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IRS Notice 2006-44: Sample Amendment for Roth Elective Deferrals (PDF) 6 pages. Excerpt: "This notice provides a sample plan amendment for sponsors, practitioners, and employers (plan sponsors) who want to provide for designated Roth contributions in their ? 401(k) plans. The sample amendment will help those plan sponsors comply with the requirement to timely adopt a discretionary amendment by the end of the plan year in which the amendment is effective, as set forth in ... Rev. Proc. 2005-66 ..."
Time Running Out for Pension Overhaul Bill Excerpt: "[P]ensions could join the list of politically sensitive items that Congress is having trouble addressing--including immigration, lobbying reform and taxes--as lawmakers face the voters this November." (Chicago Tribune)
Airlines Turn to Multiemployer Pension Plans Excerpt: "With defined-benefit pensions collapsing at a steady pace, one ailing industry is partially bucking the trend. In negotiations with unions, airlines are putting many employees into multiemployer plans ..." (Workforce Management)
Overview: Proposed Accounting Rule to Require Balance Sheet Reporting of Pensions (PDF) 2 pages. Excerpt: "Employers would have to report their defined benefit pension plans' funded status on the corporate balance sheet (rather than in the footnotes to the financial statements) under a proposed accounting standard from the Financial Accounting Standards Board (FASB)." (Milliman)
Milliman Pension Study Estimates FASB 'Mark-to-Market' Reforms Will Have $222 Billion Impact Excerpt: "Milliman's 2006 Pension Study of 100 large corporations found that if the FASB accounting rules had been in effect for 2005, companies would have needed to increase their pre-tax charges to shareholder equity by $222.2 billion, with 49 companies having pre-tax charges in excess of $1 billion." (HR Policy Association)
Is Hawaii Defined Benefit Pension System Too Costly? Excerpt: "Even though the state and counties paid about $329 million into the pension fund last fiscal year, the unfunded liability, or the amount of future payments it has yet to fund, grew by $596 million, to a record $4.07 billion. To put that in perspective, $4 billion is about equal to the total tax revenue the state collected last year." (Honolulu Advertiser)
Is Your Pension Plan Retiring Before You? Excerpt: " Even healthy companies are freezing or eliminating traditional pensions. Here's how to figure out if it could happen where you work." (Business Week)
Opinion: Murders and Pensions-- The Need for Forensic Investigations Excerpt: "Pension consultants, as you know, are important advisers to pensions and exert tremendous influence because they recommend the money managers funds hire.... On May 15, 2005 the SEC announced the findings of its staff study of conflicts of interest in pension consulting. The SEC found conflicts pervasive and disclosure abysmal. Soon thereafter the DOL released a checklist of questions pensions should ask of their consultants." (Edward Siedle of Benchmark Financial Services)
Insurance and Investment Brokers' Roles May Conflict Excerpt: "They have an obligation to help employers find the right insurance firm to run their 401(k) plans. They also want to collect a big commission from the chosen insurer." (Los Angeles Times)
Fees Eat Away at Employees' 401(k) Nest Eggs Excerpt: "Employees tenacious enough to demand information about fees from benefits departments or 401(k) administrators often complain that they can't get straight answers. Because of outdated federal disclosure rules, publicly available records on fees often reveal only a fraction of the money leaking out of retirement accounts." (Los Angeles Times)
Figuring Out How Much Your 401(k) Plan Costs You Excerpt: "Fees for record keeping, employer education and other administrative services are hard to spot. Begin with a close look at your statement." (Los Angeles Times)
ERISA Permits Trustees to Delegate Investment Direction to Participants Outside 404(c) Safe Harbor Excerpt: "[T]he trial court found that there is an 'implied exception' in ERISA Section 403 that allows participant control in individual account plans, such as 401(k) plans. The trial court concluded that the trustee did not violate ERISA Section 403 and further concluded that he had acted prudently in selecting and monitoring investment funds for the 401(k) plan assets." (Employee Benefits Institute of America Inc.)
Links to Items on Executive Comp, Benefits in General
Major Decline in U.S. Deaths Is Recorded Excerpt: "Preliminary government figures released Wednesday show that the annual number of deaths in the United States dropped by nearly 50,000 in 2004, the biggest decline in nearly 70 years." (AP via New York Times; one-time registration required)
Federal Regulation of Corporate Jet Perk Pays Off (PDF) 12 pages; reprinted on the target website by permission of the Benefits Law Journal. Excerpt: "This article discusses the financial, tax and regulatory implications behind the trend of executives using company jets for travel as part of their compensation." (Kirkpatrick & Lockhart Nicholson Graham LLP)
UnitedHealth Compensation Committee May Face Scrutiny Excerpt: "The huge paydays for UnitedHealth Group Inc. Chairman and CEO William McGuire grabbed attention last week -- but that could soon be turning to the people who signed off on his pay package." (AP via New York Times; one-time registration required)
Overview: DOL Finalizes Changes to VFC Program Excerpt: "The notice adds a new covered transaction for expenses improperly paid by the plan that should have been paid by the plan sponsor either because the expenses were 'settlor' expenses (that is, expenses relating to plan design, not administration) or because the plan's terms require that the sponsor pay the expenses." (Employee Benefits Institute of America Inc.)