BenefitsLink Retirement Plans Newsletter November 30, 2005 Today's sponsor: www.ftwilliam.com (Click on company name or banner to learn more.) Register for our free on-line demo! www.ftwilliam.com offers the employee benefits professional the highest quality plan documents and forms at highly competitive prices. Plan documents on a per document basis are only $50/adoption agreement, or $100/volume submitter document (including cross testing). An annual subscription to all documents is only $1,500. The Form 5500 package and the IRS/PBGC form package are only $250 each. Prices include access for five concurrent users. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Text of IRS Notice 2005-92: Guidance on Two KETRA Provisions Providing Relief to Katrina Victims (PDF) 16 pages. Excerpt from related press release: 'Under one provision of KETRA, individuals who live in one of the four states affected by Hurricane Katrina ... receive favorable tax treatment with respect to distributions from eligible retirement plans that are qualified Hurricane Katrina distributions ... Another provision ... increases the allowable plan loan amount from an employer-sponsored retirement plan and provides for a suspension of payments for plan loans ... to Katrina victims." (Internal Revenue Service) Analysis: E.D. Pa. Judge Dismisses Age Discrimination Claim Against Cash Balance Plan Sponsor (PDF) 2 pages. Excerpt: "In a twenty-page decision issued on November 21, 2005, Judge LeGrome Davis dismissed an age discrimination claim against PNC's cash balance plan identical to the claim against IBM's cash balance plan that the Southern District of Illinois had sustained on July 31, 2003. Register v. PNC Financial Services Group, Inc.... " (Thompson Hine) Federal Court Says Cash Balance Plans Aren't Age Discriminatory Excerpt: "A federal judge in Pennsylvania in large measure relied on pronouncements from the US Treasury Department and a growing body of case law in upholding a cash balance pension plan transition." (PLANSPONSOR.com; one-time registration required) Another Cash Balance Plan Decision from the Courts Excerpt: "For those who can't wait to read it, [Ms. Grenier posts] a copy of the Memorandum issued by the court in the Sandra Register vs. PNC Financial Services Group Inc. case. The decision, which addresses the issues involved in cash balance plan conversions, was rendered on November 21, 2005 by the Federal District Court for the Eastern District of Pennsylvania. The court granted the defendants' motion to dismiss. " (Attorney B. Janell Grenier via BenefitsBlog.com) Opinion: Update on the Roth 401k Excerpt: "[MJM Financial has] just completed an informal information gathering project on plan provider readiness for the Roth 401(k) option which is set to take effect on January 1, 2006." (Michael Malone via MJM Financial) Opinion: Lifestyle Funds -- Not So Simple Excerpt: "One of the hardest decisions for retirement plan participants--if not the hardest one--is choosing how to invest their savings. It's so daunting that many decide not to participate in retirement savings plans at all rather than make bad decisions. Nowadays, a widely touted solution is the asset allocation fund (also called a lifestyle fund) and its newer cousin, the lifecycle or 'target date' fund." (OnWallStreet) PLANSPONSOR's 2005 Defined Contribution Survey Excerpt: "A record 4,741 plan sponsors responded to [the] survey this year, running the gamut of plan sizes." (PLANSPONSOR.com; one-time registration required) PLANSPONSOR November Cover Story: The Challenge for DC Plans Excerpt: "The defined contribution marketplace has long -- some might argue too long -- been driven by technological innovation. Technology, of course, has brought the kind of access, tools, and information to participants and plan sponsors that could not even have been imagined three decades ago." (PLANSPONSOR.com; one-time registration required) The 30-Year Bond Returns in Time for Mark-to-Market Defined Benefit Plan Accounting Excerpt: "In August, the US Department of the Treasury announced it would begin reissuing the 30-year Treasury bond in February 2006. Formerly a defined benefit plan staple, Treasury ceased issuing 30-year bonds in 2001. .... Demand from defined benefit plans is expected to be robust, and could increase all the more if the Financial Accounting Standards Board (FASB) requires mark-to-market pension accounting, although such a move may further depress yields." (PLANSPONSOR.com; one-time registration required) Opinion: The Pension Bill Is Coming Due for Orange County, California Excerpt: "It's worth remembering, about 16 months ago, when the Orange County Board of Supervisors passed a retroactive 62-percent pension spike for all county employees, that the board majority claimed that the measure wouldn't cost county taxpayers anything. The three pro-union supervisors, Bill Campbell, Jim Silva and