---

---

[Guidance Overview]
Plan Provision Relieving Trustee of Duty to Monitor and Collect Contributions Is Void as Against Public Policy
Excerpt: "EBIA Comment: We found the court's final comments most interesting. Under the heading 'Coda,' the court essentially admonished the DOL for using the courts to establish a trustee's duty to monitor and collect contributions rather than its rulemaking authority. The court then noted that the implications of its order will require 'nuanced development' and a 'proper balance' that must be provided by DOL rulemaking, so that a trustee's duty to collect unpaid contributions does not become so costly and burdensome that small employers will not be able to provide retirement benefits for their employees." (Employee Benefits Institute of America)


[Guidance Overview]
Centralized versus Decentralized 403(b) Administration
Excerpt: "Some 403(b) plan sponsors have structured their plans with a single investment provider, and the number of plans designed this way has likely increased in the wake of the final 403(b) regulations. Nevertheless, many 403(b) plans continue to include multiple investment providers/recordkeepers." (Richard Turner via PLANSPONSOR.com; free registration required)


[Guidance Overview]
Monsanto Co. Receives Mixed Outcome from Two Rulings by Federal Judge in Illinois Regarding Monsanto's Cash Balance Plan
Excerpt: "In one decision, U.S. District Judge J. Phil Gilbert of the U.S. District Court for the Southern District of Illinois ruled that Monsanto had not violated the Employee Retirement Income Security Act (ERISA) by directing that cash balance plan 'interest credits' stop at age 55. . . . Later the same day, Gilbert put out a second ruling, turning aside the employer's request to dismiss claims that it violated the plan terms by refusing to use the plan's 8.5% interest rate on delayed lump-sum distributions. . . . The court said the plan clearly mandated that the interest rate for payments delayed by administrative processing must be the same as the rate used for voluntary deferrals of benefits." (planadvisor)


Financial Well-Being for Employees: A Case Study (PDF)
4 pages. Excerpt: "NCCI [Holdings, Inc.] developed a comprehensive program -- combining retirement planning with a wider view of employees' financial health -- to address employees' life goals and empower them to take charge of their financial lives. The company sought help from external vendors and partnered with its retirement provider, Charles Schwab. Schwab's broad approach to financial education, onsite workshops, and personal financial consultations played an important part in the effort. NCCI introduced plan changes in late 2007, including the launch of automatic enrollment, auto savings increases, and a Roth 401(k) option. The three-year education effort was rolled out in phases in preparation for the plan changes on January 1, 2008." (Schwab Retirement Plan Services, Inc.)


International Pension Issues in a Global Economy: A Survey and Assessment of IRS' Role in Breaking Down the Barriers (PDF)
Excerpt: "The focus of the Employee Plans subcommittee of the ACT for the year 2008-2009 was to survey and assess the most important federal tax issues affecting retirement plans of employers involved in cross-border transactions and the Internal Revenue Service ('IRS') Employee Plans Division's role in addressing those issues and providing education and outreach. . . . It is the ACT's hope that this report will spur the IRS to begin to address these international pension issues as 'one' IRS, while keeping in mind the goal... '... to break down the barriers and impediments to U.S. employers desiring to provide pensions to nonresident aliens working in the United States and to U.S. citizens and resident aliens transferred to affiliates of U.S. employers outside the United States.'" (IRS Advisory Committee on Tax Exempt And Government Entities via American Benefits Council)


Choosing Between 401(k) and 403(b) Plans
Excerpt: "BNA has published a brief article on choosing between 403(b) and 401(k) formats for retirement plans at http://www.bnatax.com/tm/insights_kenty.htm. The summary is well written and brief, both of which are real virtues. I have only two comment[s]." (403 (b)-457 Plans Blog)


Recent Survey of Retirement Plan Sponsors Offers Some Worrisome Findings on Governance and Compliance Issues
Excerpt: "Central to the [Retirement Plan Survey 2009] is the finding that only 29 percent of plan sponsors polled report a clear chain of authority for their plan's governance committee, making it difficult for most of them to support certain fiduciary decisions if faced with a Department of Labor audit." (Human Resource Executive Online)


Tobacco Bill Includes Thrift Savings Plan Changes
Excerpt: "Congress last week approved legislation designed to further regulate and restrict tobacco products - but at the same time made changes to federal worker benefit provisions. The bill -- HR 1256, the Family Smoking Prevention and Tobacco Control Act -- puts the Food and Drug Administration in charge of regulating tobacco and imposes restrictions on the marketing and production of tobacco products. But it also contained a number of enhancements to the federal government's Thrift Savings Plan, or TSP. . . . Not included in the final bill was a provision in the House-passed version that would have allowed unused sick leave accumulated by employees covered by the Federal Employees Retirement System (FERS) to be counted toward their retirement payments . . . ." (PLANSPONSOR.com; free registration required)


