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DOL Recently Dropped Rule to Allow Brokers Affiliated with Financial-Services Firms to Provide Advice to 401(k) Participants
Excerpt: "'There is no doubt an agreement amongst lawmakers that a greater level of advice is needed for American workers as they save for retirement,' . . . . 'The fact that the DOL has dropped the investment advice rule demonstrates that although legislation is necessary, the proposed rules were too complex and cumbersome to be effective.' [T]he proposed legislation is in many ways much simpler and straightforward and that, while none of the legislation is currently law, there are clear-cut themes that plan sponsors and fiduciaries should be using as potential elements of their plans, so as to put them in a position to succeed when final regulations are approved . . . ." (Human Resource Executive Online)


House Ways and Means Committee October 1 Pension Funding Hearing
Excerpt: "The committee hearing comes on the heels of a special edition of the Employee Plans News issued by the Internal Revenue Service on Sept. 25 that included information on impending funding regulations. In addition to stating that the regulations will be issued 'in the near future,' it also provided further guidance on determining the adjusted funding target attainment percentage (AFTAP). Specifically, the IRS concluded that a plan with a Jan. 1, 2009 valuation date could use the lower monthly yield curves from any of the four months immediately proceeding January 2009 and change the valuation in 2010 and after. The guidance also said that all of this could be done without having to wait for IRS approval. This move is expected to help assist pension plans achieve a smoothed valuation rate and provide more predictability." (Financial Executives International)


CRS Report: Income and Poverty Among Older Americans in 2008 (PDF)
30 pages. Updated October 2, 2009. Excerpt: "Thirty-four percent of persons aged 65 and older received income from private-sector and public sector pensions in 2008. Among individuals aged 65 and older who reported receiving income from government pensions, the median amount received in 2008 was $18,000. Among recipients of private pensions, median pension income was $7,584. Forty-four percent of households in which either the household head or spouse was aged 65 or older received income from a private or public pension in 2008. Median household income from public-sector pensions in 2008 was $19,162. Median household income from private-sector pensions in 2008 was $8,412." (Congressional Research Service, U.S. Library of Congress)


The World's Greatest One-Page Estimator of Retirement Income and 401k Contributions (and Probably the Only One) (PDF)
Excerpt: "This estimator is intended to nudge employees to: Set an initial account target, Contribute toward their target, Learn more about using their 401k and Obtain a sophisticated projection and qualified advice." (Dennis Ackley)


IRS Planning to Issue Guidance on a Number of Issues Involving Code Sec. 457 Deferred Compensation Plans
Excerpt: "[It is] noted that the IRS has not issued major guidance under Code Sec. 457 since it released final regulations in 2003. [The following is expected to be issued:] guidance on ineligible plans under Code Sec. 457(f); the definition of a governmental plan under Code Sec. 414(d); excess benefit plans under Code Sec. 415(d); and welfare benefit plans excluded from Code Sec. 457, such as bona fide sick and vacation leave, severance and death benefit plans." (Wolters Kluwer)


Answers to the 401(k) Questions that Matter Most
Excerpt: "The information that HR provides to employees about their defined contribution savings plan typically focuses on basic plan facts. That leaves unanswered questions about how to use the plan. [On the target page] are some of the answers employees need to begin using their 401(k) to have the financial future they want (in Jeopardy style, followed by the questions)." (Society for Human Resource Management)


Investment Manager Allowed More Time in Pension Probe
Excerpt: "Elliott Broidy, founder of Markstone Capital Partners, won at least a brief reprieve in a federal investigation into how public pension systems allocate funds to outside managers. According to Bloomberg News, U.S. District Judge Stephen Wilson, at a September 30 hearing in Los Angeles, denied the SEC's request to force Broidy to comply with its subpoenas and gave him until October 12 to produce the documents and until October 22 to testify, the dates suggested by his lawyers, according to a minute order posted today on the court's Web site. Regulators had accused Broidy of failing to give documents or testimony in an investigation of how public pension systems allocate funds to outside managers. Broidy, who hasn't been accused of wrongdoing, has given 'specious excuses' in the past four months to avoid producing all documents sought in subpoenas, and he failed to appear for testimony last week, the Securities and Exchange Commission wrote in its court filing, according to Bloomberg." (PLANSPONSOR.com; free registration required)


Economic Downturn Drains Pension Funds for Public Employees
Excerpt: "[Thousands of public employee pension funds] lost billions in the market crash. And fixing the problem, experts predict, may mean higher taxes, cuts in public services, reduced benefits, or even public bankruptcies. 'People are waking up to the fact that the public employees are getting a really good deal,' Jack Dean, a pension critic, said of public employees' benefits. 'And we're going to have to pay them,' said Dean, a California businessman who runs a Web site called PensionTsunami.com." (The Kansas City Star)


