DOL's Final Disclosure Regulations for Participant-Directed Individual Account Plans (PDF)
5 pages. Excerpt: "If a plan assigns investment responsibilities to participants, the DOL takes the position that plan fiduciaries must take steps to ensure that participants and beneficiaries are provided with sufficient information regarding the plan, including plan fees, expenses, and investment alternatives, so that participants and beneficiaries can make informed investment decisions."
(Morgan, Lewis & Bockius LLP)
Proposed PBGC Rule Has Potential to Expand Liability of Pension Plan Sponsors (PDF)
8 pages. Excerpt: "The PBGC has issued proposed guidance interpreting ERISA Section 4062(e), which involves reporting obligations for employers to the PBGC when more than 20 percent of plan participants are separated from employment when a facility or operation is shut down or ceased by an employer."
(McDermott Will & Emery)
DOL Proposed Regulation Would Broaden the Definition of ERISA Fiduciary (PDF)
3 pages. Excerpt: "The DOL believes that this change will enhance its ability to cure abuses that it believes currently exist in the market, such as undisclosed fees, misrepresentation of compensation arrangements and biased appraisals of the value of employer securities and of other plan investments."
(Drinker Biddle & Reath LLP)
IRS Finalizes Hybrid Plan Regulations and Proposes Additional Clarifying Regulations
Excerpt: "The final regulations adopt much of what was contained in the proposed regulations. Under the final regulations, the plan can determine the present value of benefits under a lump sum-based benefit formula as the amount of the hypothetical account maintained for the participant or as the current value of the accumulated percentage of the participant's final average compensation under that formula."
Hybrid Plans: IRS Issues Final and Proposed Regulations
Excerpt: "The final regulations, which are generally effective for plan years that begin on or after January 1, 2011, essentially maintain the status quo by keeping in place previously-issued guidance by the IRS in the 2007 proposed regulations and in Notice 2007-6. However, the IRS points out certain clarifications in the new final regulations . . . ."
(Deloitte via BenefitsLink.com)
New ERISA Fee Disclosures for Participant-Directed Individual Account Plans
Excerpt: "For plan years beginning on or after November 1, 2011, fiduciaries of individual account plans will be required to provide annual and quarterly fee disclosures to each participant and beneficiary who is able to direct the investment of their account under the plan."
(Deloitte via BenefitsLink.com)
Roth-to-IRA Reversal Opens Up Options
Excerpt: "There are a number of reasons why, after shifting assets to a Roth, someone would want to reverse that conversion through a tax-filing process called recharacterization. The assets in question may have changed in value, the filer's income may have risen or fallen significantly, or he or she may have failed to predict the impact on their taxes or on eligibility for college financial aid."
(The Wall Street Journal)
ETFs Gaining Traction with 401(k) Service Providers
Excerpt: "'Over a 30-year career, an annual fee of 0.7 percent of assets reduces the purchasing power of a participant's balance at the time of retirement by more than one-eighth,' noted the Center for Retirement Research in a research report titled 'Reducing Costs of 401(k) Plans with ETFs and Commingled Trusts.' A white paper by SEI Investments from showed the average collective trust fee is 0.26 percent lower versus a corresponding large-cap stock mutual fund."
(InvestorPlace Media, LLC)
AARP Revamps Retirement Calculator
Excerpt: "New features of the AARP Retirement Calculator include the ability to develop a retirement plan for a dual-income home, calculate and include individual Social Security benefit estimates as a part of retirement income, tabs, explanation of where an individual is currently at in their retirement planning, and the ability to experiment with various retirement scenarios to create a plan that is right for each individual. . . . To try out the new AARP Retirement Calculator, visit www.aarp.org/retirementcalculator."
Report Examines Non-Annuitized Retirement Income
Excerpt: "New research shows the percentage of households at risk for retirement jumps from 51% to 60% when they live off of the interest from their assets instead of purchasing an inflation-indexed annuity."
How Financial Literacy and Impatience Shape Retirement Wealth and Investment Behaviors (PDF)
2 pages. Excerpt: "Our results show that our measure of impatience is a strong predictor of retirement saving and investment in health, using a variety of measures of savings for retirement and investment in preventive health care. Financial literacy is also correlated with accumulated retirement saving though it appears to be a weaker predictor of sensitivity to framing in investment decisions."
(University of Michigan Retirement Research Center)
The Disaster of California's State Pensions
Excerpt: "Re-estimating California's pension obligations using a discount rate approximating what private pensions are allowed to use, [a study] finds the gap between existing plan assets and the present value of benefits accrued by participants actually reaches $282.2 bil.lion, a figure that rises to $326.6 bil.lion when current market values are taken into account. On top of that, the California Controller estimates that retiree health benefits are currently underfunded by $51.8 bil.lion. The total of these actuarial obligations thus reaches $378.8 bil.lion."
(National Center for Policy Analysis)
Public Pension Reform Key Issue in California Race
Excerpt: "Reform measures will appear on November 2 ballots in cities including San Francisco and San Jose, while Los Angeles Mayor Antonio Villaraigosa announced a reform plan last week."
(Reuters via The New York Times; free registration required)
Cash-Balance Pensions Stand to Gain Favor with Employers
Excerpt: "Financial professionals expect demand to come from large companies that want to convert a traditional pension into a cash-balance plan and from professional firms -- especially law firms and medical practices -- that are eager to save more for retirement pretax."
(The Wall Street Journal)
PBGC Flat-Rate Premiums Will Not Increase in 2011
Excerpt: "The 2011 flat-rate premiums are determined from the change in national average wages from 2008 to 2009. These wages declined 1%. However, PBGC regulations prevent reductions in premium rates when national average wages fall, so flat-rate premiums will not change in 2011."
Social Security Is Not the Problem
Excerpt: "In an article in the New York Times Week in Review section on Britain's new austerity measures, David Herszenhorn reinforces fallacies about Social Security and the U.S. budget that facts just can't seem to kill."
(The Century Foundation)
Itís a whole new world at the 2011 NTSAA Annual Conference, the premier 403(b) and 457 forum for educating producers, providers, agents, broker/dealers, sales and marketing managers, office staff, plan sponsors and other business officials. Register now and join your colleagues in Orlando February 2-5, 2011.
For more information and a brochure, visit our website.
Benefits in General; Executive Compensation
Lodging 'Per Diem' Rates Fall in Many Locales
Excerpt: "Lodging per diem rates set by the U.S. General Services Administration are being revised down in numerous locations for the new federal fiscal year that began Oct. 1. The new rates could impact travel nurse staffing firms and others with employees that travel."
(Workforce Management; free registration required)
Webcasts and Conferences
Newly Posted Employee Benefits Jobs
Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too!
This email has been published by:
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
Fax: (407) 644-2151
Jeanette Hull, News Editor
David Rhett Baker, J.D., Editor and Publisher
Copyright 2010 BenefitsLink.com, Inc.; except that you can
forward this email in full (including this boilerplate part) or
otherwise reprint this email in full (including this boilerplate
part) without obtaining our permission.
Anyone can subscribe to this newsletter.
Other useful links: