Headlines about "Ret plans - design"
Gathered from the web by the editors at BenefitsLink.com.
[Guidance Overview] Supreme Court Narrowly Upholds State's 'Imputed Service' Formula for Disability Pensions
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." (Deloitte via BenefitsLink.com)
[Guidance Overview] IRS Issues Sample Plan Language for Transfer for ESOP's S Corp Shares to Prevent Nonallocation Year
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." (Pension Protection Act Blog)
Dura Automotive's Pension Commitment Survives Bankruptcy
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.' (PLANSPONSOR.com; free registration required)
IRS Issues §457 Guidance on Teachers' Part-Year Compensation
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." (PLANSPONSOR.com; free registration required)
[Opinion] MetLife v. Glenn: Another Push for Defined Contribution Plans
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." (Oxford University Press USA)
[Guidance Overview] District Court Refuses To Dismiss ADEA Disparate ERISA Fiduciary Misrepresentation Claims Related WearAways Caused by a Cash Balance Conversion (PDF)
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." (Proskauer Rose LLP)
[Guidance Overview] U.S. Supreme Court Rules Disability Benefit Formula That Credits Younger Workers with Additional Years of Service Does Not Violate the ADEA (PDF)
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." (Proskauer Rose LLP)
[Guidance Overview] Question on Nondeductible IRA Contributions Converted to Roth IRA
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?" (Wolters Kluwer)
[Guidance Overview] IRS Provides Tips for Correcting Erroneous 401(k) Plan Hardship Distributions
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." (Wolters Kluwer)
Anheuser-Busch to Cut Lump-Sum Payouts
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." (Workforce Management; free registration required)
[Guidance Overview] DOL Issues Corrections and Guidance to Qualified Default Investment Alternatives Regulation
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.]" (Winston & Strawn LLP)
[Guidance Overview] Heroes Earning Assistance and Relief Tax Act Adds Benefits for Those in Military Service (PDF)
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." (Trucker Huss)
[Guidance Overview] New Rules for 403(b) Arrangements (PDF)
8 pages. Excerpt: "These developments affect sponsors of and participants in ERISA and non-ERISA 403(b) arrangements." (Prudential Retirement)
Equity Valuation Effects of the Pension Protection Act of 2006
Excerpt: "We examine pension firms' abnormal returns surrounding key dates in the legislative process leading to the adoption of the PPA 2006. We also estimate a multivariate model that isolates the equity valuation effects by the key provisions of the legislation. Third, we amend the multivariate model to assess whether there are differential valuation effects for firms in the different at risk categories defined by the PPA 2006." (Social Science Research Network)
Federal Thrift Savings Plan Moves Forward on Spousal Benefits and IT Modernization
Excerpt: "The Thrift Savings Plan is on track to undergo a major technology modernization and is moving forward with efforts to allow spousal beneficiaries to keep funds in the TSP. But changes to the plan's offerings and the enrollment process were the subject of debate at the first joint meeting of the Employee Thrift Advisory Council and the Federal Retirement Thrift Investment Board on Monday." (GovernmentExecutive.com)
[Official Guidance] Text of IRS Revenue Ruling 2008-40: Transfers from Tax-qualified Plan to Nonqualified Foreign Trust or Puerto Rican Plan (PDF)
9 pages. Certain transition relief is provided; also discusses application of section 410(b) minimum coverage rules to employees in Puerto Rico and other possessions of the United States. Excerpt: "HOLDINGS: 1. A transfer of amounts from a trust under a plan qualified under § 401(a) to a nonqualified foreign trust is treated as a distribution from the transferor plan. 2. A transfer of assets and liabilities from a qualified plan to a plan that satisfies section 1165 of the Puerto Rico Code is also treated as a distribution from the transferor plan, even if the plan is described in section 1022(i)(1) of ERISA." (Internal Revenue Service)
Vermont Public Pension Plan Changes Effective Today
Excerpt: "The pension plan used by Vermont state employees is changing today. Now many state employees will see more money from their paychecks going into their pensions. New state employees will have to work for three more years to receive full retirement benefits. And the age of full retirement is increasing from 62 to 65." (AP via Vermont Public Radio)
Union at Con Ed Fears the Loss of High Pay and Solid Benefits
