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[Guidance Overview]
New Form 5500 Reporting Requirements for 2008 Plan Year for Multiemployer Defined Benefit Pension Plans (PDF)
2 page chart. (Milliman)


[Guidance Overview]
Handling Short Plan Years and Sharing Credentials Under EFAST2
Excerpt: "Recently, an organization published an article in which it addressed several EFAST2 questions. While the article provided valuable information regarding EFAST2, the article also contained a few incorrect answers. Since a plan which relies on the responses would be subject to late filing penalties, we felt it necessary to correct the responses." (SunGard Relius)


[Guidance Overview]
Court Dismisses ERISA Fiduciary Breach Claims against Citigroup
Excerpt: "The U.S. District Court for the Southern District of New York has ruled that participants in two retirement plans sponsored by Citigroup failed to state a claim that defendants breached their fiduciary duties by offering Citigroup stock as an investment option." (PLANSPONSOR.com; free registration required)


[Guidance Overview]
Citigroup 401(k) Participant Lawsuit Dismissed
Excerpt: "A federal judge has dismissed a class-action lawsuit filed on behalf of 150,000 participants in Citigroup's two 401(k) plans, saying the company's inclusion of company stock as an investment option did not violate its fiduciary duties under ERISA. U.S. District Court Judge Sidney H. Stein in New York tossed out the lawsuit, filed on behalf of participants in Citigroup's 401(k) Plan and the Citibuilder 401(k) Plan for Puerto Rico. 'Investment in Citigroup stock was presumptively prudent, and plaintiffs have failed to allege facts in support of a possible claim to overcome that assumption,' Judge Stein wrote in his ruling. Judge Stein added that the two 401(k) plans 'unequivocally required' that Citigroup stock be offered as an investment option, and thus 'had no discretion and could not be acting as fiduciaries' with respect to the plans' investment in company stock. According to the ruling, the inclusion of the company stock was mandated in the terms of the plans." (Business Insurance)


[Guidance Overview]
Transfer of Partial IRA Account Balance Subjects Periodic Payments to 10% Penalty
Excerpt: "A recent IRS ruling illustrates the rigidity of the rules under IRC § 72(t) by which 'substantially equal periodic payments' are exempt from the 10 percent early distribution tax. An individual's non-taxable transfer of a portion of her individual retirement account to another IRA constituted a prohibited 'modification' of the payments, which the IRS ruled could not be corrected by reversing the transfer. The error resulted in the distributions she had taken over the prior seven years being retroactively subject to the 10 percent early distribution tax and interest. PLR 200925044 (March 23, 2009)." (Deloitte via BenefitsLink.com)


[Guidance Overview]
OECD Guidelines Raise the Bar on Pension Fund Governance and Set International Standards
Excerpt: "On 7 Jul 2009, the Organisation for Economic Co-operation and Development (OECD) published updated Guidelines for Pension Fund Governance. The Guidelines set 'international standards for the governance of private pension funds, in view of protecting people's pensions from mismanagement and fraud.' The revisions reflect the current focus on corporate governance failures that contributed to the 2008/2009 global financial crisis. This Mercer analysis discusses the Guidelines and their implications for pension fund sponsors and fiduciary committees of multinational organizations." (Mercer LLC)


Wife Jailed in Killing Husband Sues Over Denied Spousal Benefits
Excerpt: "Last week, Fayette Nale sued the Ford Motor Co.-UAW Retirement Plan in U.S. District Court in Detroit for refusing to pay her the survivor share of her husband's company pension. Nale's attorney, Sherry Wells of Royal Oak, said a Macomb County jury acquitted her client of second-degree murder when it convicted her of voluntary manslaughter. Nale was a battered wife and because her husband's death happened 'under heat of passion,' she should not be denied a 50 percent share of her husband's pension of more than $1,000 a month, Wells said Tuesday." (The Detroit News)


Improving 401(k) Plan Design: from Good to Great
Excerpt: "How do we go from good 401(k) plans to great 401(k) plans? That process is clearly underway. There are folks out there leading the charge. They include our friends and fellow bloggers Brightscope, a firm which quantitatively rates 401k plans, and Josh Itzoe. Josh is both a CFP and AIF and is a Principal of Greenspring Wealth Management, Inc., a registered investment advisory firm and Independent Fiduciary in Towson, MD. I reviewed Josh's book Fixing The 401(k) earlier this year. There's also Roger Wohlner, CFP, whose local, and in his blog, Chicago Financial Planner, writes about the characteristics of a good 401(k) plan." (National Benefit Services, Inc.)


Making Defined Benefit Plans Sustainable Through Plan Design and Dynamic Liability-Driven Investing
Excerpt: "There's another way to reduce the cost and the risk associated with many DB plans today other than freezing or terminating them. 'Going green' through a combination of plan design and dynamic LDI can help make DB plans sustainable without hindering the sponsor organization's ability to compete. Evan Inglis, Vanguard chief actuary, and Paul Bosse, principal, Vanguard Investment Strategy Group, describe how. This article appeared in a special insert to the August 11, 2009, issue of Pensions & Investments." (The Vanguard Group, Inc.)


