Retirement Plans
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March 6, 2006
Today's sponsor: Penchecks, Inc.

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The National Registry has arrived!

It is a web-based service designed to reunite plan participants with their unclaimed retirement benefits. Since going live on May 27, 2005, over 10,000 participant names with unclaimed pension benefits have already been registered. Plan Administrators and IRA custodians may register their missing participants in the National Registry's database for a nominal fee. Participants are able to check the database online. If a match is found, contact information is provided. There is no charge to individual participants to use the service to search for unclaimed retirement benefits that are owed to them. The National Registry facilitates Win-Win situations - Plan Sponsors alleviate themselves of reporting burden and fiduciary responsibility when lost participants claim their money and Former Plan Participants end up with more money!

All Automatic/Default/Missing Participant IRAs established through PenChecks, Inc. are automatically included in the National Registry database at no additional cost.

For more information, click on the link above or call (877) 462-2745.

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

The Book on the Roth 401(k) and 403(b) and Why Your Company Must Have One -- Maybe
Excerpt: "Although this article discusses the Roth primarily in terms of the 401(k) plan, the Roth 401(k) and 403(b) are very similar. The few differences between them are discussed in the second section of this article." (Trucker Huss)

Playing the 401(k) lottery
Excerpt: "In the rapidly fading world of broad employee benefits, a 401(k) plan to which the employer contributed company stock formerly made some sense. As a worker, you had the combination of Social Security, a corporate pension, your own savings in a 401(k) plan and your employer's stock contribution to the 401(k) plan. The company stock may have been a lottery ticket, but it was a 'free' lottery ticket. You had a lot of other things to rely on. You could take the risk." (The Dallas Morning News; one-time registration required)

Prohibited Transaction Rules under ERISA Have Protected Participants Against Self Dealing Conflicts
Excerpt: "Since 1997, Rep. John Boehner has championed a bill that would remove current ERISA provisions that prohibit conflicted advice and would allow mutual fund companies, banks and brokerage firms to provide advice on their own investments. Each time the bill passed the House, the Senate rebuffed it. Once again, conflicted advice is being discussed, this time as part of a broad pension bill that contains numerous very positive provisions." (

Seven Hot 401(k) Trends
Excerpt: "[4]01(k)s weren't originally designed to save investors from themselves -- or from run-ins with greedy plan administrators or a malfunctioning marketplace. But a couple of decades of experience in seeing how workers go wrong with their plans is starting to alter how workplace retirement plans function." (MSN Money)

Report Shows Oklahoma State Pension Systems at Crisis Level
Excerpt: "A report shows Oklahoma's state pension systems are in serious financial crisis with more than 10 (B) billion dollars in unfunded liabilities. That's according to a draft copy of an Oklahoma Pension Oversight Commission report obtained by The Oklahoman." (AP via WorldNow and KTEN)

Overview: Distress Termination of Pension Plans in Chapter 11 (PDF)
4 pages. Excerpt: "The Employee Retirement Income Security Act of 1974 (ERISA) sets forth the procedural framework for terminating a pension plan.1 The [target page] is a primer on the methods by which a troubled company may free itself of its pension obligations under ERISA in a chapter 11 case." (Gardner Carton & Douglas LLP via American Bankrup.tcy Institute Journal)

Pension Reform May Kill Plans
Excerpt: "Thousands of workers counting on lump-sum pension payouts upon retirement could face an unpleasant surprise if their employers haven't paid enough money into pension accounts. Congress -- reacting to record deficits in private pension accounts -- is poised to overhaul the federal rules governing those accounts. One proposed change would bar lump-sum payouts to retirees of companies that haven't met pension obligations." (Pittsburgh Tribune-Review)

Public Employee Defined Benefit Pension Plans -- Tried and True System that Benefits Taxpayers
Excerpt: "[The] plans have been under constant attack - read [on the target page] about how [the conference is] responding and why these attacks are unjustified." (National Conference on Public Employee Retirement Systems)

