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August 18, 2005
Today's sponsor: RELIUS® Education-- Seminars and Conferences for Pension Professionals

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Chicago Advanced Pension Conference

September 7-9, 2005 - Chicago, IL. Get your annual pension technical update from our respected panel of experts led by Craig Hoffman. This year, we have twice as many timely sessions to customize your education.

Relius Education by SunGard.


(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Selling Short in Your 401(k) with Mutual Funds that Mimic Hedge Funds' Investment Strategies
Excerpt: "These mutual funds buy stocks but also resemble hedge funds in that they engage in short-selling, or bets that shares will decline. They are being pitched as an alternative to hedge funds but without many of the drawbacks: steep minimum investments, withdrawal restrictions and limited transparency." (The Wall Street Journal via Pittsburgh Post-Gazette)

Abstract of Working Paper: $100 Bills on the Sidewalk -- Suboptimal Saving in 401(k) Plans
Excerpt: "[The authors] consider employees who receive employer matching contributions in their 401(k) plan and are allowed to make discretionary, penalty-free, in-service withdrawals. For these employees, contributing below the match threshold is a dominated action. Nevertheless, half of employees with these clear-cut incentives do contribute below the match threshold, foregoing matching contributions that average 1.3% of their annual pay." (National Bureau of Economic Research)

401k Workshop Series -- Successfully Managing the 401k RFP Process (PDF)
33 pages. Agenda of June 2005 PowerPoint presentation: The current provider marketplace; Steps in the RFP process-- Defining plan needs and objectives-- Providers; Who to ask; What to ask-- Fee and investment analysis-- Evaluation & selection; Service, trust & advisor agreements; and, Other plan sponsor considerations." (MJM Financial, LLC)

How to Transfer 403(b) Money (a.k.a. 90-24 Transfer)
Excerpt: "Unhappy with your current 403(b) provider? Fed up with your employer's vendor list? The IRS allows you to perform something called a 90-24 transfer into the vendor of your choice. The caveat is that your employer's plan and your existing vendor must permit transfers." (403bwise.com)

Special Report -- Another Pension System in the RED -- Part Two of Four-Part Series
Excerpt: "The county of San Diego's pension system positioned itself quite well for the investment boom of the late 1990s. With proceeds from pension obligation bonds it issued in 1994, the county's pension system rode the boom to its highest heights, generating surpluses every year. The surplus in 2000 reached $320 million. Just two years later, that fund faced a deficit of $1.25 billion." (voice of san diego)

Transcript of Online Chat with David Milstead on Colorado's PERA
Excerpt: "Question: If the state has to increase its contribution rate to shore up PERA, would those funds have to come out of the general fund which is currently subject to the TABOR spending limitation, forcing cuts in other areas? David: Answer: Wow. Great question, which I don't know the answer to. To the extent that employee salaries come out of the general fund, I think the contribution rate would too. That would explain the political difficulty of raising the contribution rate quickly." (Rocky Mountain News)

Congressional Budget Office Lowers Projected Defined Benefit Contributions
Excerpt: "Congressional economists say that larger than anticipated corporate pension contributions has led to a lowering of estimates on the level of expected defined benefit plan contributions. The Budget and Economic Outlook: An Update, August 2005 from the Congressional Budget Office (CBO) said the level of contributions CBO now is projecting for 2005 is about $15 billion lower than its previous forecast at the beginning of the year." (PLANSPONSOR.com: one-time registration required)

Montana State Supreme Court Backs Repealed Pension Law
Excerpt: "A district judge erred in throwing out a 2001 law allowing the Public Employees' Retirement Board to make changes in benefit rules, the state Supreme Court ruled Wednesday in upholding the law. District Judge Dorothy McCarter in Helena ruled last year that the law violated the Montana Constitution by giving the board legislative authority without sufficient standards, guidelines or limits." (AP via Independent Record)

IRS Guidance on the Final and Proposed Anti-Cutback Rules of Section 411(d)(6)
Excerpt: "Final and proposed regulations regarding the anti-cutback rules of section 411(d)(6) were published on 8/12/05. The anti-cutback rules protect accrued and early retirement benefits, retirement type subsidies, and other optional benefits offered under qualified retirement plans." (U.S. Internal Revenue Service)

Oregon Retirees Will Fight PERS Order to Return Pension Overpayments
Excerpt: "Retired public employees, reeling from Thursday's court ruling in a landmark pension lawsuit, are resisting calls to refund some past retirement payments. The leading pensioner's group, energized by 36,000 recent retirees now expecting to receive bills for past overpayments, will gather Friday to explore legal options." (Statesman Journal)

Defined Benefit Pension Plan Change Violated Anti-Cutback Provision, According to Federal Judge
Excerpt: "An Arizona federal judge has ruled that an employer violated the anti-cutback rule in the Employee Retirement Income Security Act (ERISA) by changing part of its pension formula." (PLANSPONSOR.com: one-time registration required)

Honoring Investment Education: The Eddy Awards Recognize Plan Sponsors in 5 Different Categories
Excerpt: "Nominations are now being accepted for the 2006 Eddy Awards, co-sponsored by Workforce Management and Pensions & Investments. The deadline for entries is October 14. .... For more information on the categories and for entry forms, visit www.pionline.com/eddy." (Workforce Management; one-time registration required)

