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January 24, 2006
Today's sponsor: ASC & The ASC Institute

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Banner ad for ASC & The ASC Institute

ASC - YOUR PREMIER SOURCE FOR RETIREMENT PLAN SOFTWARE, DOCUMENTS & EDUCATION

Even if you haven't made a final decision on a document vendor for EGTRRA, you need to be on a list. ASCi will submit to the IRS a list of all sponsors who register for the ASCi prototype/ volume submitter plans by January 26, 2006. ASCi is waiving all registration costs (except the IRS fee), and when you sign up with ASCi, you are not committing to purchase ASCi's document system now or in the future. Signing up with ASCi today guarantees your prototype/volume submitter status at no additional cost to you! Click above to learn more and enroll or email your questions to asci@asc-net.com.

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

Working Paper: $100 Bills on the Sidewalk -- Suboptimal Saving in 401(k) Plans (PDF)
42 pages. Excerpt: "[The authors] consider employees who receive employer matching contributions in their 401(k) plan and are allowed to make discretionary, penalty-free, in-service withdrawals. For these employees, contributing below the match threshold is a dominated action." (Pension Research Council)

Working Paper: Reducing the Complexity Costs of 401(k) Participation through Quick Enrollment (PDF)
37 pages. Excerpt: "The complexity of the retirement savings decision may overwhelm employees, encouraging procrastination and reducing 401(k) enrollment rates. We study a low-cost manipulation designed to simplify the 401(k) enrollment process." (Pension Research Council)

Roth 401(k) Roadmap for Employers
Excerpt: "Roth 401(k) contributions are a separate type of employee elective contribution under a 401(k) plan. The regulations are clear that a 'Roth-only' 401(k) plan cannot be established; a plan must also provide for pre-tax elective contributions. Roth 401(k) contributions have several unique characteristics: ...." (McDermott Will & Emery LLP)

Overview: IRS Provides Limited Relief from Relative Value Disclosure Deadline of February 1, 2006
Excerpt: "According to the Winter 2006 issue of Employee Plans News (http://www.irs.gov/pub/irs-tege/win06.pdf), the IRS will provide limited relief until December 31, 2006 from the original February 1, 2006 deadline for full compliance." (McDermott Will & Emery LLP)

Link to 2004 Comparative Study of Major Public Employee Retirement Systems Requires Acrobat Reader 7 (PDF)
Note to our readers: this excellent publication from the Wisconsin Legislative Council, to which we linked last week, seems to require version 7 of the Adobe Acrobat Reader in order to view the 38-page document; earlier versions of Adobe Acrobat Reader are producing error messages. (Wisconsin Legislative Council)

Overview: DOL Final Regulations on Annual Funding Notice by Multiemployer Plans
Excerpt: "The Department of Labor has issued final rules implementing the annual funding notice for multiemployer defined benefit plans. 71 FR 1904 (January 11, 2006). The final regulations, which are effective February 10, 2006 and apply to plan years beginning after December 31, 2004, provide guidance on the content requirements for the annual notice, the timing requirements for the notice, and who is entitled to receive the notice." (Deloitte's Washington Bulletin via BenefitsLink.com)

San Diego Pension Board's Other Obligation
Excerpt: "Plopped amid the hundreds of pages of a consultant's investigative report into the pension system is a recommendation for how the pension board must remedy the mistakes of its predecessors. The board is obligated, the report states, to recoup from the city the money it has shortchanged the pension system since 1996." (Voice of San Diego)

Sprint Nextel Freezes Its Pension Plans
Excerpt: "The Sprint Nextel Corporation, the wireless carrier, said yesterday that it had frozen the pension plans for almost half of its 80,000 employees and would not offer a fixed retirement benefit to new workers." (Bloomberg News via The New York Times; one-time registration required)

Update on SEC's Focus on Pension Consultants
Excerpt: "What actions have pension consultants taken after the SEC's release last year of its 'Staff Report Concerning Examinations of Select Pension Consultants' as well as its 'Tips for Plan Fiduciaries'? Lori Richards, Director, Office of Compliance Inspections and Examinations, for the SEC gave a speech December 5, 2005 ... in which she provided some insight into how pension consultants have responded." (Attorney B. Janell Grenier via BenefitsBlog.com)

