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Retirement Plans Newsletter

July 27, 2010

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[Guidance Overview]
IRS Issues Guidance on Basis Reporting Errors (PDF)
2 pages. Excerpt: "The IRS recently issued unofficial guidance on Form 1099-R reporting error due to failure to take into account a participant's basis for annuity payments received from a section 401(a) qualified plan."
(Groom Law Group)

[Guidance Overview]
DOL's Interim Final Fee Disclosure Regs for Pension Plans
Excerpt: "It is worth noting that although these fee disclosure requirements and those required on Schedule C of Form 5500 overlap, they are not identical."
(Employee Benefits Institute of America)

Why Do Some Workers Have Low Social Security Benefits?
Excerpt: "Workers with health problems and disabled workers -- especially those disabled early in the career -- are comparatively likely to have family benefits of less than poverty."
(Urban Institute)

Workers with Low Social Security: Implications for Reform
Excerpt: "To meet long-term, low-wage workers' needs, policymakers could adjust Social Security's bend points or replacement percentages; create a new minimum benefit; or adjust current law's special minimum benefit so it provides support greater than the poverty level."
(Urban Institute)

Adjusting Social Security Benefits for Changes in the Cost of Living
Excerpt: "This brief examines different price indices that might be used to adjust Social Security benefits for changes in the cost of living."
(Urban Institute)

The Data Layouts for Retirement Income Solutions (PDF)
72 pages. Excerpt: "The Data Layouts for Retirement Income Solutions . . . were developed by The SPARK Institute in order to facilitate uniform expectations among retirement income product providers and record keepers who decide to offer these products and solutions in employer sponsored retirement plans."
(The SPARK Institute)

Summary: PricewaterhouseCoopers Issues a Study of the IASB's Proposal on Pension/OPEB Accounting
Excerpt: "PricewaterhouseCoopers (PwC) performed a study of the potential impact of the proposal, looking at 60 US and non-US companies and evaluating how their historical reported financial information would have been affected had they been applying the proposal in past years."
(PricewaterhouseCoopers LLP)

Pension and OPEB Accounting: A Study of the IASB's Proposal
60 pages. Excerpt: "The International Accounting Standards Board (IASB) has proposed changes to its standard on employers' accounting for defined benefit pensions and other postretirement benefits. While the proposal is not the result of joint deliberations with the Financial Accounting Standards Board (FASB), both boards intend to eventually adopt a converged standard."
(PricewaterhouseCoopers LLP)

How Reminders Increase Saving
Excerpt: "We develop and test a simple model of limited attention in intertemporal choice. The model posits that individuals fully attend to consumption in all periods but fail to attend to some future lumpy expenditure opportunities."
(National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Does Stock Market Performance Influence Retirement Expectations?
Excerpt: "While media reports predicted substantial changes in labor supply behavior due to the sharp decline in the value of the stock market in October 2008, empirical evidence on the relationship between equity markets and retirement is mixed."
(National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

California's Dual Pension Crisis (PDF)
11 pages. Excerpt: "The stark contrast between the guaranteed and increasingly expensive pensions and retiree health benefits enjoyed by most public workers in California and the less secure (and often missing) retirement plans of private-sector workers has touched off pension envy."
(New America Foundation)

Philadelphia's Deferred Retirement Option Plan Pays City Employees Six-Figure Cash Bonuses When They Retire
Excerpt: "Rather than get rid of it, city officials have raised property taxes 10 percent and passed budget cuts that will shut down firehouses, whack millions of dollars in police overtime, and shelve plans to hire 200 new cops."
(The Philadelphia Inquirer)

What David Wray Would Tell the Deficit Reduction Commission
Excerpt: "The government's system of incentives encouraging retirement savings is one of the most effective government programs we have."
(Profit Sharing / 401k Council of America)

Lavish Salaries and Pensions in Bell, California, Could Fire Up Reform in Public Compensation
Excerpt: "Because the city participates in a pension pool with a hundred other small communities and subdivisions, the innocent taxpayers of those other municipalities may be stuck with the bills for part of these overpaid officials' outrageous lifetime pensions."

Create a Fiscally Sustainable Pension System That Offers Adequate Retirement Security to Public and Private Workers Alike
Excerpt: "There is [a] long-term reform option for California, one that would provide more retirement security for public workers and more fiscal stability and certainty for taxpayers. It is known as a cash balance pension, a hybrid that combines the best aspects of defined-benefit or pension-style plans and defined-contribution plans such as 401(k)s."
(Los Angeles Times)

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Benefits in General; Executive Compensation

[Guidance Overview]
Option Vesting on Change in Control: Timely Constructive Termination Notice
Excerpt: "The federal Court of Appeals for the Ninth Circuit recently held that an executive was not required to give notice of constructive termination until the executive had sufficient detail about a promised position to determine whether that position would involve a substantial reduction in responsibilities."
(Utz, Miller & Eickman, LLC)

[Guidance Overview]
Wall Street Reform Provisions Relating to Corporate Governance, Executive Compensation and Disclosure (PDF)
Excerpt: "Under Dodd-Frank shareholders of U.S. public companies will have a nonbinding 'say on pay' vote for named executive officers, new standards relating to the independence of compensation committees and compensation advisors are mandated, current and former executive officers may be forced to return compensation if a restatement of financial statements triggers a 'clawback' . . . ."
(Orrick, Herrington & Sutcliffe LLP)

[Guidance Overview]
Defense of Marriage Act Found Unconstitutional by Federal Trial Court in Massachusetts
Excerpt: "EBIA Comment: The U.S. government must now decide whether to appeal, and it is impossible to predict how the issues will fare in the court of appeals (or potentially in the Supreme Court). The matter of DOMA's validity is significant in the benefits arena, of course, given the federal tax implications for benefits provided to same-s.ex spouses and the impact DOMA has on other benefit rules (including, among others, whether same-s.ex spouses have COBRA and HIPAA special enrollment rights)."
(Employee Benefits Institute of America)

Webcasts and Conferences

The DOL's New Fee Disclosure Regs: Maximum Impact
Nationwide on August 3, 2010
presented by Qualified Pension Consulting, Inc.

The DOL's New Fee Disclosure Regs: Maximum Impact
Nationwide on August 26, 2010
presented by Qualified Pension Consulting, Inc.

Press Releases

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