BenefitsLink Retirement Plans Newsletter November 28, 2005 Today's sponsor: ASC & The ASC Institute (Click on company name or banner to learn more.) ASC - YOUR PREMIER SOURCE FOR RETIREMENT PLAN SOFTWARE, DOCUMENTS & EDUCATION Increase your efficiency & profitability with ASC's Document Generation & Management (DGEM) System & Roth(k) Amendment Wizard! Quickly and easily create customized prototype/volume submitter plan documents, including profit sharing, 401(k), money purchase and defined benefit plans. Effectively maintain historical plan info, including plan amendments and pre-amendment document language! Let the Roth(k) Amendment Wizard handle all your paperwork! And much more. Visit www.asc-net.com to learn about DGEM and other ASC retirement plan software systems and services. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Boomers Borrow More than Other Plan Members from Retirement Plans, According to Study Excerpt: "When the researchers analyzed Principal 401(k) plan loan data, they found that 68% of Principal's standard, 'prototype' plans allow loans. But the participation rate at plans that allow loans is only 0.4% higher than the rate at plans that make no allowances for loans, the researchers write. " (National Underwriter Life & Health; free one-time registration or paid subscription required) More 401(k) Plans Offer Brokerage Option Excerpt: "Despite a broad trend to simplify offerings in 401(k) plans, a number of large companies are giving their employees more complex options through brokerage and mutual-fund windows." (Wall Street Journal via IndyStar.com) 401(k) and Roth Plans -- Q&A Excerpt: "May a safe harbor 401(k) plan permit Roth 401(k) deferrals? .... If a safe harbor 401(k) plan includes a Roth feature, must the safe harbor 401(k) notice include an explanation of the Roth feature?" (SunGard Corbel) Overview: ADP Safe Harbor Notices under the Final 401(k) Regulations and Other Expected Guidance Excerpt: "The final 401(k) Regulations are effective for plan years beginning on or after January 1, 2006. Presumably this would mean that Notices currently being distributed for 2006 calendar year ADP test safe harbor plans would need to conform to the Notice requirements set forth in the Regulations." (SunGard Corbel) Life-Cycle Funds Mature: Plan Sponsor and Participant Adoption (PDF) 15 pages. Excerpt: "New enrollees in defined contribution (DC) plans use life-cycle funds at higher rates and more appropriately than their more tenured coworkers, although a majority continue to hold life-cycle funds in combination with other investment options. Life-cycle funds boost plan participation, and the type of life-cycle fund offered (i.e., static-allocation versus targeted maturity) can have a dramatic effect on participants' asset allocations." (The Vanguard Group) FASB Schedules GIC Guidance Release for this Week Excerpt: "The Financial Accounting Standard Board (FASB) could have ready for distribution a revised position arising out of its project relating to the proper valuation of guaranteed investment contracts (GICs)." (PLANSPONSOR.com; one-time registration required) Senate and House Set to Confer on Differing Pension Reform Measures Excerpt: "December negotiations over pension reform legislation will determine whether the Bush administration gets the new funding rules it is seeking. But if no bill passes, pensions will still be more costly for employers in 2006." (Workforce Management; one-time registration required) Overview: IRS Extends Date for Reforming Amendments Related to Anti-Cutback Case Excerpt: "The IRS has extended the deadline when plans must be in compliance with their reforming amendments relating to providing payments of retroactive benefits to plan participants who accrued benefits prior to the effective date of an original plan amendment." (PLANSPONSOR.com; one-time registration required) Plan Administrator Cleared in Company Stock Loss Lawsuit Excerpt: "A federal judge in New York has turned away arguments by a plan participant who claimed he lost more than $350,000 when his former employer allegedly delayed liquidating the company stock portion of his plan distribution." (PLANSPONSOR.com; one-time registration required) Azon Settles on ESOP Insider Stock Transaction Suit Excerpt: "A federal judge has approved a $9.35 million settlement for more than 500 former Azon Corp. workers who charged in a lawsuit that an insider stock transaction wiped out the company's ESOP while earning corporate insiders $25 million." (PLANSPONSOR.com; one-time registration required) Prosecutors to Lay Out Case Against 6 Trustees of the San Diego City Employees' Retirement System Excerpt: "After months of accusations, investigations, reports, legal bills and news conferences, the scandal surrounding San Diego's debt-ridden retirement system moves to a courtroom today for the beginning of what may be a revealing hearing." (The San Diego Union-Tribune) In Brazil, Participants Given More Time to Select Pension Tax Treatment Excerpt: "Under a law Brazilian President Luiz Inacio Lula da Silva signed November 21, 2005, certain pension plan participants will have until December 31, 2005 to designate the way their plans will be taxed." (Watson Wyatt Worldwide) National Work-Based Savings Plan Taking Shape in New Zealand (PDF) Excerpt: "Within two years, employers in New Zealand will be required to give employees access to a new national work-based savings plan launched by the government, provided the plan is adopted by lawmakers. (Originally published September 20, 2005)" (Towers Perrin) United Kingdom Pension Facts -- November 2005 (PDF) 21 pages. Excerpt: "The data [at the target site] has been selected by the PPI to answer those questions [they] are most frequently asked-- or those questions which [they] suggest should