Retirement Plans Newsletter |
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| November 18, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
SunGard’s Relius Education – Educational Resources for Employee Benefits Professionals (Advert.)
2010 Orlando Advanced Pension Conference Hilton Orlando Bonnet Creek, February 17-19. With a new administration in Washington, and a volatile economy, change is the only constant for retirement plan practitioners. Stay current, attend this important conference. Our agenda will reflect the latest updates, including: EFAST2, plan design, lost participants, restatement pitfalls and perspectives, beneficiary issues, 403(b) plans, Roth rollovers, and more. Plus, "Ask the Experts" workshop, concurrent sessions, and over 900 minutes of CE credits. Registration is now open. |
[Guidance Overview]
Massachusetts High Court Rules That ERISA Preempts a Claim Based on Unjust Enrichment
Excerpt: "In Hitachi High Technologies America, Inc. v. Bowler, SJC-10386 (Supreme Judicial Court of Massachusetts 2009), the Court faced the question of whether ERISA preempts a State law action brought by a retirement plan fiduciary to recover money mistakenly paid to a plan participant. In this case, the plaintiff, Hitachi High Technologies America, Inc. (Hitachi), filed an action for unjust enrichment in the Mass. Superior Court against its former employee, the defendant Kevin Bowler, for his alleged failure to reimburse $29,315.75, with interest, in retirement benefits that Hitachi had overpaid to Bowler due to an accounting error. The lower court dismissed the case on the grounds that it lacked subject matter jurisdiction." (Passion for Subro)
[Guidance Overview]
Upcoming Compliance Deadlines for 403(b) Plans (PDF)
2 pages. Excerpt: "This bulletin is a brief reminder and overview of important new requirements for 2009 for 403(b) plans and certain applicable deadlines for a plan operating on a calendar year. Note that different effective dates may apply to certain types of plans and special exceptions apply to plans covering collectively bargained employees or ministers and to governmental and church plans." (Thompson Hine LLP)
[Guidance Overview]
Cash Balance Plan Wins in Eighth Circuit on Opening-Balance and Age-Bias Claims
Excerpt: "No ERISA violation occurred when a pension plan used an 8 percent interest rate to establish opening balances in connection with a 1998 cash balance conversion, the US Eighth Circuit Court of Appeals has ruled. Participants claimed the rate was too high, but the appeals court said the plan was free at that time -- before passage of the Pension Protection Act -- to set opening balances as it wished, as long as already-accrued benefits did not decrease. The court also dismissed participants' age-bias claims, consistent with rulings by five other appeals courts." (Mercer LLC)
[Guidance Overview]
PPA & WRERA Qualified Plan Guidance: Action Items for 2009 (PDF)
6 pages. Excerpt: "Qualified plan amendments or action items required in 2009 relating to the Pension Protection Act of 2006 (PPA) and Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), including; (i) WRERA suspension of 2009 required minimum distributions, with operational compliance required by December 1, 2009, as well as model amendments in Notice 2009-82 which must be adopted by end of 2011 play year; (ii) revised model notices for eligible rollover distributions under Notice 2009-68, which must be put in place by end of 2009 plan year; (iii) sample amendments to add automatic enrollment to plans in Notice 2009-65 needs to be adopted by end of 2009 plan year; (iv) QACA and EACA notices, and qualified default investment alternative notice required at least 30 days in advance of plan year; (v) PPA amendments required by end of 2009 plan year. Also, other recent PPA qualified plan guidance include: (i) rollovers from employer plan or regular IRAs to Roth IRAs have no income limit in 2010, and (ii) contribution of paid time off at end of plan year or on termination of employment permitted." (Charles C. Shulman, Esq.)
