Retirement Plans
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February 2, 2006
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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Chart: Leading Legislative Proposals Affecting Defined Contribution and Other Retirement Plans (PDF)
30 pages. Excerpt: "[Note: Includes discussion of H.R. 1000, which passed the House in 2003 and included Enron-inspired changes to the treatment of company stock (and related diversification rights) that are comparable to changes included in S. 1783.]" (American Benefits Council)

Big Changes for Pensions and DC Plans, Ahead
Excerpt: "[S]ome big changes for 'defined contribution' plans will be on the table, too, when House and Senate negotiators begin to hammer out a compromise pension bill, possibly in late February. The final legislation could boost the number of workers participating in 401(k)s, but reduce the amount some employers contribute to workers' accounts." (

Overview: Roth 401(k) Plan Regulations Finalized (PDF)
Excerpt: "On January 3, 2006, the Internal Revenue Service ('IRS') published final Roth 401(k) regulations, effective for plan years beginning on or after January 1, 2006." (White & Case)

Money in 401(k)s Outstrips Pension Totals
Excerpt: "The value of large 401(k)s and similar plans surpassed pension totals in 2002, but the shift is only now emerging in statistics culled from the reports companies file with the federal government. The new figures, to be released [today], were generated by the Center for Retirement Research at Boston College." (AP via The New York Times; one-time registration required)

Employee Ownership Update for February 1
In his February 1 update, NCEO Executive Director Corey Rosen discusses the following: More than half of the for-profit corporations on the Great Place to Work Institute's '100 Best Companies to Work For in America' list have broad-based employee ownership. The IRS may investigate potentially abusive preferred or super-common stock in ESOPs. Since the implosion of Enron, more than 60 lawsuits have been filed for violating ERISA; an analysis shows the courts have not come to consistent conclusions. (National Center for Employee Ownership)

Another Hurdle for Traditional Pensions: Prepare for Changes in Defined Benefit Plan Accounting
Excerpt: "Changes in the accounting rules for defined benefit pensions -- expected to be made final at yearend--are likely to add another burden to maintaining traditional pensions. Benefits administrators should balance the new requirements against employee expectations." (Society for Human Resource Management)

Blog: Interim Valuation for PERS OKed by California State Court
Excerpt: "The Board for the San Diego County Employees Retirement Association did not act against the interests of members by relying on an interim actuarial valuation, thus did not violate the state constitution, according to a ruling of California's 4th District Court of Appeal. [Bandt v. Board of Retirement, San Diego County Employees Retirement Association, D044999, 1/30/06]" (BeneBlog)

Penalty for Not Providing Plan Related Information (PDF)
Page 3 of 4 pages. Excerpt: "In a recent case, a judge in the United States federal district court ruled against a plan administrator for not providing certain requested information with respect to a pension plan." (White & Case)

Germany to Raise Retirement Age to 67 by 2029
Excerpt: "Germany, facing severe strains on its pension system, will raise the retirement age in steps to 67 from 65 by 2029 -- six years earlier than originally planned, Labour Minister Franz Muentefering said ...." (Reuters via Business Insurance)

Italian Government Approves Pension Reform with Two-Year Delay
Excerpt: "The Prime Minister's cabinet approved a long-awaited reform of the pension system Nov. 24, 2005. The reform, which would launch a second pillar of private and occupational pension schemes, will go into effect Jan. 1, 2008, two years later than originally planned. However, the details of the program could change depending on the outcome of April's elections." (Watson Wyatt Worldwide)

Congress Passes Bank Deposit Insurance Legislation -- Limit Raised for Retirement Accounts
Excerpt: "The $100,000 account limit on federal bank deposit insurance will be raised for retirement accounts under legislation passed by Congress on Wednesday and expected to be signed by President Bush." (The Washington Post; one-time registration required)

The Role of IRAs in Americans' Retirement Preparedness (PDF)
12 pages. Excerpt: "This issue of Fundamentals summarizes the results of an ICI survey of Americans' use of IRAs." (Investment Company Institute)

Booklet: Getting Help with Your Investments (PDF)
16 pages. Excerpt: "This booklet provides the information you need to find and work with reputable brokers and financial advisers. [It tells] you the kind of help you can get from brokers -- full-service, discount and online -- and financial advisers and investment clubs. And [it will arm] you with information that will help you spot early warning signs of broker misconduct and what you can do about it." (Kiplinger's Personal Finance magazine, Investor Protection Trust, and American Library Association)

Issues in Brief: The State of Private Pensions Using Current 5500 Data
Excerpt: "[T]his brief highlights trends that are impossible to observe in the current official releases: a notable increase in pension contributions for defined benefit plans; the decline and recovery of pension assets in the 2001-2003 period; the continued use of cash balance plans; and the sustained move in coverage towards defined contribution plans." (Center for Retirement Research at Boston College)

Nissan Follows Trend of DB to DC Switch
Excerpt: "Nissan North America has frozen its defined benefit pension plan to new hires as of January 1 and is offering instead a 401(k) type defined contribution plan." (; one-time registration required)

Americans Spent More than They Made Last Year, Alarming Economists
Excerpt: "From baby boomers ill-prepared for retirement to people in their 20s deep in credit card debt, the personal savings rate of Americans dipped below zero last year for the first time since the Great Depression." (The Baltimore Sun; one-time registration required)

Lessons from the Social Security Debate (PDF)
6 pages. Excerpt: "The debate over Social Security's future highlighted the crucial role it plays in ensuring the basic income needs of middle-class families; it illustrated the different possible paths to improving Social Security solvency; and it raised the profile of a national debate over ways to increase retirement wealth in addition to Social Security." (International Foundation of Employee Benefit Plans)

