Benefits in the News

Excerpt: "Expatriation on or after June 17, 2008, may cause an expatriate to be subject to IRC § 877A, which was enacted as part of the Heroes Earnings Assistance and Relief Tax Act (HEART) Act of 2008. . . . If a deferred compensation item is not an eligible deferred compensation item (and not subject to IRC § 83), an amount equal to the present value of the deferred compensation item is treated as having been received on the day before the expatriation date."

Excerpt: "The lynchpin of the Supreme Court's decision was its interpretation of Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993), which involved a 62-year old employee who claimed he was unlawfully discharged by the employer in order to avoid the payment of pension benefits that were about to vest. In Hazen, the Supreme Court found that, without evidence of intent, a dismissal based on pension status was not a dismissal because of age."

2 pages. Excerpt: "The survey found that most multiemployer health funds continue to take the Retiree Drug Subsidy (RDS). We expect that will change in the coming years as RDS administration becomes increasingly challenging for plan sponsors."

Excerpt: "[A California] bill, SB 1096, was sponsored by Sen. Ron Calderon (D-Montebello) and would have allowed pharmacies to sell patients' prescription and medical information to third-party entities -- including Adheris, Inc., the bill's main business backer. The ostensible goal behind the bill was to allow Adheris and other similar marketing companies to mail 'reminder' notices to patients so they wouldn't forget to take their medication."

Excerpt: "Personal health record vendors have begun marketing their products to employers and insurers, rather than consumers, in the hopes of expanding PHR adoption, according to a recent study by Chilmark Research, an industry analyst, the American Medical News reports."

Excerpt: "Mention European health care to an American, and it probably conjures up a negative stereotype -- high taxes, long waiting lines, rationed care. It's not that way in Germany. Very little tax money goes into the system. The lion's share comes, as in America, from premiums paid by workers and employers to insurance companies."

12 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors."

14 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors."

23 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors."

Excerpt: "Pension Benefit Guaranty Corporation (PBGC) is amending its regulation on Administrative Review of Agency Decisions to clarify that the agency's Appeals Board may refer certain categories of appeals to other PBGC departments for a written response and to remove determinations under section 4022A of [ERISA] from the scope of part 4003. The amendments also include minor clarifying and technical changes to the rules for administrative review of agency decisions. . . . Effective August 4, 2008."

12 pages. Excerpt: "Rather than attempting to rationalize the lack of annuity demand, this paper explores the idea that aversion to annuities is not a fully rational phenomenon. A large literature has documented behavioral biases in a wide range of activities that are important steps in the process of planning for retirement, including whether to participate in employer sponsored pension plans, how much to save, and how to allocate one's portfolio. To the extent that individuals exhibit biases in the wealth accumulation aspects of planning for retirement, it seems natural that similar biases might also extend to the wealth decumulation stage of retirement planning."

Excerpt: "The Department of Revenue . . . just confirmed that it wants current taxes from the self-employed and partners ('Unincorporated Owners') on their 401(k) deferrals and matches. For a 50 year old who saves $20,000, that's $1,060 up front to the Commonwealth at the 5.3% rate."

Excerpt: "On June 19, 2008, the Supreme Court upheld the application of the deferential abuse of discretion standard of review for benefit decisions under ERISA-governed plans even in instances when the decision-maker on the claim also is responsible for paying benefits or is affiliated with the payer."

Excerpt: "Doctors have historically been the watchdogs of the U.S. medical system, with the American Medical Association scaring New Dealers into dropping national health coverage from the Social Security Act and then the AMA shredding Harry Truman's reform efforts in the late 1940s. But a new poll and other significant indicators suggest that doctors are turning against the health-insurance firms that increasingly dominate American health care."

Excerpt: "The European Union unveiled draft health insurance coverage rules that aim to ease elective-surgery waits and which could also broaden medical travel by patients living within the EU's 27-nation bloc . . . ."

Excerpt: "Milliman actuaries developed a predictive model of medical cost using 2007 medical costs and vital data as independent variables in addition to age and gender. Based on that experience, this paper discusses the issues that every researcher faces when trying to model the medical cost using regression analysis and some possible measures for those issues."

Excerpt: "Today, life cycle mutual funds go by many names including 'strategic allocation', 'asset manager,' 'personal strategy,' 'life strategy' and 'target retirement.' However, the underlying theme of these funds is the same -- one fund that would answer the asset allocation needs of an individual at a particular stage in life. But nothing is ever easy. Although these funds were created to make things simpler for investors, the layered complexity of life cycle fund choices presents a difficult investment task."

