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December 23, 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)
The Challenges of Putting Together a Diverse Retirement Plan Investment Menu
Excerpt: "The first step in selecting investments for a 401(k) plan is to step back and evaluate the needs and abilities of the participants. The second step is to select the investment categories -- not the investment funds, but the categories, or 'asset classes' -- needed to afford a broad range of investments that is consistent with the abilities and needs of the participants." (PLANSPONSOR.com; one-time registration required)

Overview of DC and IRA Provisions in HR 2830 As Passed on December 15, 2005 (PDF)
4 pages. Excerpt: "Description of private sector defined contribution and IRA provisions in HR 2830, the Pension Protection Act of 2005, as passed the House of Representatives on December 15, 2005" (The Profit Sharing/401(k) Council of America)

Class Action Status Denied in Case Against Plan Access Freeze
Excerpt: "US District Judge Phyllis Hamilton for the US District Court for the Northern District of California denied a plaintiff's motion for class certification in a case concerning the freezing of employees' access to their 401(k) accounts." (PLANSPONSOR.com; one-time registration required)

Visteon Corp Reinstates Match in 401(k) Plan
Excerpt: "Visteon Corp is reinstating its company match contributions for its retirement plan, although at a less generous rate than before, the Detroit News reports. The company stopped the matching contributions late in 2001 and said they would be reinstated when the company thought it was affordable ...." (PLANSPONSOR.com; one-time registration required)

2005 Global Survey of Accounting Assumptions for Defined Benefit Plans (PDF)
Excerpt: "The U.S. retirement plan data on FAS 87 assumptions is derived from information reported in corporate annual reports. The non-U.S. information was collected using a survey form. Eighty-two percent of the survey participants report under FAS 87; 11 percent under IAS 19; 6 percent under FRS 17 and the remaining 1 percent under other country local standards." (Watson Wyatt Worldwide)

Opinion: The Social Meaning of Pensions by Michael Perelman
Excerpt: "Pensions offer a wonderful example of the perverse phenomenon of the corporate sector winning support by taking actions that harm individuals. Between 1979 and 1997, the share of employees with defined benefit plans -- i.e., plans that promise a specific level of support -- fell from 87 percent to 50 percent ...." (Monthly Review via MRzine.com)

Overview: New Funding Guidelines Set for United Kingdom Pension Plans (PDF)
2 pages. Excerpt: "New draft guidance issued by the Pensions Regulator may require many employers with defined benefit pension plans to make higher contributions to meet funding requirements." (Towers Perrin)

Opinion: The Defined Benefit Pension Crisis
Excerpt: "The majority of existing DB plans are significantly underfunded. The crisis stems from the growing number of retirees receiving DB pensions and the growing number of companies forced into bankrup.tcy due to benefit costs. When companies default on their obligations, workers receive benefits from the federal Pension Benefit Guaranty Corporation (PBGC)." (National Center for Policy Analysis)

Senate Passes Measure Increasing PBGC Premiums
Excerpt: "With Vice President Dick Cheney casting the tie-breaking vote, the U.S. Senate passed a federal budget bill Dec. 21, 2005, that would increase Pension Benefit Guaranty Corporation (PBGC) premiums on single- and multi-employer defined benefit plans. The measure, the Deficit Reduction Act of 2005 (S. 1932), must now go back to the House of Representatives for a final vote before President Bush can sign the bill into law." (Watson Wyatt Worldwide)

Australia: Contribution Splitting Legislation Effective 1 January 2006 (PDF)
2 pages. Excerpt: "On 8 December 2005, the Australian Senate approved the Tax Laws Amendment (Superannuation Contribution Splitting) Bill that will allow Australians to have the option of splitting superannuation contributions with their spouse for the first time. " (Watson Wyatt Worldwide)

White House Conference on Aging Approves Retirement Planning Resolutions
Excerpt: "The White House Conference on Aging (WHCoA) adjourned on December 14 after approving several retirement resolutions that will be included in the final report to the president and Congress." (The ERISA Industry Committee)

Incentives to Increase Retirement Savings by Individuals & through Employment-Based Retirement Plans (PDF)
6 pages. Final Report and Recommendations to the 2005 White House Conference on Aging by the Mini-Conference held July 12, 2005, at the headquarters of the National Rural Electric Cooperative Association, Arlington, Virginia, with 110 attendees representing large and small employers (both private and public sector), unions, rural cooperatives, academia, benefits and compensation professionals and members of the public. (The ERISA Industry Committee)

GAO Responds to Comments on a GAO Report about Cash Balance Plans (PDF)
5 pages. Excerpt: "[David Walker writes:] I am responding to your letter of November 28, 2005, wherein you raised a number of specific concerns about our recent report, Private Pensions: Information on Cash Balance Pension Plans, GAO-06-42, November 3, 2005. [The November 28, 2005, comments are at http://www.actuary.org/pdf/pension/gao_112805.pdf.]" (U.S. Government Accountability Office via American Academy of Actuaries)

