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September 30, 2005
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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Senate Compromise Bill Summary: The Pension Security and Transparency Act (PDF)
2 pages. (American Benefits Council)

Increase Contributions to Increase Retirement Wealth, According to Putnam Investments Study
Excerpt: "The study, based on a hypothetical 'average Joe' who is invested in a 401(k) plan, compared the effects of mutual fund performance, asset allocation, and contribution level on retirement savings over a 15-year period. According to a Putnam news release, mutual fund performance had the least impact on savings." (PLANSPONSOR.com: one-time registration required)

Overview: Roth 401(k) FAQs
Excerpt: "The Roth 401k option was authorized as part of Economic Growth and Tax Relief Reconciliation Act (EGTRRA), which added section 402A to the Internal Revenue Code. In addition, the IRS has issued proposed regulations to implement Roth 401ks. We are awaiting the finalization of these regulations and issuance of guidance on model plan language (LRMs) before adding relevant provisions to our plan documents." (McKay Hochman Co.)

Overview: 403(b) Final Regulations
Excerpt: "Keep in mind that we are awaiting the final regulations on the Roth 401(k) and Roth 403(b) which are mandated by EGTRRA to be effective for plan years beginning after December 31, 2005." (McKay Hochman Co., Inc.)

Public Employee Pension Fund Data for 2004 -- 77% from Investment Earnings
Excerpt: "US Census Bureau reports data on state and local government plans for 2004. It shows that 77% of the public pension fund income is from plan investments. To put it simply, for every dollar in benefits paid, 77 cents came from earnings on the plan investments. [The table containing the data is at http://www.census.gov/govs/retire/2004ret02a.html.]" (National Conference on Public Employee Retirement Systems)

Overview: IRS Releases Final Regulations on Eliminating Optional Forms of Benefits
Excerpt: "The regulations apply to amendments adopted on or after August 12, 2005, the date the regulations were published in the Federal Register." (Watson Wyatt Worldwide)

Overview: Katrina Emergency Tax Relief Act of 2005
Excerpt: "On September 23, 2005, the Katrina Emergency Tax Relief Act of 2005 (KETRA) was enacted. The first four sections provide special rules for use of retirement funds for relief to Hurricane Katrina. [They are: Section 101 Tax favored withdrawals for relief relating to Hurricane Katrina; Section 102 Recontribution of withdrawals for home purchases canceled due to Hurricane Katrina; Section 103 Loans from qualified plans for relief relating to Hurricane Katrina; and, Section 104 ....]" (McKay Hochman Co., Inc.)

Overview: IRS Katrina Relief in Announcement 2005-70
Excerpt: "Announcement 2005-70 is presented ... with some minor edits and sub-headings for clarity." (McKay Hochman Co., Inc.)

Fiduciary Focus: The Pension Consultant Shell Game
Excerpt: "Here's how that shell game is played. Many pension consultants market their services (e.g., identify plan investment objectives, allocate plan assets, select money managers to manage plan assets, select mutual funds as plan investment options, monitor the performances of plan money managers and mutual funds, etc.) to sponsors of 401(k) plans with the hope of becoming the designated 'gatekeeper' to a plan." (Morningstar)

IRS Staggers Determination Letter Process and Extends EGTRRA Remedial Amendment Period (PDF)
5 pages. Excerpt: "The IRS issued Revenue Procedure 2005-66, which sets forth a new method for issuing determination letters on individually designed retirement plans and opinion and advisory letters on pre-approved plans. Significantly, the new revenue procedure calls for staggered remedial amendment periods based on an employer's identification number." (Buck Consultants)

World's Largest Pension Funds -- Assets
Excerpt: "Total assets of the world's 300 largest pension funds rose 27% in 2004, according to the annual survey conducted by Pensions & Investments and Watson Wyatt Worldwide. Assets totaled $8.39 Trillion, up from $6.59 Trillion in 2003. .... The [target article contains] a list of the top 10 largest pension funds in the world ...." (Cypen & Cypen)