Excerpt: "The House of Representatives recently passed H. Res. 1294 designating October 19-25, 2008 as National Save for Retirement Week. A sister resolution, S. Res. 601, introduced on June 25, is awaiting approval in the Senate. National Save for Retirement Week is a national campaign created to encourage American workers to build retirement security by taking advantage of their employer-sponsored retirement savings plans."

Excerpt: "House Education and Labor Chairman George Miller (D-CA) recently acknowledged that his bill regarding 401(k) fee disclosure would not clear the House this session. Miller cited opposition from the House Ways and Means Committee and the White House, as well as difficulties gaining momentum for the bill in the Senate, as reasons for abandoning the legislation."

Excerpt: "Professor Roger Baron calls our attention to another recent counterclaim case in which the district court got the analysis right. The case is Killian v. Johnson & Johnson, 2008 U.S. Dist. LEXIS 49580 (D.N.J. June 23, 2008). In that case the defendant in a claim for benefits case filed a counterclaim, asserting that social security benefits received by the plaintiff should have been offset from disability benefits paid to her - resulting in her actually owing the plan, on the defendant's theory, some $45,000."

Excerpt: "Typically, the federal courts find that the statute only reaches formal plan documents. By tying the claims regulation to the civil penalty provision, the Ninth Circuit has given ERISA claimants a discovery short cut with statutory sanctions to back up their requests."

Excerpt: "GINA contains a number of provisions that will be of interest to health plans and plan sponsors . . . ."

Excerpt: "To establish a demonstration program to provide financial incentives to encourage the adoption and use of interactive personal health records and to encourage health information exchange networks to link clinical data to such personal health records.'''Patient-Controlled

Excerpt: "As the nation's economy continues to suffer, schools, villages and other areas of the public sector are being viewed as good places to work with traditional pensions and lower-cost health-care benefits making up for what can be reduced annual salaries. That public-sector interest is backed up by national employment trends charted by the U.S. Department of Labor in 2007, the most recent available."

Excerpt: "Data from the Employment Cost Index show that health insurancecosts relative to payroll increased 34 percent between 1996 and 2005and that the increase was largest for businesses paying low wages;simultaneously, data from the Employee Benefits Surveyshow that benefit packages became less generous, yet cost growthwas not paralleled by a commensurate decrease in employer offers."

Excerpt: "This plan language is designed to prevent a nonallocation year by transferring assets from the accounts of disqualified persons to the non-ESOP portion of the plan according to Treas. Reg. 1.409(p)-1(f). A nonallocation year can occur when disqualified persons, as defined in Code section 409(p)(4), own or are deemed to own 50% of the outstanding stock of an S corporation."

Excerpt: "Russell Investments has released a paper to assist plan sponsors in evaluating and selecting target-date funds for their defined contribution plans. According to a Russell announcement, the paper outlines 12 observations about target-date funds that highlight for plan sponsors how traditional fund evaluation approaches fall short as the funds can look the same on the surface but differ dramatically in underlying investments."

Excerpt: "Let's face it -- there are a lot of scam artists out there itching to get their grubby hands on your hard-earned nest egg. Don't fall prey to those 'free lunch' seminars or 'retire early' frauds. Here are some common schemes to avoid and Web sites that can help you stay out of trouble."

Excerpt: "Having a well-thought-out plan helps you avoid panicky or impulsive moves. Online 401(k) accounts make it almost too easy for investors to transfer money from one fund to another. 'When everything's headed down, shifting into cash can have the immediately gratifying effect of shielding your portfolio from losses,' Christine Benz, Morningstar's personal-finance expert, said in a recent Web posting. But the sense of relief, she added, is often short-lived, 'replaced by another nagging worry: Is it time to get back in?'"

Excerpt: "We are in the final testing phase of our online referral service. Your answers to a few short questions will not only get you to the right government agency for your particular pension issue, you'll also receive a referral to a local pension counseling project, legal services provider, retiree organization or other helpful no-cost service provider. Until PensionHelp America can do this for you, browse the pension help resources at the Pension Rights Center's website."

Excerpt: " California's workers' compensation system has been the center of intense debate and legislative activity over the past several years. The dramatic reforms of California workers' compensation in 2003-2004 sought to reduce utilization of medical care through evidence-based medical treatment guidelines and the creation of a system of medical provider networks, establish time limits on temporary disability benefits, establish a more objective permanent disability schedule, and provide for transparent fee schedules for out-patient surgery centers, hospitals, and pharmaceuticals."

