Retirement Plans
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March 24, 2006
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Text of Employee Plans News -- Spring 2006 Edition (PDF)
15 pages. Excerpt: "This edition contains the following articles: TE/GE Commissioner Speaks at Benefits Conference of the South; EP Connections: Interview with Betty McClernan; Additional Filing Relief for Katrina Victims; New User Fees Reminder; Critical Few Points ... by Michael Julianelle (Director, EP Examinations); Enrolled Retirement Plan Agent (ERPA) Update ...." (U.S. Internal Revenue Service)

401(k) Follies -- Putting Your Investment Choices Through Their Paces
Excerpt: "For starters, it's important to perform the same kind of due diligence on the funds that appear in your company's 401(k) lineup that you would for investments in your taxable or IRA accounts. .... On that front, a short list of items to consider would include: Expense ratios. .... Managerial tenure. .... Performance -- but only during the current management team's watch." (The Motley Fool)

Overview: 401(k) Plan Investments and Redemption Fees
Excerpt: "Fiduciaries should determine whether any of the mutual funds in their plans are imposing redemption fees and, if so, the fiduciaries should consider: Removing that fund from the plan--to avoid administrative complexity; or Assigning the job of communicating the redemption fees to the participants. That job could be given to one of the service providers or an advisor, if they will accept the responsibility." (Reish Luftman Reicher & Cohen)

Timely Deposit of 401(k) Deferrals -- Still No Safe-Harbor
Excerpt: "Obviously, the adoption of a safe-harbor will provide plan sponsors with great certainty about the minimum number of days in which deferrals must be remitted. However, the official who made the announcement stated that the fact the DOL is considering adopting a safe-harbor is proof that no such rule currently exists. Thus, until we hear further from the DOL on this issue, the 'as soon as possible' rule still applies." (Reish Luftman Reicher & Cohen)

Blog: Revised Regulations for Relative Value Disclosures
Excerpt: "Revised final regulations have been published by the IRS under IRC §417(a)(3) relating to relative value disclosures in explanations of a pension plan's qualified joint and survivors annuity (QJSA) and qualified preretirement survivor annuity (QPSA). [TD 9256; 71 FR 14798]" (Pensions & Benefits Weblog)

Opinion: Pension Proposal Would Hurt Workers in 'Union' Plans
Excerpt: "An all-out lobbying effort is underway to convince Congress to pass a law that would allow certain 'underfunded' multiemployer pension plans to wipe out one of the most important worker protections in our federal pension and tax laws." (Pension Rights Center)

New Blog: Pension Risk Matters
Excerpt: "PENSION RISK MATTERS focuses on pension financial risk issues from a governance and fiduciary perspective. The goal is to identify important topics, ask thought-provoking questions, examine best practices and encourage meaningful debate about the $10 trillion global pension industry upon which millions of individuals depend." (BVA, LLC)

U.S. Pension Agency Seeks Outside Legal Advice on General Motors
Excerpt: "The government agency responsible for insuring corporate pensions sought private legal advice this week to help sort through a range of possible financial scenarios involving General Motors Corp. ..., including possible bankrup.tcy." (Reuters via The New York Times; one-time registration required)

PBGC to Meet with United Pilots
Excerpt: "The nation's pension-protection agency will be in Denver next month to meet with current and retired United Airlines pilots, many of whom are seeing significant benefit reductions. The Pension Benefit Guaranty Corp. will hold meetings with pilots April 3 and 4 near Denver International Airport to discuss how current and former workers are affected by United's move to terminate its pension plans." (Rocky Mountain News)

Text of Letter Advocating Passage of Additional Pension Provisions Benefiting Women (PDF)
1 page. Excerpt: "Four provisions of the Pension Security and Transparency Act of 2005 (S. 1783) will improve women's retirement security by closing certain loopholes and improving spousal pension rights." (National Women's Law Center)

Text of Final Regs on Explanation of Annuity Forms of Distribution from Retirement Plans
Excerpt: "This document contains final regulations under section 417(a)(3) of the Internal Revenue Code concerning content requirements applicable to explanations of qualified joint and survivor annuities and qualified preretirement survivor annuities payable under certain retirement plans.... [P]roposed regulations were published in the Federal Register on January 28, 2005..." (Internal Revenue Service)

Court Cannot 'Prevent' Husband from Retiring
Excerpt: "In connection with a dissolution of marriage, the trial judge ordered husband to 'remain an active member of the military until such time as his retirement benefits are fully vested.' If the husband voluntarily discontinued service in the military prior to obtaining full retirement benefits, she was required to pay directly to the wife the total sum of retirement benefits he would have otherwise received had husband remained an active member of the military." (Cypen & Cypen)

Former Participants Lack Standing in Company Stock Case
Excerpt: "The US District Court for the District of Massachusetts has ruled that former profit sharing plan participants lack standing to obtain relief for company stock benefits received that they claim were undervalued." ( one-time registration required)

