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December 9, 2005
Today's sponsor: APSCREEN, Employee Locator

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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)
Considering the Roth 401(k) (PDF)
9 pages. Excerpt: "In early March, the Internal Revenue Service (IRS) issued proposed regulations that would allow plan participants to make after-tax Roth IRA-like contributions to their 401(k) plans. 401(k) plans may offer this optional election to plan participants in 2006. The IRS has not issued the final regulations." (invesmart.com)

Overview: Prototype and IRA Amendment Relief (PDF)
1 page. Excerpt: "In response to concerns about the interaction of procedural and substantive guidance with respect to the timing of qualified plan amendments, the Service published clarifying guidance and transitional relief in Notice 2005-95 on December 2, 2005. The Notice included ... relief for prototype 401(a)/401(k) and IRA plans: ...." (Sutherland Asbill & Brennan LLP)

2005 Plan Year: Year-End Compliance Reminders for Defined Contribution Plans Subject to ERISA (PDF)
6 pages. Excerpt: "This information applies to qualified defined contribution plans and 403(b) plans that are subject to Title I of ERISA. Every year, plan sponsors must make sure their plans meet certain compliance requirements, including those listed below. This publication identifies the materials you need to review and will help you prepare for year-end." (Prudential Retirement)

2005 Year-End Compliance Reminders for Defined Contribution Plans Not Subject to ERISA (PDF)
3 pages. Excerpt: "This information applies to defined contribution plans, such as qualified governmental plans (including 'grandfathered' 401(k) plans), qualified church plans that do not elect to be covered by ERISA ('non-electing church plans'), 403(b) programs, and section 457 plans that are not subject to Title I of ERISA." (Prudential Retirement)

Retirement Was Actually a Sabbatical for 7 Million Americans
Excerpt: "A Putnam Investments survey has found that about seven million previously retired Americans have returned to work for pay after an average sabbatical of one-and-a-half years. In its news release, Putnam said the working retired account for 10% of the US workforce age 40 and older. Among the survey respondents, 54% work part-time, 36% work full-time, and the remaining 10% are looking for work. Two-thirds said they planned to return to work following their first retirement." (PLANSPONSOR.com; one-time registration required)

Update on ADP Safe Harbor Notices and Interim Amendments
Excerpt: "As anticipated, the IRS has provided guidance regarding ADP safe harbor notices as well as guidance regarding interim amendments that may be required for Roth provisions, final 401(k)/401(m) regulations and other changes in the law. IRS Notice 2005-95 contains some welcome relief. However, in some cases there is limited, or virtually no, relief and action must be taken now in order to comply with IRS requirements." (SunGard Corbel)

NCTR and Others Send November 30 Letter about the Proposed Section 415 Regulations to IRS (PDF)
9 pages. Excerpt: "This letter is intended to serve as additional comments on the proposed regulations [provided] as a follow up to our October 18, 2005 meeting with Treasury and Service staff. .... These additional comments ... are submitted on behalf of the National Council on Teacher Retirement (NCTR), the National Association of State Retirement Administrators (NASRA), and the National Conference on Public Employee Retirement Systems (NCPERS)." (National Council on Teacher Retirement)

Overview: IRS Final Rules for Required Payments from Defined Benefit Plans (PDF)
6 pages. Excerpt: "These rules apply to sponsors of and participants in qualified defined benefit plans, including governmental plans and church plans that do not elect to be covered by ERISA ('non-electing church plans')." (Prudential Retirement)

Guide to 2005 Corrective Distribution Forms (PDF)
1 page chart. (Prudential Financial)

QDRO Invalid for Contradicting Divorce Decree
Excerpt: "The US District Court for the Eastern District of Missouri ruled that a court order that divided pension plan benefits between a participant and his ex-wife was not a qualified domestic relations order (QDRO) because it used a distribution formula that contradicted the terms of the couple's divorce decree." (PLANSPONSOR.com; one-time registration required)

Split CalSTRS Board Votes to Oppose Dual Pension Plans
Excerpt: "A sharply divided state teachers' retirement board fired the first salvo Thursday in the upcoming public employee pension debate, voting to oppose legislation aimed to create a hybrid plan for government workers." (The Sacramento Bee; one-time registration required)

Worldwide Retirement Woes
Excerpt: "Benefits experts and practitioners shed some troubling light on the global demographic and financial retirement picture, though hope is on the horizon." (Human Resource Executive)

