---

---

[Guidance Overview]
Sixth Circuit Says Anti-Cutback Rule Does Not Apply to Ad Hoc Post-Retirement Benefit Increases
Excerpt: "Conclusion: Employers faced with difficult decisions in this economy may find themselves evaluating their options and will most certainly look to this Sixth Circuit decision as important in their decision-making. Certainly, for benefits increases granted before the effective date of Treasury's 2005 regulations, the result is more clear than for benefits increase granted after the effective date." (Attorney B. Janell Grenier via Benefitsblog.com)


[Guidance Overview]
New Safe Harbor 401(k) Guidance Helps Economically Distressed Employers
Excerpt: "The proposed rules may not provide the level of flexibility to reduce or suspend safe harbor nonelective contributions that employers and practitioners desired. Nonetheless, they offer an alternative to plan termination for certain plan sponsors should business necessity dictate that safe harbor contributions be suspended or reduced." (Littler Mendelson P.C.)


[Guidance Overview]
IRS Auditors Provide Tips and Trends on Retirement Plan Compliance
Excerpt: "The U.S. Internal Revenue Service provides compliance trends and tips for qualified retirement plans from their Employee Plans Team Audit (EPTA) Program Web pages. These pages highlight plan mistakes that IRS plan auditors see recurring in large case audits and voluntary compliance submissions. The trends are now categorized by plan types including multiemployer plans, 401(k) plans, defined benefits plans and 403(b), 457 and other governmental plans." (International Foundation of Employee Benefit Plans)


[Guidance Overview]
Introduction of 'Conflicted Investment Advice Prohibition Act of 2009'
Excerpt: "Congressman Rob Andrews (D-NJ) recently introduced the 'Conflicted Investment Advice Prohibition Act of 2009,' a bill that would significantly restrict the types of advice programs that providers and sponsors of 401(k) plans could offer to participants. In this article we review the bill, focusing particularly on the issues of fiduciary exposure and compliance for plan sponsors." (JPMorgan Chase & Co.)


Financial Literacy: Evidence and Implications for Financial Education
Excerpt: "The paper discusses financial literacy in the United States in the context of retirement planning. Due to the long-term shift away from defined benefit to defined contribution pensions, it is important to examine whether workers are adequately equipped to manage the resultant increased responsibility for planning their retirement. Given that financial literacy is an important predictor of retirement planning and other important financial decisions, widespread illiteracy is a serious cause for concern. Implications for policymakers as they consider financial education programs include the importance of targeting specific groups, simplifying financial decision-making, and providing specific steps and guidance to the least financially knowledgeable." (TIAA-CREF Institute)


Financial Crisis Causes Some Plan Sponsors To Tighten Their Retirement Plan Policies
Excerpt: "The accrual of pension benefits in a defined benefit plan was discontinued in the past 12 months by 11.3% of plan sponsors due to the financial crisis, according to a recent survey conducted by the International Foundation of Employee Benefit Plans (IFEBP). Another 15.7% of plan sponsors reported that other factors caused them to discontinue offering pension benefits for some or all categories of active employees." (Wolters Kluwer)


PBGC Deficit Sparks Fears of Bailout
Excerpt: "The financial position of the Pension Benefit Guaranty Corp. again is rapidly deteriorating, triggering fears that a taxpayer-funded bailout may be needed to shore up the government's pension plan insurer. The PBGC disclosed last week that its deficit hit a record $33.5 billion at the end of its 2009 fiscal first half on March 31, compared with $11.2 billion at the close of fiscal 2008." (Pensions & Investments)


Retirement Plan Policy Adviser Aims to Bolster Savings
Excerpt: "In a signal that retirement issues have become a higher priority at the Treasury Department, J. Mark Iwry was named on April 27, 2009, to the newly created position of senior adviser to Treasury Secretary Timothy Geithner and deputy assistant secretary for retirement and health-care policy. . . . In his new role, Iwry will be focusing more on policy than day-to-day development of specific regulations implementing policy. Policy issues Iwry will be working on include a possible overhaul of rules for private defined contribution plans, funding relief for defined benefit plans, a direct-deposit IRA program for employers that don't offer retirement plans, and expansion of the saver's tax credit." (Wolters Kluwer)


