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February 14, 2011 Health & Welfare Plans Newsletter  |  Advertise  |  Unsubscribe  |  Past Issues

[Official Guidance]
The IRS Employee Plans News, February 11, 2011 (PDF)
This edition covers: Voluntary Correction Program Fee Discount Ending Soon; Correcting a 403(b) Plan's Eligibility Failure; Cycle A Controlled Group Election; EP Phone Forums' Schedule; and, Covered Compensation Table Correction. (U.S. Internal Revenue Service)


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[Guidance Overview]
IRS Provides Relief for Tax Preparers with Pending Identification Number Applications
"The IRS recognizes that some tax return preparers are having difficulty in obtaining a PTIN." (Wolters Kluwer)

[Guidance Overview]
Who Needs ERISA Fidelity Bonds and Who is Responsible for Securing Them?
"Plan fiduciaries should take the time to review their bond forms, ask questions about who is covered by the form and secure additional bonding (or require their service providers to secure an appropriate bond) if the bond in place covers fewer than all of the persons that are required to be bonded." (Reish & Reicher)

[Guidance Overview]
Fiduciary Status for Referrals
"[The new regulation to re-define fiduciary investment advice] formalizes a long-standing DOL position that the referral of an investment manager can result in fiduciary status for the adviser making the referral.' (Reish & Reicher)

[Guidance Overview]
Final Rule for Participant Disclosures Requires Plan Fiduciaries to Provide Detailed Plan Information to Employees (PDF)
"The rule applies to all participant-directed individual account plans, regardless of size (there is no small plan exception); however, the rule does not apply to IRA-based plans that are 408(k) simplified employee pensions and 408(p) SIMPLE plans." (Wang Kobayashi Austin, LLC)

[Guidance Overview]
Cycle A Determination Application Period Open to Controlled Groups
"The 12-month on-cycle submission period for Cycle A determination letter applications and opinion and advisory letter applications for most pre-approved plans started on February 1, 2011." (PLANSPONSOR.COM)

[Guidance Overview]
Court Gives Final Approval in RadioShack Fiduciary Breach Case
"A federal judge in Texas has given final approval to a $2.4-mil.lion settlement of a class-action suit alleging RadioShack used Putnam mutual funds in its 401(k) plan even though they were overpriced and underperforming." (PLANSPONSOR.COM)

[Guidance Overview]
Reduced Correction Fees Available for Late EGTRRA Restatements Until April 30, 2011
"Once the IRS approves your VCP application, it will issue a compliance statement. This compliance statement is your assurance that the IRS will treat the EGTRRA restatement as if it were timely-adopted . . . ." (McKenna Long & Aldridge LLP)

[Guidance Overview]
Third Circuit Holds that Buyer of Assets Is Liable for Seller's Unpaid Multiemployer Plan Contributions under Successor Liability Rule
"The Third Circuit noted the following relevant factors with respect to the continuing operations requirement: (1) continuity of the workforce, management, equipment and location; (2) completion of work begun by the predecessor; and (3) constancy of customers." (Pepper Hamilton LLP)

Pension Bill Irks Experts: No Bonds Without Federal Oversight
"The bill . . . would require state and local governments to submit annual reports to the Treasury Department disclosing detailed information about their pension plans, including unfunded liabilities determined on the basis of a Treasury rate, rather than the more commonly used rate of return on investments, which is higher." (The Bond Buyer and SourceMedia Inc.)

Administration's Budget Would Raise Pension-Insurance Costs
"President Barack Obama's budget proposes to raise premiums [PBGC] charges employers by $16 bil.lion over ten years and, in a significant policy shift, would levy higher premiums on the riskiest companies." (The Wall Street Journal)

Financial Literacy and Pension Fund Fees (PDF)
"The research discussed here evaluates the relationship between financial literacy and economic outcomes and explores how the presentation of fees and charges for financial services can help people make the most cost-effective saving decisions." (TIAA-CREF Institute)

Plan Sponsors Can Minimize Fiduciary Liability with Adequate Fiduciary Education and Certification
"It is generally agreed that in order to manage its potential liability, a plan fiduciary needs a paper trail demonstrating that it acted prudently." (Profit Sharing / 401k Council of America)

Advisers Should Start with Plan Design for Small Business Owners
"Many [small business owners] may be under the impression that the only type of retirement plan available to them is a 401(k). Advisers need to broach the idea of profit-sharing or cash-balance plans." (planadviser)

401(k) Fees: A Hot Topic for Plan Fiduciaries and Participants
"Fees are only one factor in selecting and evaluating appropriate investment options for a plan fiduciary, as well as for participants. For a plan fiduciary, payments for advice, monitoring investments, participant education and other services are necessary expenses." (National Law Forum, LLC)

Video: House Committee Oversight and Government Reform Hearing on State and Municipal Debt
"Among the topics they addressed were the strength of the bond market, retirement and pension programs, the impact of federal stimulus spending . . . ." (C-SPAN Video Library)

The Top 10 Priorities for U.S. Pension Plan Sponsors in 2011
The top 'extremely high' priority, according to the poll, is controlling funded-status volatility. (SEI)

Gap Between Police and Fire Pensions and Those of Other New York Municipal Workers Widening
"The review comes as the state continues an investigation into pension padding -- the practice of loading up on overtime as retirement nears -- and municipalities brace for rising costs to fund their workers' retirements. Gov. Andrew Cuomo is pushing pension reforms to help tackle a $10 bil.lion budget shortfall." (The Journal News)