Atlanta City Council Approves Domestic Partner Pension Policy
Excerpt: "The Atlanta City Council unanimously approved legislation March 20 to allow the registered domestic partners of city employees to be designated beneficiaries under the city's three pension funds." (Southern Voice)

Opinion: Key Protections Would Be Gutted by Prohibited Transactions Provisions of House Pension Bill
Excerpt: "Section 305(e) of the House pension reform bill (HR 2830) would eviscerate critical fiduciary protections under the Employee Retirement Security Act of 1974 (ERISA) by eliminating long-standing procedures that guard against conflicts of interest between pension plan trustees and the brokers, lawyers, record-keepers, consultants, and others who provide services to plans." (Pension Rights Center)

Blog: OECD Guidelines for Pension Fund Asset Management
Excerpt: "The Organization for Economic Co-operation and Development has published OECD Guidelines for Pension Fund Asset Management. [The guidelines are at]" (Pensions & Benefits Weblog)

Two General Electric Retirees Sue over Pension Fund
Excerpt: "Two retired General Electric employees filed a class action lawsuit in federal court claiming the multi-billion dollar corporation violated the Employee Retirement Income Security Act by not being proper stewards of the pension fund." (The Record)

Opinion: Older Workers' Pensions in Jeopardy
Excerpt: "Congress is considering a bill that could lead to lower pension benefits for millions of older workers. This bill would allow employers to convert their traditional pension plans to cash balance plans without safeguarding the benefits that workers were promised. Email your members of Congress today and urge them to protect older workers." (AARP)

Opinion: Make Improvements to Pension Reform Legislation -- Write to Pension Reform Conferees
Excerpt: "The National Retiree Legislative Network feels strongly there must be improvements made during the conference committee process in order to strengthen the protection for retirees' pensions." (National Retiree Legislative Network)

Text of Letter from Participants' Advocate Seeking Monetary Relief for Participants Under 502(a)(3) (PDF)
6 pages. Excerpt: "While some might argue that amending 502(a)(3) to expressly provide monetary relief to participants and beneficiaries will impose inappropriate liabilities on plans, we would respectfully disagree, as the statute retains the threshhold requirement that the relief be 'appropriate.' ... Thank you for giving us the opportunity to to address our concerns about section 307 of the [Pension Protection Act] as currently drafted." (Hertz, Schram & Saretsky, P.C.)

Administration Says Pension System Needs Fundamental Reform
Excerpt: "While the Bush administration is pleased that the House and Senate have each passed pension legislation, the administration wants a better bill than adopted so far, .... Reforms in the current bills are inadequate to protect employees from losing benefits, ...." (CCH Pension & Benefits)

Links to Items on Executive Comp, Benefits in General

Overview: Section 409A Stock Valuation Guidance for Privately-Held Companies (PDF)
6 pages. Excerpt: "This News Alert discusses the impact of Section 409A ('Section 409A') of the Internal Revenue Code of 1986, as amended (the 'Code'), on the determination of the fair market value of company stock for purposes of granting certain stock compensation awards while the stock is not publicly traded. [Originally published January 23, 2006.]" (Haynes and Boone, LLP)

GASB White Paper: Why Governmental Accounting and Financial Reporting Is-- and Should Be-- Different
Excerpt: "Although state and local governments in the United States have had separate standards for over 100 years, occasionally the question is raised: Why can't general purpose governments (cities and counties, for example) simply apply the standards established for business enterprises?1 The following questions and answers briefly address that issue, and the accompanying paper and its appendixes provide an expanded discussion." (Governmental Accounting Standards Board)

SEC Compensation Disclosures Get CFO Support
Excerpt: "The recent move by the US Securities and Exchange Commission (SEC) to require broad-brush executive compensation disclosures has drawn wide support in a recent chief financial officer survey. A news release said that the quarterly CFO Outlook Survey conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business found that 71% were generally behind the disclosures." ( one-time registration required)

Newly Posted Events
(Post Yours!)

Discover2006: Creating Powerful Connections
in Colorado on July 15, 2006
presented by Fiserv, Inc.

SEC Launches New Regulation Affecting Advisors, TPAs & Trust Companies Webcast to Equip Industry for Change
Nationwide on April 6, 2006
presented by Gail Weiss & Associates, Inc.

Newly Posted Press Releases
(Post Yours!) Will Address Issues Affecting $10 Trillion Pension Industry

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

401k Account Executive
for BISYS Retirement Services
in PA

Enrolled Actuary
for CJA and Associates
in IL, MI

Account Manager, Employee Benefits
for ABD Insurance and Financial Services
in CA

Major Accounts Retirement Services District Manager
for ADP ~ Automatic Data Processing
in OR, WA

Enrolled Actuary
for Summit Benefit & Actuarial Services, Inc.
in OR, WI

Pension Benefit Processor
in IL

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