be more frequently asked - but where the data is not easily available from other sources." (Pensions Policy Institute) OECD Urges Denmark to Abolish Early Pension Scheme Excerpt: "The Organization for Economic Cooperation and Development urged Denmark on Wednesday to abolish its generous early retirement scheme to avoid a slowdown in economic growth and a worsening of public finances." (Business Insurance) Four Pronged Attack Needed to Make Pensions Work at Work, Says NAPF (PDF) 3 pages. Excerpt: "Government must take positive action to halt the decline of workplace pensions according to a report published ... by the National Association of Pension Funds (NAPF). A new report, Making Pensions Work at Work, sets out the agenda ahead for workplace pensions and comes in the wake of Pension Minister Stephen Timms' call for the NAPF to 'bang the drum' for workplace pensions." (National Association of Pension Funds) Fewer Hispanics Join Employer Retirement Plans Excerpt: "Hispanic workers participate in company-sponsored retirement plans at much lower rates than other ethnic groups, according to a new study. About 29 percent of Hispanic workers contributed to employer-sponsored savings plans in 2004 compared with 53 percent for whites and 46 percent for blacks, according to a report by the Employee Benefit Research Institute." (San Antonio Express-News; one-time registration may be required) Social Security Could Be Big Chill for 50-Somethings Excerpt: "Americans who are 50-something - a point in life when many are registering peak earnings, seeing their children move into the workplace and beginning to make detailed plans for their retirement - could be in for some unwelcome surprises down the road." (USA TODAY via Yahoo! News) Pension Funds Putting Billions into Hedge Funds Excerpt: "Faced with growing numbers of retirees, pension plans are pouring billions into hedge funds, the secretive and lightly regulated investment partnerships that once managed money only for wealthy investors." (The New York Times; one-time registration required) Court Ruling Favors Cash Balance Conversions Excerpt: "In a victory for employers that offer cash balance pension plans, a federal district court has dismissed a case against PNC Financial Services Group that was brought on behalf of its employees and retirees in connection with the company's switch to a cash balance plan." (Business Insurance) Links to Items on Executive Comp, Benefits in General Current Retirement and Welfare Plan Issues (PDF) 93 pages. Web seminar PowerPoint slides (Ballard Spahr Andrews & Ingersoll, LLP) Perspective: New Deferred Compensation Guidance Requires Fresh Look at Executive Compensation Excerpt: "The new Code section 409A contains many taxpayer-friendly provisions, including flexible payment rules and expanded relief for stock appreciation rights. This Perspective presents an overview and looks at the impact of the proposed regulations." (Mercer Human Resource Consulting LLC and Mercer Investment Consulting, Inc.; one-time registration required) How to Protect Yourself from ERISA Lawsuits Excerpt: "[ERISA] sets standards for most private pension and health plans. It does not cover plans set up by governmental entities or churches. ERISA allows employees to sue the administrators of these plans who violate the employees' rights. These administrators are called fiduciaries and have a high level of duties and obligations toward the employees." (Atlanta Business Chronicle via bizjournals.com; one-time registration required) Aon Consulting's Forum -- A Roundup of Regulatory Developments as of 11/18/2005 This issue covers items of general interest, developments in the retirement field, health and welfare, and HR Policies and Practices. (Aon Consulting) Delphi Study Says Average Employee Cost Is $76 Per Hour Excerpt: "A study commissioned by Delphi Corp. shows that unionized workers for the auto supplier cost the company an average of $76 per hour.The number includes a $26.97-per-hour wage as well as benefits such as health care, insurance and paid vacations." (Detroit Free Press) Newly Posted Events Annual Meeting: Wellness Programs - Wellness at Work in District of Columbia on December 13, 2005 presented by Capital Chapter ISCEBS Current Health Care Trends-2006 and Beyond - Teleweb Nationwide on December 15, 2005 presented by International Foundation of Employee Benefit Plans Executive Compensation Audits & IRS Updates Nationwide on December 6, 2005 presented by ABA Joint Committee on Employee Benefits Staggered Remedial Amendment Determination Letter Process/EPCRS Update Nationwide on December 15, 2005 presented by ABA Joint Committee on Employee Benefits Newly Posted or Renewed Job Openings 401(k) Account Manager for BISYS Retirement Services in PA Manager, Compliance and Benefits Administration for Kansas City Based Defined Benefits Plan Administrator in MO Manager, Benefits Services for The Coca-Cola Company in GA Compliance Analyst for Transamerica-The Winning Organization in CA Relationship Manager for MassMutual in MN 401K Compliance Analyst for ADP in NJ ERISA Attorney - Director of Legal Affairs for US Airways in AZ Sr. Benefits Analyst - ERISA for US Airways in AZ Pension Customer Support Representative for AccuDraft in FL Health & Welfare Consultant for Towers Perrin in CA, CT, DC, IL, NJ, NY, PA, TX Plan Administrator for Third Party Administration Firm in FL Account Executive for MetLife in IN, KY, OH Relationship Manager for MassMutual Financial Group in MN Handy Links: View Today's Active Message Threads Search BenefitsLink Using the Web for Employee Benefits Research (hypertext article) Employee Benefits Library Copyright 2005 BenefitsLink.com, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission. 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