Retirement Plans Newsletter |
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| October 21, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
New Roth IRA Conversion Rules for 2010
Excerpt: "Starting in 2010, all taxpayers will be eligible to convert a regular IRA to a Roth IRA, regardless of their level of adjusted gross income ('AGI'). The option opens new opportunities, but also may require important tax planning. This article will discuss the new rules for conversion of a traditional IRA to a Roth IRA and the issues a taxpayer should consider before converting." (Warner Norcross & Judd LLP)
[Guidance Overview]
IRS Guidance on Contribution of Unused Paid Time Off, Automatic Enrollment and Tax Notices (PDF)
Pages 1-3 of 6 pages. Excerpt: "During his weekly address over this past Labor Day weekend, President Obama announced several new initiatives with the goal of providing American workers additional avenues to save for retirement. The details of those initiatives were subsequently published in several Internal Revenue Service ('IRS') rulings and notices [and are summarized in the target document]." (Trucker Huss)
Research Project: The Joint Decision Making of Married Couples and the Social Security Pension System
Excerpt: "The current OASI program redistributes resources from high-wage workers to low-wage workers, and from two-earner couples to one-earner couples. However, previous dynamic general equilibrium analyses of Social Security mostly assume 'unisex' individuals, to alleviate complexities in modeling, and they do not consider the redistribution between one-earner and two-earner households. In this project, we extend a standard general equilibrium OLG model with heterogeneous agents, quantitatively analyze the effect of spousal and survivor benefits on the labor supply of married couples, and examine whether the government can improve economic efficiency and social welfare." (University of Michigan Retirement Research Center)
Research Project: Post-Retirement Adjustments in Defined Benefit Pensions
Excerpt: "Few private defined benefit pension plans index benefits after a worker begins receiving them. Previous (now dated) research finds that most plans do, nonetheless, make 'voluntary' adjustments, which compensate for roughly 40% of the price increases after retirement. This project will measure actual adjustments experienced by HRS respondents, and relate them to inflation, institutional factors suggested by past research (collective bargaining, government sector), and changes in the financial conditions of the industries providing the benefits. We will examine the implication of these findings for our understanding of the adequacy of pension benefits as individuals age and for between-group differences in pension wealth." (University of Michigan Retirement Research Center)
SEC Starts Pension Fund Working Group to Prosecute for 'Pay to Play'
Excerpt: "On October 15, 2009, at the American Bar Association's Fourth Annual National Institute on Securities Fraud, David Rosenfeld, associate regional director for the Northeast Regional Office of the U.S. Securities and Exchange Commission (SEC), revealed that the SEC has established a nationwide Pension Fund Working Group to civilly and criminally prosecute pension fund managers, advisors, administrators and 'the like' where 'pay to play' contributions occur. The SEC determined that the activities emanating from New York state and municipal pension fund investments were 'very widespread' with 'common players nationwide.'" (Duane Morris LLP)
Changes in Retirement Policies and Solutions Needed, According to Report
Excerpt: "A new report says that although the trend toward greater individual responsibility for retirement security will undoubtedly continue, there is much that employers, financial institutions, and the government can do to modernize their retirement policies and solutions in order to help Americans achieve a secure and dignified retirement. The McKinsey & Co. study debuts a 'Retirement Readiness Index' which finds that the average American family faces a 37% shortfall in the income they will need in retirement - a savings gap of $250,000 per household at the time of retirement - taking into account expected payouts of Social Security and pensions, as well as personal savings including 401(k) and other retirement plans." (PLANSPONSOR.com; free registration required)
[Opinion]
The Roth IRA: A Savings Vehicle in Which All Earnings, Appreciation, and Interest Can Be Free of Income Tax Forever
Excerpt: "If the rules are met, there's no RMD to be taken, no income tax due on withdrawals, and, while the account assets are included in your estate, withdrawals by your beneficiaries can also be tax-free. It hasn't been available to everyone because of income limits, but it soon will be. I'm speaking about the Roth IRA, of course. Until now, higher-income taxpayers ($100,000 modified adjusted gross income or higher) couldn't convert their savings from a traditional IRA to a Roth. But that's about to change." (The Vanguard Group, Inc.)
[Opinion]
A Response on 403(b) Plan Fees As Addressed in Recent GAO Report
Excerpt: "On October 5, the U.S. Government Accountability Office (GAO) released a report to Congressman Charles Rangel, Chair of the House Ways and Means Committee, providing some important general discussion of plan fees, though any assessment of the report must focus on the actual scope of the analysis. The report, 'Retirement Savings: Better Information and Sponsor Guidance Could Improve Oversight and Reduce Fees for Participants,' . . . reflects primarily qualitative information, rather than quantitative information, obtained in a series of interviews of a selected group of market participants (in which this author participated) and federal and state regulators. As such, it does not quantify the actual levels of fees charged in different types of plans, for different types and sizes of employers, whether paid from participant accounts or otherwise. Nor does the report attempt to analyze the reasonability and different types or levels of fees and corresponding services." (PLANSPONSOR.com; free registration required)
ASPPA (Advert.)
