Retirement Plans Newsletter |
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| November 3, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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! |
[Guidance Overview]
PPA-Related Cash Balance Plan Amendments Required by End of 2009
Excerpt: "A number of provisions in the Pension Protection Act of 2006 (PPA) apply to cash balance plans, including: (1) a requirement that a plan's interest crediting rate not exceed a market rate of return; and (2) a clarification that the payment of a participant's vested cash balance account satisfies the minimum lump sum requirements of sections 411(c) and 417(e) of the Internal Revenue Code." (Hewitt)
[Guidance Overview]
PBGC Issues October 2009 Spot Rates for Variable Premium
Excerpt: "The PBGC has also issued the spot segment rates for determining the variable rate premium amount for premium years commencing in October 2009. The spot first, second, and third segment rates for determining the variable rate premium amount for premium payment years commencing in October 2009 are 2.73%, 5.63% and 6.07%." (Wolters Kluwer Law & Business)
[Guidance Overview]
Does Your Qualified Retirement Plan Need Amendment This Year? (PDF)
4 pages. Excerpt: "This advisory is to remind plan sponsors of deadlines for amending qualified retirement plans. Some amendments must be completed by December 31, 2009 (for calendar year plans). Others must be completed by January 31, 2010 (for Cycle D plans). Still others must be completed by the deadline for filing the plan sponsor's 2009 tax return ('interim' amendments). This advisory identifies those plans that must be amended now or in the near future." (Alston+Bird)
[Guidance Overview]
Senate Hearing Considers 401(k) Target-Date Fund Concerns, More Regulation
Excerpt: "Concerns about 401(k) target-date funds aired in a Senate Special Committee on Aging hearing and report raise the prospect of greater regulation. Hearing witnesses praised the funds as an important savings option but reiterated some issues noted in the report, such as wide differences in asset allocations among funds with the same target date, provider fees and potential conflicts of interest. The Department of Labor is working with the SEC to assess the need for more guidance and may revisit rules for qualified default investment alternatives to ensure 'meaningful disclosure.'" (Mercer)
[Guidance Overview]
Guidance Provided in September on Waivers of 2009 Required Minimum Distributions (PDF)
Excerpt: "On September 24, 2009, the IRS released Notice 2009-82, which provides relief for individuals who have already received 2009 RMDs, as well as sponsors of plans that may or may not have paid 2009 RMDs." (Prudential Pension Analyst)
Supreme Court Indicates Reluctance to Set Investment Fees
Excerpt: "During an oral argument on Monday, November 2, several Supreme Court justices seemed to be wary of having courts determine the fees that investment funds can charge participants." (Workforce Management)
In Mutual Fund Case Arguments, Supreme Court Justices Seem Reluctant for Courts to Intervene
Two justices suggested that purchasers simply can change to a different mutual fund if they are dissatisfied with the fund's fee structure. (Associated Press)
Mutual Fund Case Hinges on Fee Comparison
Excerpt: "Must mutual fund investors pay significantly higher fees than institutional investors such as pension funds? That was the issue . . . at the U.S. Supreme Court as the justices heard oral arguments in a case accusing a mutual fund manager of charging excessive fees." (Los Angeles Times)
Will The Supreme Court Protect Your Money from Excessive Mutual Fund Fees?
Excerpt: "Jones v. Harris Associates concerns the management fees mutual fund advisers charge the funds. If you have any mutual fund investments, whether in investment accounts or your 401(k), a percentage of your money is siphoned off every year by the company managing those funds." (Washington Post; free registration required)
What the Stock Market Decline Means for the Financial Security and Retirement Choices of the Near-Retirement Population
Excerpt: "Simulations with a structural retirement model suggest the stock market decline will lead the early boomers to postpone their retirement by only 1.5 months on average." (Social Science Research Network)
Comparing Individual Account Retirement Plans to Defined Benefit Retirement Plans: Neither is Risk-Free
Excerpt: "DB plans have their own set of risks. Because DB plans are 'back-loaded', the final benefit is strongly determined by earnings in the final years of employment. Individuals who are involuntarily separated, who leave voluntarily, or who die before reaching retirement age lose a significant portion of what would have been their benefit had they worked for the company until retirement." (David Wray of the Profit Sharing/401k Council of America)
DATAIR Employee Benefit Systems, Inc. (Advert.)
