EBSA Cautions on SRI Focus

Federal regulators reaffirmed their position that the goal of ERISA plans must be to generate maximum returns to meet pension liabilities and not for socially responsive investing purposes.

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) said in a news release that its guidance asserts that plan fiduciaries may never increase expenses, sacrifice investment returns, or reduce the security of plan benefits to promote legislative, regulatory, or public policy goals with no connection to the payment of benefits or plan administrative expenses.

“Fiduciary consideration of non-economic factors should be rare and, when considered, must comply with ERISA’s [Employee Retirement Income Security Act’s] rigorous fiduciary standards,” EBSA officials said in the announcement.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

“Recent events highlight the importance of ensuring secure and transparent retirement savings plans for American workers, retirees and their families,” said Assistant Secretary of Labor for the Employee Benefits Security Administration Bradford P. Campbell, in the news release. “Today the department reiterates and clarifies its longstanding view that workers’ money must be invested and used solely to provide for retirements, not for political, corporate or other purposes.”

Meanwhile, an EBSA bulletin on shareholder rights updates prior guidance issued by the department on the application of ERISA’s fiduciary standards to shareholder activism and proxy voting.

The two interpretive bulletins are to be published Friday in the Federal Register.

SSA Bumps Up Social Security Withholding Limit

The maximum amount of earnings subject to Social Security tax starting in January 2009 will be increased to $106,800 from $102,000, the Social Security Administration (SSA) announced Thursday.

According to an SSA news release, about 11 million will pay higher taxes as a result of the increase in the taxable maximum of the estimated 164 million workers who will pay Social Security taxes in 2009.

The SSA also announced that monthly Social Security and Supplemental Security Income benefits for more than 55 million Americans will increase 5.8% in 2009. The cost of living adjustment (COLA) is the largest since 1982.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

The 5.8% COLA begins with benefits that more than 50 million Social Security beneficiaries receive in January 2009. Increased payments to more than 7 million Supplemental Security Income beneficiaries will begin on December 31, the SSA said.

Also Thursday, The Internal Revenue Service (IRS) announced an increase in contribution limits for defined contribution plans for 2009 (see IRS Hikes DC, Catch-Up Limits).

«