Links to Items on Executive Comp, Benefits in General

Overview: FASB Board Moves Toward Finalizing FSP FAS 123R-d
Excerpt: "At its Feb. 1, 2006 board meeting, the Financial Accounting Standards Board (FASB) instructed the FASB staff to proceed in drafting a final FASB staff position (FSP) following discussion of comment letters received on its proposed FSP No. FAS 123(R)-d, 'Classification of Options and Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event.'" (Financial Executives International)

Blog: FASB Moves to Finalize Rule on Certain Stock Options
Excerpt: "In [the February 1, 2006] Board meeting, the Financial Accounting Standards Board moved to finalize FSP FAS-123r-d, a proposed FASB Staff Position regarding the proper accounting classification under SFAS 123R for a share-based payment arrangement that allows a cash settlement upon change in control." (BeneBlog)

Accounting for the Implicit Rate Subsidy in OPEB Plans (PDF)
Pages 12-14 of 23 pages. Excerpt: "This article will illustrate that when the implicit rate subsidy is recognized in a plan's obligations, an offsetting implicit subsidy contribution should also be recognized, in order to maintain balance in the financial disclosure information." (Society of Actuaries)

G.ay Rights Group Issues Top Workplaces List for 2006
Excerpt: "The Washington, DC-based Human Rights Campaign Foundation has released a new online ranking of the employers most supportive of g.ay, les.bian, bise.xual and transgender (GLBT) employees and consumers." (; one-time registration required)

Overview: SEC Proposals on Executive Compensation Disclosure (PDF)
6 pages. Excerpt: "The proposed rules, which include many details that were not in the press release issued by the SEC on January 17th announcing the decision to propose the rules, are expected to be effective for the 2007 proxy season." (Frederic W. Cook & Co., Inc.)

District Court Gives Go Ahead for Benefits Interference Case
Excerpt: "The US District Court for the Northern District of Illinois has given three former employees the green light to continue their lawsuit alleging their former employer interfered with their right to pension benefits and breached its fiduciary duties when it laid off employees in 2004." (; one-time registration required)

Compensation Costs Up 3.0 Percent in Private Industry in 2005
Excerpt: "The components of compensation showed differences in their rates of change in the 12 months ended in December. While increases in wages and salaries continued at a moderate pace, the increase in benefit costs was somewhat lower than it had been in the past several years." (U.S. Bureau of Labor Statistics)

Newly Posted Events
(Post Yours!)

401(k) and Retirement Plan Corrections/415 Regulations
in Ohio on February 14, 2006
presented by ASPPA Benefits Council of Cleveland

Communicating Your ESOP
Nationwide on May 23, 2006
presented by National Center for Employee Ownership

Effective ESOP Committees
Nationwide on March 21, 2006
presented by National Center for Employee Ownership

Employee Participation: Take the Next Step
Nationwide on April 6, 2006
presented by National Center for Employee Ownership

Equity Compensation for Closely Held Companies
Nationwide on April 5, 2006
presented by National Center for Employee Ownership

ESOPs as a Business Transition Tool
Nationwide on March 23, 2006
presented by National Center for Employee Ownership

Executive Compensation for ESOP Companies
Nationwide on May 11, 2006
presented by National Center for Employee Ownership

Handling the ESOP Repurchase Obligation
Nationwide on June 6, 2006
presented by National Center for Employee Ownership

Is an ESOP Right for You?
Nationwide on June 13, 2006
presented by National Center for Employee Ownership

Keeping Your ESOP Culture Alive: Communications, Participation, and Plan Design Issues
Nationwide on May 9, 2006
presented by National Center for Employee Ownership

Navigating the 409A Deferred Compensation Plan Rules
Nationwide on May 3, 2006
presented by National Center for Employee Ownership

New Stock Valuation Requirements for Closely Held Companies Under the New Deferred Compensation Plan Regulations
Nationwide on June 14, 2006
presented by National Center for Employee Ownership

Preferred Stock in an ESOP
Nationwide on April 4, 2006
presented by National Center for Employee Ownership

S Corporation ESOPs
Nationwide on March 28, 2006
presented by National Center for Employee Ownership

Securities Law Requirements for Equity Compensation in Closely Held Companies
Nationwide on June 1, 2006
presented by National Center for Employee Ownership

The EU Prospectus Directive and Beyond: The Impact of Securities Laws on Global Compensation Programs
Nationwide on March 22, 2006
presented by National Center for Employee Ownership

Unscrambling the Alphabet Soup of Account-Based Plans: HRAs, HSAs and FSAs
in Ohio on February 16, 2006
presented by WEB (Worldwide Employee Benefits Network) Cleveland Chapter

Newly Posted Press Releases
(Post Yours!)

Ernst & Young Announces Comprehensive Retirement Income Database; "Knowledge Bank" Offers One-Stop Data Source for Industry
(Ernst & Young, LLP)

Labor Department Updates Exemptions Permitting Transactions With Financial Institutions and Insurers
(U.S. Department of Labor, Employee Benefits Security Administration)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Health & Welfare and Pensions Team Lead #40914
for Byrnes & Rupkey, Inc.
in NC

Fund Administrator
for The Trustees of Taft-Hartley Benefit Funds (Funds)
in NY

401(k) Consultant, Defined Contribution
for Qualified Benefits, Inc - QBI (a wholly owned subsidiary of BenefitStreet, Inc.)
in CA

Sr. Operational Risk Specialist - Fiduciary Oversight
for Bank of America
in MA

Plan Administration Manager
for PENFlex Services, Inc.
in IL

Conversions and Plan Document Specialist
for Louis Kravitz & Associates, Inc.
in CA

Pension Administrator
for A & S Shapiro Pension Consultants, Inc.
in MD

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