Tom Wilson, got annoyed at critics who suggested otherwise." (The Orange County Register) U.S. Pension Funds Need Bigger Contributions, According to Study Excerpt: "With stock market returns expected to dwindle in the years ahead, U.S. companies will have to step up contributions to their pension plans to fully fund them, the asset management arm of JPMorgan Chase & Co. ... said [yesterday]." (Reuters) Analysis of Congressional Pension Funding Reform Proposals: Multiemployer Plan Provisions (PDF) 5 pages. Excerpt: "The American Academy of Actuaries' Multiemployer Plans Task Force provides this analysis to address a number of issues related to multiemployer plans present in current pension funding reform legislation, specifically the Pension Protection Act of 2005 (H.R. 2830) as passed by the House Education and the Workforce Committee2 and the Pension Security and Transparency Act of 2005 (PSTA, S.1783), which was passed by the full Senate on November 16, 2005." (American Academy of Actuaries) Analysis of Congressional Pension Funding Reform Proposals for Single-Employer Plans (PDF) 10 pages. Excerpt: "The American Academy of Actuaries Pension Committee provides this analysis to address a number of issues in current pension funding reform legislation, specifically the Pension Protection Act of 2005 (HR2830) and the Pension Security and Transparency Act of 2005(PSTA, S.1783), which is the merged version of the bills passed separately by the Senate Finance and Senate Health, Education, Labor and Pensions (HELP) committees." (American Academy of Actuaries) A Secure Old Age in Australia from Investments Abroad Excerpt: "Few doubt that Australia needs to save more to ensure public-worker pensions. Like most industrial nations, its population is aging, and while a commodity-driven economic boom has kept the government flush, the public's savings rate is relatively low and paying for pensions will put a growing burden on working-age Australians." (The New York Times; one-time registration required) Opinion: The Demise of the Private Pension Plan Excerpt: "Do you hear a faint, but ominous-sounding, bell? It's ringing the death knell for traditional pension plans." (Bankrate.com) Opinion: Defined Benefit Pensions Still Guarantee Security through the PBGC Excerpt: "Is there cause for panic? The answer is no. The private pension system is indeed facing challenges, brought on by global economic pressures, demographic shifts and changes in corporate attitudes toward employee benefits. American workers should certainly not be panicked about a breakdown of the PBGC, however." (San Francisco Chronicle) Dealing with Disaster Relief for Retirement Plans Excerpt: "KETRA, while providing assistance to hurricane victims, nonetheless creates many more questions for those who have to administer the exceptions. Plan sponsors and their recordkeepers are scrambling to determine who is affected, what needs to be done, and how to do it expeditiously and in accordance with the new guidelines." (PLANSPONSOR.com; one-time registration required) Overview: Hurricane Katrina Statutory and Administrative Relief Excerpt: "In response to the devastation caused in the Gulf Coast region by Hurricane Katrina, Congress, the Department of the Treasury (the Internal Revenue Service (IRS)) and the Department of Labor ... took swift action to provide various measures of relief to affected individuals and entities with respect to their employee benefit plans. This article provides a summary of the relief that has been granted, and identifies some potential traps for the unwary." (The Wagner Law Group via BNA Tax Management Inc.) Opinion: Public Pension Fund Trustee Education Excerpt: "While it would seem that public fund trustees attending educational conferences would be a good thing, the practice is receiving a growing amount of negative press." (PLANSPONSOR.com; one-time registration required) Opinion: Workable Solutions for Monitoring Investment Education Excerpt: "In my experience, few fiduciaries (for our purposes, those are plan committee members) realize that ERISA requires that they evaluate the providers of investment education, understand the content and delivery of those services, and monitor the effectiveness and quality of the education -- e.g., is it working?" (PLANSPONSOR.com; one-time registration required) A Very Brief Look at Pension Plans Worldwide This article provides assorted information on social security systems and private pension plans in several countries. (AP via macon.com) UK's Turner Recommends Gradual Rise in State Pension Age to 68 by 2050 Excerpt: "The Turner Pensions Commission has recommended a rise in the state retirement age to 68 by 2050 along with the creation of a national pension savings scheme (NPSS) in which employees would be automatically enrolled." (Forbes) Federal Regulatory Agencies Offer Preview of Upcoming Pension Guidance Excerpt: "Key officials from the IRS, Treasury Department, Labor Department, and PBGC outlined upcoming regulatory initiatives at the 2005 annual conference of the American Society of Pension Professionals and Actuaries (ASPPA), held in Washington, DC on November 8, 2005." (CCH INCORPORATED) Links to Items on Executive Comp, Benefits in General May Non-Competes Still be Used in §457(f) Plans After §409A? Excerpt: "Under Regs §1.83-3(c)(1), a substantial risk of forfeiture exists 'where rights ... are conditioned directly or indirectly upon the future performance (or refraining from performance) of substantial services.' It is the inclusion of the parenthetical language - 'refraining from performance' - that has given substance to the use of non-competes." (Greensfelder, Hemker & Gale, P.C. via BNA Tax Management) Designing an Employee Benefit Plan Excerpt: "When you begin to put together an employee benefit plan, you will likely want to start with a few 'core' benefits, such as life insurance, health insurance and a retirement plan." (Naples Sun Times) The New Deferred Compensation Rules: What Employers Most Need to Know (PDF) 4 pages. Excerpt: "The Internal Revenue Service finally provided useful guidance for employers trying to comply with the new rules, in the form of proposed regulations under Section 409A of the Internal Revenue Code, on September 29, 2005. The proposed regulations are lengthy and complex. They provide extensive details for distinguishing what's covered by Section 409A from what's not, and determining how to comply with the new restrictions. This Viewpoint summarizes the key provisions." (Hay Group; one-time registration required) 2005 'To Do' List Under Code Section 409A Excerpt: "This article highlights some key 'to-do's' between now and the end of the year under Code Section 409A." (CCA Strategies) IRS Sent NQDC Plan Reporting Delay Request by Trade Group Excerpt: "A compensation trade group has asked federal officials to put off certain reporting requirements for nonqualified deferred compensation (NQDC) plans. The National Association of Tax Reporting and Payroll Management (NATRPM) made the request to Internal Revenue Service (IRS) to waive the 2005 Form W-2 and Form 1099-MISC reporting requirements of tax code Section 409A, ...." (PLANSPONSOR.com; one-time registration required) Hewitt Federal Legislation Quick Guide Updated as of November 22, 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) Overview: DOL Proposes Requirement to File Form 5500 Electronically Excerpt: "On August 30, 2005, the U.S. Department of Labor (DOL) published proposed regulations that would generally eliminate paper filings of Form 5500 (Annual Return/Report of Employee Benefit Plan), and instead require that filings be made electronically, including any statements or schedules required to be attached to the form." (Hewitt Associates) Newly Posted Events Certified Retirement Financial Advisor in Texas on February 8, 2006 presented by Getting Ready for 2006 in Ohio on December 13, 2005 presented by ASPPA Benefits Council of Cleveland Newly Posted Press Releases Holiday Savings Tips: Make a List. Keep It Short. Comparison Shop. (Employee Benefit Research Institute (EBRI)) Employease Again Ranked #1: Business Insurance Picks Employease as Top Employee Benefit Information System (Employease) Treasury And IRS Issue Guidance Clarifying New Legislation Providing Hurricane Katrina Victims Access To Their Retirement Savings (U.S. Treasury Department and Internal Revenue Service) Employers Now Have Flexibility of Adding Extensions to Great-West Healthcare FSAs (Great-West Life & Annuity Insurance Company) Workplace Options' Mary Ellen Gornick to Co-Chair 2006 EAPA Work/Life Task Force (Workplace Options) Operator Of Employers Mutual Convicted Of Fraud For Operating Bogus Health Insurance Provider (U.S. Department of Justice) Alliance for Affinity Security Launches; Will Administer Health Care Accounts for Major U.S. Employers (Alliance for Affinity Security) Newly Posted or Renewed Job Openings Director, International Compensation and Benefits for Sony Pictures Entertainment in CA Compliance Specialist for The Newport Group in NC Associate Product Manager for OppenheimerFunds, Inc in NY Institutional Relationship Manager for Fifth Third Bank in IN Benefits Analyst for Snap-on Incorporated in WI Regional Service Coordinator for Standard Insurance Company in CA Retirement Plan Document and Testing Specialist for Louis Kravitz & Associates, Inc. in CA Cost Conscious Benefits Director for Icahn Associates in ANY STATE Retirement Services Relationship Manager 2 for SunTrust Bank in DC Quality Control Reviewer-- Dental Claims Dept. for 1199SEIU National Benefit Fund in NY Account Coordinator, Employee Benefits for ABD Insurance and Financial Services in CA 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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