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July 5, 2011 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

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[Official Guidance]
Text of EBSA FAQ on Credit Ratings and Individual Prohibited Transaction Exemptions
"It is the Department's view that individual prohibited transaction exemptions are not federal regulations. As a result, the Department has concluded that section 939A of the Dodd-Frank Act does not require their review and modification." (U.S. Employee Benefits Security Administration)

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[Official Guidance]
Text of Advisory Opinion 2011–08A: Request for Guidance Concerning the Application of a Prohibited Transaction Exemption
"[The DOL was asked whether PTE 86–128 provides relief for covered transactions engaged in by any person who is a fiduciary solely by reason of rendering investment advice to the plan." (U.S. Employee Benefits Security Administration)

[Guidance Overview]
PBGC Final Rule on Termination of Underfunded Pension Plans in Bankrup.tcy
"Other refinements in the final regulation address: (1) the determination of the plan's unfunded benefit liabilities, which is based on the plan's assets and liabilities as of the termination date . . . and (2) the definition of 'basic type benefits,' which was amended to specifically include benefits that are not guaranteed solely because they accrued or became non-forfeitable between the bankrup.tcy filing date and the plan termination . . . ." (Deloitte via

Public Plans Reach Highest Level of Assets Since Second Quarter of 2008
"Total holdings and investments quarter-to-quarter increased $93.9 bil.lion or 3.6% to $2.7 tril.lion. Total holdings and investments year-to-year rose $253.5 bil.lion or 10.2% from $2.5 tril.lion in the first quarter of 2010. This was the sixth consecutive quarter with a year-to-year increase, the report said." (PLANSPONSOR.COM)

Court Issues Mixed Ruling in Case of Abusive Tax Shelter Plan
"Claims against insurance companies, pension planners, financial advisers, accountants, attorneys, and other professionals who were involved with a company that adopted a pension plan later determined to be an abusive tax shelter are not time-barred." (PLANSPONSOR.COM)

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Union Sues School District over Missing 403(b) Plan Contributions
"The Sacramento Bee reports that in the suit, Twin Rivers United Educators complains that after the district was formed in 2008, some union members noticed their 403(b) retirement contributions weren't being credited to their retirement accounts." (PLANSPONSOR.COM)

IASB Finalizes Amendments to Its Employee Benefits Standard
"The amendments were the result of a Memorandum of Understanding between the IASB and the Financial Accounting Standards Board (FASB) to work towards further aligning the standards from the two bodies. The elimination of the 'corridor method' brings the U.S. generally accepted accounting principles (GAAP) closer to those of IASB." (Wolters Kluwer Law & Business)

Social Security Taxes (PDF)
"The Joint Committee on Taxation supplied a Description of the Social Security Tax Base to the House Ways and Means Social Security Subcommittee on June 21, in advance of hearings now underway. The report contains no surprises, but it does remind readers of key information about the social security taxes that may be deemed motivating by lawmakers as they consider the ongoing financial situation, both generally and in connection to Social Security." (Alston & Bird LLP)

Pension Rulings May Boost Cutback Efforts
"The cases in Minnesota and Colorado have been closely watched by lawmakers across the country as they contemplate similar changes in their own states. Unlike changes to benefits for new workers, which can take decades to deliver savings to state and local governments, rolling back cost-of-living adjustments can yield immediate savings." (The Wall Street Journal)

How Do Changes in International Accounting Standards for Pensions Foretell the Direction of Future Changes in the U.S.?
"This Spotlight considers how the general concepts of pension accounting in the U.S. would change if IAS 19 were to become the standard in the U.S. It is not intended as a comparison between the current and revised provisions of IAS 19." (The Segal Group, Inc.)

Mercer's 2011 Retirement Benchmarking Survey Finds Improved Funded Status, Increased Liabilities
"These findings, together with other results of this comprehensive survey of Standard & Poors 1500 companies, provide plan sponsors with insights on the competitive environment of retirement benefits and ways to better manage their programs." (Mercer LLC)

The Workings of the 'Open' Multiple Employer 401(k) Plan (PDF)
"A 'Multiple Employer' 401(k) plan . . ., where a single 401(k) plan is jointly sponsored by a number of unrelated employers, can often provide a cost effective way for some employers to manage their risks related to sponsoring a 401(k) plan, while enjoying advantageous pricing on investments and administrative services to which they may not otherwise have access." (TAG Resources LLC via authored by Robert J. Toth Jr., Esq.)

