The Insider newsletter focuses on regulations, case law and policy, as well as providing in-depth, relevant research into benefits, retirement and HR issues.
Legislative efforts to extend the expired COBRA premium subsidy have been derailed, and it’s not clear when or whether the legislation can be revived. Concern about the cost of the subsidy at a time of ballooning federal budget deficits prevailed over attempts by some lawmakers to extend the subsidy through the end of the year. July 2010
On June 25, President Obama signed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act (H.R. 3962). The act replaces a scheduled 21% reduction in Medicare’s physician payment rates with a 2.2% increase for the period from June 1 to November 30, 2010. July 2010
During 2009, rising health care costs, rocky economic conditions and the specter of health care reform drove employers to seek new ways to manage costs and help their workers lead healthier lives. July 2010
Sponsors of U.S. retirement plans with Puerto Rican participants (including “dual-qualified” plans) have until the end of 2010 to eliminate some potential tax troubles. July 2010
On June 25, President Obama signed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act (the Act) into law, thereby making further funding relief available to defined benefit (DB) plans. To advance discussions in the pension community, this analysis projects aggregate regulatory funded status and minimum required contributions for single-employer DB plans both with and without this latest relief. July 2010
The pension funding relief in the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act comes with conditions. Relief recipients that pay "excess employee compensation" or make certain dividend payments in stock redemptions must also make higher pension contributions. July 2010
Large employers have been rethinking their retirement plan configurations for some time. Over the last 10 years, many of them have shifted from defined benefit (DB) plans to defined contribution (DC) plans. A variety of motives have driven the shift — overcoming financial difficulties, remaining competitive in a global market, reducing expenses and minimizing risk. June 2010
In Notice 2010-06, the IRS announces a new correction program for nonqualified deferred compensation plans with document provisions that do not comply with Internal Revenue Code section 409A. May 2010
To help pay for health reform, the Patient Protection and Affordable Care Act (PPACA) imposes a $500,000 cap on deductions for compensation paid to employees and individual service providers at health insurance companies (even those not publicly traded). The new deduction limit applies to most forms of compensation, including performance-based pay, commissions and pay under certain existing contracts. May 2010
Health care reform established a $5 billion Early Retiree Reinsurance Program (ERRP) to pay a share of the health claims incurred by early retirees (along with their spouses and dependents) under employment-based health plans. May 2010
On May 20, the Senate passed the Restoring American Financial Stability Act (S. 3217) by a 59-39 vote. Along with taking other measures aimed at ensuring economic stability, the landmark financial reform addresses executive compensation and corporate governance practices, including say on pay, compensation committee and advisor independence, clawback requirements, additional proxy disclosures and majority election of directors. May 2010
In its response to the RFI, Towers Watson provides information and analysis, as well as suggestions for ways the government and pension plan sponsors can help retirees achieve a more financially secure retirement. May 2010
Acknowledging the link between pension relief and jobs, both the House and the Senate have introduced relief bills over the last few months. As the Memorial Day recess neared, the House and Senate were hoping to approve the American Jobs and Closing Tax Loopholes Act of 2010. May 2010
Two recent laws make important changes to the COBRA premium subsidy. Plan sponsors need to update their COBRA communications and reach out to COBRA vendors to ensure compliance. April 2010
The 2010 ERISA Expanded Reporting and Disclosure Requirements Calendar provides who-what-when-where reporting and disclosure information for single-employer pension and welfare plans under ERISA. April 2010
The U.S. Department of Labor (DOL) has proposed regulations that provide guidance regarding the statutory prohibited transaction exemption for investment advice added by the Pension Protection Act of 2006 (PPA). April 2010
In Battoni v. IBEW Local Union No. 102 Employee Pension Plan, the 3rd U.S. Circuit Court of Appeals held that an amendment to a collectively bargained welfare plan illegally reduced plan participants’ pension benefits. April 2010
