Retirement Plans
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January 23, 2006
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Overview: Roth 401(k) Regulations
Excerpt: "IRS recently published final regulations implementing Roth 401(k)s and providing guidance on certain recordkeeping and administrative issues. Here [CCA Strategies reviews], briefly, the basics of Roth 401(k)s and the regulation." (CCA Strategies, LLC)

Back to School, or Buying a House, on a 401(k)
Excerpt: "[W]orkers who want to tap their retirement accounts must be careful to do it the right way, or they may find themselves subject to early-withdrawal penalties that eat up 10 percent of the money they pulled out for school. The same thing can happen to workers who tap their accounts to buy a first home." (The Washington Post; one-time registration required)

House-Senate Panel to Tackle Twin Pension Plan Proposals
Excerpt: "The final bill could limit the smoothing of liabilities and assets, force companies with bad credit ratings to make higher pension payments and restrict the use of payment credits." (Workforce Management; one-time registration required)

Commentary: Tension Over Pensions -- Can They Be Saved?
Excerpt: "Congress is now trying to save defined-benefit plans from a rapid demise. Differences between a 700-page Senate pension bill and a similarly large House bill may be reconciled next month. Though quarreling over the differences, experts consider this effort to be a useful exercise. The bill could strengthen the Pension Benefit Guaranty Corporation (PBGC), which insures traditional pension plans, and require companies to better fund the reserves for their traditional plans." (The Christian Science Monitor)

Results of the Investigation for the Board of the San Diego City Employees' Retirement System (PDF)
274 pages. Excerpt: "The genesis of the investigation was the underfunding of the defined benefit pension plan that was established by the City of San Diego ... for some of its employees." (Navigant Consulting, Inc. via San Diego City Employees' Retirement System)

San Diego's Pension Fund Board Receives Independent Investigation Results
Excerpt: "Saying that earlier members of the San Diego pension fund's board did not fully understand the breadth of their fiduciary responsibilities, a city consultant has recommended current members get extensive fiduciary training. In a 274-page report made public on the Internet Friday afternoon Navigant Consulting of Los Angeles, the consultant also recommended that the pension fund's actuary should generate an annual report based on its actuarial valuation." (; one-time registration required)

Two More Companies Join Defined Benefit Pension Plan Freeze List
Excerpt: "Add two more US companies to the growing list of firms freezing their defined benefit pension in favor of a 401(k) program. Atlanta-based athletic clothing and equipment maker Russell Corp. and communications giant Sprint Nextel Corp. have joined other employers across the country in migrating away from their DB plans." (; one-time registration required)

What Are Your Retirement Income Prospects When Your Pension Is Frozen?
Excerpt: "The general trend across corporate America is to replace pensions with 401(k) plans. Is there any way to know how this switch will affect the workers' bottom line? That's a tough question because the two approaches are fundamentally different." (The New York Times; one-time registration required)

Private Letter Ruling Says Additional Security Required for New Loan from Retirement Plan
Excerpt: "This ruling reminds us that even when an unpaid outstanding loan has been reported for tax purposes as a deemed distribution, the consequences of a defaulted loan continue when the outstanding loan remains unpaid. These consequences include the additional security requirement discussed in this ruling and the requirement to include the outstanding unpaid amount and accrued interest in determining the maximum amount available for the new loan." (Employee Benefits Institute of America Inc.)

Maryland Lawmakers Pessimistic on Teacher Pension Plan: Proposal Would Cost $500 Million
Excerpt: "By the union's measure, teachers in Maryland who retire after 30 years receive annual pension payments that equal about 38 percent of their salary, compared with 60 percent in neighboring Pennsylvania and a nationwide average of 57 percent. But an analysis by a consulting firm hired by the legislature tells another story." (The Washington Post; one-time registration required)

Text of Advisory Opinion 2005-21A for the Utah Transit Authority Hourly Employees Retirement Plan
Excerpt: "[DOL was] asked whether the Plan's status as a 'governmental plan' within the meaning of section 3(32) of ERISA would be adversely affected if it were amended to allow two Utah Transit Authority (UTA) employees to continue to participate while on leave of absence to perform duties as full-time elected officials of the Amalgamated Transit Union Local 382 (Local 382), which is the labor union representing UTA employees who participate in the Plan." (U.S. Employee Benefits Security Administration)

Overview: ERISA 4010 Reporting Waived for Employers that Valued Benefits Using PFEA Interest Rate
Excerpt: "The PBGC has issued a Technical Update that waives reporting by certain employers of financial and actuarial information under ERISA §4010. The waiver applies to filings for information years ending on or after December 31, 2005, and on or before June 30, 2006, for employers who would not be required to file if vested benefits were valued using the Pension Funding Equity Act (PFEA) 85% corporate interest rate for purposes of determining whether a 4010 filing is required." (CCH INCORPORATED)