Pension Plan Moves Forward in West Virginia Legislature
Excerpt: "Police and fire pension plans across the state are suffering from funding shortfalls. The pending bill would allow municipalities to close such plans to new hires, freezing those unfunded liabilities. Among the ailing municipalities, officials have said Huntington is hurting the worst. More than 20 percent, or $8.8 million, of Huntington's $42 million budget is going to pension costs this year. Under the current funding method, those costs will rise to $12.4 million a year by 2015 and will not reach their ceiling until they hit approximately $20 million a year between 2020 and 2022, according to the city's finance department." (Herald-Dispatch.com)
Teachers Who Move Between States Suffer Pension Hit
Excerpt: "A 30-year veteran public school teacher who moves and splits employment between two state retirement systems is at risk for losing well over one-half of his or her pension wealth, according to new study. A news release said the research was from economists Robert M. Costrell of the University of Arkansas and Michael Podgursky of the University of Missouri-Columbia. Costrell and Podgursky examined pension funds in six states and found that compared to a neutral cash balance system, the type of defined benefit pension system which covers almost all public school teachers redistributes about half the pension wealth of an entering cohort of teachers who subsequently retire in their mid-50s from those who leave the system earlier." (PLANSPONSOR.com; free registration required)
DATAIR Employee Benefit Systems, Inc. (Advert.)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]FTC Delay of Its Enforcement of Identity Theft Red Flags Rule Until June 2010
Excerpt: "EBIA Comment: The Rule's broad definitions have raised questions about whether and how the Rule applies to various employee benefit programs. This additional delay will be helpful for employee benefit plans that have been attempting to determine what portion, if any, of a benefit plan's activities might be subject to the Rule. While recent FTC guidance clarified that a 401(k) plan's loan program would not need to be included in a written identity theft prevention program . . ., further clarification would be helpful about the Rule's application to other benefits, such as DCAPs, HRAs, HSAs, and qualified transportation plan debit card programs." (Employee Benefits Institute of America)
[Guidance Overview]
IRS's Final Regulations on Employee Stock Purchase Plans
Excerpt: "On November 16, 2009, the IRS released updated regulations governing Employee Stock Purchase Plans. The final regulations give employers more flexibility in meeting the statutory requirements than the proposed regulations (though not as much flexibility as some employers desired). They deserve careful review by all corporations sponsoring Employee Stock Purchase Plans -- before the final regulations become applicable on January 1, 2010." (Sonnenschein Nath & Rosenthal LLP)
Executive Compensation and Corporate Governance Provisions in Restoring Financial Stability Act of 2009 (PDF)
3 pages. Excerpt: "On November 10, 2009 Senator Christopher Dodd and eight other members of the Senate Committee on Banking, Housing and Urban Affairs (Senate Banking Committee), including Senator Charles Schumer, introduced the Restoring Financial Stability Act of 2009, which was referred to the Senate Banking Committee. Although the vast majority of the bill relates to financial services reform, it includes executive compensation and corporate governance provisions, many of which are similar to provisions in the Corporate and Financial Institution Compensation Fairness Act of 2009 (H.R. 3269)1 that was approved by the House on July 31, and the Shareholder Bill of Rights Act of 2009 (S. 1074) that was introduced on May 19 by Senator Schumer. Both H.R. 3269 and S.1074 have been referred to the Senate Banking Committee." (Frederic W. Cook & Co., Inc.)
Governance and Compliance Advisory Update: November 2009
Excerpt: "October saw significant activity with respect to retirement, executive compensation, welfare and other benefit legislation, regulations and rulings." (Towers Perrin)
Aging and Health: The Challenges of Entitlement Growth (PDF)
November 2009. CBO Director Doug Elmendorf's presentation to the Association for Public Policy Analysis and Management. 16 pages. (U.S. Congressional Budget Office)
Employee Benefits Costs Continue to Pressure Transportation CFOs, According to Survey
Excerpt: "Nearly 69 percent of transportation CFOs and senior comptrollers responding to a survey by consulting firm Grant Thornton indicted that employee benefits -- including health care and pensions -- are putting the most pressure on their operating costs, emerging as a higher-visibility challenge even than energy costs and insurance costs, which were of concern to some 40 percent of respondents. As transportation CFOs looked at the nation's economic outlook in October, when the survey was conducted, nearly 41 percent said they don't anticipate the recession ending until the second half of 2010, while nearly 35 percent were somewhat more optimistic, seeing the recession ending during the first half of 2010." (Cygnus Interactive)
Webcasts and Conferences
COBRA ARRA Workshopin Massachusetts on December 8, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
(Click to post your webcast or conference)
Press Releases
IRS Provides Timing Relief to Hybrid Pension Plan SponsorsWatson Wyatt
ERIC Urges Agencies Not to Eviscerate Workplace Wellness Programs
ERIC (ERISA Industry Committee)
Towers Perrin's 2010 Retiree Health Care Cost Survey Shows Continuing Affordability and Access Concerns
Towers Perrin
DATAIR Releases PPA Windows Valuation System for Defined Benefit Plans
DATAIR Employee Benefit Systems, Inc.
Majority of Employers with Consumer-Driven Health Plans Prefer Health Savings Accounts, Says Aon Consulting
Aon Consulting
Charles Schwab Expands Its Educational Website
Charles Schwab Corporation
Callan Develops Advanced Tools to Assess Target-Date Funds
Callan Associates
Washington Asset Management Hires 401k Marketing VP
Paulson Capital Corporation
MG Advisory Expands RetireTool(k)it Services
MG Advisory Services
(Click to post your press release)
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