Employee Ownership Update for March 6
NCEO Executive Director Corey Rosen, who recently led a two-day conference on employee ownership in Johannesburg, discusses South Africa's haphazard moves toward broader employee ownership. In other news, IRS officials have stated they will issue more specific guidelines on stock valuation requirements under the deferred compensation rules of Section 409A of the Internal Revenue Code, affecting plans such as stock options and stock appreciation rights (SARs). (National Center for Employee Ownership)

DOD Panel Mulls 10-Year Retirement Plan
Excerpt: "Today's military members serve under the traditional 20-years-or-bust retirement plan, which has been prized by generations of retirees. That plan isn't going away for the current force. But a new plan might be offered as a voluntary option for those in now, promising at least some retirement benefits to many members who don't expect to serve 20 years." (Stars and Stripes)

Overview: IRS Targeting 412(i) Plans (PDF)
2 pages. Excerpt: "The IRS is aggressively auditing 412(i) plans-- that is, defined benefit pension plans funded exclusively with insurance contracts. It is seeking to curb what it believes to be abuses in the establishment and funding of some of these plans." (Reish Luftman Reicher & Cohen)

District Court Judge Upholds Cash Balance Plans in 2005 Opinion
Excerpt: "In one of the most important ERISA decisions of 2005, Ballard Spahr lawyers recently convinced Judge Legrome Davis of the District Court for the Eastern District of Pennsylvania to dismiss in its entirety a class action challenging an employer's conversion of its traditional defined benefit pension plan to a so-called cash balance plan." (Ballard Spahr Andrews & Ingersoll, LLP)

Different Aged Participants Have Different Education Needs, According to Study
Excerpt: "Three age groups of workers each approach retirement and its related savings issues from a much different place and will need investment education/advice programs tailored to the needs of their age bracket [is] a key conclusion of a new Hewitt Associates research report, which examined how baby boomers (Ages 42 to 59), Generation X (Ages 26 - 41), and Generation Y (Ages 18 - 25) regard the coming challenges of financing their Golden Years." ( one-time registration required)

Book Review: 'How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire'
Excerpt: "John Bogle, the founder of the Vanguard Group, wrote the foreword. Here's what Bogle had to say: 'This is a great book because it fills a major gap in the investment literature. There are countless books about accumulating financial assets for retirement, but few about what to do when you get there.'" (The Washington Post; one-time registration required)

Economists at Odds Over Savings Rate
Excerpt: "Now that America's savings rate has been negative for an entire year, a first since the Great Depression, the question is whether we're a spendthrift nation on its way to the poor house or whether we're looking at the wrong numbers when we calculate savings." (AP via The New York Times; one-time registration required)

Saver's Credit for Moderate-Income Families Would Fade Away under House-Passed Pension Bill
Excerpt: "Pension legislation passed by the House and now heading to conference would permanently extend the saver's credit -- the only retirement tax cut enacted in 2001 aimed at people with incomes under $50,000 -- but in such a way that this saving incentive would be sharply scaled back over time and eventually would disappear altogether." (Center on Budget and Policy Priorities)

House and Senate Must Now Reconcile Reform Bills
Excerpt: "After passing major pension reform bills last year, the US House of Representatives and the US Senate now face the task of reconciling the two bills to present legislation to President Bush for approval." ( one-time registration required)

Links to Items on Executive Comp, Benefits in General

Becoming an Employer of Choice: Strategies for Worker Recruitment and Retention (PDF)
8 pages. Excerpt: "The demographics of the nation tell us we are getting more culturally diverse and increasingly 'older,' with a large segment of 'baby boomers' nearing retirement age. Already there are certain skill shortages emerging that will only be compounded as large numbers of skilled workers leave the labor force. It seems inevitable that employers will face a skills shortage in the near future." (International Foundation of Employee Benefit Plans)

How Does the Size of the Millennial Generation Coming Into the Workforce Compare to Baby Boomers?
Excerpt: "'The Millennials are somewhat larger than people expected,' says William Strauss, co-author of the book Millennials Rising: The Next Great Generation. Baby Boomers, born between 1943 and 1960, averaged 3.8 million births a year in the United States, his co-author, Neil Howe, says. Millennials, born between 1982 and 2002, averaged 3.9 million births a year in this country, he adds." ( one-time registration required)