Excerpt: "As the power industry was deregulated over the past decade, Con Edison, like other utilities, has been under pressure from shareholders and customers to keep labor costs down, eroding some of the benefits that drew workers to the utility." (The New York Times; free registration required)
[Guidance Overview] IRS Proposed Regs Extend DB Plan Accrual Rules for Plans with Two or More Formulas
Excerpt: "The IRS has issued proposed regulations that refine and extend defined benefit (DB) plan accrual rules for plans with two or more benefit accrual formulas, such as converted cash balance plans. The proposed rules provide a limited exception to the requirement to aggregate accrued benefits under all statutorily prescribed benefit accrual formulas." (Wolters Kluwer)
Anheuser-Busch to Take $400M in Charges from Early Retirement Offer
Excerpt: "A-B said that on June 25, it had approved an enhanced retirement program to be offered to certain salaried employees in connection with its plan to reduce costs and improve efficiency. The program will provide enhanced pension and retiree medical benefits to salaried employees who are at least 55 years old as of Dec. 31 this year, according to the filing." (St. Louis Business Journal; bizjournals.com; free registration required)
Anheuser-Busch to Cut Health and Pension Benefits for Salaried Employees
Excerpt: "The nation's biggest brewer laid out its benefit-cut plan in a memo . . . . The memo says employees' individual, lump sum payouts under the pension plan will be reduced by approximately 5 percent to 6 percent in 2009 and approximately 15 percent by 2012. Workers also will make a bigger contribution to their health insurance plan, rising from approximately 21 percent today to 25 percent of the cost beginning in 2009." (AP via Forbes.com)
Why CFOs Are Hooked on Pension Earnings
Excerpt: "Cecil Hemingway, executive vice president and head of the U.S. retirement practice at Aon Consulting, says companies -- and more importantly, their earnings -- are dependent on pensions to generate an additional source of steady income every year. So much so, that he estimates the 500 largest companies will log pension earnings somewhere in the neighborhood of $20 billion to $25 billion this year, combined. Who would walk away from that?" (Financial Week; free registration required)
Delphi Retirement Plan Gets $2.2 Million
Excerpt: "The federal government has obtained court approval to restore $2.2 million in retirement plan assets owed to hourly employees of auto supplier Delphi Corp. The U.S. Department of Labor said in a statement Monday the settlement approved by U.S. Bankruptcy Court ensures assets are available to pay future retirement benefits for workers." (AP via mlive.com)
Defined Benefit Plans May Make Comeback in Next Several Years As Recruitment and Retention Tool
Excerpt: "While many companies have frozen their defined-benefit retirement plans, they haven't terminated them, partly because they want the option of making them available again. Some companies see the plans as a way to attract and retain talent as baby boomers retire." (Workforce Management; free registration required)
[Guidance Overview] Supreme Court OKs Employer Use of Age as a Factor In Pension Plans
Excerpt: "What does this decision mean for public and private employers going forward? Basically, it means that public workers in Kentucky and states with similar pension plans can continue to rely on the promise of disability retirement benefits if they become disabled. It also means that public and private employers who feared their plans were implicated by the Kentucky Retirements Systems case -- a number estimated at 2,700 employers and 25 million affected workers -- do not have to cut benefits, increase employer contributions, or otherwise restructure their plans to bring them into compliance with the ADEA." (Porter Wright Morris & Arthur LLP)
[Guidance Overview] High Court Allows Different Calculations for Disability and Age-Related Retirements
Excerpt: "A state retirement system did not violate the Age Discrimination in Employment Act (ADEA) by crediting young workers with additional years of service in calculating disability retirement benefits, according to a June 19 Supreme Court decision (Kentucky Retirement Systems et al. v. Equal Employment Opportunity Commission, No. 06–1037)." (Wolters Kluwer)
New Jersey Budget Cut but Leaves 'Pink Elephant' of Pensions
Excerpt: "Gov. Jon S. Corzine and the Democratically controlled state legislature accomplished a legislative coup of sorts last week when they approved a $32.9 billion state budget that is actually $600 million lower than the current year's budget, and that for the first time cuts back on pension and health benefits for new state workers and public school teachers." (The New York Times; free registration required)
