Retirement Plans
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January 19, 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)

Working Paper: The Inattentive Participant -- Portfolio Trading Behavior in 401(k) Plans (PDF)
40 pages. Excerpt: "Most workers in defined contribution retirement plans are inattentive portfolio managers: only a few engage in any trading at all, and only a tiny minority trades actively. Using a rich new dataset on 1.2 million workers in over 1,500 plans, we find that most 401(k) plan participants are characterized by profound inertia." (Pension Research Council)

Boomers Are About to Find Out Whether Their 401(k)'s Are Such a Sweet Deal
Excerpt: "[O]lder baby boomers, the first generation to have climbed the corporate ladder in the 401(k) era, are just now turning 60. This means that boomers have only begun the long and anxious transition from work life to retirement. And since many boomers are expected to live well into their 80s, it's too early to say whether 401(k)'s have encouraged a sufficient level of saving to fund a full--and fulfilling--retirement." (U.S.News & World Report)

PlanSponsor Feature: 2006 Compliance Calendar Checklist for DB/DC/403(b) Plans
Excerpt: "The Year Ahead: It takes a lot of work to keep your retirement programs in compliance, but it can all be for naught if key deadlines are missed. The following compliance calendar should help you keep up with not only the what, but also the when." (; one-time registration required)

Think the U.S. Will Soon See a Crisis Spawned by a Huge Wave of Baby Boomer Retirement? Think Again
Excerpt: "Conventional wisdom says that the United States nears a retirement crisis, as the giant Baby Boomer generation retires en masse and a smaller generation of young workers struggles to maintain their productivity level and fund Social Security. Conventional wisdom is wrong, demographer David Foot believes." (; one-time registration required)

Overview on the Retirement Security Outlook for 2006
Excerpt: "[A]s Congress wrestles with pension reform legislation, the long-term challenge facing policymakers is the same one facing large employers--how can our retirement security system address the needs of a highly mobile workforce whose long-term interests are tied to an economy that evolves much more rapidly than in previous eras?" (HR Policy Association)

New Legislation Weakening Pension Protections
Excerpt: "One of the most far-reaching changes in both the House and Senate versions would reduce the payment workers receive from their pension plans when they take single, lump-sum payments in lieu of monthly distributions. The payment reduction would result from changing the interest rate used to calculate the size of lump-sum distributions." (The Wall Street Journal via

Editorial: Fake Retirement Security
Excerpt: "[A]lthough it's true that companies are dropping defined-benefit plans, and that even more may do so if they are told they can no longer fudge the numbers, this is not a reason to allow the fudging to continue. It makes no sense to extol the reliability of traditional pensions at one moment, then to propose legislation that makes them unreliable in the next. Yet that is what a recent letter circulated by a group of lobbyists styling themselves the Pension Coalition does: ...." (The Washington Post; one-time registration required)

The Best Retirement-Planning Ideas You've Never Heard Of
Excerpt: "Here ... is a sampling of some of the best retirement-planning ideas [on distributions, conversions, and contributions]." (MarketWatch)

San Diego Pension Board Braces for Findings: Outside Consultant's Report Due Tomorrow
Excerpt: "Three separate firms have attempted to shed light on how the city of San Diego came to be saddled with an estimated pension deficit of $2 billion. Two of them have worked for the city, adding up fees over two years that could reach $30 million. A less familiar inquiry, sought by the pension system itself, has been quietly progressing since September and will cost less than $3 million." (The San Diego Union-Tribune)

2004 Comparative Study of Major Public Employee Retirement Systems (PDF)
38 pages. Excerpt: "This report compares significant features of major state and local public employee retirement systems in the United States. The report compares retirement benefits provided to general employees and teachers, rather than benefits applicable only to narrower categories of employees such as police, firefighters, or elected officials." (Wisconsin Legislative Council)

Editorial: Chile Future under Michelle Bachelet?
Excerpt: "We should be keeping our eyes on Bachelet [the first woman ever to lead Chile] for the long haul, because she's just landed herself in the middle of a major crisis that's going to hit us next, and how she copes with it should teach us some lessons. Simply put, her country's social security system is collapsing." (The Forward)

African Americans and Social Security: Implications of Reform Proposals
Excerpt: "This analysis first examines how the current Social Security system affects African Americans. It then analyzes the impact that some private accounts proposals would have on them." (Center on Budget and Policy Priorities)

Resolve to Retire Rich: Ten Strategies for Individuals to Consider (PDF)
2 pages. Excerpt: "Here are 10 simple steps that all boil down to two strategies: maximize income and minimize debt/spending." (Jane White of the Retirement Solutions Foundation)

The Arguments for and against Terminating Public Defined Benefit Plans
Excerpt: "The Reason Foundation, in its June 2005 study 'The Gathering Pension Storm', recommended terminating defined benefit plans for public employees, arguing that policymakers approve higher pension benefits for selfish, political reasons, creating crises in the pension system and costs to future taxpayers. The National Association of State Retirement Administrators (NASRA) has issued a response to the Reason study contending that the Foundation's arguments are erroneous, ...." (; one-time registration required)

