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May 23, 2011 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

[Guidance Overview]
Elements of a Well-Written Investment Policy Statement (IPS) for a Defined Contribution Plan (PDF)
"A well-written Investment Policy Statement (IPS) is the very core of an investment program, it is effectively a blueprint. It can be hard to argue for the meeting of one's fiduciary duties without one. An IPS forms the basis for demonstrating prudence in making decisions." (Conrad Siegel Actuaries)

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[Guidance Overview]
Update on IRS 401(k) Questionnaire Project
"Monika Templeman [Director of Employee Plans Examinations] explained several key differences between compliance checks performed by the EPCU and an audit of a plan's return. Compliance checks are not considered an audit or investigation under Code Section 7605(b)." (McKay Hochman Company, Inc.)

[Guidance Overview]
District Court Authorizes Court-Appointed Fiduciary to Terminate Troubled DC Plan
"Federal courts may exercise broad equitable powers when implementing remedial decrees under ERISA. . . . Sec. 409(a) authorizes courts to remove fiduciaries, while ERISA sec. 502(a)(2) and 502(a)(5) authorize other 'appropriate relief' where necessary." (Wolters Kluwer Law & Business)

[Guidance Overview]
IRS Questionnaire Sent to College Plan Doesn't Put Plan 'Under Examination' But EPCRS Availability Unclear
"[I]t is not clear whether or not a [403(b)] plan sponsor that identifies an operational error as a result of the questionnaire can use EPCRS to correct the problem. This will remain a gray area until the IRS releases an updated version of EPCRS; the current version, set forth in Revenue Procedure 2008-50, does not address Section 403(b) plans to the same degree as other qualified plans . . . ." (E is for ERISA blog by Christine P. Roberts, Esq.)

Register Now for 2011 SPARK National Conference, June 12-14 [Advert.]

Sponsored by SPARK (Society of Professional Asset-Managers and Record Keepers)

Join the industry’s top marketing, sales, administration and recordkeeping professionals for unequaled educational and networking opportunities. Gain insights into the latest business and sales strategies, market trends, and regulatory and legislative issues.

403(b) Plans Increase Use of Advisers and Online Communications
"A press release from the Principal Financial Group, which sponsored the survey, said more than 45% of respondents use an independent investment adviser to help with fiduciary responsibilities, versus 41% in 2009. Forty-six percent of respondents indicated they have an investment policy statement, while 34.6% of plans are unsure if their plan has an IPS." (

This Investment Will Absolutely Kill You: Death Derivatives
"Goldman Sachs, JPMorgan Chase, and Deutsche Bank don't have it in for you personally . . . . [They want to] help pension funds deal with one of the biggest risks they face right now: the possibility that retired workers end up living longer than expected, which could lead to gross underestimations of the amount of money that pension funds need to set aside in order to cover their eventual payouts." (The Motley Fool)

Schwab to Join the 401(k) Wars, Guns Blazing
"Charles Schwab. . . could dramatically change the way that workers invest for retirement. Schwab announced that it plans to offer employers a 401(k) package that includes only index funds as investment options. . . . In one fell swoop, an index-only 401(k) will address several problems that led policymakers a few years back to consider massive changes to the entire structure of retirement savings." (The Motley Fool)

San Jose Mayor Declares State of 'Fiscal Emergency'
"In theory, at least, a state of emergency will enable Mr. Reed, a popular Democrat, to amend contracts and benefits packages of the city's employees and retirees. . . . Mr. Reed is asserting that public employees have no 'vested rights' to the specific terms of their pension plans and benefits going forward. (Already-accrued benefits would not be affected.)" (New York Times; free registration required)

Fiduciary News Trending Topics for ERISA Plan Sponsors for Week Ending May 20, 2011
Links and commentary by Christopher Carosa. (Fiduciary News)

Proposal to Increase Federal Employee Pension Contributions Draws Fire
"[Some legislators] say it would represent a demoralizing, disproportionate hit on civil servants. And federal employee unions warn that the government may be facing a 'brain drain' if federal workers are, unfairly in their view, targeted for cuts." (