[Opinion] It's Good to See Some Florida Cities Scrapping Costly Pension Systems
Excerpt: "Leesburg is the latest Central Florida city to recognize its pension plan -- which grew during the boom years -- is getting harder and harder to support as retirees live longer and investments take a dive. Leesburg commissioners wisely decided to cap pensions and begin providing employees the government's equivalent of a 401(k) plan that most businesses adopted years ago." (Orlando Sentinel)
The Impact of PPA on Retirement Savings for 401(k) Participants (PDF)
24 pages. Excerpt: "Modeling of auto-enrollment results: This Issue Brief simulates (under several assumptions) the likely impact of 401(k) plan sponsors switching from voluntary enrollment systems to automatic enrollment designs with automatic escalation of contributions for a significant portion of workers (not just current 401(k) participants or those eligible to participate)." (Employee Benefit Research Institute)
Compromise Reached on San Diego, California, Pension System Overhaul
Excerpt: "Mayor Jerry Sanders and City Council President Scott Peters Wednesday reached a compromise on competing ballot initiatives aimed at overhauling San Diego's pension system. The compromise would create a hybrid pension plan for newly hired, nonpublic safety employees that combines a conventional retirement plan with a 401(k)-type savings plan." (City Wire via 10News.com)
[Opinion] Legislative Pension Mandates Drain Florida's Municipal Budgets
Excerpt: "[A] bill passed by the 2006 Legislature expanded worker's compensation and pension-disability benefits for law enforcement, firefighters and emergency medical technicians. Everyone values the service provided by these public employees. They put their lives on the line everyday. I appreciate their valor and commitment to serve. But ultimately the question becomes: Who is going to pay for these state-mandated benefits? The answer is, your city government and residents." (Miami Herald)
[Opinion] Yes, A Public Pension Can Be Forfeited
Excerpt: "As Upton Sinclair might have said: It is difficult to get a man to understand something when their pensions depend on not understanding it. So it is when government lawyers study whether public pensions are secure. They really want to believe they are. Based on my reading of the New Jersey state constitution, I don't. Here's how I see it playing out." (NJ.com)
[Guidance Overview] IRS Cannot Require Taxpayer to Suspend Membership in Retirement Fund Prior to Retirement Age
Excerpt: "When the IRS is attempting to levy assets in the retirement fund account of a taxpayer who has not yet reached retirement age, the IRS cannot 'elect,' on behalf of the taxpayer, to suspend the taxpayer's membership in the retirement fund in order to secure the immediate release of the assets in that account, according to IRS Chief Counsel Advice." (Wolters Kluwer)
Steelworkers Reach Settlement with Freightcar America to Provide Pensions and Severance Pay to Johnstown Workers
Excerpt: "The United Steelworkers announced today that a tentative settlement has been reached with FreightCar America (FCA) that will provide pensions to 201 union members and severance pay to another 110 who were laid off in 2007." (SunHerald.com)
Nortel Hit with Defined Benefit Plan Freeze Suit
Excerpt: "A group of Nortel Networks employees not grandfathered into the company's defined benefit plan when it was frozen in June 2006 have filed a lawsuit charging they did not receive enough advance notice." (PLANSPONSOR.com; free registration required)
How Does Your Retirement Program Stack Up? Integrated Retirement Financial Management Benchmarking Data (PDF)
48 pages. Excerpt: "[Mercer presents their] annual survey report of retirement programs sponsored by companies in the S&P 500 . . . . This report provides total and industry group benchmark data that encompasses the three policy levers of Mercer's Integrated Retirement Financial Management (iRFM) framework – design, contributions and investment." (Mercer LLC)
Helping Small Businesses Set-up Retirement Plans
Excerpt: "By itself, a retirement plan sponsored by a small business or a professional practice might be modest, with $1 million or less in assets. By pursuing several plans, though, advisors may discover that 'real money' is attainable." (Financial Planning)
[Guidance Overview] IRS, DOL and PBGC Propose Guidance on PPA Changes for Multiemployer Plans (PDF)
7 pages. Excerpt: "The Pension Protection Act of 2006 included many provisions that significantly impact multiemployer pension funds. Three federal agencies have recently released guidance to help these funds comply with some of the PPA provisions as well as clarify other issues." (Buck Consultants)
