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[Guidance Overview]
Liquidity Issues for Plan Fiduciaries Relating to Securities Lending or Stable Value Funds
Excerpt: "Plan fiduciaries are currently facing various liquidity issues in connection with pension and 401(k) plans. There are two circumstances, in particular, where plan administrators are dealing with new and unexpected concerns: securities lending programs and stable value funds. Plan administrators have been surprised to learn that, in the current economic climate, what were once considered safe investments, may actually be quite volatile. As discussed in greater detail [in the target document], plan administrators should be aware of the current issues surrounding securities lending programs and the 'stability' of stable value funds." (The Metropolitan Corporate Counsel)


[Guidance Overview]
Management and Oversight of Employee Benefit Plans: Good Governance
Excerpt: "I recently discussed the issue with Jeffrey D. Mamorsky, author of the Employee Benefits Handbook, published by West. Mamorsky is a shareholder at Greenberg Traurig, LLP in New York. He serves as employee benefits counsel to large multinational corporations and a variety of other organizations. [I asked]: How have the requirements for good governance in employee benefit plans changed?" (The Metropolitan Corporate Counsel)


[Guidance Overview]
Plan Loans: Plan Loan in Excess of 50% Vested Account Balance
Excerpt: "[A]lthough a participant loan of 100% of the vested account balance up to $10,000 is permitted, the amount of the loan in excess of 50% of the vested account balance must be secured by actual collateral to be provided by the participant, not the vested account balance. The additional collateral is required from the participant in order for the participant loan to be considered a prohibited transaction exemption." (McKay Hochman Co., Inc.)


[Guidance Overview]
Heroes Earnings Assistance and Relief Tax Act (HEART) Provisions by Effective Date
Chart. (McKay Hochman Co., Inc.)


[Guidance Overview]
Directors' Duty to Monitor Met by 'Systematic Monitoring System'
Excerpt: "Conclusion: The court in Lingis was willing to give the directors 'the benefit of the doubt' when it came to whether or not they were regularly assessing the performance of the committee members due to the fact that they were only elected to one-year terms. The court held that this meant the directors had a 'systematic monitoring system' in place which, when coupled with the annual audit conducted by an independent auditor, would have been enough to show that the directors had fulfilled their monitoring duty under ERISA. While attorneys who regularly advise directors in this area would likely not consider the system to be a 'best practice' to emulate (without some improvement), it was certainly enough, in at least one court's view, to satisfy the duty to monitor under ERISA." (ERISA Fiduciary Guidebook)


[Guidance Overview]
Waiver of Joint and Survivor Annuity Benefit Invalid If Plan Representative Breached Fiduciary Duty
Excerpt: "It's true that generally speaking a properly executed waiver cannot be challenged later by protestations from an aggrieved party regarding what her actual intent might have been. However, the court explained, plan representatives participating in the execution of such waivers have a fiduciary duty to disclose to the beneficiary material facts which the beneficiary should know for her own protection. If that duty is breached, then the waiver is invalid." (Wolters Kluwer)


[Guidance Overview]
Another Question is Answered in the 401(k) Plans Q&A Column
There are three companies in a controlled group. Each has a separate but identical 401(k) plan. None of the plans has 100 participants but collectively they would have in excess of 100 participants. Would these individual plans qualify for an audit waiver in connection with the Form 5500 filings? (BenefitsLink.com)


[Guidance Overview]
IRS Proposed Reliance Regulations that Permit Suspension of 401(k) Non-Elective Safe Harbor Contributions
Excerpt: "Plan sponsors that need to take advantage of the proposed regulations should act quickly as the analysis with respect to whether the criteria for a 'substantial business hardship' have been met, the drafting of plan amendments, and the requirement to give plan participants 30 days notice will require time to implement, during which the plan sponsor continues to be obligated to make safe harbor contributions to its plan." (The Metropolitan Corporate Counsel)


DOL/SEC Target-Date Hearing Webcast Now Online
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) has posted on its Web site the archived Webcast of the June 18, 2009, joint target-date fund hearing with the Securities and Exchange Commission (SEC). The hearing received testimony from 36 witnesses on issues relating to target-date funds and other similar investment options. According to EBSA, the Webcast archive is broken down by witness panels to make it easier to view. It can be viewed at http://www.dol.gov/dol/media/webcast/hearing/ ." (PLANSPONSOR.com; free registration required)


401(k) Has Advantages Even If Employer Cuts Match
Excerpt: "Given the severity of the downturn, employees have learned to live with a certain amount of corporate belt-tightening. But cutbacks in matching contributions to your 401(k) plan are much harder to stomach. More than a quarter of large companies have suspended matching contributions to their employees' 401(k) plans or plan to do so in the near future, according to a survey by CFO Research Services and Charles Schwab. The company match has always been a powerful incentive for contributing to a 401(k) plan, at least up to the match. But what if there is no match? Should you still contribute?" (USA Today)


Text of California Governor's Pension Reform Proposal (PDF)
2 pages. Excerpt: "For new employees hired on or after July 1, 2009 this proposal would: Return to pre-SB 400 retirement formulas for Miscellaneous, Industrial, State Safety, and Peace Officer retirement categories. Repeal the SB 183 expanded definition of the State Safety retirement category. Change the benefit formula for Firefighter and Highway Patrol from 3 percent at age 50 to 3 percent at 55. Compute final compensation for Peace Officers, Firefighters, and Highway Patrol based on the highest 3 years instead of the highest 1 year." (State of California, Office of the Governor, via The Sacramento Bee)


