Retirement Plans
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January 5, 2006
Today's sponsor: ASPPA • Working for America's Retirement™

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ASPPA • Working for America's Retirement™

Register for the '06 LABC Conference Today! January 26-27, 2006

The Los Angeles Benefits Conference provides an opportunity to discuss and exchange information on employee benefit issues with colleagues and local, regional and national government employees from the Internal Revenue Service and the Department of Labor. And don't miss the special pre-conference conversations with the IRS and DOL on January 25, 2006.

Contact ASPPA to register for the LABC conference and the pre-conference event at

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Overview: IRS Finalizes Basic Rules for Roth 401(k) Contributions (PDF)
3 pages. Excerpt: "On December 30, 2005, the IRS published final regulations that provide guidance on the requirements applicable to Roth contributions under Code section 402A. 71 Fed. Reg. 6 (Jan. 3, 2006). Although the final regulations do not specifically address Roth contributions to 403(b) plans, this guidance also should be generally applicable to such plans." (Groom Law Group)

Keeping 401(k) Intact After Retirement Getting Popular
Excerpt: "Employers, financial planners and the 401(k) industry itself are increasingly coming around to the idea that maybe retirees should leave their money in their 401(k) account after they box up their cubicle for good." (Wall Street Journal via The Contra Costa Times; one-time registration may be required)

Freezing a Defined Benefit Pension Plan Doesn't Eliminate the Financial Risks
Excerpt: "'What's surprising is how long it takes most typical plans after they're frozen to achieve a reduction in financial risk,' says Alan Glickstein, a senior retirement consultant in the Dallas office of Watson Wyatt. 'You're talking decades in many cases before there's an appreciable drop in the liabilities and the exposure to risk.'" (Treasury & Risk Management)

IRS Cracking Down on Undervaluing Annuities to Avoid Taxes in Roth IRA Conversions
Excerpt: "In August, the IRS issued temporary proposed regulations to shut down schemes that were marketed to the public in which annuity values were reduced at the time of a conversion to a Roth IRA in order to avoid taxes." (

ABI Sets Out Standards for Pension Maturities
Excerpt: "The Association of British Insurers has published a new Statement of Good Practice on Pension Maturities to help make transferring pension funds into annuities easier." (Insurance Business Review Online)

Gov. Owens Says Colorado State Employee Pension Needs Changes
Excerpt: "Gov. Bill Owens called Wednesday for dramatic changes to the state pension system for public employees, suggesting fixes used by private industry as a way to solve woes that include a $12.8 billion shortfall." (The Durango Herald)

Pension Demand Was an Error, Chairman of NYC Metropolitan Transportation Authority Concedes
Excerpt: "The chairman of the Metropolitan Transportation Authority said yesterday that he had erred in making pension changes a central demand in contract negotiations with the city's transit workers, a miscalculation that helped lead to a 60-hour subway and bus strike the week before Christmas." (The New York Times; one-time registration required)

Chief Executive Shakes Up Arcadia's Pension Plan
Excerpt: "We all know that a global pension crisis is looming, but the multibillion dollar question is, who should pick up the tab? Philip Green has made his decision about the matter and said that the employees of Arcadia, of which he is chief executive, should help foot the bill." (

U.K.'s Co-Op Changes Pension Formula, Angers Union
Excerpt: "The United Kingdom's Co-operative Group said on Wednesday it proposed to change the basis for payments on its defined-benefit pension scheme, a move condemned by trade unions for cutting benefits." (Business Insurance)

Democrats Say United Pension Case Underscores Need for Social Security
Excerpt: "House Democrats said Wednesday that United Airlines' success in winning court approval to terminate its employee pension plans underscores the need to preserve a traditional Social Security benefit." (WorldNow and WTOL)

DB(k) Plan Could Make Retirement Offerings Easier and More Affordable for Small-Business Owners
Excerpt: "The Principal Financial Group and the American Society of Pension Professionals & Actuaries (ASPPA) have developed and taken to Congress a new hybrid retirement plan, called a DB(k) plan, .... It combines the best features of defined benefit and 401(k) plans and should be easy and affordable for small-business owners to offer." (

Opinion: More Modern Plans Would Lessen Pension Woes
Excerpt: "''The corporate pension system is a disaster waiting to happen. The cure is to abandon present defined benefit programs where benefits are derived by formulas but funding may or may not cover the promised outlays. Pension systems should adopt defined contribution plans instead.''" (The Morning Call Online)

Opinion: The Best and Worst in Social Security, 2005
Excerpt: "The year 2005 turned out to be one of the best ever for Social Security. The debate launched by President Bush's proposal to partially privatize the system ultimately helped to demonstrate how strong public support remains for the nation's most successful program." (Greg Anrig, Jr., The Century Foundation)

Opinion: Bush's Stealth Attack on Social Security
Excerpt: "When President Bush launched his drive to change Social Security, he argued in part, that it was unfair to African-Americans because their shorter life expectancy cheated them out of old-age benefits. The president got it wrong, though, because he did not acknowledge that African-Americans benefit disproportionately from the survivor and disability benefits that are integral to the program. Now this omission has resurfaced with a vengeance in a proposal to limit access ...." (Philadelphia Daily News)

