BenefitsLink
Retirement Plans
Newsletter
November 14, 2008
Here are the Web's best new links about compliance and cost
aspects of plan operation, design and policy.
Today's sponsor is International Foundation of Employee Benefit Plans
(Click on company name or banner to learn more.)
If you need compliance education and are under pressure to cut travel expenses, the International Foundation?s e-learning courses are the perfect choice. With the Foundation?s commitment to high quality education, you can be certain you are receiving need-to-know employee benefit information. A wide range of benefit topics are available, from the basics to compliance technicalities. Stay within your travel budget and stay on top of benefit complexities with the International Foundation?s e-learning courses.
[Guidance Overview] Towers Perrin U.S. Legislative Tracking Charts -- Retirement -- Updated November 13, 2008 (PDF)
13 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
[Guidance Overview] Rediscovering Defined Contribution Plans: Design Basics
Excerpt: "[W]e explore how employers can use old-fashioned defined contribution plans to provide additional retirement benefits in conjunction with 401(k) plans. In this article, we review what plan design issues employers must consider when adopting these plans." (JPMorgan Chase & Co.)
[Guidance Overview] New Rule Could Change Pension Payouts for Some New Retirees
Excerpt: "A growing number of defined-benefit pension plans, especially small- to-mid-sized plans, could be in trouble this year because of the struggling stock market combined with a little-known provision in the Pension Protection Act of 2006. Under PPA, firms with defined-benefit plans have to use something called the Adjusted Funding Target Attainment Percentage, or AFTAP, when calculating pension distributions for newly retiring workers." (MarketWatch)
California State Appellate Court Dismisses San Diego City Attorney Michael Aguirre's Attempt to Repeal Certain Pension Benefits
Excerpt: "Aguirre has been fighting to repeal approximately $900 million in benefits he claims were illegally granted in 1996 and 2002. According to the Daily Transcript, Aguirre says he will seek an expedited trial date for the newly remanded case." (PLANSPONSOR.com; free registration required)
Communications Company Avaya Wins Appeal in Stock Drop Case
Excerpt: "A former communications company employee battling in support of his stock-drop lawsuit suffered his second major legal setback when a federal appellate court backed a lower court judge who ruled he had not proven his allegations. The 3rd U.S. Circuit Court of Appeals asserted that U.S. District Judge Joel A. Pisano of the U.S. District Court for the District of New Jersey was correct when he declared in April 2007 that plaintiff Byron Ward had failed to prove fiduciaries of Avaya Inc.'s defined contribution plans breached their fiduciary duties . . . ." (PLANSPONSOR.com; free registration required)
Qualified Retirement Plan Governance: 2008 Survey Findings (PDF)
20 pages. Excerpt: "The primary objective of this survey report is to help organizations gain insights into prevailing governance practices regarding their benefit plans -- particularly their qualified retirement plans -- and, in so doing, assist in the evaluation of their own approaches to benefit plan fiduciary oversight and governance." (Towers Perrin)
Plan Participants Delay Retirement in Response to Current Financial Crisis, According to Survey
Excerpt: "Retirement plan participants appear to be responding to the current economic and financial crisis by delaying retirement, saving less and re-aligning their retirement investments, according to an International Foundation of Employee Benefit Plans (IFEBP) survey. . . . In this survey of retirement plan sponsors and trustees, nearly half of respondents ( 46%), stated their employees and plan participants are considering delayed retirement. Furthermore, 38 percent of plan sponsors noted that their employees are concerned about not saving enough for retirement." (Wolters Kluwer)
Putting Target-Date Retirement Funds to Work
Excerpt: "A finance professor at the University of Massachusetts has come up with a way that retirement investors can create their own 'target-date' funds. Ben Branch suggested that if an investor started managing his own 'target date' retirement fund at age 25 and saved 1 percent a year in fees, he could accrue an extra $237,100 for retirement by age 65, increasing his nest egg more than 25 percent." (Reuters)
California Firm Charged with Misusing ESOP Assets