More Details on EBSA/SEC Hearing on Target-Date Funds
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) and the Securities and Exchange Commission (SEC) have provided more information regarding a one-day hearing on June 18, 2009, to explore issues relating to target-date funds and other similar investment options. A news release said the 'purpose of the hearing is to examine the need for additional guidance given the importance of these investments to the retirement savings of investors.'" (PLANSPONSOR.com; free registration required)


Nevada PERS Reform Will not Include Age Hike for Pension Withdrawals
Excerpt: "Nevada Assembly Majority Leader John Oceguera said negotiators have reached a tentative agreement on reforms to the financially strapped Public Employees Retirement System (PERS). The Las Vegas Review-Journal reports that Oceguera said the tentative agreement does not include a requirement demanded earlier by Senate Minority Leader Bill Raggio that no pensions should be given to public employees before they turn 62." (PLANSPONSOR.com; free registration required)


Comparison of ERISA Pension and State Pension Protections
Excerpt: "You asked whether any state has adopted Employees Retirement Income Security Act of 1974 (ERISA) pension fund mismanagement protections. You also asked for a comparison of the ERISA provisions that are designed to protect private-sector employees from pension plan mismanagement with state law provisions designed to protect public pension plans from mismanagement by the state treasurer." (Blogness)


Hearing on Target Date Funds Announced by Department of Labor and the Securities and Exchange Commission
Excerpt: "[T]hey will hold a joint one-day hearing on June 18, 2009 on issues relating to investments in target date funds and similar investment options by 401(k) plan participants and other investors. . . . The Agencies are specifically interested in obtaining information on: how TDF managers determine asset allocations and changes to asset allocations (including glide paths) over the course of a TDF's operation; how they select and monitor underlying investments; how the foregoing, and related risks, are disclosed to investors; and the approaches or factors for comparing and evaluating TDFs." (International Foundation of Employee Benefit Plans)


Informed Participation: The Path to Retirement Security (PDF)
3 pages. Excerpt: "Automatic plan design sets a new paradigm for financial education in the workplace. Since the goal of getting employees into the plan can be met largely through automatic enrollment, sponsors can focus on what participants need to know about the value of the plan, and how to use it to achieve financial security in retirement." (Retirement Made Simpler)


The Hewitt Pension Risk Tracker
Excerpt: "This is an interactive series of Indices which shows the aggregate funding level of the pension funds of companies in a number of equity indices from around the world on an 'accounting' and 'wind-up'/'Settlement' basis. The charts plot both the assets and liabilities of these pension funds, based on figures disclosed in publicly available accounts. All figures are updated daily." (Hewitt Associates)


Treasury Allows More Flexibility on Small-Business 401(k)s
Excerpt: "Small businesses facing financial hardship won relief from the U.S. Treasury through new rules providing more flexibility to suspend contributions to employee 401(k) retirement accounts. The rules, effective immediately, allow the companies to stop making payments to their so-called safe-harbor 401(k)s, without having to terminate the programs as previously required. Companies seeking the relief must show significant financial distress, such as the loss of money from low sales or a rise in health-care costs, the Treasury said in a statement . . . ." (Bloomberg L.P.)


Despite the Market Downturn, Participants Continue Contributions to Their Retirement Plans
Excerpt: "That's supposed to be 'good news,' but underlying the stay-the-course mentality is either a stubbornness or inertia that could be hazardous to wealth. It's not that experts are suggesting ordinary investors ought to stop kicking funds into the retirement kitty or that they should completely overhaul the investment strategy. It's that investors can't ignore the last few years of volatility, as well as a decade where the broad market has been flat to down, when picking the proper investment strategy for their retirement savings. Hewitt Associates released a study showing that, despite record losses in 401(k) accounts in 2008, savings and investing habits barely changed at all." (MarketWatch via The Seattle Times)

