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March 20, 2006
Today's sponsor: InvestLink

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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)

As 401(k) Plans Evolve, Participation Will Become More Automated
Excerpt: "The primary push is to change 401(k) plans to operate more like pension plans by automating most of the decisions that employees are required to make. No more forcing employees to answer difficult questions such as: How much should I save? Should my savings be pretax or after tax? Where should I invest?" (Milwaukee Journal Sentinel)

A 401(k) Hero for the Ages
Excerpt: "Now all of us know that there is a better way to run 401(k) plans. There is a way that puts experts in charge of money instead of novices. There is a way that cuts record-keeping and administrative costs. There is a way that can bring investment management costs down from the retail pricing of the mutual fund industry to the wholesale pricing of pension fund management. Most important, there is a way that will make employee accounts bigger when they retire." (The Dallas Morning News; one-time registration required)

401(k) Industry Urged to Help Workers Save
Excerpt: "In a rare public appearance, Abigail Johnson, president of Fidelity Investments' Employer Services Co., has called for employers and financial services providers to take immediate action to address the growing retirement savings crisis." (Workforce Management; one-time registration required)

Major Changes Raise Concerns on Pension Bill
Excerpt: "[A]ccording to a little-noticed analysis by the government's pension agency, the bill being completed in a House-Senate conference committee, rather than strengthening the pension system, would end up actually weakening it. The agency's report projects that the bills would lower corporate contributions to the pension system by $160 billion in the next three years." (The New York Times; one-time registration required)

UPS Uses Political Clout to Press for Cuts in Pension Benefits
Excerpt: "The world's largest package-delivery service wants Congress to allow employers to cut pension benefits already promised to some workers in plans funded by multiple companies." (Bloomberg News)

Opinion: Maryland Legislators Can't Change the Benefits of Years Past
Excerpt: "But legislators who couldn't sully the budget with bonuses for guards are now poised to give pension benefits retroactively to teachers and state employees. Senate and House proposals vary, but some would reach back as far as 1998 to give teachers credit for pension contributions that were never made - either by the state or by the teachers themselves. Such an effort is expected to cost taxpayers $100 million to $150 million this year." (The Baltimore Sun; one-time registration required)

San Diego's Aguirre Demands Court Roll Back Pensions
Excerpt: "San Diego City Attorney Michael Aguirre has asked a California judge to invalidate pension benefits granted in 1996 and 2002." (PLANSPONSOR.com: one-time registration required)

Should Plan Sponsors Be Concerned About IRA Rollovers?
Excerpt: "Money managers are focusing a lot of attention on rollover IRAs to retain assets distributed from qualified plans; some have even set up special IRA consulting units to assist participants in making those decisions. However, both managers and plan sponsors are understandably nervous about the possibility that ERISA's fiduciary responsibility provisions will be applied to these transactions." (PLANSPONSOR.com: one-time registration required)

Payments to Investment Provider under Contracts with Mutual Funds May Violate ERISA
Excerpt: "To determine whether the investment provider could be liable for ERISA violations, the court first considered whether the investment provider could reasonably be found to be an ERISA fiduciary. .... The court concluded that the investment provider's ability to determine and alter the mutual funds that were available as investment options could constitute authority or control over plan assets and could result in a finding that the investment provider was an ERISA fiduciary." (Employee Benefits Institute of America Inc.)

Opponents Call Illinois Pension Enhancement 'Double-Dipping'
Excerpt: "Opponents of a proposed pension enhancement for the state's police and firefighters say the enhancement is nothing short of 'double-dipping' and could lead to financial catastrophe for local municipalities." (The Southern Illinoisan)

Blog: FDIC Announces Increase in Insurance Coverage for Retirement Accounts
Excerpt: "The Federal Deposit Insurance Corporation ('FDIC') Board of Directors last week approved final rules that will raise the deposit insurance coverage on certain retirement accounts at a bank or savings institution from $100,000 to $250,000. The increase will become effective on April 1." (Attorney B. Janell Grenier via BenefitsBlog.com)

Social Security Reform Rejected in Senate
Excerpt: "Sen. Jim DeMint, South Carolina Republican, offered the proposal, which would have let Congress create a reserve fund protected under budget rules to save the Social Security surplus to pay for future benefits instead of other federal programs, as happens now." (The Washington Times)