Links to Items on Executive Comp, Benefits in General

Overview: FASB Considers Changes to Pensions and Benefits Accounting (PDF)
8 pages. (Milliman)

The FASB Rules on Post-Retirement Accounting Are Changing -- Benefits Could Suffer
Excerpt: "BusinessWeek Associate Editor Anne Tergesen spoke to Bear Stearns accounting analyst Janet Pegg about what investors and pensioners can expect from the proposed changes, which are scheduled to take effect in two stages -- at the end of 2006 and around 2009." (BusinessWeek)

Boomers to Find That Working After 65 Won't Be Easy
Excerpt: "A new Putnam Investments study of work-in-retirement lends strength to those projections: It found that 7 million retired Americans -- about a third -- have returned to work at least 15 hours a week. Most stayed retired for less than a year, with two-thirds reporting that they went back to work because they wanted to, not because they had to." (Pittsburgh Post-Gazette via InsuranceNewsNet)

Five Steps to Implementing a Benefit Portal
Excerpt: "Is your company planning to implement a portal? Are you wondering how to decide to buy or build this technology and how to integrate a portal with your current benefits process? If so, this article will take you through the necessary steps for a successful portal selection and implementation." (Employee Benefit News)

Employer Coalition Seeks Benefits Tax Equity for Domestic Partners
Excerpt: "Some of the nation's largest and best-known employers want to give g.ay and les.bian couples the same tax breaks married couples enjoy in purchasing health insurance. General Mills, Microsoft, and Nike Inc. are among the firms that have joined the Business Coalition for Benefits Tax Equity, organized by the Washington, D.C.-based Human Rights Campaign." (Employee Benefit News)

Groom Law Group Comment Letter to IRS on 409A Proposed Regulations (PDF)
9 pages. (Groom Law Group)

Supporting the Troops -- Employers Maintain Benefits for Deployed Reservists
Excerpt: "The continuation of benefits 'creates a strong bond between the guardsman or reservist and the employer,' says Maj. Robert Palmer, a public affairs officer for Employer Support of the Guard and Reserve, a Defense Department agency responsible for promoting cooperation between employers and military employees. 'It's a good technique for building company loyalty.'" (Employee Benefit News)

Excerpt from 'What Gen X Women Want at Work and How Their Boomer Bosses Can Help Them Get It' (PDF)
6 pages. Excerpt: "According to recent survey results reported in 'The NeXt Revolution: What Gen X Women Want at Work and How Their Boomer Bosses Can Help Them Get It,' they want: 1) positive relationships; 2) interesting work; and 3) lots of opportunities for continuous learning. When these job factors are missing, increasingly Gen X women walk." (Laura Shelton & Charlotte Shelton via

Severance Denied for Employee Who Resigned before Reorganization of His Department
Excerpt: "The US District Court for the District of New Jersey has ruled that an employee who resigned after learning of AT&T Capital Corp's decision to reorganize his department is not entitled to severance benefits." (; one-time registration required)

Newly Posted Events
(Post Yours!)

Health Plan Notices for 2006: COBRA, HIPAA, and More--You Might Need to Change Your Forms or Your Procedures!
Nationwide on January 26, 2006
presented by Employee Benefits Institute of America Inc. (EBIA)

Plan Design & Administrative Strategies and Priorities
in California on January 10, 2006
presented by Western Pension & Benefits Conference - Los Angeles Chapter

Newly Posted Press Releases
(Post Yours!)

The Principal Financial Group to Reward Committed Retirement Plan Sponsors; New Principal Advocate Edge Program Offers Special Pricing for Retirement Plans That Spur Employee Savings
(Principal Financial Group)

International Foundation Awarded Contract from DOL
(International Foundation of Employee Benefit Plans)

Assistant Secretary of Labor Combs to Address Fort Wayne, Ind., Workers and Business Leaders on Strength of U.S. Economy
(U.S. Department of Labor, Employee Benefits Security Administration)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Compliance Testing Consultant
for Diversified Investment Advisors
in NY

401(k) Administrators
for Pension International Dynamics, Ltd
in NY

Employee Benefits Tax Senior
for Deloitte Tax LLP
in OH, PA

Employee Benefits Tax Associate (Staff)
for Deloitte Tax LLP
in MI, OH

Employee Benefits Tax Manager
for Deloitte Tax LLP
in PA

Marketing Coordinator - Pension Consulting Services
for RSM McGladrey Inc.
in AZ

Benefits Consultant/Senior Account Manager - Group Health and Ancillary Products-- Southern New Jersey (Cherry Hill or Oakhurst)
for Commerce Insurance Services
in NJ

Account Representative-- Provider Relations
for 1199SEIU National Benefit Fund
in NY

Pension Analyst - Contract/Temporary
for T. Rowe Price
in MD

Retirement Plan Services-- Relationship Manager
for AMCORE Bank
in IA, IL

Defined Contribution Plan Administrator
for Pentec Pension Mgt. Group, Inc.
in TX

Retirement and Securities Specialist
in VA

Handy Links:

Copyright 2006, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.

Published by:, Inc.
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Editor and Publisher: David Rhett Baker, J.D.