ERIC Letter Urges the Senate to Protect Hybrid Pension Plans
Excerpt: "Hybrid plans provide portable defined benefit pension benefits that employees earn automatically without having to make contributions and protect employees against investment risk. Importantly, hybrid plans offer the option of receiving benefits as an annuity that protects the retiree against the threat of outliving his or her retirement benefits. These plans have become increasingly popular with participating employees." (The ERISA Industry Committee)

Disaster Relief Relating to PBGC Deadlines in Response to Hurricane Rita in Louisiana and Texas
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disasters declared by the President of the United States on account of damages from Hurricane Rita in Louisiana and Texas." (Pension Benefit Guaranty Corporation)

Links to Items on Executive Comp, Benefits in General

Overview: IRS Issues New Proposed Regulations Under Section 409A of the Internal Revenue Code
Excerpt: "The Internal Revenue Service today publicly released its long-awaited proposed regulations under Internal Revenue Code Section 409A. The proposed regulations are scheduled to be published in the Federal Register on October 4, 2005." (Pillsbury Winthrop Shaw Pittman LLP)

Overview: Treasury and IRS Release Proposed Deferred Compensation Regulations
Excerpt: "The regulations are proposed to be effective commencing January 1, 2007. However, they can be relied on immediately for purposes of determining compliance during 2005 and 2006." (Faegre & Benson LLP)

Overview: Treasury Department Releases Second Deferred Compensation -- Section 409A -- Guidance Document
Excerpt: "The guidance is in the form of proposed regulations that outline the operational requirements around elections to defer compensation and the timing around distributions of deferred compensation. Companies will have until December 31, 2006 to amend their plans for compliance." (PLANSPONSOR.com: one-time registration required)

Communicating Regulation Changes to Employees and Retirees -- Medicare Part D
Excerpt: "[Chicago Consulting Actuaries provides] plan sponsors with a 'top ten' checklist of steps to keep in mind when communicating regulatory changes." (Chicago Consulting Actuaries)

Hurricane Katrina-Related Internet Links
Excerpt: "[The target page lists] websites related to Hurricanes Katrina and Rita with a focus largely, but not entirely, on Retirement Plans: ...." (McKay Hochman Co., Inc.)

Hewitt Federal Legislation Quick Guide Updated as of September 27, 2005
Excerpt: "Hewitt's Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding health and welfare benefit plans, retirement plans, and human resources and employment law." (Hewitt Associates)

Newly Posted Events

Form LM-10: Surprising New DOL Enforcement of Reporting and Disclosure Requirements
Nationwide on October 17, 2005
presented by Morgan Lewis & Bockius LLP

Form LM-10: Surprising New DOL Enforcement of Reporting and Disclosure Requirements
Nationwide on October 18, 2005
presented by Morgan Lewis & Bockius LLP

Health Plan Eligibility Audits: Getting Rid of the Ineligibles
Nationwide on October 20, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)

Recent 409A Guidance Regarding Deferred Compensation Plan Requirements
Nationwide on October 14, 2005
presented by Morgan Lewis & Bockius LLP

Recent 409A Guidance Regarding Deferred Compensation Plan Requirements
in California on October 19, 2005
presented by Morgan Lewis & Bockius LLP

Newly Posted Press Releases

PSCA Announces Its 2005 Signature Awards Winners
(Profit Sharing/401(k) Council of America (PSCA))

PLANSPONSOR in Partnership with Whitmore Retirement Solutions Launches Women's Pension Exchange
(PLANSPONSOR)

Blue Cross And Blue Shield Association Consumer Survey Shows High Rate Of Satisfaction With HSAs, Cites Increased Reliance On Decision-Support Tools
(Blue Cross and Blue Shield Association)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Account Executive
for The Principal Financial Group
in NY

Institutional Investment Consultant
for Charles Schwab
in AZ

DC Administrator in Hawaii
for Hicks Pension Group
in HI

ERISA Attorney
for BISYS Retirement Services
in MN

Client Relations Manager
for ProNvest Inc.
in GA

401(k) Compliance Analyst
for AccuRecord, Inc.
in NY

Testing & Reporting Specialist II
for Fidelity Investments
in MA

Full Time Retirement Plan Administrator
for Maryland based Third Party Administration firm
in MD

Plan Implementation Consultant
for Invesmart, Inc.
in CA

Client Services Analyst/ Administrator
for Mercer HR Services
in IL



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