Dispelling Misinformation on Money Market Funds
"The ongoing attention to U.S. prime money market funds' exposure to the debt crisis in Greece has brought three questions to the fore: Are U.S. money market funds invested in the 'periphery countries'—Greece, Italy, Spain, Portugal, and Ireland—that are seen at risk in a debt crisis? Why are U.S. money market funds investing in European banks? What risks do those investments pose for U.S. money market funds and their investors?" (Investment Company Institute)

Proposed Change to Social Security COLA Would Further Erode Retirees' Financial Security (PDF)
"First, the specific suggested change—using a 'chained' consumer price index (CPI), described in more detail below—is all but guaranteed to lower growth in Social Security benefits, which could aid efforts to reduce the federal budget deficit. Second, these reductions would not be specifically legislated but would arise from what is characterized as a technocratic 'improvement' in economic measurement." (Economic Policy Institute)

How to Make States' Public Pension Funds Solvent
"The best way forward is for the public sector to follow private companies and switch from defined-benefit plans to defined-contribution plans." (Bloomberg L.P.)

The Coming Destruction of U.S. Pensions
"In previous commentaries we've discussed the coming wave of State and local defaults, and it appears that the end game is close. Cook County is not alone, and chances are that every major metropolitan area in the country is heavily in the red. This means that the jobs and retirement futures of millions of people are under threat." (Mac Slavo via

Tax Section of Florida Bar Comments on Proposed, Modified Definition of the Term 'Fiduciary' (PDF)
Comments were submitted to EBSA on April 12, 2011. (U.S. Employee Benefits Security Administration)

If the Democrats Lose the Senate, Our Retirement Is Toast
"It's not just the middle-class who are at risk but virtually every worker in the private sector who doesn't have 'chief' and 'executive' in their job title." (Jane White via The Huffington Post)

Benefits in General; Executive Compensation

[Guidance Overview]
IRS Revision of Code Section 162(m) Rules (PDF)
"[T]hese proposed regulations provide further evidence of the IRS taking tougher positions on section 162(m) issues and the dangers of relying on private letter rulings, particularly in this area [of equity compensation issues]." (Groom Law Group)

Court Moves Forward Top Hat Plan Participant's Claim for Benefits
"A federal court has decided that a top hat plan participant has made adequate allegations of a merger that support her contention that the successor company owes her benefits from the plan." (PLANSPONSOR.COM)

Local and State Leaders Say Workers Demanding Unsustainable Benefits; Union Rebuttal Not Turning the Tide
"If the stakes were not high enough already, union leaders in the public sector are attempting to raise them even higher. The current circumstances, they say, represent a challenge to their workers—and, indeed, to government programs in general. They also consider themselves to be on the front lines of a broader battle between corporations and the wealthiest Americans on one side, with union members and middle-class workers on the other." (Governing)

2011 Guide to Employee Benefits Based on the Alphabet
"Your role as a benefits professional has become more complex and involved. You will be able to prepare six months in advance for some benefit initiatives, while having to reverse course on proper actions taken for others. It is more important than ever to surround yourself with good resources and talent so you can maintain your workload and sanity." (Employee Benefits News; free registration required)

Proposed DOL Rule Could Require Employers Report Agreements with Their Attorneys
"The Department of Labor has asked for public comment on a proposed rule that would significantly affect reporting requirements for agreements with labor relations consultants, including attorneys." (Employee Benefits News; free registration required)

What Perk Would Keep You at Your Job?
"The Wall Street Journal reports that employee perks are up! Companies that have been treating their employees like [insert bad word of your choice] are, apparently, now realizing that their best employees just might be prone to leaving them if a better offer comes along." (CBS Interactive)

Employee Ownership Update for July 1, 2011
NCEO Executive Director Loren Rodgers discusses employee ownership companies among the Winning Workplace Award winners; the Supreme Court's CIGNA v. Amara decision; proposed regulations on the taxation of performance-based equity compensation; employee ownership and values; and the death of Robert Oakeshott. (The National Center for Employee Ownership (NCEO))

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Jeanette Hull, News Editor
David Rhett Baker, J.D., Editor and Publisher
Lois Baker, J.D., President
Holly Horton, Business Manager

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