Excerpt: "[The company] sponsors four defined benefit pension plans that cover more than 4,600 participants, emerged from bankruptcy with those programs still intact [and] the plan of reorganization confirmed by the bankruptcy court provides that Dura Automotive will continue to sponsor and maintain those plans.'

Excerpt: "A sharply divided federal appellate court has upheld a lower court ruling that the widow of a life insurance plan participant killed in a 2002 car accident did not deserve a benefit payout because the alcohol-related crash was not considered an accident."

Excerpt: "The Internal Revenue Service has issued a notice of the proposed treatment of recurring part-year compensation under §457(f) and §409A of the Internal Revenue Code."

Excerpt: "Citing a recent situation in which the nation's private-sector pension insurer demanded repayments from retirees after the agency had miscalculated pension benefits, a group of U.S. senators called for an agency investigation."

Excerpt: "A new report from Unum lays out changing trends in voluntary benefits purchases by employers driven by a changing workforce demographic and rising health care costs, and provides employers with suggestions on how to deal with these factors."

Excerpt: "North Carolina health care insurers must provide the same amount of coverage for certain mental conditions as they do for physical ailments under a state law that took effect on Tuesday, the Winston-Salem Journal reports."

Excerpt: "Whistle-blower lawsuits alleging that pharmaceutical companies and government contractors defrauded the federal government have created a backlog of more than 900 cases at the Department of Justice, the Washington Post reports. According to the Post, more than 500 of the cases involve the health care and pharmaceutical industries, as well as Medicare and Medicaid."

Excerpt: "'The settlement provides UnitedHealth Group with certainty and closure on this lawsuit, avoids potentially costly and protracted litigation and allows us to continue to focus on providing Americans with high-quality, affordable health care solutions.' Separately, UnitedHealth reached an agreement in principle to resolve the Employee Retirement Income Security Act (ERISA) class action litigation relating to the company's historical stock options practices that was originally filed June 2006, in the U.S. District Court in Minnesota against the company and certain current and former officers and directors."

Excerpt: "Employers who sponsor and administer defined benefit plans are now on notice that, because of their conflicts of interest, their administrative decisions will generally receive less deference from the courts than will the comparable decisions of their competitors sponsoring and administering 401(k) plans who do not operate under such conflicts of interest."

Page 8 of 11 pages. Excerpt: "In George v. Duke Energy Retirement Cash Balance Plan, 2008 WL 2307485 (D.S.C. 2008), the district court dismissed ERISA and ADEA age discrimination claims arising out of Duke Energy's conversion of its defined benefit plan to a cash balance plan, but allowed plaintiffs' wearaway claim under ADEA to proceed. The court also concluded that plaintiffs' fiduciary misrepresentation claim may proceed."

Pages 4-6 of 11 pages. Excerpt: "The Court's opinion saves the imputing of service tied to pension eligibility from being deemed per se unlawful. Because of the numerous factors and qualifications referred to in the majority opinion, it is unclear, however, how broadly its reasoning and rule may apply beyond this context."

Excerpt: "Senator Edward M. Kennedy's office has begun convening a series of meetings involving a wide array of healthcare specialists to begin laying the groundwork for a new attempt to provide universal healthcare, according to participants."

Excerpt: "An individual has a traditional IRA that's been funded with both deductible and nondeductible contributions. He wants to establish a new nondeductible traditional IRA, make contributions through 2010, and convert it to a Roth IRA. If he converts only the new nondeductible IRA, will he have to pay tax only on the earnings in the new one, or will he have to consider the deductible contributions and earnings in the old traditional IRA?"

Excerpt: "In order to find such a mistake, the IRS recommends that plan sponsors review: (a) the plan document to determine when distributions may occur; (b) each plan distribution and its related documentation showing the reason for the distribution; and (c) whether distributions designated as hardship distributions were made in accordance with the terms of the plan."

Excerpt: "About 45% of the smallest business owners had health care coverage purchased through the business, through a spouses's employers's plan, or through other group coverage such as COBRA, according to a 2008 survey by the National Association for the Self-Employed (NASE). Another 40% purchased individual health insurance coverage. However, only 18.6% of those owners who buy health coverage through their business also offer that coverage to some or all full-time employees."

