| | Benefit Briefs | | PLANSPONSOR Covers 40 Years of ERISA | | Forty years ago this month, Congress passed and
President Gerald Ford signed into law the Employee Retirement Income Security
Act (ERISA)—a law created to protect employees entitled to benefits in
private-sector retirement plans and group welfare plans. PLANSPONSOR offers a
timeline of some ERISA developments over the past 40 years, and we spoke to
various industry insiders—including one who was present at the act’s
signing—about the importance of ERISA and its evolution.Read more > | | | Economic Events | | After four consecutive months of gains,
existing-home sales slipped in August as investors paying in cash retreated
from the market, according to the National Association of Realtors. Sales
increases in the Northeast and Midwest were outweighed by declines in the South
and West. Total existing-home sales, which are completed transactions that
include single-family homes, townhomes, condominiums and co-ops, decreased 1.8%
to a seasonally adjusted annual rate of 5.05 million in August from a slight
downwardly revised 5.14 million in July. Sales are at the second-highest pace
of 2014, but remain 5.3% below the 5.33 million-unit level from last August,
which was also the second-highest sales level of 2013. | | | Market Mirror | | Yesterday, the Dow was down 107.06
points (0.62%) at 17,172.68, the NASDAQ fell 52.10 points (1.14%) to 4,527.69,
and the S&P 500 closed 16.11 points (0.80%) lower at 1,994.29. The Russell
2000 lost 17.56 points (1.53%) to finish at 1,129.36, and the Wilshire 5000
decreased 211.51 points (1.00%) to 21,008.37.
On the NYSE, 3.2 billion shares changed
hands, with declining issues outnumbering advancing issues nearly 5 to 1. On the
NASDAQ, 2.8 billion shares traded, with a near 4 to 1 lead for decliners.
The price of the 10-year Treasury note increased 4/32,
bringing its yield down to 2.563%. The price of the 30-year Treasury bond was
down 2/32, increasing its yield to 3.288%.
| | | Rules & Regulators | | Lawmakers Hear Suggestions for DB Plans | | Making sure valuations are correct, addressing
multiemployer plan problems and providing relief for closed plans were among
suggestions made by witnesses for a hearing about defined benefit (DB)
retirement plans.Read more > | | Ensuring You Have a High-Quality Plan Audit | | Retirement plans with more than 100 employees
eligible to participate must include a plan audit with their annual Form 5500
filing to the Department of Labor (DOL). According to David M. Kot, partner at
Wolf & Company in charge of the firm’s Employee Benefit Plan Sponsors
Services Group, the DOL is investigating auditors to make sure they are
performing quality audits. But, he noted, the department has no authority over
auditors, it can only report them. Kot told attendees of the 2014 Plan Sponsor
Council of America (PSCA) Annual Conference that plan sponsors have ultimate
responsibility for making sure the audit is performed and is a high-quality
audit. “A simple mistake and the DOL could say, ‘This is not a valid audit,’
and the Form 5500 is not complete, and the plan sponsor would be subject to
lots of fines,” he said.Read more > | | Senators Introduce DB Nondiscrimination Legislation | | U.S. Senators Ben Cardin (D-Maryland) and Rob
Portman (R-Ohio), both members of the Senate Finance Committee, have introduced
the Retirement Security Preservation Act (S. 2855), designed to remove possible
incentives for companies to hard-freeze the defined benefit (DB) plans of
long-time employees or otherwise refrain from providing compensating benefits
for employees whose plans have been frozen. In a letter sent to the Secretary
of Treasury last year, Cardin and Portman pointed out that nondiscrimination
testing required to qualify a DB plan for tax-deferred status under the
Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code
(IRC) makes it difficult for companies to enact soft freezes on pension
plans—even though soft freezes can result in better retirement outcomes for
employees than simply closing a pension plan outright. The problem is that,
over time, grandfathered employees in the old system typically build seniority
and become more highly compensated than younger workers entering into a
company’s defined contribution (DC) plan. This widens the income gap between
the two groups and inadvertently increases the likelihood that the DB plan will
fail to meet nondiscrimination standards.Read more > | | IRS Issues Guide for Retirement Plan Reporting | | The Internal Revenue Service (IRS) has created a
guide for retirement plan sponsor reporting and disclosure responsibilities.Read more > | | | Small Talk | | ON
THIS DATE: In 1642,
the first commencement at Harvard College, in Cambridge, Massachusetts, was
held. In 1846, German astronomer
Johann Gottfried Galle discovered the planet Neptune at the Berlin Observatory.
In 1962, “The Jetsons”
premiered on ABC-TV. It was the first program on the network to be carried in
color. In 1972, “Baby Don’t Get
Hooked On Me” by singer-songwriter Mac Davis reached the top of the
American pop charts. In 1998, Jamie
Lee Curtis received a star on the Hollywood Walk of Fame. In 1999, the magician team Siegfried &
Roy received a star on the Hollywood Walk of Fame.
TUESDAY
TRIVIA: Siegfried was performing magic shows on a
cruise ship when one night, after deciding he needed an assistant, he grabbed a
steward boy on the stairwell as he was running down to start the show. And, the
duo Siegfried & Roy began.
| | TRIVIAL PURSUITS:
Who was the first woman to run for U.S. President?Read more > | | Share the good news with a friend! Pass the Dash along – and tell your
friends/associates they can sign up for their own copy.Read more > | | News from PLANSPONSOR.com
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