Kentucky Senate Approves Change to State's Pension Plan
"New hires into state and local government jobs would be covered under the savings plan beginning July 1, 2012." (WorldNow and WAVE)

Elected Officials Plus All Interested Individuals Headed to Pension Boot Camp
"The California Foundation for Fiscal Responsibility, along with the Pacific Research Institute, Governing Magazine and the Independent Voter Network, will host the training program on Feb. 17 in Irvine. Register at www.californiapensionreform.org." (Orange County Register Communications)

Florida Municipal Pensions in Deep Trouble, According to Study
"The report, titled 'Touch Choices Facing Florida's Governments,' paints an increasingly dire picture of communities that have promised retirement benefits the state and local governments can't possibly meet." (CBS Local Media)

EBSA Sets New 408(b)(2) Fee Disclosure Rules Deadline for January 2012
"[The delay] was designed to give regulators more time to consider suggestions to its interim final rule that was published July 16, 2010." (PLANSPONSOR.COM)

Republicans Beat Unions with Pension `Fright' on Bailout Ban, Lawyer Says
"Called the Public Employee Pension Transparency Act, [the] bill would prevent the federal government from sending aid to help states cover unfunded pension obligations." (Bloomberg L.P.)

Pension Solution for Pittsburgh Remains Elusive
"The city of Pittsburgh spends nearly $3 mil.lion a year managing its pension benefits and investing its retirement pool . . . . Some of the spending is outside the administration's control, governed instead by panels of police and firefighters who have given veterans of their ranks well-paid posts administering retirement benefits." (Pittsburgh Post-Gazette)

[Opinion]
Intergenerational Theft: Increasing Pension Liabilities
"We shouldn't borrow long-term to pay ongoing labor costs. It's irresponsible. Yet, that's what we're doing with pension liabilities." (Bay Area News Group)

[Opinion]
Pensions Squeezing Money Managers on Fees?
"Pension system investment directors overseeing more than $217 bil.lion in California and New Jersey cut millions of dollars in projected costs by reducing the fees they pay to asset managers [according to a Bloomberg report]." (Leo Kolivakis)


DOL Issues Proposed Regulation Updating the Definition of ERISA Fiduciary (advert.)

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Benefits in General; Executive Compensation

[Guidance Overview]
SEC's Proposed Rules on Executive Compensation Shareholder Votes Under Dodd-Frank (PDF)
"Set forth in this White Paper are several important features of the proposed rules that are worthy of immediate consideration in preparing for the 2011 proxy season." (McDermott Will & Emery)

Employee Benefits Developments, January/ February 2011
A brief look at developments in Employee Benefits law from January and February, including cases, rulings, and opinions. (Hodgson Russ LLP)

Wisconsin May Take an Ax to State Workers' Benefits and Their Unions
"Among key provisions of Mr. Walker's plan: limiting collective bargaining for most state and local government employees to the issue of wages (instead of an array of issues, like health coverage or vacations); requiring government workers to contribute 5.8 percent of their pay to their pensions, much more than now; and requiring state employees to pay at least 12.6 percent of health care premiums (most pay about 6 percent now)." (The New York Times; one-time registration required)

Press Releases

PBGC Director Welcomes Cheryl Alston and Daralyn Peifer to Advisory Committee
(Pension Benefit Guaranty Corporation (PBGC))

Multiple Employer Plans and the Role of the Advisor
(American Pension Services, Inc.)

US Department of Labor Announces Intention to Extend Applicability Date of Section 408(b)(2) Fee Disclosure Regulation
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

Aetna to Offer Unique and Affordable Benefits Package to Chamber of Commerce Members
(Aetna)

Better Together: Coordinated Medical and Pharmacy Benefits Reduce Costs, Improve Health
(CIGNA Corporation)

HSA Bank, Trotter Wellness Partner to Form Integrated HSA and Wellness Solution
(HSA Bank)

CalSTRS Advances Current Work On Risk Based Asset Allocation
(California State Teachers' Retirement System (CalSTRS))

CDHP, FSA, HSA, HRA? Unum Offers a Clear Guide to the Acronym Soup of Consumer-directed Health Plans
(Unum)

MapMyFITNESS Teams With Humana To Create “Humana Fit” – A New Social Network To Help People Lead Healthier Lives
(Humana)

McGraw Wentworth Welcomes Chris Bouschet As Account Director
(McGraw Wentworth)

Six in Ten Employers Hope Health Care Reform Will Be Repealed
(Market Strategies International)

Corporate Health Programs Could Improve if People Exercised Manners, Says Austin Etiquette Expert Sharon Schweitzer
(Protocol & Etiquette Worldwide)

Legacy Retirement Solutions - Reliable, Affordable TPA Services
(Legacy Retirement Solutions, LLC)


Employee Benefits Jobs


Webcasts and Conferences

401(k) Rekon Advisor Symposium- Salt Lake City
in Utah on March 15, 2011 presented by 401(k) Rekon

Executive Compensation: Strategy, Design, and Implementation
in New York on June 16, 2011 presented by ALI-ABA (American Law Institute-American Bar Association)

Retirement, Deferred Compensation, and Welfare Plans of Tax-Exempt and Governmental Employers
in District of Columbia on September 15, 2011 presented by ALI-ABA (American Law Institute-American Bar Association)


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