Retirement Plans
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March 8, 2006
Today's sponsor: ASPPA • Working for America's Retirement™

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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)

Alicia Munnell Takes a Hard Look at 401(k)s and Pensions
Excerpt: "To scrutinize and interpret [the] changing landscape, EBN Associate Editor Leah Carlson Shepherd interviewed Alicia Munnell, director of the Center for Retirement Research at Boston College and co-author of 'Coming Up Short: The Challenge of 401(k) Plans' (The Brookings Institution, 2004)." (Employee Benefit News)

GM Unveils Finalized Pension Restructuring
Excerpt: "General Motors Corp. [yesterday] reiterated its plans to shift new employees from a defined benefit to a defined contribution plan to help it slash ballooning labor costs." ( one-time registration required)

Pentagon Gets Recommendations for Beefed up 401(k) Plan
Excerpt: "At a time when numerous public and private employers are rethinking their retirement plan programs, the US Defense Department is also considering needed pension changes for the nation's military personnel." ( one-time registration required)

Participant Inertia Key to Understanding Behavior
Excerpt: "Defined contribution participants face the investment markets hampered not only by their own 'counterproductive' investing style, but also because of 'inadequate' plan design, a new study asserted." ( one-time registration required)

Federal Employee Retirement Fund Tapped to Avoid National Debt Limit
Excerpt: "The Treasury Department has started drawing from the civil service pension fund to avoid hitting the $8.2 trillion national debt limit. The move to tap the pension fund follows last month's decision to suspend investments in a retirement savings plan held by government employees." (The Washington Post; one-time registration required)

Official Says Administration Has 'Serious Concerns' about Pension Reform Bills
Excerpt: "With sweeping pension reform measures in the US House and Senate set to be reconciled in a joint conference committee, one Bush Administration official has warned that the bills as they now stand simply will not do the job. Mark Warshawsky, ... of the US Treasury Department, reminded an audience in a speech ..., that administration officials have vowed to veto either bill in their current form, and asserted that the officials had a minimum alternative they would accept." ( one-time registration required)

Opinion: Do the PBGC's Assumptions Overstate Liabilities and Is It Time for a Change? (PDF)
1 page. Excerpt: "In the interest of the same 'transparency' that the PBGC is encouraging employers to embrace, the PBGC should issue transparent financial statements that reflect its true financial position based on reasonable estimates of its own future experience." (Jim Keightley, Keightley & Ashner via Global Pensions)

Textron ESOP Claims Thrown Out of Court
Excerpt: "Former Textron Inc. employees have hit a major legal roadblock in their long-standing battle to prove the value of their employee stock ownership plan (ESOP) holdings fell because they were improperly allowed to invest in company stock shares." ( one-time registration required)

Chart: 2006 Cost-of-Living Adjustments (PDF)
1 page. Excerpt: "The Internal Revenue Service and the Social Security Administration have issued the inflation-adjusted amounts which affect qualified retirement plans and Social Security benefits for the year 2006." (Briggs and Morgan)

CBO Background Paper: Evaluating Benefit Guarantees in Social Security (PDF)
40 pages. Excerpt: "Some proposals to modify the Social Security system by incorporating individual accounts would also require that beneficiaries receive a guaranteed minimum benefit, regardless of the accounts' investment performance. The Congressional Budget Office (CBO) has developed the capacity to analyze the value of such guarantees and their potential cost to the government. This background paper demonstrates how benefit guarantees can be evaluated ...." (U.S. Congressional Budget Office)

Latest Principal Financial Well-Being Index Covers Savings and Spending Issues
Excerpt: "[A] sign of thriftiness among workers surveyed is the accuracy with which those who participate in a Flexible Spending Account (FSA) estimated their medical expenses. Almost half (44%) said they estimated their actual medical expenses within $100 in 2005. Thirty-nine percent said they underestimated expenses and did not put away enough into their FSA, while 16% overestimated the amount they would need for medical expenses." ( one-time registration required)