Supreme Court to Hear Game-changing ERISA Case on Plan Administrators' Authority to Interpret Terms
Excerpt: "The U.S. Supreme Court is set to hear Conkright v. Frommert, an important ERISA benefits case, this fall. The Conkright decision has the potential to have some of the farthest-reaching consequences on the day-to-day administration of ERISA benefits plans of any case in recent memory. Plan administrators should be holding their collective breath, knowing that the question before the high court is how much deference their reasonable interpretations of plan terms are entitled to when those interpretations arise in any context other than the administrative benefits claims process. Additionally, the Court's acceptance of certiorari on the issue of whether a district court has the discretion to adopt any reasonable interpretation of the plan's terms for calculating those benefits when it has been charged with determining the amount of benefits a participant is owed following an ERISA violation should be equally nail-biting to plan administrators." (Holland & Hart LLP)


PBGC Pension Insurance Data Book 2008 (PDF)
122 pages. Excerpt: "This edition of the Pension Insurance Data Book contains one short article describing the characteristics of plans that PBGC newly insured during 2006. The edition also contains two new tables, inserted at tables S-36 and S-37, that show the number of hard-frozen defined plans insured by PBGC and the number of participants in these plans." (Pension Benefit Guaranty Corporation)


The New Reality of Pension Investment Strategies: Survey Results (PDF)
15 pages. Excerpt: "To understand how U.S.-based companies are adjusting their pension investment strategies for a post-economic crisis environment, Watson Wyatt conducted a short survey of 85 senior-level financial executives. The analysis focuses on how investors are seeking to manage their risks, optimize returns and improve their governance strategies." (Watson Wyatt Worldwide)


New Defined Benefit Plans Being Created by Employers
Excerpt: "The [PBGC] Data Book includes an analysis of newly insured plans in 2006. The PBGC found the 1,662 newly insured plans could be divided into three groups. The first group consisted of 195 plans created before 2004 (Old Plans). The second group comprised 450 newly created plans that show ties to previous employer plans (New Plans With Ties). The third and largest group, with 1,017 plans, includes newly created plans that have no apparent ties to a previous employer plan (New Plans Without Ties)." (PLANSPONSOR.com; free registration required)


Private Pensions: Alternative Approaches Could Address Retirement Risks Faced by Workers but Pose Trade-offs
Excerpt: "This report was revised on September 1, 2009, to correct table 12, row 1, column 4 - 'The Baseline results, Household annuity equivalent (per year, 2008 dollars) for income quartile 2 should be $7,780.'" (U.S. Government Accountability Office)


Publisher of Popular 401(k) Web Site Returns Home from Hospital and Rehab; Meigs Is on the Mend
BenefitsLink is a big fan of 401khelpcenter.com and is delighted to report that its publisher, Rick Meigs, has left the rehab center and returned to his home, where he is recovering from a serious motorcycle accident in June. Rick was hit by a truck -- which fled the scene -- while riding his motorcycle near the Idaho/Oregon border, and suffered a broken jaw, two broken shoulders, four broken vertebrae, a broken arm, a fractured knee, and several broken ribs. A bit of nerve damage in one hand will take some time, but a full recovery is expected! In the meantime Rick's staff is operating the web site and distributing the excellent 401khelpcenter.com email newsletters. Pray for Rick's continued healing. Sign his guestbook at http://www.caringbridge.org/visit/rickmeigs (registration is required but easy), drop him a get-well card at 7032 SW 26th Avenue, Portland OR 97219, or email him at rick@401khelpcenter.com. (401kHelpCenter.com)


Overtime Pay Can Be a Drag on Pensions and the Bottom Line
Excerpt: "There are cities and states in which workers who are about to retire put in scores of hours of overtime, largely to hype their pension benefits. In Buffalo, New York, for example, firefighters who retired in 2008 earned about $110,000 a year before their retirement, with an average of $45,000 of it in overtime. For those not nearing retirement, the average pay was about $70,000, with less than $16,000 of it from overtime. Some cities invite this kind of problem by allowing unions to select who gets overtime assignments. In Bridgeport, Connecticut, which faced a $19 million deficit last year, police officers racked up nearly $9 million in overtime." (Governing.com)

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Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
DOL Scrutinizes ERISA Plan Audits (PDF)
2 pages. Excerpt: "Do you sponsor any employee benefit plans that are required to be audited on annual basis? If yes, you should be aware that the DOL is targeting certain auditors and is seeking penalties from the plan administrator (typically, the employer) of up to $1,100 per day, or $50,000 per annual report, when it believes that the audit work is deficient. There are a number of due diligence steps you can take in an effort to comply with ERISA responsibilities, and to reduce exposure in this area." (Porter Wright Morris & Arthur LLP)


