Retirement Plans
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January 12, 2006
Today's sponsor: ASPPA • Working for America's Retirement™

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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)

Existence of a Match Is Number One Driver for Participation by Employees in Their Company's 401(k)
Excerpt: "While simplified investment choices can boost employee participation in a 401(k), nothing meets that goal as well as a robust cash or stock contribution that matches part of what the employee saves." (

Text of Notice 2006-8: Weighted Average Interest Rates (PDF)
1 page; 30-year Treasury weighted average for plan years beginning January 2006: 4.85%. (Internal Revenue Service)

Text of Annual Funding Notice for Multiemployer Defined Benefit Pension Plans
Excerpt: "Section 103 of the Pension Funding Equity Act of 2004 (PFEA '04) amended section 101 of ERISA by adding a new subsection (f), which requires the administrator of a multiemployer defined benefit plan to provide participants, beneficiaries, and certain other parties, including the Pension Benefit Guaranty Corporation, with an annual funding notice indicating, among other things, whether the plan's funded current liability percentage is at least 100 percent." (Employee Benefits Security Administration via Federal Register)

Table of ERISA Section 4044 Mortality Rates for 2006 Valuation Dates
Excerpt: "These mortality tables are used to determine the present value of annuities in involuntary terminations and distress terminations of single-employer plans, as discussed in 29 CFR 4044." (U.S. Pension Benefit Guaranty Corporation)

Retirement Plan Rollover Chart Updated as of January 12, 2006
What are the rollover rules as of 2006? See this chart to learn what plan funds can be rolled over to a recipient plan. (McKay Hochman Co., Inc.)

Firm Pursued in Hawaii Public Plan Asset Diversion Files for Bankrup.tcy
Excerpt: "The state of Hawaii's effort to recoup $2.3 million in missing retirement contributions suffered a setback when the company accused of diverting assets from the education employees' fund filed for bankrup.tcy protection." (; one-time registration required)

'The New Retirement Mindscape'
Excerpt: "With significant increases in life expectancy, retirement is lasting longer than ever for Americans. The New Retirement Mindscape from Ameriprise Financial is the first study to explore people's attitudes, worries, behaviors, ambitions, and needs in retirement." (Ameriprise Financial)

Overview: The IRS Has Substantially Increased a Number of User Fees
Excerpt: "Effective February 1, 2006, there will be user fee increases for the issuance of IRS opinion, determination and advisory letters. The pre-approved defined contribution plans due to be filed by January 31, 2006 are thus exempt from this increase. However, all plans submitted after that January 31, 2006 are subject to the increases." (McKay Hochman Co., Inc.)

Overview: The EGTRRA Document
Excerpt: "Why do pre-approved plan (i.e. master, prototype and volume submitter) defined contribution documents have to be rewritten for EGTRRA and sent to the IRS for approval by January 31, 2006? What happens if this procedure is not followed?" (McKay Hochman Co., Inc.)

Overview of the 2006 Pension Policy Congressional Agenda
Excerpt: "In this article we review the pension policy agenda (as of January) for 2006. As these things go, much of the discussion is of initiatives left over from 2005 (or 2004), ...." (CCA Strategies, LLC)

Opinion: Corporate Pensions - Unstable, Unfair, Economically Perverse Means of Paying for Retirement
Excerpt: "When succeeding generations are bigger and wealthier than the ones whose retirements they must help fund -- as is the case in a growing corporation or in the United States since the launch of Social Security -- this isn't much of a problem. But it's no longer the case at GM, and may no longer hold for the U.S. as a whole a few decades down the road." (Fortune via CNN Money)

Links to Items on Executive Comp, Benefits in General

FASB to Issue a Proposed FSP Related to FAS123(R) on Options
Excerpt: "At its meeting [January 11, 2006], the Financial Accounting Standards Board ... voted to proceed with issuing a proposed FASB Staff Pronouncement ... related to FAS123(R), Share-Based Payment ... to address the classification of options or similar instruments granted as employee compensation that allow for cash settlement upon the occurrence of a contingent event." (Financial Executives International)

Overview of FAS 123R Valuation: Considering Historical Life in Developing Expected Life
Excerpt: "There are many reasonable ways to determine the fair value, but all involve making assumptions about the option holder's expected behavior and the company's financial outlook. It is now more important to develop these assumptions, and thus the option's fair value, as rigorously and as accurately as possible." (CCA Strategies, LLC)

Overview: GASB 43 & 45 -- Accounting, Reporting and Disclosure Requirements for Government OPEBs
Excerpt: "The new standards outlined in GASB 43 and 45 have the potential for tremendous increases in the expenses and liabilities reported in the financial statements of many government entities. Here [CCA Strategies reviews] these and other implications of the new standards." (CCA Strategies, LLC)

