Retirement Plans Newsletter
December 15, 2009
December 15, 2009
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ASC
[Official Guidance]
IRS Schedules Hearing on Proposed Regs for Enrollment of Actuaries
Excerpt: "This document provides notice of a public hearing on proposed regulations relating to the enrollment of actuaries under section 3042 of the Employee Retirement Income Security Act of 1974. . . . The public hearing is being held on Thursday, February 25, 2010, at 10 a.m. The IRS has extended the deadline for requests to speak. The IRS must receive requests to speak, along with outlines of the topics to be discussed at the public hearing by January 25, 2010." (Internal Revenue Service)
[Guidance Overview]
DOL Confirmation That Assets in Registered Fund of Funds Are Not Subject to ERISA (PDF)
Excerpt: "In Advisory Opinion 2009-04A (December 4, 2009), the U.S. Department of Labor (DOL) opined that assets in a fund of funds registered under the Investment Company Act of 1940 (1940 Act) are not 'plan assets' subject to regulation under ERISA. A money manager requested the opinion, out of a policy concern about the practice of target-date or life cycle funds investing in affiliated mutual funds." (Sutherland Asbill & Brennan LLP)
[Guidance Overview]
IRS's Initial Remedial Amendment Period Guidance for 403(b) Plans
Excerpt: "Signaling what will be coming down the pike soon for 403(b) plans, the IRS has issued Announcement 2009-89 to provide some information in advance of the anticipated 403(b) 'pre-approved' or prototype program, which it says will be out 'in a few months', and will be followed by an individual determination letter program." (Groom Law Group)
[Guidance Overview]
No Extension of PPA Amendment Deadline
Excerpt: "Contrary to rumors currently circulating, IRS Notice 2009-97 (issued on Friday, 12/11/09) DOES NOT provide for a general extension of the deadline to adopt a good-faith PPA amendment. The amendment only delays the deadline (to the last day of the 2010 plan year) for 3 specific PPA provisions . . . ." (SunGard Relius)
[Guidance Overview]
7th Circuit Fee Case Precedent Prompts Dismissal of Similar Suit by District Court in Illinois
Excerpt: "With one eye cast toward the recent closely watched excessive fee case Hecker v. Deere & Co., a federal judge in Illinois has thrown out a similar participant suit involving the Exelon Corp. U.S. District Judge John W. Darrah of the U.S. District Court for the Northern District of Illinois said the recent Hecker ruling from the 7th U.S. Circuit Court of Appeals . . . dictated his holding in Loomis v. Exelon Corp." (PLANSPONSOR.com)
Alabama Cannot Maintain Public Retirees' Benefits As They Are
Excerpt: "Even after the state has kicked in more funds, there is not enough money to fund the retirement benefits for state workers, leading officials to believe that either benefits will have to be cut or those receiving them will have to contribute more for them." (montgomeryadvertiser.com)
Employer Views on the 401(k) and Financial Education in the Workplace (PDF)
13 pages. Excerpt: "The clear finding from this latest research is that, despite the short-term loss in value of investment portfolios, the 401(k) continues to be one of the most important elements in Americans'retirement savings toolbox. Echoing the conclusion from last year's study, this research shows that both finance and HR executives view 401(k) plans as an important part of maintaining and retaining a productive and retirement-ready workforce." (Charles Schwab)
Latinos: The New 401(k) Market Opportunity?
Excerpt: "A research report released last week by the National Council of La Raza (NCLR), the largest national Hispanic civil rights and advocacy organization in the United States, reveals that even when companies offer 401(k) plans Latinos are less likely to participate than Whites or Asians. The report, Insecure Retirements: Latino Participation in 401(k) Plans, points out that although Latinos currently make up 14% of the U.S. workforce and are projected to be one-third of the workforce by 2050, the current employer-sponsored retirement plans are not effective in helping Latinos to save for retirement." (Bank Investment Consultant)
Experts Look at Retirement Plan Reform
Excerpt: "Robert Reynolds, the CEO of Putnam Investments, began calling for retirement reform late last spring, and has kept it up with a blog at http://www.theretirementsavingschallenge.com. In May, the blog posted an outline on major measures for reform." (RIABiz LLC)
Professor Says 401(k) System Is Biased Against Women
Excerpt: "Research shows that women end up with much less in their retirement plans than men because women take time out of their careers for family responsibilities, In addition, they still earn less than men on average for the same work. As a result, the median female worker near retirement held $34,000 in a retirement plan, whereas her male counterpart held $70,000, according to the Retirement Security Project. Under ERISA, assets in a 401 (k) are held in the worker's name only and cannot be transferred to another person tax-free, even to a spouse. Monopoli points out the contradiction between the way ERISA treats retirement assets and the way well-established marital law does." (RIABiz LLC.)