IRS Memo Considers Backdated Stock Options Under 162(m)
Excerpt: "A recent IRS internal memo on backdated and misdated nonqualified stock options discusses how to determine the grant date when assessing whether options were discounted under Section 162(m). Besides analyzing the use of related accounting and tax standards to define the grant date, the memo concludes that discounted options can never qualify for exemption from 162(m)'s $1 million cap on deductible compensation. This disqualification applies even if the employee reimburses the discount or the option exercise price is reset to eliminate the discount. Some practitioners are criticizing the memo." (Mercer LLC)


Companies Handing Out Cash to Needy Workers
Excerpt: "Disbursing funds for emergencies, or letting workers trade vacation time for cash, are among practices lauded in a new report by the Families and Work Institute, a New York nonprofit. At 1-800 Contacts, a Salt Lake City, Utah, contact-lens vendor with 850 employees, an 'associate outreach fund' offers emergency funds to employees in crisis. The company helped one worker make mortgage payments after a spouse was laid off; another payout helped an employee strapped by two surgeries and four months' missed work. Other disbursements covered emergency medical treatment for an employee's child, and cancer treatment for a spouse, says Max Neves, vice president, administration." (The Wall Street Journal)


Congressional Research Service Report on Insurance Regulation: Issues, Background and Legislation in the 111th Congress (PDF)
16 pages. Excerpt: "The individual states have been acknowledged as the primary regulators of insurance as far back as 1868. Since the 1945 McCarran-Ferguson Act, this system has operated with the specific blessing of Congress, but has also been subject to periodic scrutiny and suggestions that the time may have come for Congress to take back the regulatory authority that it granted to the states. In the late 1980s and early 1990s, congressional scrutiny was largely driven by the increasing complexities of the insurance business and concern over whether the states were up to the task of ensuring consumer protections, particularly insurer solvency. . . . Although the financial crisis has changed the focus of the debate surrounding insurance regulatory reform, many of the pre-crisis pressures for regulatory changes continue. Narrower bills addressing insurance regulation and regulatory requirements have been introduced in the 111th Congress. These include H.R. 1583, H.R. 2554, H.R. 2571/S. 1363, H.R. 2609, and H.R. 3126. None of these have been considered on the floor of the House or the Senate in this Congress." (U.S. Congressional Research Service)

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Webcasts and Conferences

2009 Fall Forum: Boston, MA
in Massachusetts on October 19, 2009
presented by Ascensus

2009 Fall Forum: Chicago IL
in Illinois on September 21, 2009
presented by Ascensus

2009 Fall Forum: San Diego, CA
in California on November 9, 2009
presented by Ascensus

2009 Fall Forum: Tampa, FL
in Florida on October 5, 2009
presented by Ascensus

2009 Web/Telephone Seminar: Advanced HSAs
Nationwide on October 13, 2009
presented by Ascensus

2009 Web/Telephone Seminar: Basic IRAs
Nationwide on October 1, 2009
presented by Ascensus

2009 Web/Telephone Seminar: Individual (k) Plans
Nationwide on October 6, 2009
presented by Ascensus

2009 Web/Telephone Seminar: IRA Excess Contributions
Nationwide on October 1, 2009
presented by Ascensus

2009 Web/Telephone Seminar: Withholding
Nationwide on October 8, 2009
presented by Ascensus

COBRA Workshop
in California on October 15, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

COBRA/ARRA Workshop
in California on October 16, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

( Click to post your webcast or conference )

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Press Releases

U.S. Labor Department Sues to Appoint Independent Fiduciary for 401(k) Plan Abandoned by Melville, New York, Employer
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Labor Department Sues to Recover Assets for SIMPLE IRA Plan Sponsored by Coshocton, Ohio-based Company
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

ERIC's New Benefit Platform Featured in GAO Report on Alternative Approaches to Current U.S. Pension System
ERIC (ERISA Industry Committee)

BeneTrac, HSA Bank Make It Easier to Enroll in Health Savings Accounts
BeneTrac

Auto Enrollment Adoption at Ascensus Surpasses 1,000 Plans
Ascensus

401k Ratings Firm BrightScope Secures $2 Million in Series B Funding
BrightScope

FinanceAnswers Launches Website Which Profiles and Rates Every Financial Advisor
FinanceAnswers, Inc

( Click to post your press release )

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Employee Benefits Jobs

DC/401(k) Plan Administrator
for Shore Tompkins Actuarial Resources, LLC
in IL

401(k) Daily Valuation Recordkeeper
for Papalia Retirement Plan Services, Inc.
in PA

Contract Plan Administrator
for The Allocation Company, Inc.
in TX

401k Plan Administrator in Northern Virginia
for TPA firm in Northern Virginia
in VA

Retirement Plan Administrator
for Law Offices of R. David Danziger
in PA

Manager of Strategy Analysis & Development
for Prudential Financial
in CT

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

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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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