Retirement Plans
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February 22, 2006
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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)

Solving the Problem of Employer Stock in 401(k)s
Excerpt: "Any practical solution to the dangers posed by pension investments in employer stock must preserve the benefits and incentives that encourage employers to maximize the amount they may contribute to employee retirement funds. Equity securities consistently have outperformed other types of investments over any lengthy period of time. Laws that discourage employees from maximizing their investment returns make no sense." ( one-time registration required)

It Goes by Many Names, But Stable Value Still Has a Place on the 401(k) Menu
Excerpt: "During the early years of 401(k) plans, most total plan assets -- often in excess of 80% -- were invested in GICs (guaranteed investment contracts) or other stable value products. With the mutual fund boom of the 1990s, however, stable value seems to have become something of an investment relic, even though it still accounts for more than $1 of every $5 in defined contribution assets in larger programs." ( one-time registration required)

With Two Simple Steps, Two Big Problems Can Be Averted
Excerpt: "Taking the following two steps can prevent costly and time consuming benefit problems from occurring. Deposit 401(k)Employee Deferrals into the Plan Trust ASAP Following Each Payroll [and] ... Read Your Benefit Plan Summary Plan Descriptions." (Poyner & Spruill LLP)

Employee Ownership Update for February 21
NCEO Executive Director Corey Rosen discusses: Pension plan reforms include provisions providing greater diversification for public company employees in 401(k)s and KSOPs. A court ruled Merrill Lynch employees can get allocations of suspense account shares from the ESOP of a company Merrill Lynch acquired. The European Union's Prospectus Directive may discourage non-EU companies from having ESPPs. The IASB issued an exposure draft for amendments to share-based accounting rules. (National Center for Employee Ownership)

Introduction and Overview of the Pension Plan Funding Reform Monograph (PDF)
6 pages. Excerpt: "[The SOA Pension Section issued a] Call for Papers, asking members of the consulting, plan sponsor and academic communities to develop proposals that innovatively address the future of pension plan funding -- with the goal of creating a better system. The challenge was to present new thinking on pension plan funding, to develop principles applicable across national borders and to ensure a variety of perspectives would be presented." (Society of Actuaries)

Chart Comparing Prohibited Transaction Rules in Retirement Bill -- H.R. 2830/S. 1783 (PDF)
6 pages. Excerpt: "Side-By-Side Comparison of the Amendments to the Prohibited Transaction Rules and Other ERISA Fiduciary Provisions Included in H.R. 2830 and S. 1783" (Groom Law Group via American Benefits Council)

Just out of Reish: Basic Steps for Fiduciary Compliance
Excerpt: "ERISA requires that fiduciaries, such as the committee members or corporate officers who make decisions about the plans, engage in a prudent process to manage and monitor retirement plans. As a starting point, fiduciaries are required to look at the right information (substantive prudence) in the right way (procedural prudence), but that begs the question: What is 'right'?" ( one-time registration required)

Pension Forfeitures for Criminal Conduct: Public Employment vs. Private Employment
Excerpt: "From the Tennessee's new ethics law takes another stab at stripping away the pensions of corrupt lawmakers who are convicted of crimes of official misconduct. .... Because this law deals with a government retirement plan it does not concern ERISA. But one may ask: could a private employer covered by ERISA take away an employee's pensions because of criminal misconduct either at or outside the workplace?" (Workplace Prof Blog)

Employer-Sponsored Retirement Plans to Become Mandatory in Norway
Excerpt: "All Norwegian employers will be required to sponsor a retirement plan for their employees starting July 1, 2006 under legislation approved by the Norwegian parliament." (Towers Perrin)

United Kingdom Pension Commission Proposal Suffers Another Attack
Excerpt: "The Confederation of British Industry (CBI) on [February 20] entered the melee over the UK Pension Commission's answer to a pension system strained by retiring baby boomers." ( one-time registration required)

2006 National Summit on Retirement Savings Will Be Held March 1-2 in Washington, DC
Excerpt: "[One objective of the summit is to] Develop recommendations for additional research, reforms and action in the field of private pensions and individual retirement savings." (U.S. Department of Labor)

Multiemployer Review, February 2006 -- Update on Issues Affecting Taft-Hartley Plans (PDF)
2 pages. This edition includes articles titled: Annual Notice of Funding Status and Moody's Proposes to Consider Multiemployer Participation to Set Companies' Credit Ratings." (Milliman)

Participant Could Sue Plan's Investment Advisor Without Going Through Arbitration
Excerpt: "A plan participant who sued the plan's investment advisor under ERISA was not bound by an arbitration clause contained in an investment management agreement that governed the relationship between the plan's trustees and the investment advisor, where the participant neither signed the agreement nor sought to enforce its terms. (Kevin Comer v. Micor, Inc. (2006, CA9) 2006 WL 231643)" (Pension & Benefits Week via RIA News Briefings - Pension & Benefits)

Agenda of Upcoming Savings Summit Sponsored by DOL
Excerpt: "The National Summit on Retirement Savings will begin on the morning of March 1, 2006 and end in the afternoon of March 2, 2006." (Employee Benefits Security Administration, Department of Labor)

Statement of the Hon. Sen. Tom Harkin on 30th Anniversary of the Pension Rights Center, page 1 of 2
Excerpt: "Over the years, the center has played a key role in identifying pension inequities and promoting reasonable solutions." (Hon. Sen. Tom Harkin of Iowa)

Statement of the Hon. George Miller on 30th Anniversary of the Pension Rights Center
Excerpt: "For three decades, the center has been at the forefront of protecting retirement security. Today its work is more important than ever." (Hon. George Miller of California)

Private Pension Plan Bulletin: Abstract of 2001 Form 5500 Annual Reports (PDF)
26 pages. Excerpt: "Over the past 25 years, as the private pension system has shifted from defined benefit (DB) plans toward 401(k) type defined contribution (DC) plans, the financing of benefits has shifted from employers to participants." (U.S. Employee Benefits Security Administration)

Links to Items on Executive Comp, Benefits in General

Towers Perrin February 2006 News Briefs: United States
This edition includes information on the following recent happenings: New Budget Law Raises Flat-Rate PBGC Premiums; Mandatory Electronic Filing of PBGC Premiums Planned in 2006; IRS Proposes Regulations for Roth 401(k) Plans; Final USERRA Regulations Issued; FASB Provides Accounting Relief for Options With a Contingent Cash Settlement Feature; and, CMS Issues Guidance on Medicare Part D Disclosure Rules. (Towers Perrin)

Letter Urges Regulators not to Implement SOX Exemption
Excerpt: "A letter from former Securities and Exchange Commission Chairman Arthur Levitt and former Federal Reserve Chairman Paul Volcker urges regulators to reject a proposal to exempt thousands of smaller public companies from Sarbanes-Oxley-imposed rules on internal controls." ( one-time registration required)

Tenth Circuit OWBPA Case Sets More Stringent Requirements for Reductions-in-Force
Excerpt: "According to a recent decision by the Tenth Circuit, employers need to provide more information to employees when they seek to have them waive their rights to bring Age Discrimination in Employment (ADEA) claims after they have been impacted by a reduction-in-force (RIF)." (Workplace Prof Blog)

Communication Article -- Putting Employees in Control of Their Benefits (PDF)
Excerpt: "There is no question that the time is ripe for changes to the way employees and employers approach benefits. But, is the American workforce ready to be given the wheel when it comes to managing their benefits? And, what can an employer expect in return for the investment in developing programs that prepare their workforce for these changes?" (Aon Consulting)

Overview: SEC Initiates Overhaul of Executive Compensation Disclosure Rules
Excerpt: "A new era in executive compensation disclosure -- one requiring companies to provide more information on how they reward their top people and directors -- may be coming soon ....... [T]he new rules would usher in a new look for disclosures and a new way of reporting executive compensation, including stock awards, company-provided perquisites and retirement benefits. Besides proxy statements, the SEC proposal would apply to annual reports and registration statements." (Towers Perrin)

Section 409A Compliance: Bonus Arrangements and Deferring Performance-Based Compensation
Excerpt: "This alert, ... regarding Section 409A compliance and the proposed 409A regulations, discusses the deferral election rules applicable to performance-based compensation and Section 409A application and considerations for bonus arrangements." (Poyner & Spruill LLP)

Employer Violated FMLA by Requiring Two-Week Notice for Employees Using Paid Vacation Time (PDF)
Page 5 of 6 pages. Excerpt: "An employer's leave policy that required employees to give two weeks' notice before taking paid vacation leave violated the Family Medical Leave Act (FMLA) because it discouraged employees from taking medical leave." (Seyfarth Shaw LLP)

Insurance Can Negate the Nefarious Effect of Lawsuits
Excerpt: "Standards and practices are only the first line of defense against liability. In our litigious times, even the most circumspect professionals may find themselves sued for breach of fiduciary duty or other misfeasance. Insurance is therefore of paramount importance as a defense against fiduciaries' liability exposure." (

Aon's Quarterly Update on HR Regulatory News, March 2006 (PDF)
4 pages. This edition includes information of general interest, and notes on retirement plans, health and welfare, and other HR practices. (Aon Consulting)

Overview of New Military Leave Rules: All Employers Must Act (PDF)
1 page. Excerpt: "This article highlights some of the important areas covered in the recently issued final regulations interpreting the Uniformed Services Employment and Reemployment Rights Act (USERRA)." (Aon Consulting)

Newly Posted Events
(Post Yours!)

Fiduciary and Investment Considerations for ESOP Companies and Trustees
Nationwide on June 1, 2006
presented by National Center for Employee Ownership

Jump Start - An Introduction to IRAs
Nationwide on March 9, 2006
presented by Wolters Kluwer Financial Services

Jump Start - An Introduction to IRAs
Nationwide on April 5, 2006
presented by Wolters Kluwer Financial Services

New SEC Disclosure Rules and Their Implications for Executive Compensation
Nationwide on February 28, 2006
presented by Thompson Interactive, A Division of Thompson Publishing Group

Traditional and Roth IRA Distributions
Nationwide on March 22, 2006
presented by Wolters Kluwer Financial Services

Newly Posted Press Releases
(Post Yours!)

Cali Joins Gilsbar As Company Continues To Promote Its Thought-Leading 360 Benefit Plan Management
(Gilsbar, Inc.)

Karl Senner, Inc. Selects Gilsbar, Inc. for Self-Funded Health Plan Management
(Gilsbar, Inc.)

CPI Announces Payroll Division
(CPI Qualified Plan Consultants, Inc.)

U. S. Labor Secretary Elaine L. Chao Announces Agenda for 2006 Saver Summit
(U.S. Department of Labor, Employee Benefits Security Administration)

Killbuck Savings Bank Exceeds All Expectations in Growth of Health Savings Account Program
(Wolters Kluwer Financial Services)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Employee Benefits Tax (EB) Manager
for Deloitte
in FL, GA

Retirement Plan Administrator
for Alliance Benefit Group of New England
in NH

Account Executive
for Transamerica
in IL

Health & Welfare Group Leader
for Towers Perrin
in CA

Record Keeping Specialist for Qualified Retirement Plans
for AKT Retirement Plan Services LLC
in OR

401(k) Administrator
for R-Tech Consultants, Inc.
in CA

Service Delivery Manager II
for Automatic Data Processing (ADP)
in GA, IA, UT

Defined Benefit Forms Specialist
for New York Life Investment Management LLC
in MA

Handy Links:

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