Letter Regarding Automatic Enrollment and Other Provisions in Retirement Bill Conference (PDF)
2 pages. The target page is a letter from Senator Gordon Smith to the Senate Finance Committee regarding automatic enrollment and other provisions under consideration in the retirement bill conference. (Senator Gordon H. Smith via American Benefits Council)

Retirement Savings Permanence Bulletin, Issue 1, March 14, 2006 (PDF)
1 page. Excerpt: "Since workers save virtually nothing outside of tax-favored retirement plans, it is very important that the simplifications for employer-sponsored retirement savings plans in EGTRRA be made permanent in the final conference report of the pension reform legislation (H.R. 2830/S. 1783)." (American Benefits Council)

For Some, Revenue Sharing Remains Out of Sight, Out of Mind
Excerpt: "Despite the considerable hue and cry that arose over such practices following the mutual fund scandals three years ago, revenue sharing still is a common -- and legal -- component of retirement plan processing. In fact, many analysts believe that revenue sharing -- literally the 'sharing' of revenue received by one party, generally the mutual fund/investment management component, with other parties, frequently recordkeeping and/or financial advisors -- is beneficial to plans ...." (PLANSPONSOR.com: one-time registration required)

Youth Is Wasted on the Generation Y Investor
Excerpt: "IN today's 'do-it-yourself' but 'don't know if my pension will be around tomorrow' world of retirement, it's only natural for baby boomers to seek financial advice. What's surprising, though, is the advice they want most." (The New York Times; one-time registration required)


Links to Items on Executive Comp, Benefits in General

Corporate Governance Forum Discusses SEC's Proposed Executive Compensation Disclosure Rules (PDF)
6 pages. Excerpt: "[A] PANEL OF CORPORATE, EXECUTIVE-COMPENSATION, AND SECURITIES EXPERTS DISCUSS some of the more pressing corporate governance issues facing public companies today: executive compensation, corporate penalties, and internal investigations." (8-K magazine, Daily Journal Corp. via Orrick, Herrington & Sutcliffe LLP)

Overview: Code Section 409A Proposed Regulations (PDF)
13 pages. Excerpt: "On September 29, 2005, the Treasury and IRS issued proposed regulations under Section 409A of the Internal Revenue Code (the 'Code'). Code Section 409A was enacted as part of the American Jobs Creation Act of 2004 and contains extensive restrictions on nonqualified deferred compensation plans and arrangements. [Originally published October 2005]" (Epstein Becker & Green, P.C.)

Overview: Filing Deadline for Initial LM-10 Reports and Additional Compliance Information (PDF)
4 pages. Excerpt: "[T]he Department of Labor (DOL) announced an extension of the filing deadline for initial LM10 reports and issued additional guidance concerning employer LM10 reporting obligations under the Labor Management Reporting and Disclosure Act (LMRDA or Act), 29 U.S.C. §§ 401 et seq. Employers with fiscal years ending December 31 now have until May 15, 2006 to submit their initial LM10 reports to the DOL." (Morgan, Lewis & Bockius LLP)


Newly Posted Events
(Post Yours!)

Administering Plans Under the Final 401(k) Regulations
in Kentucky on March 28, 2006
presented by ASPPA Benefits Council of Greater Cincinnati


Newly Posted Press Releases
(Post Yours!)

Survey Shows Employers Are Rethinking Their Prescription Drug Strategies for 2007
(International Society of Certified Employee Benefit Specialists (ISCEBS))


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm
in NJ

Senior Plan Administrator
for WESPAC
in CA

Senior Plan Administrator
for American National Insurance Company
in TX

Client Integration Transition Manager
for Diversified Investment Advisors
in NY

Defined Benefit and Defined Contribution Administrator
for Pension Strategies
in AZ

Enrolled Actuary
for Nicholas And Hicks, Inc
in AK, AZ, CA, CO, ID, NV, OR, TX, UT, WA

Account Manager
for LaRhette Manin Benefits Service Group (LMBSG)
in MA

Enterprise Operations Specialist
for Wachovia Corporation
in NC

Annual Plan Reporting Services Manager - PA
for Vanguard
in PA




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