September 2009 

 General Items

In 2010 IRS Could Cut 401k Contribution Limit to $16,000 — Summary: Low inflation has made food and gas more affordable during the recession, but there's a downside: Social Security beneficiaries probably won't get a raise next year, and the IRS may reduce the amount workers can contribute to their 401k plans. Located at: USA Today. Click on headline for full article.  

Fiduciary Status for Broker-Dealers — Summary: The Administration has included a provision to establish a fiduciary duty for broker-dealers who offer invest. advice and to harmonize the regulation of investment advisers and broker-dealers. While the proposal was written from the perspective of the retail investor, the authors believe that it will have a significant impact on invest. advice for 401k plans—particularly in the mid-sized and small plan market. Located at: Reish & Reicher (PDF File). Click on headline for full article.

Safe Harbor for 2010 — Summary: It will soon be time to consider whether to start or continue a safe harbor 401k plan for next year. Obviously, the harsh economic times have influenced the future use of the guaranteed NEC option and brought new favor to the use of the flexible NEC. Located at: McKay Hochman. Click on headline for full article.

Participant Loan Extension Can Carry Unexpected Consequences — Summary: Failure to comply with the Tax Code's constraints on participant loans can subject a borrowing participant to immediate income taxation and, if the participant is not yet age 59½, a 10% penalty tax. Two recent Tax Court decisions highlight one aspect of these participant loan rules that can easily be overlooked, thereby subjecting participants to these adverse tax consequences. Located at: Spencer Fane Britt & Browne LLP. Click on headline for full article.

The DB(k): Pension of the Future — Summary: An attractive new option for employer sponsored retirement plans becomes available next year. The "DB(k)" offers businesses with 500 or fewer employees an opportunity to provide a strong retirement plan for their employees with fewer hassles and less financial drain than a traditional pension plan. Located at: Kiplinger. Click on headline for full article.

IRS Obsoletes Old 403(b) Guidance; Highlights Unique School Guidance — Summary: The IRS has recently released Revenue Ruling 2009-18 which officially declares to be obsolete many old pre-2009 rulings and notices which dealt with 403(b) plans.
Located at: Sungard Relius. Click on headline for full article.

Annual 401k Benchmarking Survey: 2009 Edition — Summary: Staying the course through uncertain economic times: Employers take a “wait and see” approach towards their 401k plans. Located at: Deloitte. Click on headline for full article.  

10th Annual Transamerica Retirement Survey — Summary: Employers believe health insurance is the most important benefit to employees, followed by employee-funded retirement plans, life insurance, and disability insurance. Long-term care insurance is less likely to be seen as important. Most benefits are more likely to be considered important to employees by large employers than by small employers. The exceptions are health insurance and company-funded pension plans which hold equal importance between large and small employers. Located at: Transamerica (PDF File). Click on headline for full article.

Supreme Court to Clarify ERISA Plan Standards of Review — Summary: The U.S. Supreme Court has agreed to review the decision of the Second Circuit Court of Appeals in Frommert v. Conkright, 535 F.3d 111 (2d Cir. 2008). At issue is the degree of deference courts should accord the decision of the administrator of a plan subject to ERISA that is made outside the context of an administrative claim for benefits. The Supreme Court will also consider what standard an appellate court should use in reviewing a lower court's interpretation of an ERISA plan's terms. Located at: McGuire Woods LLP. Click on headline for full article.  

Summary of The Defined Contribution Plan Fee Transparency Act of 2009 — Summary: This is the official summary of a bill (H.R. 2779) that would add new Section 4980H to the Internal Revenue Code requiring notice to plan participants and taxes for failure to comply. Located at: American Benefits Council (PDF File). Click on headline for full article.

Towers Perrin Legislative Tracking Chart — Summary: This chart tracks bills related to retirement and executive compensation. Thousands of bills are introduced in Congress but only a select few are summarized on this chart. This selection represents Towers Perrin's best judgment on the likelihood of enactment and the relevance of the issue for employers. Located at: Towers Perrin (PDF File). Click on headline for full article.