Retirement Plans Newsletter |
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| November 9, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
Retirement Solutions, LLC (Advert.)
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[Official Guidance]
Text of IRS Notice 2009-88: Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
4 pages. Excerpt: "This notice provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code as in effect for plan years beginning before 2008. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates under § 430(h)(2). In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007." (Internal Revenue Service)
[Official Guidance]
DOL Advisory Opinion 2009-03A on Certain Transactions or Arrangements Involving an Individual Retirement Account
Excerpt: "[The DOL was asked w]hether an IRA owner's granting to a broker of a security interest in assets held in his non-IRA accounts to cover potential indebtedness of an IRA established with the broker would result in prohibited transactions under Code section 4975." (U.S. Employee Benefits Security Administration)
[Guidance Overview]
IRS Retirement Plan Limitations on Benefits and Contributions for Tax Year 2010 (PDF)
Excerpt: "On October 15, the Internal Revenue Service (IRS) announced in a news release (IR-2009-094) the cost-of-living adjustments to be applicable to dollar limitations for defined benefit pension and defined contribution plans and other items for tax year 2010. Most limits remained unchanged from last year due to the fact that cost-of-living index for the quarter ended September 30, 2009 was less than the cost-of-living index for the quarter ended September 30, 2008. By way of example, the Code Section 402(g)(1) limit on the exclusion for elective deferrals remained unchanged at $16,500. This limitation affects elective deferrals to Section 401(k) plans and to the federal government's Thrift Savings Plan, among other plans." (Morgan, Lewis & Bockius LLP)
[Guidance Overview]
Law Firm that Settled Pension Suit on Its Own May be Fiduciary
Excerpt: "The U.S. District Court for the Eastern District of Michigan has determined that a pension fund's law firm that agreed to a settlement of a lawsuit by the fund against a service provider without approval of the fund's trustees may have breached fiduciary duties under the Employee Retirement Income Security Act (ERISA). In his opinion, U.S. District Judge Stephen J. Murphy, III said certain allegations in the complaint against law firm Sullivan, Ward, Asher and Patton, P.C. 'appear sufficient, if proved, to support a finding that Sullivan Ward was a 'fiduciary' under ERISA and thus state a claim upon which relief can be granted.'" (PLANSPONSOR.com; free registration required)
PBGC and UK Pension Bodies Agree to Share
Excerpt: "A new agreement between the Pension Benefit Guaranty Corp. (PBGC) and the United Kingdom's Pensions Regulator and Pension Protection Fund provides a framework for information sharing across the pond. According to a PBGC announcement, under a Memorandum of Understanding, signed Wednesday, the three agencies 'will share any unrestricted information that advances the security of defined benefit plans sponsored by private sector companies.' Confidential financial information from those companies will not be shared. 'The agreement is a reflection of the mutual interests of the three agencies and the global reach of corporate entities that sponsor pension plans,' the announcement said." (PLANSPONSOR.com; free registration required)
Congressional Research Service Report: Income of Americans Aged 65 and Older, 1968 to 2008
Excerpt: "This CRS report presents data collected by the Census Bureau in the Current Population Survey from 1969 through 2009 about the employment status and the sources and amounts of income received by people aged 65 and older. The report focuses on the sources and amounts of income received by individuals aged 65 and older and by households in which either the household head or the household head's spouse (if present) was 65 or older in the year of the survey." (Congressional Research Reports for the People)
Creating Buyers: The ESOP as Exit Strategy for Company Owners
Excerpt: "Interest in creating employee stock-ownership plans seems to be ticking up among business owners worried that capital-gains tax rates soon may rise. They may want to sell now while the rates stay at 15%. These are tough times for selling a privately owned business. Valuations are low as the economy struggles to emerge from its recession, and even where buyers and sellers can agree on price, it can be difficult to secure bank financing to complete a deal. That's pushing some business owners to create their own buyers -- in the form of employee stock-ownership plans that also serve the purpose of providing employees with retirement benefits." (CFO.com)
