INSIDER

Appeals Court Will Not Rehear San Francisco ERISA Preemption Case
On March 9, the U.S. Court of Appeals for the 9th Circuit denied a petition for an en banc (full court) rehearing of the case involving ERISA preemption of San Francisco’s Health Care Security Ordinance. On Sept. 30, 2008, a three-judge panel for the 9th Circuit ruled that ERISA does not preempt the ordinance, which requires employers to help fund the city’s universal health care program.

Supreme Court Affirms Primacy of Plan Documents in Paying ERISA Benefits After a Divorce
On Jan. 26, 2009, in Kennedy v. DuPont Plan Administrator, the Supreme Court unanimously ruled that the beneficiary designation in the ERISA plan document overrides a divorce decree invalidating a spouse’s right to the other spouse’s pension benefits.

District Court Upholds Whipsaw Calculation For Pre-PPA Distributions
In Traylor v. Avnet Pension Plan, a District Court ruled that the elimination of the so-called whipsaw calculation by the Pension Protection Act of 2006 (PPA) does not quash claims for additional benefits based on pre-PPA lump-sum distributions.

President Obama Signs SCHIP Legislation Into Law
On Feb. 4, President Obama signed the Children’s Health Insurance Program Reauthorization Act (H.R. 2) into law, just hours after it was cleared for his signature. The act extends and expands the State Children’s Health Insurance Program (SCHIP). Several of its provisions affect employer-sponsored group health plans by adding special enrollment rights and imposing new reporting and disclosure requirements.

Stimulus Bill Expands TAA Benefits
President Obama signed the American Recovery and Reinvestment Act of 2009 (H.R. 1) into law on Feb. 17. Otherwise known as the stimulus bill, the act makes numerous changes to the Trade Adjustment Assistance (TAA) program. In addition to expanding TAA eligibility, the act increases the health coverage tax credit (HCTC) and extends COBRA eligibility periods for TAA-eligible individuals and Pension Benefit Guaranty Corporation (PBGC) pension recipients.

President Obama’s Budget Includes Health And Retirement Proposals
President Obama’s budget proposal for fiscal year 2010 would establish a reserve fund and guiding principles for health care reform. The retirement proposals emerged during the president’s campaign: to establish automatic workplace pensions and expand the Saver’s tax credit. To bring in revenue, the president proposes to means-test Medicare Part D premiums, tax carried interest as ordinary income and "reform deferrals and other tax reform policies."

COBRA Subsidy: What Employers Need to Know
On Feb. 17, President Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA) into law. The massive stimulus package of government spending and tax cuts will have direct and immediate effects on employer-sponsored health care plans. Under the act, the government will subsidize Consolidated Omnibus Budget Reconciliation Act (COBRA) continuing health care coverage for certain individuals who lose their jobs between Sept. 1, 2008, and Dec. 31, 2009, through a payroll tax offset arrangement with employers. Individuals involuntarily terminated between Sept. 1, 2008, and Feb. 16, 2009, who do not currently have a COBRA election in place must be given a second chance to enroll.

Additional TARP Compensation Restrictions in Stimulus Package
President Obama signed the American Recovery and Reinvestment Act of 2009 on Feb. 17. The bill imposes stringent limits on executive compensation for companies receiving assistance under the Troubled Asset Relief Program (TARP). It applies the restrictions retroactively to all financial institutions currently participating in the TARP (with some limited exceptions for employment agreements in place before Feb. 11).

Golden Parachute Gross-Ups May Be Unnecessary for Many Executives
Compensation committees have been reexamining their non-core compensation elements under the brighter light shone by the recent changes to the Securities and Exchange Commission (SEC) proxy disclosure rules. Severance and change-in-control (CIC) benefits seem to be attracting the most criticism these days, so many companies are reevaluating the business purpose and effectiveness of those first.

DOL Issues — But Then Delays — Final Regulations on Providing Investment Advice to Plan Participants
In August 2008, the Department of Labor (DOL) proposed regulations and a class exemption for investment advice provided to participants in 401(k) plans. On Jan. 16, 2009, the department issued final regulations, which generally follow the proposed regulations. The final regulations were intended to take effect March 23, 2009, but the DOL has delayed the effective date to May 22, 2009. The delay was in response to a Jan. 20 request from White House Chief of Staff Rahm Emanuel to delay Bush administration regulations pending review by the Obama administration.

‘Value at Risk’ for Pension Plans to Rise in 2009 According to Watson Wyatt PRI
Having gradually worked back up to full funding after challenging financial-market conditions earlier in the decade, pension plan sponsors find themselves deep in another financial crisis. And the effect on pension plan funding has sharpened concerns about pension risks.

President Signs Pay Discrimination Legislation
On Jan. 29, 2009, President Obama signed the Lilly Ledbetter Fair Pay Act — his first major bill — into law. The act expands the time frame during which individuals may file workplace discrimination claims and will affect both compensation practices and retirement plans.

DOL Issues Final FMLA Regulations on Military Family Leave
The Department of Labor (DOL) recently issued final Family and Medical Leave Act (FMLA) regulations addressing the new military family leave entitlements under the National Defense Authorization Act (NDAA) for fiscal year 2008. There are two new types of military leave: (1) qualifying exigency and (2) military caregiver. The regulations took effect Jan. 16.

Most Viewed Articles

	IRS Releases Grab Bag of Guidance on Pension Distributions DOL Issues Final Regulations on Timing of QDROs Looking Into the FASB’s Crystal Ball: What’s Ahead for Liability Measurement? Default Investment Options in Defined Contribution Plans: A Simple Comparison