Retirement Plans Newsletter |
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| September 24, 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! |
[Official Guidance]
Text of IRS Notice 2009-82: Waiver of 2009 Minimum Distributions (PDF)
12 pages. Excerpt: "[This notice provides] transition relief through November 30, 2009 for a plan that is not operated in accordance with its terms with respect to waived required minimum distributions and certain related payments; sets out rollover relief with respect to waived required minimum distributions and certain related payments, including an extension of the 60-day rollover period to November 30, 2009 for certain of the distributions; and answers questions that have been raised regarding the waiver of 2009 required minimum distributions under WRERA. . . . [T]he notice also provides two sample plan amendments that give recipients a choice as to whether to receive waived required minimum distributions and certain related payments and that specify the application of the direct rollover rules to the distributions. The sample amendments can be used by plan sponsors that are uncertain as to the treatment under plan terms of waived required minimum distributions and certain related payments or that otherwise desire to give recipients a choice as to whether to receive such distributions." (Internal Revenue Service)
[Guidance Overview]
Winding Down Your Hard-Frozen Defined Benefit Plan
20 pages. Excerpt: "Our analysis centers around best practices for winding down hard-frozen DB plans and will cover the following: Understanding the rules for termination; Developing a termination strategy by evaluating: The cost; Funding strategies; The impact of asset allocation; Carrying out your termination strategy" (Principal Financial Services, Inc.)
[Guidance Overview]
IRS Illustration of Application of Escalator Provision in 401(k) Automatic Contribution Arrangements
Excerpt: "Specifically, the IRS has provided two scenarios illustrating circumstances under which: (1) an employee's default contribution percentage may automatically increase after the first year of participation in an automatic contribution arrangement, based in part on increases in the employee's plan compensation; and (2) default contributions may be made without violating the applicable uniformity and minimum percentage requirements, pursuant to qualified automatic contribution arrangements (QACAs) and eligible automatic contribution arrangements (EACAs), under which the default contribution for all employees increases on a date other than the first day of the plan year." (Wolters Kluwer)
[Guidance Overview]
IRS's Sample Plan Amendments for Adding 401(k) Automatic Contribution Features
Excerpt: "The IRS has issued two sample plan amendments in IRS Notice 2009-65 that will enable employers to add automatic contribution features to their 401(k) plans. Sample Amendment One may be used to add an automatic contribution arrangement to a 401(k) plan. Sample Amendment Two may be used to add an eligible automatic contribution arrangement (authorizing withdrawals of elective deferrals) to a 401(k) plan." (Wolters Kluwer)
[Guidance Overview]
Risk Management: Listen to Your Employees (PDF)
Pages 1, 6 of 7 pages. Excerpt: "While ERISA is a voluminous law, it says little, if anything, about listening to employee comments and complaints. However, by listening . . . and acting, when appropriate . . . employers can avoid the disruption of an unnecessary DOL investigation and even the potential of fiduciary litigation." (Reish & Reicher)
Changes Needed in DC Retirement System
Excerpt: "In a recent survey, Mercer asked 180 DC plan sponsors if they believe the 401(k) system can ever provide adequate retirement benefits. Half of the respondents indicated that the existing system is adequate (16%) or would be adequate with additional regulations (34%), while the other half said the 401(k) system cannot provide such benefits (29%) or were unsure (21%)." (Employee Benefit Adviser; free registration required)
New York Tightens Pension Fund Rules
Excerpt: "In the latest effort to crack down on pay-to-play practices involving public funds, New York state is restricting its pension fund from doing business for a time with anyone who makes a campaign contribution to the comptroller. The new rule, an executive order by State Comptroller Thomas DiNapoli, will prohibit any firm that makes a contribution to the state comptroller, or a candidate for that office, from seeking business from the $116.5 billion fund for two years. Unlike most states, where boards oversee pension-fund investments, the state comptroller is the fund's sole trustee." (The Wall Street Journal)
The Evolution of Retirement Risk Management: Proceedings Summary
Excerpt: "Leading academics, public pension sponsors, and their advisors met recently to examine ways to reformulate and restructure retirement risk management at the 2009 Wharton Impact Conference sponsored by the Pension Research Council and the Boettner Center for Pensions and Retirement Research. Here we summarize the proceedings from this event, co-organized by Olivia S. Mitchell and Robert Clark." (Pension Research Council; registration required to download fulltext of paper)
Retirement Saving Adequacy and Individual Investment Risk Management Using the Asset/Salary Ratio
Excerpt: "This chapter uses the Asset-Salary Ratio (ASR) to examine the factors that increase the likelihood that defined contribution plan participants will have sufficient assets to generate adequate retirement income, similar to the defined benefit plan full-funding ratio. We apply this measure to a sample of TIAA-CREF participants, and we show that participant assets are on average consistent with at least a 70 percent income replacement ratio. Key factors explaining success are an adequate contribution rate and long tenure in the system; having a portfolio weighted to equities is beneficial but to a lesser extent. Thus good funding and early participation is more important than 'chasing returns.' Measures such as the ASR can help participants make more informed choices." (Pension Research Council; registration required to download fulltext of paper)