Federal Workers Late to Feel Pension Pinch
"[A]s part of a compromise to limit federal borrowing, many Democrats and Republicans want federal civil servants to [pay] more into their pensions." (Washington Post (free registration required))

California Eyes 'Pension Spiking'
"California until recently based pensions for state workers on a single year of salary, a practice that made it easier to spike retirement payments by inflating salaries for a short time. That increased to three years' of salary beginning with labor contracts in 2007 . . . ." (The [Monterey County CA] Herald)

Rhode Island State Treasurer to Unveil Plan for Fixing State Pension System
"[Rhode Island State Treasurer Gina M.] Raimondo points to the generous improvements in benefits, fictional rates of return on investments and failure to account for the simple fact that people are living longer and thus, collecting their pensions longer." (Providence Journal)

Consider the Solo 401(k) in Lieu of a SEP
"[W]ith a solo 401(k), as your own employee, you can contribute as much as 100 percent of your earnings to the solo 401(k), up to $16,500 in contributions annually (that goes up to $22,000 annually if you're over the age of 50). Then, in the role of your own employer, you can contribute an additional 20 percent of the business' net income as a profit-sharing contribution." (Kathy Kristof via Tulsa World)

U.S. Teachers' Union Endorses Action on Pension Abuses
"The nation's second-largest teachers' union on Thursday endorsed action on pension abuses . . . ['Practices] like end-of-career spiking and double-dipping have to be addressed,' [American Federation of Teachers] President Randi Weingarten said." (Reuters via

Benefits in General; Executive Compensation

[Guidance Overview]
Employee Benefits Update, May 2011 (Reinhart Boerner Van Deuren) (PDF)
Nice brief overview of significant employee benefit developments. (Reinhart Boerner Van Deuren)

[Guidance Overview]
Employee Benefits Developments, May 2001 (Hodgson Russ)
One of our favorite plain-text brief overviews of recent significant rulings and cases. (Hodgson Russ)

[Guidance Overview]
Supreme Court Speaks on the Remedies for Benefits Description Mistakes
"In a move that will gratify plan sponsors, administrators and fiduciaries, the Supreme Court . . . concluded that plan summaries, including summary plan descriptions and summaries of plan modifications, do not constitute plan terms. . . . The authors recently hosted a 25-minute teleconference addressing this Supreme Court decision [the link to which is on the target web page]." (McDermott)

[Guidance Overview]
Supreme Court Addresses Remedies for Violation of ERISA Disclosure Rules
"[T]he Supreme Court found that errors or omissions from the SPD might justify equitable relief in some circumstances. Drafting good SPDs has always been a challenge, and drafters must now consider Amara in writing or amending SPDs." (McGuireWoods)

Door to Monetary Awards Against Fiduciaries Is Opening (PDF)
"[T]he Supreme Court has signaled that 'compensatory,' 'make-whole' monetary relief is available under ERISA's catch-all provision, Section 502(a)(3). . . . . [Also, the] impact of the Supreme Court's holding that the terms of an SPD cannot be enforced as if they were plan terms will have to be sorted out in future litigation. The decision appears to overturn the rule adopted by many circuits . . . ." (Trucker Huss)

At Supreme Court, Employees Win New Benefit Protections
"In a 6-2 decision, the Supreme Court ruled that a lower court could award employees the benefit the company led them to believe they had. The ruling could have broad repercussions not only in pension cases, but also for health-care, disability and other workplace benefits." (Wall Street Journal)

Press Releases

Employee Benefits Jobs

Webcasts and Conferences

New Form W-2 Guidance: Reporting Employer-Sponsored Health Coverage
Nationwide on May 19, 2011 presented by EBIA / Thomson Reuters

TRI-AD Web Seminar: Getting Up to Speed with Commuter Reimbursement Plans
Nationwide on June 16, 2011 presented by TRI-AD

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