Retired United Airlines' Pilots Want Recount
Excerpt: "Retired pilots of United Airlines are demanding a recount of the votes cast for the airline's Chapter 11 plan of reorganization. In an emergency motion submitted Monday to the U.S. Bankrup.tcy Court in Chicago, the United Retired Pilots Benefit Protection Association said the company failed to count the votes of more than 1,500 retired pilots because they sought to recover lost pension benefits in greater amounts than reflected on the ballots." (AP via The New York Times; one-time registration required)

Overview: DOL Issues Final USERRA Regulations
Excerpt: "Employers should confirm that their military leave policies are consistent with the final regulations, make appropriate additions and adjustments to those policies, and post the revised informational notice in appropriate locations." (Ballard Spahr Andrews & Ingersoll, LLP)

United CEO Could Get $15M in Incentives; Other Executives to Share $152 Million
Excerpt: "'Such compensation for executives is outrageous considering the sacrifices other employees have made,' said Joseph Tiberi, a spokesman for the International Association of Machinists and Aerospace Workers. 'Our members alone will have sacrificed more than $4.6 billion' in wages, benefits and pensions." (AP via The Washington Post; one-time registration required)

Employers Adapt Global Executive Pay Plans to Local Markets
Excerpt: "CEOs in the United States continue to enjoy the largest and most comprehensive pay packages, both in terms of base compensation and total remuneration while CEOs in France, Germany, Italy, Switzerland and the United Kingdom command higher levels of total compensation than their peers in the rest of the world." (; one-time registration required)

Pay-for-Performance Programs Can Improve Care to Diabetics
Excerpt: "As health insurers incorporate more diabetes process and outcomes measures into their physician pay-for-performance (P4P) programs, some are reporting significant improvements in the quality and cost of care provided to diabetics." (INSIDE DISEASE MANAGEMENT via

Overview: Post-Severance Compensation
Excerpt: "Until recently, there was no IRS guidance on post-severance compensation. When an employee received a severance package, arguably, the employer had wide latitude in allowing post-severance compensation to be included for qualified plan purposes. It was not uncommon for post-severance compensation to count towards deferrals, matches, and other employer contributions for periods of up to six months or sometimes even longer." (McKay Hochman Co., Inc.)

Newly Posted Events
(Post Yours!)

Annual Spring Employee Benefits Law and Practice Update
Nationwide on April 6, 2006
presented by ALI-ABA (American Law Institute-American Bar Association)

Newly Posted Press Releases
(Post Yours!)

ERISA Section 4010 Reporting Waived For Certain Employers
(Pension Benefit Guaranty Corporation (PBGC))

Trustmark Introduces Integrated Healthy Foundations Approach to Consumer-Directed Healthcare

The Principal Financial Group Streamlines Retirement Plan Management for Sponsors
(Principal Financial Group)

Enlightened California Employers Offer Health Advocates to Help Retirees with Medicare Prescription Drug Benefit

Blurred Lines Between Prescription Drug Treatment and Health Care Make Carefully Designed Pharmacy Benefit Plans Essential
(International Foundation of Employee Benefit Plans)

For Immediate Release: CPI Announces Retirement Plan Consultant for Chicago Area
(CPI Qualified Plan Consultants, Inc.)

Liberty Mutual Adds Assistance Programs to Group Disability and Life Policies; Counseling, Financial and Legal Services Help Employees Stay Focused and Productive
(Liberty Mutual)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Plan Administration Specialist
for Boston Financial Data Services
in MA

MetLife® Employee Benefits Sales and Enrollment Specialist
for MetLife®
in CA

Implementation Manager
for Great-West Financial Services
in CO

Benefits Analyst
for Automobile Club of Southern California
in CA

Benefits Manager
for Automobile Club of Southern California
in CA

DB Benefits Operations Manager
for Hewitt Associates
in NJ

HM Benefits Operations Manager
for Hewitt Associates
in NJ

401(k)/Executive Deferred Compensation Plan Administrator (Contractor Position Approx. 3 month Temp Assignment)
for Synopsys, Inc.
in CA

DC Benefits Service Manager
for Hewitt Associates
in NJ

Retirement Service Specialists
for Constantin Control Associates
in GA, RI

Employee Benefit Service Specialist
for CUNA Mutual Group
in CA

Defined Contribution/ 401(k) Administrator
for Gary Mann & Associates, Inc.
in IL

Paralegal - Retirement Plans
for Ward Rovell, Professional Association
in FL

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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Fax: (407) 644-2151

Editor and Publisher: David Rhett Baker, J.D.