DC Spending Now Ahead of DB Spending, According to Mercer Study
Excerpt: "For the first time, employers' median spending on defined contribution (DC) benefits in 2008 topped their median spending on earned pension benefits, according to Mercer's annual study of S&P 500 companies' retirement programs. A Mercer news release said the latest data reflects the now well-documented shifting defined benefit to defined contribution benefits landscape, with the median defined contribution plan costing 0.39% of revenue in 2008, compared to the median value of median defined benefit accruals of 0.38% of revenue. Although DC spending was relatively constant from 2005 through 2008, DB spending was down from 0.51% of revenue in 2005, Mercer reported." (PLANSPONSOR.com; free registration required)


Borrowing from 401(k) Plan May Have Positive Effects for Some Participants
Excerpt: "A new government report breaks from conventional wisdom and casts doubt on some long-held beliefs about the negative effects of borrowing from a 401(k) fund. Shifting expensive consumer debt to defined-contribution plans may make sense for some workers." (Human Resource Executive Online)


Bill Would Allow Independent Advisers to Counsel 401(k) Participants
Excerpt: "This bill aims to allow only independent investment advisers -- essentially those advisers whose compensation is not affected by the counsel they provide -- to work directly with 401(k) participants. . . . [The] bill effectively would repeal the Labor Department's ruling update this year of the Pension Protection Act of 2006." (Investment News; free registration required)


AIG Alleges Former Top Executive Plundered Retirement Plan
Excerpt: "The former top executive of American International Group Inc. plundered an AIG retirement program of billions of dollars because he was angry at being forced out of the company, a lawyer for AIG told jurors Monday at the start of a civil trial. Attorney Theodore Wells told the jury in Manhattan that former AIG Chief Executive Officer Maurice 'Hank' Greenberg improperly took $4.3 billion in stock from the company in 2005, after he was ousted by the company amid investigations of accounting irregularities." (AP via Google)


Retirement Plan Administrator Must Ascertain Marital Status Before Paying Benefits
Excerpt: "Where there is conflicting information about a deceased retirement plan participant's marital status, it is unreasonable for a plan administrator to disburse funds until the conflict is resolved, a federal appeals court has ruled (Smith v. New Mexico Coal 401(k) Personal Savings Plan (10th Cir. June 9, 2009)). The US Court of Appeals for the Tenth Circuit found that a plan administrator acted arbitrarily and contrary to plan procedures when it paid benefits to a deceased participant's children after learning that legal proceedings on the participant's marital status were ongoing." (Mercer LLC)


New Mexico State Workers Sue Over Pension Changes
Excerpt: "Multiple unions representing more than 60,000 state and public school employees filed a lawsuit against the state of New Mexico on Monday, accusing the state of violating employees' constitutional rights by decreasing contributions to public employee pension funds and making employees fill the gap. 'We believe this was in order to remedy a general budget shortfall, and we believe it's just not fair,' said attorney Shane Youtz at a news conference . . . ." (KRQE News 13)


[Opinion]
What's Wrong with the Current 401(k) System - and How It Can Be Salvaged
Excerpt: "Unfortunately a one-two punch thrown by well-meaning consumer advocates and desperate corporations has worsened an already bad situation. First, as a way to save too-cautious investors from themselves, in 2007 and 2008 some plans changed the default investment from a money market fund to an age-appropriate mix of stocks and bonds. Which then proceeded to tank. Second, a growing number of companies (see the list above and to the right [on the target page]) are eliminating or curtailing the employer match entirely. Doing so when stock prices are low is particularly harmful because it makes it that much harder for investors to recoup losses." (CNNMoney.com)

---

---

Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
IRS Request for Comments on Three Alternatives for Substantiating Business Use of Employer-Provided Cell Phones
Excerpt: "EBIA Comment: As the IRS has previously acknowledged, the 'listed property' substantiation rules -- especially the requirement that an employee prove the business purpose of each business use -- are difficult to satisfy in the context of employer-provided cell phones. Notice 2009-46 represents a welcome first step toward making those substantiation rules more manageable. While this is encouraging news, employers should remember that, until substantiation guidance is actually issued and becomes effective, there are no special simplified substantiation methods for cell phones (as there currently are for employer-provided vehicles), so full compliance with the 'listed property' substantiation rules is required." (Employee Benefits Institute of America)