Ontario Ends Mandatory Retirement
Excerpt: "The Legislative Assembly of Ontario has passed a law abolishing mandatory retirement at age 65, in an effort to provide older workers more options. The legislation, which passed third reading on Dec. 8, 2005, will take effect on Dec. 12, 2006, one year after it received royal assent." (Watson Wyatt Worldwide)

Opinion: Slovakia's Pension Reforms
Excerpt: "Politicians in Europe and America who remain in denial about the huge black holes at the heart of their state pension systems should take a look at the remarkable reforms pushed through by Slovakia. That tiny Eastern European country, already famed for its flat tax, launched its pension reform on 1 January last year." (Cato Institute)

Maine Would Have No Income Tax for Military Pensions As a Lure for Retirees
Excerpt: "Gov. John Baldacci's plan to exempt military pensions from state income taxes is being sold as an economic benefit because it would attract retirees who have high work skills and few needs for government services. But some worry about the fairness of giving a tax break to one group of people while others with lower incomes get no break." (Blethen Maine Newspapers, Inc.)

Overview: Employer Obligations towards Employees Engaging in Military Service (PDF)
Excerpt: "In December 2005, the Veterans Employment and Training Service of the U.S. Department of Labor (.VETS.) issued final regulations interpreting the Uniformed Services Employment and Reemployment Rights Act of 1994 (.USERRA.), which generally are effective January 18, 2006." (Dow, Lohnes & Albertson, PLLC)

Multiemployer Review, January 2006 (PDF)
2 pages. Excerpt: "Key Multiemployer Pension Reforms Moving in Congress" (Milliman)

Hazard for Boomers: Tax on Social Security Benefits
Excerpt: "The tax on Social Security benefits is triggered when a senior's wage, pension, investment and dividend income exceeds a set threshold. At that point, a senior who fills out a return by hand must complete an 18-line worksheet that ultimately determines how much of his or her otherwise tax-free Social Security benefits will become taxable. (Most tax software programs do the calculation automatically, so those who file that way may not even notice the extra tax.)" (Los Angeles Times; one-time registration required)

Opinion: Where Are We Headed? The Retirement Industry in 2006
Excerpt: "2005 was not a year of momentum-changing events. There were few notable sales, acquisitions or affiliations; no significant scandals; no major new service advances; and no major changes in plan design. What we did see in 2005 was a lot of planning. Companies -- both large and small -- began for the first time in a long time to truly evaluate their businesses and assess their prospects for growth." (The McHenry Group)

Working Paper: Importance of Default Options for Retirement Saving Outcomes: Evidence from the U.S. (PDF)
41 pages. Excerpt: "This paper summarizes the empirical evidence on how defaults impact retirement savings outcomes. After outlining the salient features of the various sources of retirement income in the U.S., the paper presents the empirical evidence on how defaults impact retirement savings outcomes at all stages of the savings lifecycle, including savings plan participation, savings rates, asset allocation, and post-retirement savings distributions." (Pension Research Council)

Participant's Financial Advisor/Investment Manager Is Plan Fiduciary, According to Advisory Opinion
Excerpt: "There is a wealth of content in this short advisory opinion that plan fiduciaries as well as financial planners, advisors, and investment managers would be advised to read and understand. The opinion again reminds us that the determination of who is a plan fiduciary is functional, not definitional, under ERISA." (Employee Benefits Institute of America Inc.)

Text of Advisory Opinion 2005-23A for the Deseret Mutual Benefit Administrators
Excerpt: "[DOL was asked for] guidance concerning the responsibilities of plan fiduciaries regarding the advice and other services provided directly to plan participants by financial planners or advisers." (U.S. Employee Benefits Security Administration)

Social Investing Can Boost Performance, but Roadblocks Exist, According to Survey
Excerpt: "Three quarters of institutional investors recently polled say environmental, social, and corporate governance (ESG) factors can make a difference in how well an investment performs. However, few of those in the Mercer Investment Consulting survey expect a stampede of institutional money managers to become converts overnight - instead predicting a moderate growth in socially responsible investing between now and 2008, ...." (PLANSPONSOR.com; one-time registration required)

Be Sure Your Retirement Plan Administration Complies with Cost of Living Adjustments for 2006
Excerpt: "The Internal Revenue Service has announced its annual cost of living adjustments for 2006. To assist plan sponsors, Ice Miller's updated Cost of Living Adjustment (COLA) chart lists the cost of living adjustments to retirement plan limitations for the years 1995 through 2006." (Ice Miller LLP)