Overview: Court Invalidates New York City Law Relating to Domestic Partner Benefits
Excerpt: "New York City's Equal Benefits Law (EBL), which requires companies with city contracts of $100,000 or more to offer the same benefits-- including pension and health benefits-- to employees' domestic partners and spouses, is preempted by ERISA, according to New York's highest court. Council of the City of New York v. Bloomberg, 2006 N.Y. LEXIS 149 (N.Y. Feb. 14, 2006). The Court of Appeals of New York also ruled the state's competitive bidding law preempts the EBL." (Deloitte's Washington Bulletin via

More Employers Are Extending Coverage to G.ay and Les.bian Workers' Partners
Excerpt: "[G]ay and les.bians still face hurdles, even when their employer offers same-sex benefits. For example, not all are comfortable disclosing their se.xual orientation to their employers, so they don't participate. Additionally, employers can lawfully have a two-tiered system in which they pay the health-insurance premium of a spouse, but not a domestic partner. There are also different tax consequences." (Daily Record)

Overview: Stock Valuation Guidance and Section 409A Technical Corrections (PDF)
2 pages. Excerpt: "The Internal Revenue Service (the 'Service') and Congress were busy in December. The Service issued additional guidance on section 409A of the Internal Revenue Code of 1986, as amended (the 'Code') and Congress enacted the Gulf Opportunity Zone Act of 2005 ('GOZA'). Both impact deferred compensation arrangements under Code section 409A ('409A'). [Published January 4, 2006]" (Haynes and Boone, LLP)

SEC Pay Rules Might Limit Porkers' Weight Gains, According to Graef Crystal
Excerpt: "The U.S. Securities and Exchange Commission's proposed new rules for disclosing executive pay will ultimately give shareholders the tools they need to stop all those porkers from just getting fatter and fatter. But a few of the many proposed changes need some tweaking." (Bloomberg News)

Equity Awards Under 409A -- Deferred Compensation or Not (PDF)
12 pages. Excerpt: "This Alert reviews the most recent IRS guidance, including Notice 2006-5, on the valuation of stock of private companies. It describes the current guidance on the application of Code Section 409A to equity awards and is intended to be a convenient and up-to-date summary of the Section 409A rules applicable to equity and equity-based companies." (Baker & McKenzie)

Overview: The Effects of the Final USERRA Regulations on Multiemployer Plans (PDF)
Pages 7-10 of 11 pages. Excerpt: "As proposed, the regulations would have required multiemployer plans to grant full credit for periods of military service as long as the service member returned to work in covered employment for any contributing employer rather than just the service member's last employer before entering military service." (Trucker Huss)

Additional sponsor: DATAIR Employee Benefit Systems, Inc.

(Click on company name or banner to learn more.)
Banner ad for DATAIR Employee Benefit Systems, Inc.

Software for DC/401(k) Plan Administration

DATAIR's IMPROVED BENEFIT ADMINISTRATION SOFTWARE for 401(k), Profit Sharing and all other Defined Contribution plans. Designed for administrators and consultants.

This Windows system features many important enhancements including flexible input for employee data, share and dollar accounting; redesigned easy-to-read report formats, a transaction database for time-weighting of allocations; electronic anniversary notification and data collection; and unlimited investment and source definitions. The system also allows for great flexibility in setting up graded class allocation (cross-tested new comparability) plans.

Training and support included. For free demo versions and pricing, contact or call 1-888-328-2474.

(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!)

Final USERRA Guidance: Taking Care of Our Troops on the Home Front
Nationwide on March 9, 2006
presented by ABA Joint Committee on Employee Benefits

Seizing Opportunities and Sidestepping Pitfalls: Drafting Welfare Plan Documents
Nationwide on March 21, 2006
presented by ABA Joint Committee on Employee Benefits

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Tax Reporting Supervisor - PA
for Vanguard
in PA

Pension Administrator
for Associated Pension Consultants
in CA

Employee Benefits Account Manager
for Kibble & Prentice
in WA

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