Excerpt: "The U.S. Department of Labor has sued the board of directors of The Employee Ownership Holding Co. of Stockton, California, and Fife, Washington, for alleged violations of the Employee Retirement Income Security Act (ERISA). According to a DoL news release, also being sued are trustees of the company's employee stock ownership plan (ESOP), its attorney, certified public accountant, and valuation adviser. The lawsuit alleges that the defendants imprudently used ESOP assets to purchase company stock from President and Chief Executive Officer Clair R. Couturier Jr. at an inflated price, and engaged in transactions that caused millions of dollars of harm to the ESOP and its participants while enriching themselves." (PLANSPONSOR.com; free registration required)
Too Many 401(k) Choices Can Lead to More Risky Investments, According to Study
Excerpt: "A Rutgers School of Business, University of Texas-Austin, and University of Pittsburgh study found that many employees without extensive investment knowledge will choose a heavier concentration of stocks in their portfolio when confronted with more fund options. A large fund assortment more than doubled investment in stocks among those less knowledgeable, from 29 percent to 60 percent of the portfolio, and decreased bond fund investments from 46 percent to 26 percent. But more investment options had no significant affect on people who said they had investing knowledge." (U.S. News & World Report)
[Opinion] A Question of Withdrawal Timing of Retirement Funds
Excerpt: "Investors and portfolio managers alike have been shellshocked by the stock market's decline and its extreme volatility. Investment models that once seemed bulletproof have been exposed as inadequate, none more surprisingly than the recently introduced managed-payout retirement income portfolios. The market has exposed incongruities in the design and structure of these new funds, revealing that investors' No. 1 fear -- running out of money -- has not been sufficiently addressed by the funds." (Investment News; free registration required)
[Opinion] What You Need To Know About Corporate Pension Plans
Excerpt: "The problem with Lockheed Martin and several other companies is that the potential for big pension shortfalls is craftily understated in the discount rates they use in their projections. Lockheed has been using a discount rate of 7.5% for its pension plan returns. Is that reasonable? No way! Nor should you accept a rate like that in an annuity or life insurance plan's projections. First of all, a pension plan should be conservative. It should hold bonds along with blue-chip stocks, and bonds do not pay anything near 7.5% unless they are of poor credit quality and highly risky." (Contrarian Stock Market Investing News)
Sponsored by: IRS & AIRE, LLC
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Earn the privilege of practicing before the IRS with the new Enrolled Retirement Plan
Agent (ERPA) designation. The initial exam window opens on January 6, 2009.
Be prepared and register NOW!
Agent (ERPA) designation. The initial exam window opens on January 6, 2009.
Be prepared and register NOW!
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Links to Items on Executive Comp, Benefits in General
[Guidance Overview] Towers Perrin U.S. Legislative Tracking Charts -- Human Resources -- Updated November 13, 2008 (PDF)
15 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
Newly Posted Events
Return on Investment for Wellness Programs
Nationwide on January 21, 2009
presented by Lorman Education Services
Understanding the COBRA Alternative Coverage Rules
Nationwide on January 16, 2009
presented by Lorman Education Services
Newly Posted Press Releases
Market Turmoil Causes Pension Pain for Employers and Workers
Watson Wyatt
U.S. Labor Department Sues California Defendants For Misusing Millions Of Dollars In Plan Assets
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
New IRS Guidelines Simplify FSA Programs
WageWorks Inc.
Newly Posted or Renewed Job Openings
( Post a Job | View All Jobs |
RSS Feed
)Defined Contribution Senior Consultant/Team Leader
for USI Consulting Group
in CT
Senior Retirement Plan Consultant
for USI Consulting Group
in CT
Systems & Actuarial Services Manager
for Milliman, Inc.
in TX
Employee Benefits Account Manager
for Westchester Risk Management/Benefits Advisory Firm
in NY
Defined Contribution Client Management Specialist (Client Consultant)
for Prudential Financial
in PA
Strategic Communications Consultant
for New York Life Retirement Plan Services
in MA
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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