[Official Guidance]
Employee Plans News Issue for June 22, 2011
This edition includes items titled: 2009 Form 8955-SSA and 2010 Form 5500-EZ; Form 5500-Special Extensions of Time to File; Employee Plans Rulings & Agreements Priority Items; Are SEP IRA Contributions Deductible if a Return is Filed Late? How Do You Calculate a Participant's Required Minimum Distribution from a Defined Contribution Plan? Revised procedures for reviewing ESOP determination letter applications submitted during Cycles C - E; Completing a Power of Attorney Form for Form 5330.
(U.S. Internal Revenue Service)
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[Guidance Overview]
IRS Extends the Deadline for Filing the 2009 and 2010 Form 8955-SSA
"Example. Employer X must report on the 2009 and 2010 Forms 8955-SSA 6 and 4 participants respectively. X's plan year is a calendar year. X has until January 17, 2012 to file the 2009 and the 2010 Form 8955-SSA. Note: The instructions to the form permit the plan sponsor to include the 2010 participants on the 2009 form."
(SunGard Relius)
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[Guidance Overview]
Terminating a 403(b) Plan under the IRS Guidance
"Until this guidance was issued, the IRS's position was, generally, that a 403(b) plan could not be terminated, so the guidance is a welcomed step. However, there are issues that have not been addressed by IRS in the guidance and issues that plan sponsors may need to address in order to terminate their plans."
(EisnerAmper)
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Employers Unable to Pinpoint What the Real Value of Retiree Benefits Is to Them
"One argument has been that higher pension benefits make for lower turnover and more qualified applicants. There have been a small handful of studies over the past two decades that support the very broad idea that employees of governments that offer pensions are often more loyal than those working for entities that don't offer pensions."
(Governing)
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The Revenue Demands of Public Employee Pension Promises (PDF)
"We calculate the increases in state and local revenues required to achieve full funding of state and local pension systems in the U.S. over the next 30 years. Without policy changes, contributions to these systems would have to immediately increase by a factor of 2.5, reaching 14.2% of the total own-revenue generated by state and local governments (taxes, fees and charges)."
(Kellogg School of Management)
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Corporate Transactions Can Trigger Liability Under PBGC Regulations, Practitioner Says
"There are traps for the unwary in the Pension Benefit Guaranty Corporation's increasingly active role in corporate transactions . . . . Practitioners should also be aware that in a downsizing situation, the agency may find the downsizing has triggered liability and pursue a demand against the employer equal to a portion — or all — of the pension plan's underfunding, determined on a plan termination basis . . . even though the plan remains ongoing.' [Click on the link under 'Items of Interest' on the target page.]
(Keightley & Ashner LLP)
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Vanguard 2010 Defined Contribution Plan Data Report (PDF)
"During 2007–2010, plan participants endured a substantial period of stock market volatility associated with the global financial crisis, including a decline of stock prices of more than half. . . . Despite the exceptional volatility that marked the period, the saving and investment behavior of defined contribution . . . plan participants changed only marginally."
(The Vanguard Group)
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Helping Improve the Retirement Outlook for the Unemployed (PDF)
"The study of 668 displaced workers who are either unemployed or underemployed found that the majority (67 percent) of these displaced workers are less confident in their ability to achieve a financially secure retirement since the recession began. However, the survey report also identifies steps that can be taken to improve their long-term prospects."
(Transamerica Center for Retirement Studies)
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Reciprocal Act Increases Pension Payments for Former Illinois State Legislators
"Here's how it works: The Reciprocal Act allows some public workers from a variety of different fields — including teachers, corrections officers, state workers, municipal workers and legislators — to pool their years of service at various jobs. They then collect benefits based on their most generous pension plan — typically the one for state legislators."
(Daily Herald)
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[Opinion]
American Academy of Actuaries' Comments to the SEC on Registration of Municipal Advisors (PDF)
"We request that public pension plans be excluded from the definition of 'investment strategies' and that enrolled actuaries and members of the five U.S.-based actuarial organizations that have adopted the actuarial Code of Professional Conduct (including the Academy) be excluded from the definition of 'municipal advisors' to the extent they are providing actuarial services that are governed by the Actuarial Standards of Practice and the Code of Professional Conduct."
(American Academy of Actuaries)
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Benefits in General; Executive Compensation
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[Guidance Overview]
GSA Increases Miscellaneous Expense Allowance for Relocations
"The GSA announced on June 16 that effective July 18, it will increase the lump sum it will pay for the miscellaneous expense allowance . . ., the figure by which it reimburses miscellaneous relocation-related expenses for which employees do not provide documentation."
(Thompson Publishing Group)
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Frequency of Shareholder Say on Pay: A Form 8-K Reminder
"We want to remind readers of the obligation to disclose in an 8-K/A the company's decision regarding how frequently it will offer the advisory Say on Pay vote, unless the company has already disclosed that decision in the initial 8-K filed after the annual meeting."
(Michael S. Melbinger via Winston & Strawn LLP)
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PSCA Releases Survey of Non-Qualified Plans
"The survey found non-qualified plans continue to be more common among large companies, with fewer than 10% of small companies (fewer than 500 employees) offering a non-qualified plan versus 70% of companies with 25,000 or more employees."
(PLANSPONSOR.COM)
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Press Releases
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