The Powerful California Pension Fund CalPERS Is Catching Flak for Not Practicing What It Preaches
Excerpt: "The California Public Employees' Retirement System has long pushed companies to clean up their acts. Now the nation's largest pension fund is getting flak for its own governance practices. But while other pension funds are overhauling their policies on hot-button issues -- including campaign contributions and investment middlemen -- CalPERS is making only marginal changes. The worry among shareholder activists is that this new perception may hamper CalPERS' ability to enact change elsewhere." (BusinessWeek)
To Encourage Saving for Retirement, Use Research to Change Policy
Excerpt: "The Obama Administration wanted to reverse [the borrowing] trend and promote saving, and, particularly, saving for retirement. Why the latter? Less that half the work force has access to a retirement plan at work. And, fewer than 10 percent of those without workplace retirement plans have one of their own. So, to push for retirement savings was wise public policy. How did the Obama Administration know what to do? The simple answer: It's what the research says to do. What research informs this policy initiative? The question at the heart is the following: How does (or can) society encourage positive behavior? Should government attempt to affect certain decision-making behaviors? What techniques and tools of science, particularly cognitive science, are likely to steer people toward better choices?" (New Jersey On-Line LLC)
MassMutual Financial Group (Advert.)
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Links to Items on Executive Comp, Benefits in General
To Retain Its Bankers, Citigroup Offers Stock Option PlanExcerpt: "Hoping to encourage bankers and managers to stay, Citigroup began dispensing several million stock options this week to more than a quarter of its workers in a way that could result in a sizable gain for them. . . . As an extra incentive to stay and help with the turnaround, Citigroup said it would grant one stock option at just above the current market price for each unvested share employees had accumulated. If the share price rebounds, as it has at Goldman Sachs and JPMorgan Chase, Citigroup employees could see a sharp increase in their 2009 compensation." (The New York Times; free registration required)
Specific Corporate Compliance Challenges by Practice Area: ERISA
Excerpt: "[The chapter] provides a general overview of the Employee Retirement Income Security Act of 1974 ('ERISA') and discusses best practices for fiduciary compliance, ERISA litigation and risk management, and ERISA reporting and disclosure requirements." (Corporate Compliance Practice Guide: The Next Generation via Seyfarth Shaw LLP)
How to Drive Value for Your Benefits Package with the Enrollment Experience
28 pages. Excerpt: "This white paper discusses how to reinvent the enrollment experience to benefit both employers and employees -- while increasing a company's return on its benefits investment. Employers will learn how this paradigm shift is driving the need for more comprehensive benefits education and what measures they can take to help employees better understand and appreciate their benefits choices. Readers will learn the importance of planning and reporting before, during and after the actual enrollment. The paper also illustrates why an effectively communicated benefits package can make a big difference in how employees perceive their company and how they may perform -- no matter if the company has a few employees or a few thousand." (Colonial Life)
After 40 Years, Age Discrimination Still Gets Second-Class Treatment
Excerpt: "Age discrimination is illegal. But when compared with discrimination against racial minorities and women, it is a second-class civil rights issue. The Supreme Court drove its inferiority home again in June of this year, ruling that older workers must show that age was the decisive factor in their firing -- not merely a contributing factor, which can be enough for a race or sex claim. Congress is considering overturning the ruling. It should do so. It is particularly important in the current downturn, with age discrimination complaints soaring. But the problem is larger than any one legal standard." (The New York Times; free registration required)
Press Releases
Council Letter to House: Health Care Reform Bill Fails to Control Costs, Weakens Employer-sponsored CoverageAmerican Benefits Council
401ktest.com Reduces Their Annual Subscription Cost by 63%!
401kTest.com
Author Calls on Rep. Robert Andrews to Hold Hearings on 401(k) Crisis, Demanding that the Mutual Fund Industry Explain Its Lack of Insight
Retirement Solutions LLC
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