The U.S. Department of Labor (DOL) has issued Field Assistance Bulletin (FAB) 2010-01 regarding the revised Form 5500 filing requirements for 403(b) plans. April 2010
After gradually working their way back up to full funding after some rough market conditions during portions of the last decade, pension plan sponsors are again facing an uphill funding challenge. The deteriorating economic conditions that took root in 2007have increased the funding gap for pensions and caused stock values to plummet, sharpening concerns about the risks posed by these plans. April 2010
During 2009, the aggregate funding ratio for the largest U.S. pension plans increased by 4 percentage points — from 78% to 82%, according to Towers Watson calculations. April 2010
The Equal Employment Opportunity Commission (EEOC) has proposed a rule to provide guidance on the meaning of "reasonable factors other than age" (RFOA) under the Age Discrimination in Employment Act (ADEA). April 2010
The U.S. Supreme Court has declined to review a federal appeals court's 2009 decision allowing pension plan sponsors to define normal retirement age (NRA) by a period of service rather than a specific age. April 2010
To improve the retirement security of American workers, the Department of Labor (DOL) and the Internal Revenue Service (IRS) are considering whether to promote the use of lifetime income distribution arrangements in employer retirement plans and individual retirement accounts (IRAs). March 2010
Towers Watson has projected aggregate regulatory funded status and minimum required contributions for single-employer defined benefit (DB) plans in a continuing series of studies. March 2010
Investment experts foresee modest economic recovery and are optimistic about investment returns in the near term. But their 10-year outlook is less hopeful. The experts project an upward trend in inflation and continued weakness in the labor market, according to the second annual Towers Watson Global Survey of Investment and Economic Expectations. February 2010
The U.S. Department of Labor (DOL) has finalized a safe harbor rule for deposits of employee contributions to pension plans (including 401(k) plans) with fewer than 100 participants. Under the safe harbor rule, employers sponsoring such plans have seven business days after the employer receives or withholds the contribution to make the deposits. February 2010
Health care spending growth in the United States slowed to 4.4% in 2008 — a 48-year low. And, nevertheless, the health care portion of gross domestic product (GDP) grew from 15.9% in 2007 to 16.2% in 2008 — a significant increase — as the country experienced slowing and ultimately negative economic growth. February 2010
The Securities and Exchange Commission (SEC) voted 4-1 to adopt several changes to the proxy disclosure rules that will take effect for the 2010 proxy season for companies whose fiscal year ended on or after Dec. 20, 2009. February 2010
On Dec. 19, 2009, President Obama signed legislation to extend the 65 percent Consolidated Omnibus Budget Reconciliation Act (COBRA) premium subsidy enacted earlier this year. Plan sponsors should prepare for the subsidy to remain available to workers who lose their jobs by Feb. 28, 2010. January 2010
Assets in pension plans sponsored by Fortune 1000 companies regained some lost ground in 2009 and have experienced greater growth than plan liabilities. Despite lower interest rates and consequently larger liabilities, strong equity market returns are expected to boost average year-end funding status significantly — from 70% in 2008 to 78% in 2009. January 2010
A new study by Towers Watson highlights the wide-ranging variations in hybrid pension plans, reflecting the spectrum of sponsors' workforce planning, compliance and other needs and goals. It examines eligibility requirements, definitions of applicable compensation, benefit formulas, interest rates and transition methods for cash balance plans (CBPs) and pension equity plans (PEPs). December 2009
Both the House and Senate health care reform bills currently being debated would establish a new voluntary long-term care insurance program. Called CLASS,2 the new program would be offered to all workers through the Department of Health and Human Services (DHHS). December 2009
Towers Watson has been comparing investment rates of return in defined benefit (DB) and defined contribution (DC) plans for more than 10 years,1 and DB plans have been the long-term victor. This analysis updates our prior studies with investment returns for 20062 and 2007for a large set of plans, as well as a snapshot of year-end returns for 2008 based on a small set of plan sponsors. December 2009
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