in fees; mandates that plan administrators offer at least one low-cost index fund in their plans; and requires that companies offer investment advice to plan participants. Industry experts welcome the widespread interest but worry that many of the legislative proposals are mired in politics. 'The legislative approach has gotten off track from the central theme of the bill and instead has resulted in a turf war between bundled and unbundled providers,' says Ed Ferrigno, vice president, Washington affairs, for the Profit Sharing/401k Council of America. 'You have service providers dominating the debate.'" (Workforce Management; free registration required)
Pension Benefit Guaranty Corporation: More Strategic Approach Needed for Processing Complex Plans Prone to Delays and Overpayments
Excerpt: "To conduct this study, GAO reviewed PBGC policies and procedures, analyzed automated data and case files, and interviewed PBGC officials and certain associations, participants, and their representatives from among those most affected by the process." (U.S. Government Accountability Office)
[Opinion]
Pension Rights Center Statement Before the ERISA Advisory Council on Promoting Retirement Literacy and Security by Streamlining Disclosures to Participants and Beneficiaries (PDF)
6 pages. September 15, 2009. Excerpt: "Model notices are important because notices generated by plans are often confusing to plan participants. Much of the confusion can be traced to the complex nature of retirement plans, and the fact that different people absorb information differently. We recommend that for each required participant notice or disclosure EBSA draft an introductory paragraph that would answer the following questions for participants. 1. What is it? 2. Why am I receiving it? 3. What do I do with it? 4. Will this affect my current or future benefits? 5. Whom do I contact at the plan and at EBSA with a question?" (Pension Rights Center)
[Opinion]
Ohio's Retirement Systems Need More Than a Mere Nip and Tuck
Excerpt: "Two years ago the Thomas B. Fordham Institute issued a report critical of the financial sustainability of the State Teachers Retirement System (STRS) and the adverse effects the system's benefits policy has on recruiting young teachers. The June 2007 report noted the system's unfunded liability was $19.4 billion, which then represented a debt of over $4,300 per Ohio household.'At current contribution rates, STRS actuaries estimate that it will take 47.2 years to amortize the unfunded liability, a funding period that exceeds the 30-year requirement established in state law (see here),' the report noted. This was at a time when the Dow Jones Industrial Average stood at almost 14,000. Today it stands at about 9,500. When our report came out, STRS officials angrily denied problems . . . . But what a difference a couple of years make. Last week, STRS Executive Director Michael Nehf stood in front of lawmakers and state officials and admitted that without a massive infusion of taxpayers' dollars and trimming and adjusting of benefits, the fund eventually would be bankrupt." (The Thomas B. Fordham Institute)
TIAA-CREF (Advert.)
TIAA-CREF Compliance Coordinator Is your plan operating in line with 403(b) regulations?
TIAA-CREF is dedicated to providing you specialized, consultative guidance to help you manage your plan in the most efficient way possible. Our online Compliance Coordinator helps you monitor employee loan and hardship withdrawals across multiple plans and investment providers. It’s easy to implement – no IT work required – and saves you time by simplifying data collection and by providing comprehensive reporting. |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]IRS Launching Employment Taxes Audit: 6,000 Employers Will Be Receiving Notices Shortly
Excerpt: "Recommendations for Employers[:] Immediately update mail processing procedures to monitor for audit notice. Designate an 'Employment Taxes Czar' with suitable support to review current employer compliance, manage audits and make recommendations for adjustments. Engage the assistance of outside expertise as early in the process as possible. Proactively review current employment taxes (state and federal) procedures/practices. Defer scheduling any IRS (or other) employment taxes audit appointment until an internal analysis can be conducted and necessary records reviewed and organized." (Littler Mendelson)
[Guidance Overview]
Denmark Opinion Influences Narrow Post-Glenn Discovery in Judicial Review
Excerpt: "Denmark v. Liberty Life, No. 05-2877 (1st Cir.) (May 6, 2009) casts a long shadow over post-Glenn discovery efforts in the First Circuit as this recent district court opinion illustrates. . . . The Court states that a 'very good reason' must be shown by the plaintiff for allowing discovery. This hurdle is described as a 'threshold showing' that: the denial of benefits was improperly influenced by the administrator's [structural] conflict of interest.' This requirement may be viewed as circular since, without discovery, there is some doubt that the showing can be met." (Roy Harmon III via Health Plan Law)
Executive Pay Reform Poses Complex Risks for Compensation Committees (PDF)
11 pages. Excerpt: "[The White Paper] explores issues facing compensation committees under the proposed Corporate and Financial Institutional Fairness Act of 2009 (the Act) and other reforms." (Pillsbury Winthrop Shaw Pittman LLP)
Employers Cut Costs for Ex-Pat Programs
Excerpt: "International employers continue sending workers for overseas assignments, but in a less expensive way, according to a new study. A KPMG LLP news release about its latest study about overseas assignments found that among the cost-saving measures taken were short-term assignments (STAs) (79%) and permanent transfers (45%), in place of long-term or standard assignments." (PLANSPONSOR.com; free registration required)
[Opinion]
A Modest Proposal to End Those Outlandish Bonuses at Financial Institutions
Excerpt: "The financial system might well work better if most pay at financial institutions came in the form of fixed salary, not sharply varying bonuses. Bankers' pay might be too high or too low -- that is another question -- but the mix between fixed and variable looks oddly skewed in favor of the variable. Many bankers accept that their remuneration practices -- bonuses often being a big multiple of base salaries -- are anomalous in modern economies. When employees of large companies get bonuses, they are typically relatively small: 10 percent to 40 percent of base pay. But bankers think their business is different, for three reasons. Actually, they are more like three myths." (The New York Times; free registration required)
Press Releases
U.S. Labor Department Proposes Exemption To Allow New Health Plan For General Motors Retirees To Acquire Company SecuritiesU.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Senate Finance Committee Measure Shows Promise As A Starting Point For Bipartisan Health Reform
American Benefits Council
Milliman Report Addresses the Potential Impact of Height and Weight on Medical Costs
Milliman USA
Milliman Analysis Indicates Fourth Straight Month of Pension Funding Declines
Milliman USA
Schiff Hardin LLP Welcomes Former Assistant Secretary of Labor Bradford P. Campbell as Of Counsel in the Washington, D.C. Office
Schiff Hardin LLP
(Click to post your press release)
Employee Benefits Jobs
Account Executivefor Diversified Investment Advisors, Inc.
in TX
(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: