Retirement Plans
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February 6, 2006
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Overview: Roth 401(k) Final Regulations (PDF)
2 pages. Excerpt: "On December 30, 2005, the Internal Revenue Service (IRS) issued final regulations on designated Roth 401(k) accounts. These final regulations generally retain the guidance in the proposed regulations and provide clarification/confirmation relating to some, but not all, of the issues raised after the issuance of the proposed regulations." (Transamerica Center for Retirement Studies)

Overview: IRS Issues New Publication and Form Relating to Gulf Coast Hurricane Tax Relief
Excerpt: "While both Pub. 4492 and Form 8915 are aimed at individual taxpayers affected by the hurricanes, Pub. 4492 is helpful for plan sponsors and administrators of 401(k) plans to understand the eligibility criteria for the tax relief measures affecting their 401(k) and other retirement plans." (Employee Benefits Institute of America Inc.)

Overview: Proposed Rules on Designated Roth Contributions
Excerpt: "The Q&As address additional issues that [EBIA has] not discussed here, including the handling of hardship withdrawals, plan loans, stock dividends, distributions in stock, and partial rollovers." (Employee Benefits Institute of America Inc.)

Plan Sponsors Lower Discount Rates to Soften Expenses
Excerpt: "As regulators' attention to pension accounting increases, defined benefit plan discount rates continue to drop, according to a report from financial firm SEI Investments." (Employee Benefit News)

U.S. Moves to Seize Bankrupt Steel Maker's Pension Plan
Excerpt: "The federal government said it filed suit [February 3] to seize the pension plan of the bankrupt WCI Steel, saying the plan was more than $100 million short of the amount it needed. The move is a first step toward holding WCI's corporate parent, the Renco Group, responsible for the money." (The New York Times; one-time registration required)

Bill to Increase PBGC Premiums Sent to President
Excerpt: "Under a budget bill the U.S. House of Representatives passed Feb. 1, 2006, Pension Benefit Guaranty Corporation (PBGC) premiums will increase substantially for single- and multi-employer plans. President Bush is expected to sign the bill into law soon." (Watson Wyatt Worldwide)

New IRS Relative Values Disclosure Rule Presents an Issue for Sponsors of Qualified Pension Plans
Excerpt: "Sponsors of all pension plans subject to ERISA must comply with Internal Revenue Service (IRS) regulations that established a new relative values disclosure requirement for individuals retiring on or after Feb. 1, 2006." (Employee Benefit News)

The Politics of Parallel Pensions: Lessons from the United Kingdom for the United States
Excerpt: "Opt-out pensions pose many difficult design and implementation issues. The U.K. experience suggests several valuable lessons for U.S. policymakers." (Center for Retirement Research at Boston College)

United Kingdom Retirement Plans under Additional Stress from Longer Life Spans (PDF)
Excerpt: "New information suggesting that U.K. pensioners are living longer is stirring fresh questions about the adequacy of funding for employer-sponsored retirement plans." (Towers Perrin)

Pension Consulting Industry Probe Continues
Excerpt: "A letter from the Department of Labor (DoL) indicates the Department has initiated investigations into conflicts-of-interest in the pension consulting industry." ( one-time registration required)

Editorial: Will Your Money Last in Retirement?
Excerpt: "It simply makes no sense, socially or economically, for each person to increasingly bear the risks of financing old age when that risk is more efficiently borne on the much broader shoulders of Washington and corporate America. What America needs are leaders who understand that asking ordinary citizens to assume ever-greater risks is not the path to greater security." (The New York Times; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Overview: FASB Amends Statement 123(R) for Contingent Cash Settlement of Stock Options (PDF)
1 page. Excerpt: "The Financial Accounting Standards Board (FASB) on February 3, 2006 released its fourth FASB Staff Position (FSP) providing interpretive and implementation guidance on the provisions of FASB Statement 123(R). The FSP, referred to as FAS 123(R)-4, amends paragraphs 32 and A229 of Statement 123(R) to provide a 'practical accommodation' that prevents employee stock options or similar instruments such as stock-settled stock appreciation rights (SARs) from being reclassified ...." (Frederic W. Cook & Co., Inc.)

Trucker Huss Benefits Report, January 2006 (PDF)
7 pages. This edition includes articles on the following topics: Final Regulations Interpreting the Uniformed Services Employment and Reemployment Rights Act of 1994 Issued; HIPAA Privacy Notice Reminder; and, Medicare Part D Annual Notice to CMS Due Soon. (Trucker Huss)

Plan's Review Procedures Must Be Described in Denial Notice
Excerpt: "Under both the old and the new ERISA claims procedure regulations, a claim denial notice must include a description of the plan's review procedures; so arguably, it is not enough to state, for instance, that the procedures are described in the SPD or to just send the claimant a copy of the plan." (Employee Benefits Institute of America Inc.)

'ES' Beneficiary Designation on Insurance Form Thrown Out
Excerpt: "A federal appeals court has ruled that a man who entered a relationship code on a life insurance beneficiary designation form to indicate his estate did not validly complete the process." ( one-time registration required)

Practitioner Discussion on Notice 2005-94: 2005 Reporting and Withholding Relief for 409A Deferrals
Excerpt: "The [target page] is a transcript of an informal discussion of employee benefits practitioners held in Washington, D.C. on December 19, 2005. The topic involved Notice 2005-94, 2005-52 I.R.B. 1208, which suspended the reporting and withholding requirements imposed in connection with the deferred compensation rules under 409A." (BNA Tax Management)

Overview: Year-End Guidance for Nonqualified Deferred Compensation Plans (PDF)
Excerpt: "For 2005, the IRS has suspended the wage withholding and information reporting requirements that apply to certain nonqualified deferred compensation amounts under the American Jobs Creation Act of 2004 (AJCA). However, future guidance may require employers to file corrected information returns and furnish corrected withholding statements for 2005 to report amounts includible in income that are not reported due to this temporary suspension of the reporting rules." (Prudential Retirement)

Chart of Highlights of October 4, 2005, Proposed Rules for Nonqualified Deferred Compensation Plans (PDF)
5 pages. (Prudential Retirement)

Highlights of October 4, 2005, Proposed Rules for Nonqualified Deferred Compensation Plans (PDF)
6 pages. Excerpt: "[The] Compliance Bulletin, 'IRS Publishes Proposed Regulations for Nonqualified Deferred Compensation Plans,' ... provided an overview of the actions that plan sponsors may need to take before December 31, 2005, to comply with these rules, and highlighted important additional transitional period relief. This publication provides an overview of other important provisions of the proposed rules ...." (Prudential Retirement)

Finding Firms that Boost Benefits
Excerpt: "[L]et's fantasize about a place where companies are boosting benefits. First, let's look for this place somewhere in the future. It will happen, eventually -- when companies have to compete harder to hire the best people. 'It would be if employers start to feel that what they've done is adversely affecting hiring, and secondly, that it is affecting retention,' said Dallas Salisbury, chief executive of the Employee Benefit Research Institute." (The Dallas Morning News; one-time registration required)

Newly Posted Press Releases
(Post Yours!)

Treasury and IRS Revise Circular 230 for Tax Professionals
(U.S. Treasury Department and Internal Revenue Service)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

ERISA/Benefits Attorney
for Parker, Poe, Adams & Bernstein L.L.P.
in NC

Compliance Consultant - AZ
for Vanguard
in AZ

Compliance Administrator
for BISYS Retirement Services
in PA

ERISA Attorney
for Employee Benefits Institute of America Inc. (EBIA)
in WA

Director of Client Services
for BISYS Retirement Services

ERISA Associate
for DLA Piper Rudnick Gray Cary US LLP
in MD

Compliance Administrator - AZ
for Vanguard
in AZ

Manager, Contribution Processing ~ Financial Services
for CitiStreet
in NJ

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Copyright 2006, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.

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