Opinion: Social Security Benefits -- The Distinction Between Those Who Pay and Those Who Receive
Excerpt: "Seventy years ago today Social Security was signed into law. This anniversary will bring out assertions of how successful it has been and how important it is to never touch it. Among the most prominent claims of beneficiaries will be 'We paid our Social Security taxes; we earned our benefits.' That has a ring of truth to it, provided one is not misled by the word 'we.'" (The Washington Times)

Overview: Pension Reform -- Comparison of NESTEG with the Pension Protection Act
Excerpt: "[The Hewitt Associates'] report compares the key pension plan provisions of the National Employee Savings and Trust Equity Guarantee Act of 2005 (NESTEG) and the Pension Protection Act (PPA)." (Hewitt Associates)

Oregon Files Suits Against Merck and Marsh to Recover Public Pension Funds Lost
Excerpt: "The state of Oregon has filed suit against the drug company Merck & Co., Inc., maker of the drug Vioxx, and is seeking $15 million in damages. .... After Merck withdrew the drug from the market in September 2004, its stock tumbled 26 percent, causing a drop in the $50 billion Oregon Public Employees Retirement Fund, which owned 1.1 million shares of Merck at the time, through various money managers." (AP via OregonLive.com)


Links to Items on Executive Comp, Benefits in General

Analysis: FASB's Interpretation of 'Grant Date' under FAS 123/123(R)
Excerpt: "The Financial Accounting Standards Board (FASB) staff has confirmed that in order for a company to fix the 'expense' amount of an equity award under FAS 123 and FAS 123(R), it is not enough for the Board of Directors or Compensation Committee to merely approve the equity awards. Instead, the date for fixing the expense (what FASB refers to as the 'measurement date') does not occur until the terms of the award actually have been communicated to employees. " (McDermott Will & Emery)

Opinion: Demand Change or Pay More for Lawmakers' Salary and Perks
Excerpt: "The greed of Pennsylvania legislators extends far beyond the pay raises of 16% to 34% that they recently gave themselves. For example, who else gets insurance coverage for five years of costly nursing home care? Who else gets paid extra for showing up to work in Harrisburg? Who else gets a pension after just a few years on the job?" (Public Opinion)

Overview: Supreme Court Approves of Disparate Impact Claims Involving Age Discrimination (PDF)
Pages 1-2 of 18. Excerpt: "In light of the Court's ruling, employers should review their policies and procedures to confirm that they do not, in their application, adversely impact protected classes of employees, including those over 40. Further, employers should document the business reasons for employment decisions that impact a broad group of employees, and contact an attorney before implementing any policy that may adversely effect a large number of older workers." (Troutman Sanders LLP)

Overview: IRS Proposed Regulations on Electronically Transmitted Employee Benefit Notices
Excerpt: "A public hearing will be held in November 2005 on proposed regulations on the use of electronic media for certain employee benefit plan notices." (Hewitt Associates)

Overview: Treasury Proposes Electronic Communications Regulations
Excerpt: "The proposed regulations pull together, simplify and in some cases extend guidance previously published, in the form of notices and regulations, on the issue of electronic employee benefit notices." (Chicago Consulting Actuaries, LLC)

Suit Says Michigan Amendment on Marriage Didn't Kill Public Employment-Based Same-Sex Benefits
Excerpt: "A group of 21 g.ay couples told a Michigan judge that the state's 2004 constitutional amendment defining marriage as involving one man and one woman does not preclude public employers from providing domestic partner benefits." (PLANSPONSOR.com: one-time registration required)

The 2005 Form 5500 -- Overview with Outline of Changes on Front Page of the 'form 5500 help' Site
Excerpt: "On July 25, 2005, the U.S. Department of Labor's Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) announced the release of the 2005 Form 5500 [www.dol.gov/ebsa]. Don't underestimated the early release date - there are several significant revisions." (form 5500 help)

Overview: IRS Revenue Ruling Addressing Medical Reimbursement Accounts within Profit Sharing Plans
Excerpt: "IRS Revenue Ruling 2005-55 concludes that such accounts cannot make distributions to reimburse for medical expenses unless they are made on a taxable basis." (Hewitt Associates)


Newly Posted Events

The Updated DOL Voluntary Fiduciary Correction Program
Nationwide on September 15, 2005
presented by ASPPA (American Society of Pension Professionals & Actuaries)


Newly Posted Press Releases

Pension Liabilities Pose Little Threat to Financial Health of Most U.S. Companies, Watson Wyatt Study Finds
(Watson Wyatt)

Transamerica Retirement Services Provides Employers with a Guaranteed Blueprint for Increasing Participation
(Transamerica Retirement Services)


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Client Services Consultant- NJ
for American United Life Insurance Company
in NJ

Pension Administrator
for Preferred Pension Planning Corporation
in NJ

Install/Conversion Consultant
for Wachovia
in MN

COBRA/FSA Staff
for RSM McGladrey Insurance Services
in CA

Senior Plan Administrator / Actuarial Assistant / ERISA Compliance Assistant
for Actuarial Consulting Group, Inc.
in IL, NY

Financial Planner / Investment Specialist
for Diversified Investment Advisors
in IA

401(k) Plan Administrator
for Northeast Planning Services, Inc.
in MA

Client Relations Manager
for RSM McGladrey Retirement Resources
in IL

Director, Service
for BISYS Retirement Services
in PA

Relationship Manager
for BISYS Retirement Services
in PA

ERISA/Employee Benefits Attorney
for Parsinen Kaplan Rosberg & Gotlieb P.A.
in MN

Sr. Implementation Consultant
for AIG VALIC
in TX




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