Excerpt: "A lawsuit before California's Second District Court of Appeal centers on the question of whether public employees who get health benefits through CalPERS can sue insurers if they deny treatment, the Los Angeles Daily Journal reports."

Excerpt: "Anheuser-Busch Cos. will change the way it calculates lump-sum pension payouts that will mean a reduction in payouts of about 5 percent to 6 percent in 2009 and about 15 percent by 2012, according to an internal memo addressed to salaried employees from Tim Farrell, vice president of corporate human resources. The change will affect only salaried employees."

Excerpt: "The Department of Labor recently corrected and clarified its regulation on qualified default investment alternatives published on October 24, 2007. The guidance consists of corrections to the final regulation and a Field Assistance Bulletin in question and answer format. [Reprinted from Employee Benefit Plan Review with permission from Aspen Publishers.]"

Pages 3- of 8 pages. Excerpt: "The HEART Act deals principally with the tax treatment of military personnel, with provisions applying to a wide range of Internal Revenue Code ('Code') provisions. This article will deal primarily with those provisions which have an effect on qualified retirement or Section 125 plans, and IRAs."

Pages 1-3 of 8 pages. Excerpt: "Although regulations are expected within a year, health plans, insurers and employers should begin reviewing their policies and procedures relating to the treatment and collection of genetic information now to ensure timely compliance."

Excerpt: "Mandatory pension systems can have a negative impact on individual savings and labor supply decisions. In particular, defined benefit pension schemes that are not actuarially fair, can create incentives for early retirement, and therefore, reduce labor supply and the stock of human capital."

Excerpt: "This report . . . examines the economic and policy implications of various options for restructuring the health care finance system, exploring the principle alternatives proposed by 2008 presidential candidates Senators John McCain and Barack Obama."

8 pages. Excerpt: "These developments affect sponsors of and participants in ERISA and non-ERISA 403(b) arrangements."

Excerpt: "For years, a common projection was that workers needed to replace 70% to 90% of their pre-retirement pay to maintain the same living standard in retirement. But now, as medical costs grow, life spans lengthen and fewer retirees receive pensions, financial planners say you'll need more."

3 minutes.

Excerpt: "We compare and contrast the labor market and distributional impact of three common approaches to state and federal health insurance expansion: public insurance expansions, refundable tax credits for low income people, and employer and individual mandates."

Excerpt: "We analyze the long-run trends in executive compensation using a new panel dataset of top executives in large publicly-held firms from 1936 to 2005, collected from corporate reports."

Excerpt: "Prices in government and employer-sponsored health insurance markets only partially reflect insurers' expected costs of coverage for different enrollees. This can create inefficient distortions when consumers self-select into plans. We develop a simple model to study this problem and estimate it using new data on small employers."

The target page links to guidance published by the Service relating to retirement plans: Treasury Regulations; Revenue Rulings; Revenue Procedures; Notices; and, Announcements.

1 page. Excerpt: "This Special Edition provides sample plan language under Code section 409(p) for the transfer of an ESOP's S corporation shares. Also, in this edition, IRS Nationwide Tax Forums will be held across the country this summer and a new Joint Board for the Enrollment of Actuaries web page is now available."

9 pages. Excerpt: "[T]he candidates have proposed changes to employer-paid leaves of absence, the rules governing union elections, minimum wage . . . ."

6 pages. Excerpt: "All of these proposals are of interest to employers. They may also be a harbinger of what the new Congress turns to when it convenes in January 2009, depending on which candidate wins the presidential election as well as the results of the elections in the U.S. Senate and House of Representatives."

9 pages. Excerpt: "After a long primary election season, Barack Obama (D) and John McCain (R) are the presumptive U.S. presidential nominees. Both candidates have articulated a position on health care reform, though some of their proposals are more detailed than others."

Excerpt: "Fifty-five percent of the employers in the United States with more than 200 employees partially or completely self-fund their health plans. Yet despite the prevalence of self-insured plans, there is still misinformation about them."

Excerpt: "'Not only did we find that the energy used by working in the office was about twice as much as what was used when working from home, which was a significant difference, but we also found a huge impact [from] the energy consumption used in the commute,' . . . ."

Excerpt: "The Financial Industry Regulatory Authority (FINRA) and the International Foundation of Employee Benefit Plans are working together to get out the word about two new online resources to help companies and their older workers protect themselves from early retirement scams."

Excerpt: "The lawsuit filed by the California Public Employees' Retirement System in 2006, alleged that UnitedHealth's CEO and COO collectively earned over $500 million by exercising the backdated options."