More Lessons on 'What A Retirement Plan Is Not'
Excerpt: "A surprisingly high percentage of Americans think that the most practical way for them to accumulate several hundred thousand dollars is to win the lottery. When asked about the most practical way for them personally to accumulate several hundred thousand dollars, over half (55%) said 'save something each month for many years.'" (Attorney B. Janell Grenier via

Disaster Relief Relating to PBGC Deadlines in Response to Tornadoes and Severe Storms in Kentucky
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to tornadoes and severe storms on November 15, 2005, in Kentucky." (Pension Benefit Guaranty Corporation)

The End of an Era? Investment Advice Offerings for Participants and Plan Sponsors
Excerpt: "A currently proposed House bill (sec. 601 of H.R. 2830) would enable a financial institution to provide investment advice to both participants and plan sponsors. The bill would allow advice even with the existence of a financial conflict of interest if steps are taken to provide adequate disclosure of fees, conflicts, services to be provided, etc." (The McHenry Group)

Procedures for Issuing Letter Rulings, Determination Letters, and Other Guidance for Employee Plans
Excerpt: "Employers and their advisors seeking plan-specific guidance from the IRS will need to familiarize themselves with this bulletin. Those new to the process will benefit from practical tools in the bulletin, such as sample formats for letter ruling requests, checklists to ensure that ruling requests are complete, and definitions of basic terms." (Employee Benefits Institute of America Inc.)

Links to Items on Executive Comp, Benefits in General

Opinion: Graying America Won't Sink the Ship
Excerpt: "[T]he graying of America may not be the fiscal disaster that the deficit hawks project. The nation may age a good deal more gracefully than advertised, thanks to American ingenuity, adaptability and an increasingly hardy group of elderly people, say a diverse group of demographers and public policy experts." (The Register-Guard)

Overview: Department of Labor Issues New USERRA Poster (PDF)
1 page. Excerpt: "When the Department of Labor finalized the Uniformed Services Employment Reemployment Rights Act (USERRA) regulations on December 19, 2005, it also updated its notice poster. This poster replaces the previous poster, and should be posted immediately." (Gardner Carton & Douglas LLP)

Overview: Application of Section 409A Valuation Requirements to Stock Options
Excerpt: "The IRS issued Notice 2006-4 on December 23, 2005, easing the valuation requirements for stock rights granted before January 1, 2005. Commentators had expressed concern over whether companies would be able to demonstrate that a reasonable valuation method had been used to determine the exercise price of these stock rights, as §409A had not yet been enacted when they were issued. This notice responds to these concerns by providing ...." (BNA Tax Management)

Newly Posted Events
(Post Yours!)

Exclusive Webcast: Roth 401(k) - Here's the Latest!
Nationwide on February 1, 2006
presented by National Institute of Pension Administrators

Other Post-Employment Benefit Liability: Retiree Medical And Life Benefits
Nationwide on February 10, 2006
presented by Morgan Lewis & Bockius LLP

Other Post-Employment Benefit Liability: Retiree Medical And Life Benefits
Nationwide on February 14, 2006
presented by Morgan Lewis & Bockius LLP

Pension Focus 2006
in Missouri on May 4, 2006
presented by Pension Consultants, Inc.

Newly Posted Press Releases
(Post Yours!)

Disaster Relief Announcement
(Pension Benefit Guaranty Corporation (PBGC))

Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
(Post Yours!)

David Turner
(BusinessPlans, Inc. (BPI) - myCafeteriaPlan)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

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

Account Manager
for SunTrust Bank
in VA

401(k) Plan Administrator
for Plan Design Consultants, Inc.
in CA

Actuarial Assistant
for The Benefit Practice
in NY

401(k)/Pension Administrator
for Benetech, Inc.
in AZ, CA, DC

Manager, Retirement Programs
for Stanford University
in CA

Senior New Business Analyst (Implementation Analyst)
in DC

Compliance/Administration Associate
for Towers Perrin
in NJ

Compliance/Administration Junior Associate
for Towers Perrin
in NJ

Institutional Trust Communication Specialist
for BB&T
in KY

Plan Review Group Representative - PA
for Vanguard
in PA

ERISA Counsel/Defined Contribution Consultant
for SunTrust Banks, Inc.
in TN

External Regional Retirement Plan Sales Consultant
for Waddell & Reed, Inc.
in AZ, CO, ID, MT, NM, TX, UT, WY

Pension Consultant
for Standard Insurance Company
in OH, TX

Defined Contribution Plans Administrator
for Benefit Associates Inc.
in CA

Compliance Manager / ERISA Attorney
for ABD Insurance and Financial Services
in CA

Operations Manager - 401(k)
for CitiStreet
in FL

Retirement Plan Coordinator
for American Funds, a part of The Capital Group Companies, Inc
in TX

Benefits Analyst
for Corning Incorporated
in NY

Benefits Collection Manager
for Service Employees International Union
in DC

Senior Plan Administrator
for Acuff & Associates, Inc.
in TN

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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.