Opinion: Would Major Tax Reform Be Good for Retirement Programs?
Excerpt: "[If] the United States were to adopt a system that taxed consumption (e.g., a retail sales tax) and did not tax earnings in savings and investment accounts, would the average American worker save more than he or she does today?" (PLANSPONSOR.com; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Text of Interim Guidance with Respect to the Application of Section 409A to Outstanding Stock Rights (PDF)
IRS Notice 2006-4. 3 pages. Excerpt: "Final regulations may establish more detailed standards for valuation in the context of stock rights than those provided in this Notice and Notice 2005-1. The Treasury Department and the IRS continue to request comments with respect to the proposed regulations, and specifically how the standards proposed with respect to the determination of the fair market value of stock subject to stock rights may be improved ...." (U.S. Internal Revenue Service)

Overview: Congress Approves Hurricane Relief and Budget Bills (PDF)
3 pages. Excerpt: "Congress has paved the way for the enactment of two pieces of legislation -- the Gulf Opportunity Zone Act and the Deficit Reduction Act of 2005. The former has provisions extending the relief provided to Hurricane Katrina victims with respect to distributions and loans from qualified retirement plans to victims of Hurricanes Rita and Wilma. The latter has provisions raising premiums to be paid to the PBGC." (Buck Consultants)

PlanSponsor Feature Article: The Year in Review
Excerpt: "In retrospect, 2005 seems almost a dip in the cycle of change for plan sponsors. Not that change wasn't in abundance; far from it. Many issues loomed large again -- scandals, the need for pension reform, the impetus of new regulations -- but the prospect of solutions remained tantalizingly out of reach." (PLANSPONSOR.com; one-time registration required)

Some Companies Shield Executives from Taxes
Excerpt: "Amid soaring CEO compensation, a number of companies are paying extra sums to cover executives' personal tax bills. Many companies are paying taxes due on core elements of executive pay, such as stock grants, signing bonuses and severance packages. Others are reimbursing taxes on corporate perquisites, which are treated as income by the Internal Revenue Service." (The Wall Street Journal via Pittsburgh Post-Gazette)

The Design of Deferred Compensation Plans
Excerpt: "Considering the origins of deferred compensation programs -- programs designed to defer the taxation of compensation -- it is not surprising to find a certain nexus between the administrative underpinnings of today's deferred comp programs and that of the most widely utilized deferred compensation arrangement: the 401(k) plan." (PLANSPONSOR.com; one-time registration required)

Overview: Withholding and Reporting Requirements for Nonqualified Deferred Compensation in 2005 (PDF)
2 pages. Excerpt: "The Internal Revenue Service (IRS) issued Notice 2005-94 on December 8, 2005, suspending the reporting and income tax withholding requirements for the calendar year 2005 with respect to Code Section 409A nonqualified deferred compensation amounts." (Pillsbury Winthrop Shaw Pittman LLP)

Overview: Deadline for Several Transition Relief Amendments to Nonqualified Deferred Comp Plans
Excerpt: "The deadline is rapidly approaching for amending nonqualified deferred compensation plans subject to Internal Revenue Code Section 409A to reflect certain transition relief provisions provided by IRS Notice 2005 1. If your plan has taken advantage of any of the ... forms of transition relief [noted on the target page], it must be amended by December 31, 2005." (Perkins Coie)

Employee Benefits Update, December 2005, from Snell & Wilmer (PDF)
6 pages. The newsletter includes material on the Retirement Plan Limits for 2006; an Employer 'To Do' List of items that may require attention before the end of the year or early in 2006; and, the Extension of the EGTRRA Remedial Amendment Period and Schedule of the Next Five-Year Amendment Cycle. (Snell & Wilmer L.L.P.)

Washington Regulatory Wrap Up, As of December 21, 2005 (PDF)
3 pages. The chart of federal regulatory proposals concerning employee benefits of interest to NCTR members has been updated to be current as of November 30, 2005. The federal updates referenced in the chart are available at http://www.nctr.org/federal/index.html. (National Council on Teacher Retirement)

Newly Posted Events

Final USERRA Regs: What Benefit Plans Must Do by January 18--What's New, What's Different, What's Been Clarified
Nationwide on January 12, 2006
presented by Employee Benefits Institute of America Inc. (EBIA)

Outsourcing Benefits Administration--A Roadmap for Employers and TPAs
Nationwide on December 8, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)

Update on Deferred Compensation Arrangements
in Massachusetts on January 18, 2006
presented by WEB Worldwide Employee Benefits Network MA Chapter

Newly Posted Press Releases

Benefit Advisors Network Announces Their First Educational Conference of 2006
(Benefit Advisors Network)

Lois G. Lerner Selected As Director of IRS Tax Exempt Organizations Division
(Internal Revenue Service (IRS))

IRS GuideWire
(Internal Revenue Service (IRS))

Projecting Mortality: Key Findings From A Forum of Experts
(Center for Retirement Research at Boston College)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Senior Plan Administrator
for The Allocation Company, Inc.
in TX

HRO Employment Legal Consultant
for Hewitt Associates
in IL

Data Project Administrator - PA
for Vanguard
in PA

Plan Review Group Representative - PA
for Vanguard
in PA

Sponsor & Management Data Analyst - PA
for Vanguard
in PA

Health and Welfare Consulting Actuary (FAS 106)
for Towers Perrin
in WA

Pension Plan Administrator
for JADE Plan Services, Inc.
in TX

Manager - Compensation and Benefits
for Bayada Nurses
in NJ

Benefits Specialist
for Bayada Nurses
in NJ



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