Medicare Bite Tied to Roth Would Be Temporary
Excerpt: "Yes, converting to a Roth could result in paying higher Medicare premiums, but the increase will likely be temporary. The key: If you are a Medicare beneficiary, or about to become one, it is smart to calculate whether the additional income created by a conversion could increase your Part B premiums, as well as your tax bill. Then, with that information in hand, you can make an informed decision about whether a Roth conversion makes sense for you." (The Wall Street Journal)


Supreme Court Slated to Hear One ERISA Case
Excerpt: "The issue in Conkright vs. Frommert involves how much deference a court must give to an ERISA plan administrator's interpretation of the terms of the plan. A group of Xerox Corp. retirees who left and then returned before retiring brought the suit. At issue is the method of accounting for lump sum distributions received by the employees when they first left the company when determining the benefits to which they were entitled at retirement." (Business Insurance)


How to Tap Retirement Assets Early with Minimal Tax Bite
Excerpt: "There are several ways to get at least a portion of your retirement money out without paying penalties. But there's just one method that works for all types of retirement plans -- the 'substantially equal periodic payments' or 'the 72(t)' method of retirement withdrawals. (Section 72[t] of the tax code spells out the rules for penalty-free early retirement plan distributions. Accountants, being clever wordsmiths, thus call these penalty-free early withdrawals '72[t] distributions.' To be fair, there's no snappy way to say it.) How does it work? In a nutshell, you spread out your retirement payments over your remaining life span, taking 'substantially equal' annual payments for the rest of your life." (Los Angeles Times)


The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Baby Boomers (PDF)
27 pages. Excerpt: "A large share of traditional defined benefit pension plans have frozen within the past decade and evidence suggests that this trend will continue in the future. This article uses the Model of Income in the Near Term (MINT) microsimulation model to project the impact on boomers' retirement incomes of freezing traditional pension plans and replacing them with 401(k)-type plans. The projections suggest that the largest impact will be for the most recent boomers born between 1961 and 1965." (U.S. Social Security Administration)


[Opinion]
ERIC Letter Identifies Key Transition and Process Issues on Upcoming Hybrid Plan Guidance
Excerpt: "The ERISA Industry Committee (ERIC), in conjunction with the Coalition to Preserve the Defined Benefit System and the American Benefits Council, on October 1 submitted a letter to the Internal Revenue Service and the Department of Treasury identifying key transitional and procedural issues related to upcoming proposed regulations on hybrid plans. It is the organizations' understanding that Treasury and IRS may soon issue final regulations on substantially all of the hybrid plan amendments contained in the Pension Protection Act, and that the (1) requirement that a hybrid plan's interest crediting rate not exceed a market rate of return and (2) the rules regarding pension equity plans (PEPs) may be addressed separately in proposed regulations. The letter says that the organizations strongly support this three-part approach to hybrid plan guidance." (The ERISA Industry Committee)

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Links to Items on Executive Comp, Benefits in General

Executive Compensation Limits on Health Insurance Providers: Lincoln Amendment to The America's Healthy Future Act (PDF)
1 page. Excerpt: "This amendment would create a special rule under Section 162(m) regarding the deductibility of excessive remuneration (including deferred deduction remuneration) by a health insurance provider, if at least 25 percent of the health insurance provider's gross premium income is derived from health insurance plans that meet the minimum creditable coverage requirements in the Chairman's mark ('covered health insurance provider'). Employers with self-insured plans are excluded from the definition of covered health insurance provider." (American Benefits Council)


The High Price of Being a G.ay Couple
Excerpt: "We looked at benefits that routinely go to married heterose.xual couples but not to g.ay couples, like certain Social Security payments. We plotted out the cost of health insurance for couples whose employers don't offer it to domestic partners. Even tax preparation can cost more, since g.ay couples have to file two sets of returns. Still, many couples may come out ahead in one area: they owe less in income taxes because they're not hit with the so-called marriage penalty." (The New York Times; free registration required)

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Press Releases

Virginia School District Appoints Great-West As 403(b) Provider
Great-West Retirement Services

ERIC Letter Identifies Key Transition and Process Issues on Upcoming Hybrid Plan Guidance
ERIC (ERISA Industry Committee)

?Automatic? Features in Defined Contribution Plans Gaining Worldwide Acceptance
Mercer

Arnerich Massena Announces New Director of Research and Analytics
Arnerich Massena & Associates

BPAS Hires Sales Relationship Manager in the Midwest
BPAS

The Wiley Group Emerges As Independent RIA
Wiley Group

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