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April 29, 2011 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

[Guidance Overview]
The Presumption of Prudence Persists: In re UBS ERISA Litigation
"Most recently, the Southern District of New York found that the fiduciaries of two UBS retirement plans were entitled to the Moench presumption of prudence regarding their decision to continue to offer the UBS stock fund to employees after the firm suffered serious financial losses at the beginning of the financial crisis." (Verrill Dana, LLP)


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[Guidance Overview]
Failure to Amend for EGTRRA Causes Disqualification of Profit-Sharing Plan
"The Tax Court concluded, 'The requirements that a plan must satisfy for qualification under Sec. 401(a) must be strictly met. Vague, general references in plan correspondence to such requirements are insufficient.'" (Wolters Kluwer Law & Business)

401(k) Participants' Awareness and Understanding of Fees: Survey Results
"Despite the need for knowledge, seven in ten are not aware that they pay fees to their 401(k) plan provider to maintain their account. When told of these fees, six in ten are not aware of the amount they pay in fees to maintain their account." (AARP)

IRS Starts 403(b) Universal Availability Higher Education Project Check
"The project, which builds upon a similarly focused 403(b) pilot project involving K-12 public schools, focuses on higher education organizations sponsoring [IRC] section 403(b) plans and their satisfaction of Universal Availability . . . non-discrimination rules and new plan document requirements." (PLANSPONSOR.COM)

Pension Funding Has 'Stabilized,' According to New Head of National Governors Association
"I think . . . probably the headlines overstated the findings [of the Pew report]. It was not much [of a drop]. So it wasn't a really dramatic change." (Governing)



Rule 408(b)(2) Amendments 'Fully Drafted' at DOL
"'Right now, the amendments are effective January 1, 2012. Since the probable purpose of the rumored extension -- if true -- is the late issuance of these amendments, it is reasonable to assume that the new effective date would be somewhere in the range of April 1 to July 1, 2012.'" (AdvisorOne)

When Smaller Menus are Better: Variability in Menu-Setting Ability and 401(k) Plans
"We illustrate this result [a negative relation between menu size and menu quality, i.e., a smaller menu is better than a larger menu] empirically in the context of 401(k) plans, where we show a negative relation between the number of the investment choices in the 401(k) plan and the quality of optimal portfolio achievable given those investment choices." (President and Fellows of Harvard College)

The AARP 401(k) Fee Calculator
"This calculator can: Help determine the fees associated with individual plans and compares them to the average for a low-cost 401(k) investor. [Free registration is required.]" (AARP)

2010 Disclosures of Funding, Discount Rates, Asset Allocations and Contributions of the Towers Watson Pension 100
"During 2010, aggregate funded status for defined benefit . . . plans sponsored by the Towers Watson 100 . . . increased from 82% to 84%." (Towers Watson)

Should Social Security's Cost-of-Living Adjustment Be Changed?
"Some recent deficit reduction proposals call for shifting to a chained CPI to determine the cost of living adjustment (COLA) for Social Security. Others call for using a special price index for the elderly to adjust benefits. This fact sheet examines the consequences of each change on beneficiaries' incomes, program costs, and the economic security of older Americans." (National Academy of Social Insurance)

In the April Issue of Benefits Magazine: 'I Know I Could Save More, But . . . .'
"For those without easy access to the article, which reports the results of a survey ING did with 1,000 workers participating in employee-sponsored 401(k) plans, here are a few highlights . . . ." (Milliman, Inc.)

Michigan State House Passes Pension Tax Plan
"By a compromise worked out with lawmakers, the plan would exempt from the pension tax citizens who are 67 or older by Jan. 12, 2012." (The Detroit News)

[Opinion]
The Flushing Effect of the 403(b) Connection Between 408(b)(2), Participant Disclosures and Plan Audits
"So it is with a potential impact 408(b)(2) may have on many 501(c)(3) sponsors of ERISA 403(b) plans. It shows up when you take an 403(b) ERISA plan, impose a fundamentally new set of basic principles (by way of the 2007 403(b) tax regulations); revoke its exemptive relief from reporting requirements (the Form 5500); while nearly simultaneously superimposing a tremendous new disclosure scheme (participant and service provider disclosures); there are inevitably going to be some unusual results." (Business of Benefits published by Robert J. Toth, Jr)

[Opinion]
The Impact of Federal Budget Deficits on Your Retirement Income
"If your tax bracket during your working years had been in the 28% or higher brackets, you just received a nice tax benefit for waiting to pay taxes. But what if the brackets went up? [Let's look at Theoretical Increased Taxes on a $1 Mil.lion Portfolio . . . .]" (Retirement Online LLC)

[Opinion]
Critique of Joshua Rauh's 2010 Paper, 'Are State Public Pensions Sustainable?' (PDF)
"A recent paper uses unrealistic assumptions to exaggerate the financial condition of state and local government employee retirement systems. The author also recommends changes to these programs that would only serve to exacerbate their financial condition." (National Association of State Retirement Administrators)

Benefits in General; Executive Compensation

[Guidance Overview]
Stock-Based Bonuses Not Considered Compensation in Calculating Top-Hat Plan Benefits
"The court rejected an executive's claims urging that plan language that conferred interpretive discretion on an administrative committee should be disregarded because the committee had a conflict of interest and that a top-hat plan administrator is not a fiduciary under ERISA." (Wolters Kluwer Law & Business)

[Guidance Overview]
Proposed SEC Rules Implementing Compensation Committee Independence Requirements
"Neither Dodd-Frank nor the proposed rules would require a public company to have a compensation committee. However, as a practical matter, most public companies already do have compensation committees in order to comply with existing SRO listing requirements, Section 16(b) of the Securities Exchange Act of 1934 and Section 162(m) of the Internal Revenue Code." (McguireWoods LLP)

Press Releases

Employee Benefits Jobs

Institutional Investment Group Account Manager
for PNC Bank in PA

Benefits Consultant (Large Group)
for Northwestern Benefit Corporation of Georgia in GA

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Webcasts and Conferences

Contracting Web Summit
in California on May 19, 2011 presented by MCOL

Health Care Reform Update: Internal Appeals, Grandfathered Plans, and More
Nationwide on May 26, 2011 presented by EBIA / Thomson Reuters

Healthcare M&A in California: A Progress Report (Co-sponsored by Payers & Providers)
in California on May 20, 2011 presented by MCOL

Preventive Care: Cost and Utilization Implications of the Affordable Care Act
in California on June 29, 2011 presented by MCOL


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Jeanette Hull, News Editor
David Rhett Baker, J.D., Editor and Publisher
dbaker@benefitslink.com

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