Advice Tug-of-War -- Pension Bills Take Different Approaches on Providing Investment Information
Excerpt: "House and Senate bills take two entirely different approaches to the issue, and most industry players have come to pitch their tents in one camp or the other. Raising far fewer eyebrows and voices than other components of pension reform, the outcome of the tug-o'-war over financial advice will nevertheless wreak major change in the way plans are administered." (Employee Benefit News)

Trends and Issues: Tax-Efficient Saving and Investing (PDF)
16 pages. Excerpt: "A central component of investment advice in recent decades both for individual and institutional investors has focused on asset allocation, and rightly so since it plays a critical role in determining returns. For individual investors, tax management also plays a significant role in maximizing wealth but it typically does not receive the attention it deserves. This Trends and Issues examines four types of tax considerations that can reap benefits to investors: ...." (TIAA-CREF Institute)

Small, Private-Employer Pension Plans: A Back-to-the-Future Retirement Savings Strategy
Excerpt: "Many baby boomer business owners who embraced 401(k) plans in the 1980's and 1990's are now turning to defined benefit plans to meet their retirement needs." (Employee Benefit News)

Links to Items on Executive Comp, Benefits in General

Measure Would Allow Tax-Free Employer Contributions to 529 Plans
Excerpt: "A House bill sitting in committee would let employers make tax-free contributions to 529 college savings plans and Coverdell accounts. Introduced by Rep. Jon Porter, R-Nev., H.R. 3585 was referred to the Ways and Means Committee. Meanwhile, lawmakers continue throwing their weight behind bipartisan bills, H.R. 2386 and S. 1112, to make permanent the federal tax treatment of 529 plans." (

2005 -- The Year in Review: Working Toward Clarity in Executive Compensation (PDF)
11 pages. Excerpt: "Whereas recent years brought sweeping framework changes such as stock option expensing and deferred compensation reform, legislative and regulatory developments in 2005 primarily sought to clarify and finalize these rules as companies worked to transition their programs and practices to ensure compliance. New proxy disclosure rules, proposed by the SEC in early 2006, are likely to take center stage this year." (Frederic W. Cook & Co., Inc.)

Welcome to New BenefitsLink Advertiser Alsam Communications
Excerpt: "Benefit product and service providers---let buyers know what you have. Increase your market share -- send your sales message directly to proven benefit plan sponsors. Small to mid-size businesses (100-500 employees) are not aware of the providers in the marketplace, and what products and services you offer. Alsam Communications provides effective methods to reach such benefit plan sponsors by providing the most efficient links between you and the decision makers in these businesses." (

Form LM-10 -- Employer Reports -- Frequently Asked Questions
Excerpt: "[This] series of questions and answers responds to inquiries received by the Department of Labor on the Form LM-10 (Employer Report), a reporting and disclosure form issued by the Department of Labor pursuant to the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA)." (U.S. Department of Labor)

Advisory Regarding Filing of Forms LM-10 and LM-30
Excerpt: "Due to the short time remaining before the deadline for filing Forms LM-10 and LM-30 for the fiscal year that ended December 31, 2005, OLMS, pursuant to its enforcement discretion, issues this advisory." (U.S. Department of Labor)

Newly Posted Press Releases
(Post Yours!)

Troutman Sanders Teams With White Horse Advisors To Answer Questions A 401(k) Plan Fiduciary Should Be Asking
(White Horse Advisors, LLC)

White Horse Advisors Partners Speak To Institute Of Management Accoutants
(White Horse Advisors, LLC)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Benefits Supervisor
for Southern Wine & Spirits, Business Solutions Group
in FL

Director of Employee Benefit Sales
for CUNA Mutual Group
in WI

Health And Welfare Analyst
for Constantin Control Associates
in NJ

Director, Total Benefit Communications
for BISYS Retirement Services
in GA

Director of Business Development
for ADP~ Automatic Data Processing
in NJ

Human Resources Compliance Specialist
for Phelps Dodge Corporation
in AZ

Director - Retirement Services
for Merrill Lynch
in FL

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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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Fax: (407) 644-2151

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