The Long Road to Retirement Recovery May Be Shorter for Those with Pensions
Excerpt: "For individuals fortunate enough to have access to a pension plan, the news is a bit brighter. Despite the significant losses that pension funds have endured along with all investors, these funds still have enough assets in reserve to pay promised benefits for years to come. Further, pensions have a longer time horizon than individuals to recover losses, a point highlighted in a recent analysis by Standard & Poor's." (National Institute on Retirement Security)


Social Security is a Retirement Plan That's Guaranteed to Fail
Excerpt: "[B]y the end of this year, Social Security's average payout will be below the minimum wage. When the trust fund is exhausted, Social Security is expected to be able to pay only around 78% of its promised benefits. That works out to an inflation-adjusted equivalent of about $10,792 per year -- or just under 75% of the new minimum wage." (The Motley Fool)


Not All Retirement Plan Participants Pay Share of Revenue Sharing
Excerpt: "[O]ne problem with the current system has gotten little attention: Using investment fees to pay for other aspects of 401(k) expenses means investors in some high-cost funds, like actively managed funds, pay a much greater share of a retirement plan's fixed costs than investors in more basic options like company stock or an index fund. 'The concern is it's not equitable,' says Lori Lucas, leader of consulting firm Callan Associates Inc.'s defined-contribution practice. 'Some people could pay almost all of the costs. Some could pay none of the costs. What funds you select can determine whether you pay or not.' A recent Callan study found that only one in eight plans that used revenue sharing actually had their entire menu of funds contributing to the plan's upkeep. In about a third of plans, half the funds or fewer contributed." (The Wall Street Journal)

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Links to Items on Executive Comp, Benefits in General

[Official Guidance]
Letter on Making Work Pay Credit; Issues Related to Statutes Other Than Contained in Internal Revenue Code (PDF)
Excerpt: "I am responding to your inquiry dated April 7, 2009, on behalf of your constituent, a retired public school teacher, has questions about the Making Work Pay Credit and the credit for certain government retirees. The American Recovery and Reinvestment Act of 2009 (the Act) provides that taxpayers with earned income in 2009 and 2010 may be eligible for the Making Work Pay Credit (section 1001 of the Act) in those years. The credit is the lesser of 6.2 percent of earned income or $400 for working individuals ($800 for married couples filing jointly). The credit begins phasing out for taxpayers with modified adjusted gross income over $75,000 per year for working individuals ($150,000 for married couples filing jointly)." (Internal Revenue Service)


[Guidance Overview]
The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA) Provisions by Effective Date
Chart. (McKay Hochman Co., Inc.)


Shareholder Empowerment Act of 2009 Introduced
Excerpt: "On June 12, 2009, U.S. Representative Gary Peters (D-MI) introduced the Shareholder Empowerment Act of 2009 (the Peters bill). The full text of the bill can be found here. The bill comes one month after the introduction of the Shareholder Bill of Rights Act of 2009 (the Schumer bill) by U.S. Senator Charles Schumer (D-NY), summarized in this WSGR Alert. Like the Schumer bill, the Peters bill, if adopted, would dramatically alter the corporate governance of U.S. public companies. . . . The Peters bill, however, goes further than the Schumer bill on certain executive compensation issues. A summary of the Peters bill is found [in the target document], followed by a chart comparing the two bills." (Wilson Sonsini Goodrich & Rosati)


New Study Suggests That Employees Value Their Total Benefits Offering More Than Cash
Excerpt: "Of the supplemental benefits evaluated, employees ranked their dental insurance, 401(k)/retirement plans, vision insurance and group life insurance as most valuable, Sun Life said in a press release. Employees were asked to assume they had all the medical insurance their family needed and to distribute 100 points across other benefits based on how much they would value them. Only 33% of respondents assigned a value greater than 0 to cash -- and only 5% of the total assigned a value greater than 30 to cash. Cash was the least utilized category . . . ." (PLANSPONSOR.com; free registration required)

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Webcasts and Conferences

Business Management Education (BME) Webcast: Strategies for TPAs that Ignite Growth in People and Profits. Where Do We Go From Here?
Nationwide on August 5, 2009
presented by National Institute of Pension Administrators

( Click to post your webcast or conference )

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Press Releases

Watson Wyatt Data Services Reveals Steady Rise in the Cost of Benefits
Watson Wyatt Data Services

CPI Qualified Plan Consultants Launches 2009 Marketing Strategy Targeting Fee-Based Adviser Retirement Channel
CPI Qualified Plan Consultants, Inc.

Pew Report Documents Challenges Faced by Philadelphia in Paying for City Workers? Pensions and Health Care
Pew Charitable Trusts

Northern Trust Deploys Cross-Border Pooling Solution for U.S. ERISA Plans
Northern Trust

ING?s Taking Control? Helps Retirement Plan Sponsors Empower Their Employees in Transition
ING Retirement Services

Pricelock Offers New Recruiting/Retention Tool
Pricelock, Inc

( Click to post your press release )

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Employee Benefits Jobs

Employee Benefits Administration
for Primary Consulting, Inc.
in ANY STATE

Retirement Plans Analyst
for Saks Fifth Avenue
in NY

DC / 401(k) Compliance Consultant
for The Savitz Organization
in DE, NJ, PA

Senior Manager - Global Benefits, #13161
for Discover Financial Services
in IL

Pension Manager
for Girardot, Strauch & Co.
in IN

Senior Benefits Consultant / Manager - Health&Welfare
for Financial Services Firm
in NC

Financial Services Proposal Writer
for New York Life Retirement Plan Services
in MA

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

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EmployeeBenefitsJobs.com (Sponsor)

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Handy Links:

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

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