UAL Flight Attendants Agree to New Pension Program
Excerpt: "A deal struck Wednesday between United Airlines flight attendants and the bankrupt air carrier calls for an annual company cash contribution, $20 million in convertible notes, and immediate vesting for all employed flight attendants. The deal is less lucrative than the labor group's long held retirement plan that the carrier terminated during its restructuring ...." (; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Slide in Use of Equity Incentives Continues
Excerpt: "Large employers have continued to scale back their use of equity incentives, especially stock options, according to a Towers Perrin analysis of existing stock plans of Fortune 500 companies." (Towers Perrin)

Overview: Proposed Changes to Executive Compensation Disclosure Announced by the SEC (PDF)
3 pages. Excerpt: "At an open meeting held on January 17, 2006, the Securities and Exchange Commission (SEC) voted to publish for comment proposed rules that would significantly change disclosure requirements relating to: (i) executive and director compensation; (ii) director independence, corporate governance and related person transactions; and (iii) Form 8-K." (Powell Goldstein LLP)

Overview: SEC Proposals to Expand Executive Compensation Disclosure (PDF)
4 pages. Excerpt: "The SEC also approved other proposals relating to disclosure of related party transactions, director independence and other corporate governance matters and modification of the Form 8-K requirements for reporting compensation arrangements. The proposals would change the disclosure required in proxy statements, Annual Reports on Form 10-K and registration statements." (Orrick)

Code §409A: Getting to Know and Love the Short-Term Deferral Rule
Excerpt: "The 'short-term deferral rule,' is an essential feature of the Code §409A regulatory environment. This advisory explains the short-term deferral rule and its applications." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.)

Overview of Proposed Changes to Disclosure Requirements Concerning Executive Compensation
Excerpt: "Under the proposal, executive compensation disclosure would be organized into three broad categories: (1) compensation over the last three years; (2) holdings of outstanding equity-related interests received as compensation that are the source of future gains; and (3) retirement plans and other post-employment payments and benefits." (Attorney B. Janell Grenier via

Look at Whose Pay Packages Companies Will Now Have to Make Public
Excerpt: "Current rules require that companies disclose the compensation of the chief executive and the next four highest-paid executives in management. The new rule ... will require companies to disclose the pay, severance, bonus, stock and option grants, and retirement packages of the chief executive, the chief financial officer, the next three highest paid executives - and as many as three other employees who receive more than any of the first five." (The New York Times; one-time registration required)

Overview: SEC Issues Proposals for Expanded Executive Compensation Disclosure (PDF)
4 pages. Excerpt: "As expected, the Securities and Exchange Commission (SEC) approved [January 17, 2006] the release of proposals to amend its disclosure requirements with respect to executive compensation. The proposals will affect the disclosure in proxy statements, annual reports, prospectuses and Forms 8-K." (Morgan, Lewis & Bockius LLP)

2005 Legislative and Regulatory Year in Review and the Outlook for 2006 (PDF)
34 pages. Excerpt: "Several laws were enacted in 2005 affecting employers, but many other relevant issues, with a potentially greater impact on employers, have been deferred until 2006. While the November elections may impede the legislative output from Congress in 2006, certain 'must-pass' bills, e.g., budget reconciliation and retirement plan reforms, will top the agenda." (Hewitt Associates)

Additional sponsor: ASPPA • Working for America's Retirement™

(Click on company name or banner to learn more.)
Banner ad for ASPPA • Working for America's Retirement™

Sal L. Tripodi’s 2006 ERISA Outline Book now available

The ’06 ERISA Outline book will give you what you need to succeed.
Now with five volumes, these are the books that will tell you what you need to know, including:

  • Revised comprehensive 415 regulations
  • Expanded information on Roth 401(k) contributions
  • Final USERRA regulations

Order The ERISA Outline Book today!

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

Newly Posted Events
(Post Yours!)

2006 Employee Ownership Conference
in Minnesota on April 26, 2006
presented by National Center for Employee Ownership (NCEO) and the Beyster Institute

Cafeteria Plan Election Changes--What's Permitted, What's Not?
Nationwide on February 9, 2006
presented by Employee Benefits Institute of America Inc. (EBIA)

Newly Posted Press Releases
(Post Yours!)

Expedia Chooses Corporate Focus: They Need to Vacation Too: - Leading Companies Select Corporate Focus to Centralize Corporate Records and Manage Entity Information
(Two-Step Software, Inc.)

PERFORMAX and Interactive Health Solutions Form Alliance

Council Urges Treasury To Make Available ESOP Tax Deduction To U.S. Companies Owned By Foreign Parents
(American Benefits Council)

New Survey Finds 62% of Employers Offer Wellness Initiatives
(International Foundation of Employee Benefit Plans)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Compliance Specialist
for The Newport Group
in NC

401(k) Recordkeeper / Supervisor
for Beyer - Barber Company
in PA

Plan Administrator
for Sanders Petmecky, LLC
in GA

Employee Benefits Tax Consultant
for Deloitte Tax, LLP
in GA

Employee Benefits Tax Consultant
for Deloitte Tax, LLP
in NC

ERISA / Pensions Legal Counsel
for Nationwide Insurance
in OH

Public Relations and Corporate Communications Specialist
for RG Wuelfing & Associates
in NC

Financial Planner/Investment Specialist (part-time)
for Diversified Investment Advisors
in AL

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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Winter Park FL 32789
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Fax: (407) 644-2151

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