Retirement Plans Newsletter |
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| September 25, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
Guidance Allowing Unused Paid Time Off to Be Contributed to 401(k) Plans
Excerpt: "The IRS has issued guidance that allows 401(k) plans to be amended to permit or require certain contributions of the dollar equivalent of participants' unused paid time off (PTO), in accordance with the governing nondiscrimination requirements and contribution limits. Two general situations are addressed: the contribution of unused PTO at the end of the year that would otherwise be forfeited and the contribution of unused PTO at the time of participants' termination of employment that would be distributed to the participants." (Wolters Kluwer)
[Guidance Overview]
IRS Guidance on Rollover Notices, Rollovers to Roth IRAs, Automatic Contribution Arrangements and Other Retirement Savings Incentives (PDF)
4 pages. Excerpt: "The IRS recently released three revenue rulings and five notices on provisions intended to spur retirement savings. One notice provides a new model 402(f) notice for eligible rollover distributions upon termination of employment. Another notice provides guidance clarifying the rules for rollovers from qualified plans to Roth IRAs. The other guidance provides sample plan amendments for adding automatic enrollment features to 401(k) plans and SIMPLE IRAs, affirms that default contribution percentages under automatic contribution arrangements may automatically increase as employee compensation increases, and confirms that employees may be allowed to contribute the dollar equivalent of unused paid time off (PTO) into their 401(k), profit-sharing, or stock bonus plans." (Buck Consultants)
[Guidance Overview]
IRS's Final Regulations on Section 401(a)(9) Required Minimum Distributions for Governmental 401(a), 403(b) and 457(b) Plans (PDF)
2 pages. Excerpt: "The IRS has now finalized the 2008 proposed regulations without change. Under the final regulations, reasonable good faith compliance with the required minimum distribution rules is extended to - all governmental plans, including defined contribution plans, 403(b) plans and 457(b) plans; all distribution options under governmental plans, not just annuity distribution options available under the terms of the plan as in effect on April 17, 2002; all distributions from governmental plans, not just those made during 2003, 2004 and 2005." (Buck Consultants)
[Guidance Overview]
IRS's Application of Escalator Provision in 401(k) Automatic Contribution Arrangements
Excerpt: "The IRS has issued guidance in Rev. Rul. 2009-30 clarifying the use of escalator provisions in 401(k) plan automatic contribution arrangements that allow for an adjustment in the amount of an employee's default contributions based on increases in pay. 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 Two Sample Plan Amendments on the One-Year Waiver of Required Minimum Distribution
Excerpt: "According to Notice 2009-82, the amendments provide that participants and beneficiaries can choose to receive or not to receive the 2009 RMD and provide for the rollover of certain 2009 RMDs. The tax agency document said sponsors may need to tailor the sample amendment to their plan's particular terms and administration procedures and must adopt the amendment no later than the last day of the first plan year beginning on or after January 1, 2011 (January 1, 2012, for governmental plans)." (PLANSPONSOR.com; free registration required)
Investment Committee Decision-Maker Study
Excerpt: "How do institutional investment committees make their decisions? How do they manage conflict and dissent? To learn more about the dynamics, Vanguard surveyed committee members and analyzed more than 100 responses. This paper summarizes the results." (The Vanguard Group, Inc.)
Vanguard Principal Addresses ERISA Advisory Council on Stable Value Funds
Excerpt: "Susan Graef, principal and head of Vanguard Stable Value Management group, addressed the Department of Labor ERISA Advisory Council on September 16, 2009. Graef presented the potential advantages -- and risks -- associated with stable value funds, as well as disclosure to plan sponsors and participants and the funds' appropriateness as a qualified default investment alternative." (The Vanguard Group, Inc.)
Vanguard Principal Addresses ERISA Advisory Council on Retirement Readiness
Excerpt: "Steve Utkus, principal and head of the Vanguard Center for Retirement Research, addressed the Department of Labor ERISA Advisory Council on September 17, 2009. Utkus testified on the question of retirement readiness in America, providing a synopsis of his interpretation of several research studies examining how well-prepared Americans are for retirement. His testimony included opinions on questions such as 'Is retirement readiness getting worse?' and 'Who is not ready?'" (The Vanguard Group, Inc.)