DC DB-ification Picking Up Steam
Excerpt: "As [an] article from Investment News points out, several of the country's largest insurance companies have rolled out income products within 401(k) plans, and more are sure to follow. While the jury may still be out on how well these particular products fare, one thing seems clear to us: the trend to embrace the 'DB-ification' of defined contribution plans is accelerating." (Baker & Daniels)
Study Shows Defined Contribution Plans Quickly Changing
Excerpt: "Once just a supplement to the pension system, defined-contribution plans such as 401(k)s are growing and changing fast as they evolve into a linchpin of Americans' retirement savings and offer increasingly innovative investment options, a new study indicates." (AP via The New York Times; free registration required)
Weston, Connecticut Nears Agreement with Eligible Employees on Payment Plan for Retirement Fund
Excerpt: "Local leaders are willing to cover all upfront costs associated with making four town employees eligible for Municipal Employees Retirement Fund benefits from the date at which they should have originally become part of the plan. All the four need to do now is agree to the Board of Selectmen's proposed repayment plan, which would allow each employee a certain time period to repay their portion of the eligibility cost." (The Weston Forum)
Changes to San Diego Pension Plan Would Cut Back Benefits for New Hires
Excerpt: "San Diego voters may get the chance in November to ratchet down retirement benefits for new city hires starting next year. The changes would increase the minimum retirement age, reduce the maximum benefit payout and cut the taxpayer contribution to the retirements of city workers almost by half." (San Diego Union Tribune)
[Opinion] It's Time to Reform Retirement-Age Requirements
Excerpt: "Actuaries in Washington State have made public a 'dirty little secret' in the pension world: Retirees are living longer. While that seems like a statement of the obvious, it's not. Pension plans have blinders on when it comes to thinking about how long employees will live. Unless something is done about it, taxpayers alone will pay the price." (Governing.com)
Supreme Court Grants Certiorari in AT&T v. Hulteen
Excerpt: "The Supreme Court yesterday (June 23) agreed to hear arguments in AT&T Corp. v Hulteen, a case that reflects a split among the circuit courts relating to the calculation of retirement benefits based on a system that predated the Pregnancy Discrimination Act of 1978 (PDA), and whether employers can continue using a pre-PDA formula for employees who took pregnancy leave before the Act came into effect." (The ERISA Industry Committee)
Boeing Alters Retirement Plan for New Employees
Excerpt: "The Boeing Co. said it's changing its retirement program for new, nonunion workers, replacing its traditional pension plan with one that's similar to a 401(k) plan." (Seattle Post-Intelligencer)
Attitudes Strongly Influence Participant Deferral Rates
Excerpt: "A new Spectrem Group report indicates participant attitudes as well as demographics strongly influence the level at which they contribute to their retirement plans." (PLANSPONSOR.com; free registration required)
Video: How to Boost 401(k) Participation Rates of Younger Workers
Five minutes. Excerpt: "Getting younger employers to sign up for a 401k) plan can be a tough sell. Here's how to win them over." (Financial Week; free registration required)
Executive Summaries of Articles in Benefits Quarterly, 3rd Quarter, 2008
The articles are titled: The Supreme Court Gives a 'Green Light' to Individual 401(k) Lawsuits; FMLA Expanded for Leaves Related to Family Members Serving in the Military; Nationwide Savings Plan Automatic Enrollment Getting Associates PREPared for Retirement; Work Options for Older Americans: Employee Benefits for the Era of Living Longer; Alternatives to Cash in Ensuring the Solvency of Defined Benefit Pension Funds; Lessons From Pension Reform in the Americas; and, The Future of Retirement: An Exploration and Comparison of Different Scenarios. (International Society of Certified Employee Benefit Specialists)
[Guidance Overview] Supreme Court Charts New Course in Pension Plan Case Interpreting ADEA
Excerpt: "In Kentucky Retirement Income Systems v. Equal Employment Opportunity Commission, No. 06-1037 (June 19, 2008), the United States Supreme Court interpreted the Age Discrimination in Employment Act (ADEA) to permit Kentucky to increase disabled public safety workers' pensions to the level they would have attained at normal retirement age, even though that meant workers who became disabled after reaching retirement age would not receive any pension increase." (Littler Mendelson P.C.)