[Guidance Overview]
Comments Requested on Proposed Methods for Substantiating the Business Use of Employer-Provided Cell Phones (PDF)
3 pages. Excerpt: "On June 8, the Internal Revenue Service (IRS) issued Notice 2009-46, seeking comments on proposed simplified procedures for substantiating the business use of employer-provided cell phones under Section 274(d)(4). This provision generally requires employees to allocate their personal and business use of employer-provided cell phones and contemporaneously document such use in a business log or diary. The IRS views the value of any such personal use as income to the employee. The Notice is the first step towards future IRS guidance that will better clarify how to substantiate the allocation between employees' business and personal use of their employer-provided cell phones." (Morgan, Lewis & Bockius LLP)


[Guidance Overview]
Treasury Outline of Compensation Practices Reform and Interim Final Rule on TARP Compensation Standards (PDF)
6 pages. Excerpt: "On June 10, the U.S. Department of Treasury . . . outlined a set of broad-based principles regarding compensation practices for companies to follow, particularly those companies in the financial sector, which it believes will encourage sound risk management, long-term growth, and value creation; align compensation practices with the interests of shareholders; and ultimately reinforce the stability of firms and the financial system. The Treasury Department specifically stated that its intention is not to cap pay. The principles are as follows: Compensation plans should properly measure and reward performance; Compensation should be structured to account for the time horizon of risks; Compensation practices should be aligned with sound risk management; Golden parachutes and supplemental executive retirement benefits should be reexamined to determine whether they align the interests of executives with shareholders; Transparency and accountability should be promoted in the process of setting compensation[.]" (Morgan, Lewis & Bockius LLP)


The Search for the Next Workplace Perk (PDF)
1 page. (Time Inc. via Towers Perrin)


Audit Risk Is Rising: What an Employer Can Do Before an Audit Happens
Excerpt: "The IRS announced that it will begin conducting detailed employment tax audits on certain taxpayers as early as November of this year. Employers will be selected for audit based on a statistical sampling method, and not necessarily on suspicious past tax returns. One IRS representative speculated that there may be 6,000 of these employment tax audits over the next three years. Among the employment tax items the IRS may scrutinize on an audit are: worker classification, fringe benefits, officers' compensation, and expense reimbursements." (Poyner Spruill LLP)

---

Webcasts and Conferences

ASPPA Annual Conference
in Maryland on November 1, 2009
presented by American Society of Pension Professionals & Actuaries (ASPPA)

ASPPA Cincinnati Pension Conference
in Ohio on November 19, 2009
presented by American Society of Pension Professionals & Actuaries (ASPPA)

DOL Speaks: The 2009 Employee Benefits Conference
in District of Columbia on September 14, 2009
presented by American Society of Pension Professionals & Actuaries (ASPPA)

SPDs for Health and Welfare Plans: A Step-by-Step Guide to Preparation and Distribution
Nationwide on June 11, 2009
presented by EBIA / Thomson Reuters

The Effect of Bankruptcy on Retirement Plans, Participants and Sponsors
Nationwide on July 14, 2009
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Western Benefits Conference
in Colorado on June 28, 2009
presented by American Society of Pension Professionals & Actuaries (ASPPA)

What! I Can't Get My Lump Sum? A Discussion on Restricted Distribution Rules
Nationwide on August 11, 2009
presented by ASPPA (American Society of Pension Professionals & Actuaries)

( Click to post your webcast or conference )

---

Press Releases

Public Opinion on Health Reform Stable and Supportive as Debate Heats Up, But Moveable Too
Kaiser Family Foundation

Benefit Advisors Network Plans Expansion Into 21 Markets
Benefit Advisors Network

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)

Revzon Taps Brooks to Head Recordkeeping Services
Revzon Consulting Group

( Click to post your press release )

---

Employee Benefits Jobs

Retirement Plan Sales
for Solenture, Inc.
in DE, MD, NJ, PA

Outsourcing Consultant
for Diversified Investment Advisors
in NY

ERISA/Employee Benefits Associate
for Brownstein Hyatt Farber Schreck, LLP
in NV

Defined Benefit Actuary I
for The Standard
in MA

Pension Consultant
for Third Party Consulting Firm
in NJ, PA

Account Manager, Retirement Plans
for Boutique Firm with Local Clients in the Glens Falls/Albany Area
in NY

( 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