---

---

Links to Items on Executive Comp, Benefits in General

[Official Guidance]
Text of IRS Notice 2009-48: Q&A on Entities Subject to Information Reporting Requirements for Employer-Owned Life Insurance (PDF)
14 pages. From an IRS-provided summary: 'Section 101(j) was added to the Internal Revenue Code by the Pension Protection Act of 2006 to ensure that employees whose lives are insured by their employers are adequately informed of that coverage and its consequences. Section 6039I sets forth corresponding reporting obligations applicable to those employers who obtain life insurance coverage on their employees. This notice provides guidance in the form of questions and answers concerning what entities are subject to the information reporting required for employer-owned life insurance contracts and how those entities can provide that information." (Internal Revenue Service)


Employee Benefits Research Tips and Techniques
Excerpt: "[B. Janell Grenier has posted her] outline for a presentation given to the Louisville Employee Benefits Council on March 10th of this year." (ERISA Fiduciary Guidebook)


White House Memo on Preemption
Excerpt: "The White House has issued a general Memo [at http://www.whitehouse.gov/the_press_office/Presidential-Memorandum-Regarding-Preemption/] to 'Heads of Executive Departments and Agencies' relating to the issue of federal preemption of state law. ERISA lawyers will want to read it and reflect on how the policy might or might not impact an already complicated and tangled ERISA preemption regime." (Attorney B. Janell Grenier via Benefitsblog.com)


Announcing a New Blog: ERISA Fiduciary Guidebook
Excerpt: "For some time now, I have had a great interest in starting a website devoted to following legal developments related to ERISA fiduciary law as the whole area seems to be exploding with developments and it is difficult to cover them all at this site. The new site can be found at www.fiduciaryguidebook.com and is called 'The Fiduciary Guidebook.' It is, of course, a work in progress. . ." (Attorney B. Janell Grenier via Benefitsblog.com)


American Diplomats' Same-S.ex Partners to Get Benefits
Excerpt: "The State Department will offer equal benefits and protections to same-s.ex partners of American diplomats, according to an internal memorandum Secretary of State Hillary Rodham Clinton sent last week to an association of g.ay and les.bian Foreign Service officers. Mrs. Clinton said the policy change addressed an inequity in the treatment of domestic partners and would help the State Department recruit diplomats, since many international employers already offered such benefits." (The New York Times; free registration required)

---

Webcasts and Conferences

401(k) Update
Nationwide on June 18, 2009
presented by McKay Hochman Co.

Designated Roth: Contributions, Distributions, Rollovers and Reporting
Nationwide on June 25, 2009
presented by McKay Hochman Co.

Form 5500 for Health and Welfare Plans: A Guided Tour for Employers, Preparers, and Advisors
Nationwide on May 21, 2009
presented by EBIA / Thomson Reuters

Hearing on Target Date Funds and Similar Investment Options
in District of Columbia on June 18, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

( Click to post your webcast or conference )

---

Press Releases

U.S. Labor Department and SEC to Hold Hearing on Target Date Funds and Similar Investment Options
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

IRS Names 10 New Members to ACT Advisory Panel; ACT to Submit Recommendations at June Meeting
Internal Revenue Service (IRS)

Reed Group Launches New MDGuidelines Web Site with 6th Edition of Medical Disability Advisor
Reed Group

Rarely Used Closed Doors Slammed Again In U.S. Senate Health Care Reform
Consumer Watchdog

( Click to post your press release )

---

Employee Benefits Jobs

Branch Manager (TPA/Insurance)
for Zenith Administrators
in NV

( Click to post your job opening | View all jobs | RSS feed of all jobs )

---

EmployeeBenefitsJobs.com (Sponsor)

(Click on banner to learn more.)

---

Handy Links:

• View Today's Active Message Threads
• Using the Web for Employee Benefits Research (hypertext article)
• Employee Benefits Library

---

---

Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too!

Sign-up form is at https://benefitslink.com/newsletter (free).

---

This email has been published by:
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

David Rhett Baker, J.D., Editor

Copyright 2009 BenefitsLink.com, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.

Anyone can receive these emails; just have them sign up at this web page: https://benefitslink.com/newsletter/

Other useful links:

• How to Sponsor an Issue
• Privacy Policy
• Archive of Previous Newsletters