Supreme Court Grants Cert. in Hulteen Retroactive Pregnancy Discrimination Act Case
Excerpt: "The case concerns whether Title VII permits an employer, when setting retirement benefits, to discriminate between women who took pregnancy disability leaves before the Pregnancy Discrimination Act (PDA) came into effect and other employees who took any other kind of temporary disability leave during that same period. The en banc Ninth Circuit held that AT&T's employment benefits system violated the PDA." (Workplace Prof Blog)
Cross-Border Pension Plans Open Up (PDF)
1 page. Excerpt: "Two recent developments have opened up the possibility of using a single pension plan to cover employees in multiple countries: Towers Perrin is working with a major multinational employer to set up a ground-breaking, cross-border plan sited in the EU and covering employees both in multiple countries within the EU and even some outside of it." (Towers Perrin)
The Future of Public Employee Retirement Systems
Excerpt: "At a recent Wharton Impact conference hosted by the Pension Research Council, an energetic cast of academics, financial experts, regulators, and plan sponsors examined the challenges facing public retirement systems in the US and around the world." (Pension Research Council; registration required to download fulltext of paper)
403(b) Rule Changes Spur New Approach
Excerpt: "With new 403(b) regulations looming, plan providers, consultants and plan sponsors are changing how they market, advise and manage the plans. The regulations, effective Jan. 1, require plan executives to provide a written plan document, account for excess contributions and monitor the transfer of assets among multiple plan service providers." (Pensions & Investments)
New Jersey Pension Changes Win Approval in Legislature
Excerpt: "It took three and a half hours of cajoling and twisting arms, but the Assembly finally passed a bill to tighten eligibility for state pensions and eliminate one state holiday just after 11 o'clock Monday night. After easily passing the Senate, the bill stalled in the Assembly, forcing Democratic leaders to scurry to line up the 41 votes needed to pass it." (NJ.com)
[Opinion] Jottings from a Plan Designs Conference
Excerpt: "[Nevin E. Adams recalls what he heard at the conference:] new ideas, modifications of existing 'assumptions,' and the occasional validation of the 'tried and true.'" (PLANSPONSOR.com; free registration required)
John W. Livick v. The Gillette Company; The Gillette Company Retirement Plan
Excerpt: "The Question: Does the Employee Retirement Income Security Act (ERISA) require that a plan pay benefits beyond those provided in the plan document when a company representative and an online benefit calculator provided a mistaken benefits estimate?" (PLANSPONSOR.com; free registration required)
[Opinion] Proposed Rule Would Create a 'Safe Harbor' for Participant Contributions Deposited Within Seven Business Days of Receipt or Withholding
Excerpt: "DoL's position, as stated in numerous Field Assistance Bulletins and Advisory Opinions, is that an employer impermissibly 'uses' plan assets if it fails to transmit participant contributions to the plan as soon as they are 'reasonably segregable' from the employer's general assets. This 'use of plan assets' is a potential prohibited transaction, subjecting the employer to remedies (e.g., making the plan whole), excise taxes, and penalties." (PLANSPONSOR.com; free registration required)
In Down Economy, Less Upside to DC Plans
Excerpt: "Pensions may be seen as a mill-stone around the corporate neck, but for some companies, these relics of business largesse might actually provide labor management flexibility that their defined-contribution cousins can't match. And that flexibility may come in especially handy if the economy continues to head south and layoffs become inevitable." (Financial Week; free registration required)
The Law of Unintended Consequences As Applied to a Business Owner's Retirement Plan
Excerpt: "[A 1936 article has since been popularized as The Law of Unintended Consequences, as] in case of a business owner using the tax laws to exclude Non-Highly Compensated Employees (Non-HCEs) from his or her retirement plan if asset protection is a key objective. Why? Because a retirement plan covering only the business owner and/or the owner's spouse is not an ERISA plan, and does not qualify for anti-alienation protections under Title I of ERISA." (The Retirement Plan Blog)
Fiduciary Concerns on the Rise, Advisers Say
Excerpt: "Three out of four advisers have observed heightened fiduciary concerns from plan sponsors since last year, according to a survey by Putnam Investments. The Putnam survey of 154 retirement plan advisers found that advisers see fiduciary concerns as an important issue for plan sponsors; favor target-date-type products; and, amid fee regulation, think their fees are on par with industry standards." (planadvisor.com)
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