Employer-Provided Retirement Planning Programs
Excerpt: "As older workers approach the end of their working career, they face a series of important decisions that will determine their economic wellbeing during their remaining lifetime. They must decide when to retire, when to start Social Security and company pensions, whether to annuitize 401(k) balances, and whether to take lump sums from defined benefit plans. Lack of knowledge or insufficient financial literacy may lead to regrettable decisions. This chapter assesses employer provided financial education as well as pre-retirement planning programs and examines their effectiveness in increasing knowledge and altering retirement behavior." (Pension Research Council; registration required to download fulltext of paper)
Chart: Retirement Benefits Access and Participation Rates, March 2009
Excerpt: "In March 2009, 71 percent of civilian workers had access to retirement benefits plans through their employers; 57 percent of civilian workers participated in such plans." (U.S. Bureau of Labor Statistics)
IRS's Retirement Plans Navigator Website for Small Businesses
Excerpt: "EBIA Comment: This new IRS website will be a useful tool to assist small businesses in selecting from the various retirement plan designs available and staying on top of compliance issues. Although some of the resources on the website are not new (e.g., various publications for small business retirement plans and the 401(k) plans checklist and fix-it guide), it is helpful to have this information housed in one easy-to-navigate website." (Employee Benefits Institute of America)
Managing Retirement Benefits Amid Capital Market Disruption
13 pages. Excerpt: "Prudential commissioned this research program on how finance executives are managing retirement benefits in today's environment because Prudential believes that finance executives are critical to managing the risks inherent in such benefit programs. This research demonstrates that finance executives are more involved than ever in their companies' retirement benefit programs, and are prepared to take concrete steps to strengthen them. Employers shoulder the risks within a DB plan, such as the possibility of a sharp market decline that creates the need for higher cash contributions. This research shows that a majority of employers are actively seeking solutions to help manage such risks. Companies can benefit by incorporating several key elements into their DB risk management approach." (Prudential Retirement)
Public Pensioners Have Taxpayers As a Backstop
Excerpt: "While private-sector workers can only hope their 401(k)s and IRAs recoup their big losses of the last year, government employees are at less financial risk because their pensions are generally guaranteed by law -- with taxpayers on the hook for benefits. . . . That doesn't mean the financial crisis hasn't taken a toll on the pension plans of state and local government workers. Funding levels for public pension plans have dropped, and are expected to fall even further as more investment losses are recognized, experts said." (MarketWatch, Inc.)
[Opinion]
403(b) Theft: How Employees and Employers Get Bilked
Excerpt: "Quite simply, participants in expensive plans are losing A LOT of money. How much? How about $875,000 in some cases? Consider? If a participant invested $10,000 per year (inflation adjusted) for 40 years, earned a 9 percent return (before fees), he or she would accumulate approximately $2.4 million. If fees were along the lines of the plan I just described (2.08 percent + additional advisor fee of 1 percent), this investor would pay more than $875,000 in fees." (403bwise.com)
DATAIR Employee Benefit Systems, Inc. (Advert.)
DC/401(k) Administration Software from DATAIR DATAIR’s DC/Win System for Allocations, Discrimination Testing, and Proposals. Handles New Comparability Plans, Sole Proprietorships, 401(k) and 403(b) plans. Use with our DB System for Cash Balance and Combo Plans. Expert support. DC/401(k) System includes * Downloads from many allocated account fund providers * Automated loan processing * Flexible data import/export *Interface with DATAIR's 5500/1099R system. sales@datair.com or call 1-888-328-2474 |
Webcasts and Conferences
Smartcast -- New HIPAA Breach and HITech Rules w/ Craig J. Davidson, CEBSNationwide on October 20, 2009
presented by FutureOffice Network
The Medical Home Web Summit
Nationwide on October 29, 2009
presented by MCOL
(Click to post your webcast or conference)
Press Releases
Vast Majority of Employers Expect Health Care Reform to Increase Costs, Watson Wyatt Poll FindsWatson Wyatt
IRS Issues Guidance on 2009 Required Minimum Distribution Waiver
Internal Revenue Service (IRS)
Putnam Investments Offers Target Date Funds to Integrate Absolute Return Strategies
Putnam Investments
TRI-AD and Paylocity Integrate Their Payroll/HRIS and 401k Recordkeeping Services
TRI-AD
Employees and Employers Reveal High Satisfaction and Improved Cost Control with HSAs, Surveys Report
Buck Consultants, an ACS Company
McHenry Partners Add Staff in California
McHenry Partners
(Click to post your press release)
Employee Benefits Jobs
Plan Administrator for Retirement Plan & ERISA Specialistsfor Dana Consulting Group, Ltd.
in IL
Trust Counsel
for Northern Trust Company
in IL
(Click to post your job opening | View all jobs |
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EmployeeBenefitsJobs.com (Sponsor)
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