LIVE! ...on your Computer or Cell Phone! November 4th The ASPPA "Q & A Sessions with the IRS" - Defined Benefit and Defined Contribution With so much change in the air—these two sessions are "must attend" opportunities to hear candid comments from key IRS personnel. We’ll answer your questions about the new DB regulations and cover the latest activity on DC plans. Unable to attend this year’s annual conference? ...We’ve got the solution. For the first time ever, the Q&A Sessions will be streamed LIVE over the Internet. Watch from the convenience of your office. Or, call-in and listen on your cell phone! Year after year, the Q & A Sessions with the IRS offer some of the best takeaway information from the ASPPA Annual Conference. If you can’t be there in person, you can still join us by phone or computer. Register HERE today! |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]2010 Benefit Limits
Excerpt: "The Service has also released health and fringe benefit plan adjustments effective January 1, 2010." (Kilpatrick Stockton LLP)
IRS Mounts Audit Initiative Targeting Misclassification and Fringe Benefits
Excerpt: "In the next few months, the IRS will commence an audit initiative intended to study compliance in the areas of payroll taxes, independent contractor (IC) status and fringe benefits/executive compensation arrangements. One of the goals is to reduce: (1) the tax gap by increasing tax compliance' and (2) the number of 'misclassified' ICs. A likely secondary objective, and one urged by the Government Accountability Office (GAO), is to ensure benefits coverage and 'labor protection' associated with employee status." (Thompson Publishing Group, Inc.)
Executive Compensation: Facts
Excerpt: "In this paper we describe the important features of executive compensation in the US from 1993 to 2006. Some confirm what has been found for earlier periods and some are novel. Important facts about compensation are that: the compensation distribution is highly skewed; each year, a sizeable fraction of chief executives lose money; the use of equity grants has increased; the income accruing to CEOs from the sale of stock has increased; regardless of the measure we adopt, compensation responds strongly to innovations in shareholder wealth; measured as dollar changes in compensation, incentives have strengthened over time, measured as percentage changes in wealth, they have not changed in any appreciable way." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
At Rescued Banks, Chief Executive Perks Keep Rolling with Fringe Compensation Rising 4 Percent Last Year
Excerpt: "Even as the nation's biggest financial firms were struggling and the federal government was spending hundreds of billions of dollars to save many of them, the companies as a group were boosting the perks and benefits they pay their chief executives. The firms, accounting for more $350 billion in federal bailout funds, increased these perks and benefits 4 percent on average last year, according to an analysis of corporate disclosures filed in recent months." (The Washington Post; free registration required)
New York Court Asked to Rule on Same-S.ex Marriage Benefits
Excerpt: "For the first time since 2006, when it ruled the state Constitution does not guarantee same-s.ex couples the right to marry, the New York Court of Appeals last week took up the issue of same-s.ex marriage. Tackling two cases simultaneously, the court on Oct. 13 heard arguments challenging Westchester County Executive Andrew Spano's 2006 decision to recognize same-s.ex marriages performed in other jurisdictions, as well as the state Department of Civil Service's extension of health insurance benefits to same-s.ex spouses of government workers in 2007. Lower court rulings have affirmed the government's position in both cases. " (Legislative Gazette)
Webcasts and Conferences
"Would You Like Some Catch-up With Those Deferrals?" Web SeminarNationwide on November 10, 2009
presented by SunGard Relius
Managing Outsource Service Providers for Your Company's 401(k)
Nationwide on November 19, 2009
presented by FA Associates, LLC
Phyllis Borzi, Assistant Secretary of Labor for the Employee Benefits Security Administration, Speaks About DOL Priorities
Nationwide on November 12, 2009
presented by Western Pension & Benefits Conference - Los Angeles Chapter
Reducing Costs and Improving Performance Through a Vendor Management and Oversight Program
Nationwide on November 10, 2009
presented by Buck Consultants, an ACS Company
(Click to post your webcast or conference)
Press Releases
PBGC Protects Powermate Corporation Pension PlanPension Benefit Guaranty Corporation (PBGC)
Cornerstone Insurance Group Joins Benefit Advisors Network
Benefit Advisors Network
Series of Surveys Gauge Employer, Employee Reaction to Retirement Issues During the Onset, Peak and Current Recovery Phase of the Recession
International Foundation of Employee Benefit Plans
First Mercantile Adds Northwest Region Sales Director
First Mercantile
Announcing the Osler Pensions & Benefits Blog
Osler, Hoskin & Harcourt LLP
(Click to post your press release)
Employee Benefits Jobs
Supervisor, Pension Administration Servicesfor Milliman
in TX
Retirement Plan Administrator
for Indiana Benefits, Inc. (On-Site, Not Telecommuting)
in IN
Second Vice President, Relationship Manager
for New York Life Retirement Plan Services
in CA
Second Vice President, Relationship Manager
for New York Life Retirement Plan Services
in MA
Second Vice President, ERISA Consultant
for New York Life Retirement Plan Services
in MA
Acquisition Integration Specialist
for Paychex, Inc.
in NY
(Click to post your job opening | View all jobs |
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