Links to Items on Executive Comp, Benefits in General

Overview: SEC Proposes Proxy Rules -- Disclosure of Compensation to be Enhanced
Excerpt: "Companies will be required to discuss their compensation policies and explain in plain English their rationale for executive compensation. In this new Compensation Discussion and Analysis (CD&A) section, registrants will be expected to discuss each element of compensation and explain why that element is appropriate for their executive group. The SEC has indicated that 'boiler plate' language will not be acceptable in the CD&A." (CCA Strategies, LLC)

Text of Advisory Opinion 2005-22A for the Hartford Life Insurance Company
Excerpt: "[DOL was asked for] guidance regarding the definition of a 'separate account' contained in section 3(17) of ERISA." (U.S. Employee Benefits Security Administration)

Florida School: 'Non-Platonic' Relations Qualifies for Benefits
Excerpt: "The University of Florida will extend health benefits to its employees' domestic partners beginning in February. To be eligible for coverage, employees and their partners have to sign an affidavit noting that, among other things, they have been in a 'non-platonic' relationship for at least 12 months." (All Things Considered via National Public Radio)

Social Security Numbers: Stronger Protections Needed When Contractors Have Access to SSNs
Excerpt: "GAO recommends that Congress consider possible options for addressing gaps in federal requirements for safeguarding SSNs shared with contractors. None of the seven agencies GAO talked to provided formal written responses. However, six of the seven agencies provided technical comments, which were incorporated as appropriate. [Highlights of the GAO report are at http://www.gao.gov/highlights/d06238high.pdf.]" (U.S. Government Accountability Office)


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

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Banner ad for ASPPA * Working for America's Retirement (tm)

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!)

Intermediate IRA Seminar
in Indiana on February 21, 2006
presented by Wolters Kluwer Financial Services

Intermediate IRA Seminar
in Texas on February 21, 2006
presented by Wolters Kluwer Financial Services

Intermediate IRA Seminar
in Illinois on February 21, 2006
presented by Wolters Kluwer Financial Services

Intermediate IRA Seminar
in Arkansas on February 22, 2006
presented by Wolters Kluwer Financial Services

Intermediate IRA Seminar
in Illinois on February 22, 2006
presented by Wolters Kluwer Financial Services

Intermediate IRA Seminar
in Michigan on February 22, 2006
presented by Wolters Kluwer Financial Services

Intermediate IRA Seminar
in Tennessee on February 23, 2006
presented by Wolters Kluwer Financial Services

Intermediate IRA Seminar
in Illinois on February 23, 2006
presented by Wolters Kluwer Financial Services

Intermediate IRA Seminar
in Michigan on February 23, 2006
presented by Wolters Kluwer Financial Services

Intermediate IRA Seminar
in Kentucky on February 28, 2006
presented by Wolters Kluwer Financial Services

Intermediate IRA Seminar
in Montana on February 28, 2006
presented by Wolters Kluwer Financial Services


Newly Posted Press Releases
(Post Yours!)

New Publication Explains Tax Law Changes Related to Recent Hurricanes
(Internal Revenue Service (IRS))

Groundbreaking Research Reports Will Track Best Practices in Marketing and Selling to HR Decision Makers and Employee Benefit Brokers
(HRmarketer.com)

Podcast Now Available: The New Retirement Mindscape(SM)
(Ameriprise Retirement Services)

ADP TotalSource Enters California; Professional Employer Organization Continues National Growth With Opening of 7 Offices in the State
(ADP)


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

Emily Centers
(BusinessPlans, Inc. (BPI) - myCafeteriaPlan)


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Contribution/401(k) Administrator
for TPA Firm in Detroit Area (Northwest Suburbs)
in MI

Defined Contribution Administrator
for Pension Plan Professionals, Inc.
in FL

Internal Retirement Plan Wholesaler
for New York Life Investment Management LLC
in NJ

Pension Administrator
for The Kagan Company
in CA

Health & Productivity Project Manager
for Guardian Industries Corp.
in MI

Account Executive Director
for Principal Financial
in AZ

Benefits Product Manager
for Gevity
in FL

Appeals Administrator - Legal Operations Dept
for 1199SEIU Benefit and Pension Funds
in NY

Benefits Analyst
for Weyerhaeuser Company
in WA

Regulatory Analyst
for PAi
in WI

Account Manager
for Great-West Retirement Services
in VA

Quality Assurance Coordinator - Dental Claims Dept
for 1199SEIU Benefit and Pension Funds
in NY




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