The Major Categories of 401(k) Expenses and Tips for Evaluating Them
Excerpt: "The first step for a plan sponsor is to know the total annual fees. The second step is to benchmark -- to obtain information on the costs for similar plans (i.e., plans with similar assets and numbers of participants); the competitive marketplace does a good job of establishing reasonable prices. However, even where the total expenses are reasonable, the costs for one of the categories may be too expensive. As a result, fiduciaries need to identify, quantify, and evaluate each major type of expense." (PLANSPONSOR.com; free registration required)
[Opinion]
Public Employer Retirement Benefits and the Incumbent Employee Conundrum
Excerpt: "Regardless of political ideology, most public policymakers agree that, given the current financial squeeze, something needs to change. Typically, those who seek to reform these systems begin with new employees, because they are invisible. Over the coming decades, younger workers are likely to receive lower benefits than current employees. But what about incumbent employees? Shouldn't they share some of the load? Here it gets tricky for public managers. The law is pretty clear in most states: You can't reduce pension benefits of retirees. And in most states, a similar rule applies to the previously earned benefits of incumbent employees: They are entitled to what they have already earned for past service. It's a property right, especially for those who have achieved vesting status. But with respect to their future work and the compensation employees receive for their services in 2010 and later, there are vast interstate and ideological differences of opinion about legal rights as well as basic principles of fairness." (Governing.com)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Step-by-Step Action Plan for Conducting Executive Compensation Risk Assessments (PDF)
2 pages. Excerpt: "The most important year-end 2009 task for Companies, Boards of Directors, and Compensation Committees may be to begin to establish a process for assessing the risk of the Company's executive and employee compensation programs. The U.S. Securities and Exchange Commission ('SEC') is expected to publish final rules later this Fall (the proposed rules were issued in July), which will apply to proxy statements for fiscal years ending after December 15, 2009, and require that every company: Evaluate whether any of its compensation plans or practices, including non-executive officer compensation plans and practices, include risk-taking incentives that may have a material effect on the company, and Disclose the results of that evaluation and any steps the company has taken to manage or mitigate those risk-taking incentives." (Winston & Strawn LLP)
Boeing to Stop Paying for Many Employees' Education
Excerpt: "Boeing employees are about to lose a fabulous perk, and the cost-cutting move could mean a significant financial hit for some local colleges and universities as well. Until now, when a Boeing employee enrolled for any class at any accredited college, the company picked up the tuition -- with no restrictions. Boeing currently pays for the classes of about 6,000 employees in the Puget Sound region and 21,000 companywide. But many of those enjoying free classes will lose that benefit at year-end, when Boeing starts limiting its subsidy to cover only courses that further an employee's career at the company." (The Seattle Times)
Webcasts and Conferences
Medicare Advantage Strategic Business Symposiumin Virginia on October 19, 2009
presented by Opal Events
Webcast: Time-Sensitive IRS Guidance on 2009 RMD Waiver
Nationwide on October 1, 2009
presented by Convergent Retirement Plan Solutions, LLC
(Click to post your webcast or conference)
Press Releases
PBGC Negotiates Deal to Strengthen Pension Funding at Hanesbrands Inc.Pension Benefit Guaranty Corporation (PBGC)
Prudential Report Shows Employers, Benefits Budgets Hit Hard by Economy
Prudential Financial, Inc.
Millennium Trust Company Joins with The Keane Organization to Offer a Wide-range of Plan Termination and Missing Participant Solutions
Millennium Trust Company, LLC
Millennium Trust Company Integrates Consumer Health Technologies, BenefitSpan™, Platform for their HSA Solution
Millennium Trust Company, LLC
IRS Issues 2010 Contribution Limits for Health Savings Accounts
Millennium Trust Company, LLC
RolloverSystems to Provide NRP Financial with Expanded Participant Rollover Network Services
RolloverSystems
PenChecks's Launches New Premium IRA Fiduciary Service
PenChecks, Inc.
Mercer Adds Staff to Investment Consulting Business
Mercer
EPIC Advisors, Inc. Employee Receives National Designation
EPIC Advisors, Inc.
(Click to post your press release)
Employee Benefits Jobs
Analyst in Income Security (Social Security)for Library of Congress
in DC
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EmployeeBenefitsJobs.com (Sponsor)
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