Fact Sheet: Understanding the Financial Condition of the Pension Insurance Program
Excerpt: "This fact sheet addresses questions that have been raised about what the deficit means, how it is calculated, and the true cost of the PBGC insurance program. It also answers questions about measures of pension underfunding in the defined benefit system." (Pension Benefit Guaranty Corporation)

Overview: IRS Extends Deadlines for Amending Qualified Retirement Plans
Excerpt: "Under recent guidance, the IRS has extended the deadlines for plan amendments to comply with a number of changes in the law and regulations, including the retroactive annuity starting date requirements, the new automatic rollover rules, and the final regulations issued under Code Sections 401(k) and (m)." (Seyfarth Shaw LLP)

Study Warns Defined Benefit Plan Freezing Doesn't Mitigate All Risks
Excerpt: "Plan sponsors who freeze their traditional defined benefit pension plans have to fully understand the potential risks of making that move or they could end up in even more trouble. That was a central conclusion of a research paper by SEI lead actuary John Waite on potential issues plan sponsors could face by freezing their program so participants immediately stop accruing benefits." (PLANSPONSOR.com; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Text of IRS Notice 2005-94: Suspension of Withholding Requirements for Sec. 409A Deferrals in 2005 (PDF)
Excerpt: "This Notice suspends employers' and payers' reporting and wage withholding requirements for calendar year 2005 with respect to deferrals of compensation within the meaning of § 409A ... [F]uture published guidance may require an employer or payer to file a corrected information return and to furnish a corrected payee statement reporting any previously unreported amounts includible in gross income under § 409A." (Internal Revenue Service)

IRS Releases 409A Payroll Reporting Guidance
Excerpt: "The IRS has released Notice 2005-94 which provides for suspension of employer and payer reporting and wage withholding requirements with respect to deferrals of compensation under § 409A for calendar year 2005. The notice also provides no assertion of penalties against service providers in certain circumstances." (The ERISA Industry Committee)

Text of IRS Notice 2005-99: Valuation of Stock-Based Compensation Under Cost Sharing Arrangements (PDF)
Excerpt: "Treas. Reg. § 1.482-7(d)(2)(iii)(B) provides an elective method of measurement and timing that is applicable for taking certain options on publicly traded stock into account as intangible development costs of a controlled participant in a qualified cost sharing arrangement (QCSA). This notice extends that elective method to certain stock-based compensation commonly referred to as 'restricted shares' or 'restricted share units.'" (Internal Revenue Service)

Overview: Proposed 409A Regulations for New Deferred Compensation Law (PDF)
5 pages. Excerpt: "While the proposed regulations incorporate many of the issues that the IRS addressed in a previously issued Notice (Notice 2005-1), they also provide guidance on the scope of Section 409A and clarify the rules for deferral elections and distributions under plans subject to Section 409A." (von Briesen & Roper, s.c.)

Navigating the Proposed 409A Regulations -- General Rules (PDF)
26 pages. Excerpt: "On September 29, 2005, the Department of Treasury released proposed regulations pertaining to Code Section 409A. In general, the proposed regulations incorporate the guidance provided in IRS Notice 2005-1 and provide substantial additional guidance. The proposed regulations are voluminous (reaching 238 pages) and provide a number of clarifications regarding the application of Code Section 409A." (Gardner Carton & Douglas LLP)

Newly Posted Events

Roth 401(k) Regulations Presentation and Annual Business Meeting
in Kentucky on December 14, 2005
presented by ASPPA Benefits Council of Greater Cincinnati

Newly Posted Press Releases

New Retirees: One-Third Go Back To Work, Putnam Study Shows
(Putnam Investments)

Pension Reporter Government Forms System from DATAIR - Year 2005 Forms Released
(DATAIR Employee Benefit Systems, Inc.)

A Book Only A Pension Expert Could Love.
(412iCompany, The)

NADART Announces Automatic Enrollment Option for 401(k) Plans
(NADART)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

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

Senior Defined Benefits Administrator
for The Rosen Group
in DC, MD, VA

Benefits Manager
for The Rosen Group
in DC, MD, VA

Client Services and Administrator Officer
for Fulton Financial Corporation
in PA

401 (k) Plan Administrator
for Polycomp Administrative Services, Woodland Hills (LA) and Roseville (Sacramento)
in CA

410(k) Administrator (Part-time or Full-time)
for Long Island Pension Consulting Firm
in NY

Associate Manager, Investment Research & Strategy
for Advised Assets Group (AAG)
in CO

Defined Contribution Administrator
for Pension Plan Professionals, Inc.
in FL

Manager Processing Team
for Administaff
in TX



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