DATAIR’s DB Valuation System DB Administration, Discrimination Testing and Proposal software with Multiple Plan and Cash Balance Plan handling. PPA’06 Pension Funding. * Funding Target and Target Normal Cost with 3-rate segments * 404(o) Cushion; 430 minimum and 404(o) maximum contributions * Funding Target Attainment Percentages (FTAPs) Schedule SB reports and links to our 5500/PBGC System, and our FAS 158 and Termination Calculation reporting systems. sales@datair.com or call 1-888-328-2474 |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Deadline Approaches to Bring Qualified Performance-Based Compensation into Compliance with Section 162(m)
Excerpt: "In 2008, the Internal Revenue Service . . . issued Revenue Ruling 2008-13, which held that compensation arrangements that permit payment of performance-based compensation upon termination of the covered employee's employment (regardless of whether the performance goals are achieved) will not constitute qualified performance-based compensation, which is exempt from the $1 million per year deduction limit under Section 162(m) of the Internal Revenue Code . . . . Compensation arrangements covered by this Revenue Ruling generally should be amended by December 31, 2009 to avoid this adverse treatment." (Troutman Sanders)
[Guidance Overview]
The Perfect Storm Swirling Around Executive Compensation and the Related Corporate Governance
Excerpt: "In addition to [SEC and IRS] regulation, the Financial Accounting Standard Board issued Statement 123(R) in 2006 requiring companies to estimate the amortized expenses of stock options on their income statements and has continued to regulate the disclosure of post-retirement medical and other benefit obligations under FASB Statement 158. All these measures are ways in which executive compensation has been subject to increasing regulation and disclosure requirements." (Haynes and Boone)
[Guidance Overview]
Perform Year-End Review of Nonqualified Deferred Compensation Plans for 409A Operational Failures
Excerpt: "Employers that maintain nonqualified deferred compensation plans should strongly consider adding a review of operations for Section 409A non-compliance to their end-of-the-year to-do lists. If operational failures are identified and corrected before the year has run out, it may be possible to avoid some or all of the adverse consequences that would otherwise result under 409A by taking advantage of the relief provided under IRS Notice 2008-113." (Faegre & Benson)
IRS Requests Applications for IRS Advisory Committee on Tax Exempt and Government Entities
Excerpt: "The Secretary of the Treasury invites those individuals, organizations, and groups affiliated with employee plans and tax-exempt organizations to nominate individuals for membership on the ACT. Nominations should describe and document the proposed member's qualifications for membership on the ACT. Nominations should also specify the vacancy for which they wish to be considered.' (Editor's note: the document is silent as to which vacancies exist, however.) (Internal Revenue Service)
Employee Ownership Update for November 2, 2009
NCEO Executive Director Corey Rosen discusses the following: defined contribution plan limits will remain unchanged in 2010; House Concurrent Resolution 204, expressing continued support for employee stock ownership plans (ESOPs), has been introduced; NCEO board nominations are now open; and SARs may be better than stock options in closely held companies. (National Center for Employee Ownership)
Webcasts and Conferences
"2009 Required Minimum Distributions: Now We Know" Web SeminarNationwide on November 2, 2009
presented by SunGard Relius
(Click to post your webcast or conference)
Press Releases
US Labor Department Obtains Court Judgment to Restore More Than $1.2 million to El Vocero de Puerto Rico Union Employee Retirement PlanU.S. Department of Labor, Employee Benefits Security Administration (EBSA)
IRS Seeks Applications for TE/GE Advisory Committee
Internal Revenue Service (IRS)
Employer Contributions Shifting in Consumer-Driven Health Plans
Employee Benefit Research Institute (EBRI)
Retirement Security Project Available for Comment on GAO Report Promoting Improvements to Automatic Enrollment to Enhance Long-term Retirement Security
Retirement Security Project
EPIC Advisors, Mutual of Omaha Team Up with Banks to Offer New Retirement Solutions for Commercial Clients
EPIC Advisors, Inc.
BrightScope, Target-Date Analytics Create New Index
BrightScope
ABA Retirement Funds Announces Enhanced Investment Structure for Participants
ABA Retirement Funds
(Click to post your press release)
Employee Benefits Jobs
Compliance Testing Consultantfor Xcitek Consulting Services
in CT, MI, NJ, NY, OH, PA
Director, Retirement Plans
for Monsanto
in MO
ERISA/Benefits Attorney
for Baird Holm LLP
in NE
401(k) Plan Specialist
for Moneta Group Investment Advisors
in MO
Plan Administrator
for Consulting Actuarial Group, Inc.
in IL
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