TIAA-CREF Launches iPhone App
Excerpt: "TIAA-CREF, provider of retirement services in the academic, research, medical and cultural fields, is offering its first application for the iPhone: The TIAA-CREF Savings Simplifier." (PLANSPONSOR.com)
Milliman Pension Funding Index Status Improves in November
Excerpt: "The funded ratio of 100 of the nation's largest defined benefit plans increased from 75% to 75.5% in November, according to Milliman. A news release about its Milliman 100 Pension Funding Index said the pensions experienced asset increases of $20 billion and liability increases of $18 billion, resulting in a $2-billion increase in funded status - the first such hike since April." (PLANSPONSOR.com)
IRS Retirement Newsletter Highlights Internal Compliance Controls, Schedule SSA, and Website Updates
Excerpt: "EBIA Comment: While this quarterly newsletter (a companion to the IRS's Employee Plans News) does not delve deeply into the subjects it covers, it provides a helpful overview of recent IRS and DOL developments with links to more detailed information. The newsletter often provides insight into issues of current concern to the IRS, as illustrated by this edition's internal controls interview." (Employee Benefits Institute of America)
[Opinion]
ASPPA Comments on Proposed Regulations Relating to Performance of Actuarial Services Under ERISA
6 pages. Excerpt: "The American Society of Pension Professionals & Actuaries (ASPPA) appreciates this opportunity to comment on the proposed amendments to the regulations relating to performance of actuarial services under the Employee Retirement Security Act of 1974 (ERISA) as issued by the Joint Board for the Enrollment of Actuaries on September 18, 2009 (REG -159704-03)." (American Society of Pension Professionals & Actuaries)
[Opinion]
The Independent Fiduciary Experience
Excerpt: "In early December, I participated in a trustee meeting presided over by Matthew D. Hutcheson. Some in the 401(k) industry may wonder exactly what an independent fiduciary like Mr. Hutcheson does. Here's a first-hand report." (Interlake Capital Management LLC)
How to Succeed in the 403(b) Market!
Expand your business in the lucrative 403(b) and 457(b) non-profit market. Learn what you need to know by attending the annual conference of the National Tax-Sheltered Accounts Association (NTSAA). The industry's top practitioners will show you how to not just survive, but thrive!
For more information and to register, visit the NTSAA website or click here .The 2010 NTSAA Annual Conference...the place to be for 403(b)! January 27 - 30, Indian Wells, CA
NTSAA
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]2010 Reporting & Disclosure Calendar for Benefit Plans
29 pages. Excerpt: "This [Calendar] posted in December 2009, is intended to indicate general reporting and disclosure requirements applicable to employee pension and welfare benefit plans on an annual basis. It does not cover all special requirements that may apply in a particular year due to an extraordinary event (e.g., plan termination or benefit cutbacks) or that may apply only to a particular class of participants (e.g., highly compensated employees or nonresident aliens)." (The Segal Group, Inc.)
[Guidance Overview]
IRS Steps Up Audits of Executive Compensation Programs
Excerpt: "The IRS has amplified enforcement initiatives with regard to executive compensation. In this article we look at the increased attention on Code section 409A, as well as providing an overview on efforts to regulate FICA taxes on nonqualified deferred compensation." (J.P. Morgan Compensation and Benefit Strategies)
'Fat Cat Compensation:' Rewarding Failure
Excerpt: "The CEOs of 10 Wall Street firms that either failed or received taxpayer bailouts were paid an average of $28.9 million per year in the years leading up to the Wall Street meltdown, according to a Public Citizen report. Their average pay this decade, calculated through 2007, equaled 575 times the median American family's 2007 income." (Public Citizen)
Potentially Significant Change Announced by IRS for Year-End Deduction of Annual Bonus Payments
Excerpt: "Just two weeks ago, I blogged on the question of whether your company is deducting its annual bonuses one year too early, since many bonus plans provide that bonuses attributable to Year 1 will be paid early in Year 2, but only to participants who are employed on the date of payment, and this provision could create a deduction timing trap for the unwary. Last week, the IRS released a Chief Counsel Advice Memorandum that seems to tighten the deduction of annual bonus rules further." (Michael Melbinger via Winston & Strawn LLP)
TARP Trends in Executive Compensation
Excerpt: "This article outlines restrictions that apply to financial institutions participating in TARP." (Haynes and Boone LLP)
Pension Fund Sues Goldman over C-Suite Bonuses
Excerpt: "A union pension fund has sued Goldman Sachs, alleging its 2009 bonus payouts are based on taxpayer bailout money the financial services firm received and not the executives' performance." (PLANSPONSOR.com)
Ford to Bring Back Raises and Benefits for Some Workers
Excerpt: "Ford Motor Co. will restore some benefits U.S. salaried employees lost last year and resume merit raises -- the latest sign that its recovery is gaining traction. 'Our plan is working,' Ford Americas President Mark Fields said in a note to white-collar workers . . . ." (The Detroit News)
2009-2010 Regulatory Plans for Employee Benefits Are Published (PDF)
4 pages. Excerpt: "In recent days, the principal regulators of U.S. employee benefits have published their guidance plans for the coming months. The U.S. Treasury and Internal Revenue Service released their joint 2009-2010 Priority Guidance Plan, often informally referred to as the IRS Business Plan. The U.S. Department of Labor (DOL) issued its Fall 2009 Semi-Annual Regulatory Agenda." (Sutherland Asbill & Brennan LLP)
Women Reshape Union Agenda
Excerpt: "Women make up nearly half of the union membership and that is having an impact on issues that come up at the bargaining table. There's more of an emphasis on work/life issues, paid sick leave and paternity leave, experts say." (Human Resource Executive Online)
2009 Workplace Holiday Fetes Less Festive, According to Survey
Excerpt: "A new employer survey finds the down economy has taken a major bite out of traditional year-end holiday workplace activities. BNA reports that its Holiday Practices Survey finds a significant dropoff in corporate sponsorship of holiday parties from 81% in 2008 to 67% in the latest poll. The proportion of employers backing a company-wide holiday party has also plunged from 64% in 2008 to 50% in 2009." (PLANSPONSOR.com)
Benefits for Departing Employees Impact Those Who Remain
Excerpt: "Severance pay, outplacement support and other continuing benefits for terminated employees impact the morale of remaining employees, even affecting the company's brand and public image, according to new research on separation benefits. The study of more than 1,200 business leaders from 45 countries, conducted by DBM, a global outplacement firm, and the Human Capital Institute, a research group, reveals that most organizations (85%) provide severance to at least some of their employees, with almost half (45%) offering severance to all of their employees, including part-timers." (Employee Benefit Adviser; free registration required)
A Brief Overview of Employee Ownership in the U.S.
NCEO Executive Director Corey Rosen discusses the main approaches to employee ownership in the U.S. (ESOPs, stock options, etc.); employee ownership and corporate performance; and current estimates of the extent of broad-based employee ownership in the U.S. (National Center for Employee Ownership)
Press Releases
Council Warns: Senate Health Care Bill Must be Improved Now or Employers Will OpposeAmerican Benefits Council
Milliman Analysis Shows First Improvement in Pension Funding Status in Six Months
Milliman USA
Optimizing Corporate Culture is Critical to the Success of Wellness Programs
The Vitality Group
AFSCME Releases Best Practices Guide for Pension Systems
American Federation of State, County and Municipal Employees (AFSCME)
Corporations, Universities and State Governments Deploy Thomson Reuters Solution to Improve Employees' Benefit Selection Process
Thomson Reuters
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