Retirement Plans
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March 27, 2006
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ASPPA's Exam Registration for Spring and Fall Exams Now Open

ASPPA's exam registration is open for the 2006 spring and fall exam windows. The Spring window runs from May 15-June 30. Learn more about our exams at,
or register at
New exams include the Plan Financial Consulting (PFC-1 & PFC-2) exams that represent the advance level curriculum for the new Qualified Plan Financial Consultant (QPFC) credential. Register today!

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

Opinion: Retirement Plan Woes? 'The System Defies Rational Thinking'
Excerpt: "If you're annoyed at retirement plan results enough to want to sue someone, the fiduciaries of the plan will need to be faced in court. Fiduciaries include the officers of your company as well as the trustees and advisers they have appointed to operate the plan. But, before calling your attorney, let me give you some free legal advice: ...." (The Contra Costa Times; one-time registration required)

Belt Quits the PBGC, but Expects Pension Bill Passage
Excerpt: "Brad Belt, director of the Pension Benefit Guaranty Corp., has announced that he is resigning but he says he still expects the pension bill to go through before he steps down in May." (Workforce Management; one-time registration required)

Audio: The Marketplace Report -- Federal Pension Chief Resigns
Excerpt: "In an unexpected move, Bradley Belt, the director of the federal agency that insures company pensions, resigned .... Madeleine Brand talks to John Dimsdale of Marketplace about how Belt has been at odds with the Bush administration over the policies of the Pension Benefit Guarantee Corporation." (Day to Day via National Public Radio)

Overview: Garnishment of Pension Plan for Criminal Restitution Order
Excerpt: "ERISA does not prohibit garnishment of a qualified pension plan to collect a criminal restitution order, according to a divided 9th Circuit ruling reversing a district court decision. [U.S. v. Raymond P. Novak, No. 04-55838]" (Pensions & Benefits Weblog)

Ninth Circuit Holds MVRA Creates Statutory Exception to ERISA's Anti-Alienation Provision
Excerpt: "The Ninth Circuit Court of Appeals has issued an opinion overturning a lower court decision and siding with the U.S. attorney in a case involving a writ of garnishment issued against a pension plan. The case is U.S. v. Novak and specifically holds that the Mandatory Victims Restitution Act of 1996 ('MVRA'), 18 U.S.C. § 3663A, in conjunction with 18 U.S.C. § 3613, constitutes a statutory exception to ERISA's anti-alienation provision." (Attorney B. Janell Grenier via

Employer Stock or Securities Distributed from the Plan in a Lump Sum Distribution
Excerpt: "The general rule that plan distributions are includable in taxable income in the year received does not apply to distributions of the net unrealized appreciation in employer securities." (McKay Hochman Co., Inc.)

Prudence in Advice Selection
Excerpt: "Plan committees (or the responsible officers) are duty-bound by ERISA to select prudently investment options that are, individually and in the aggregate, suitable and prudent for the plan and for the participants. The failure of the committee to do a good job could result in lawsuits, and the failure of an employee to do a good job of investing can result in a diminished lifestyle during retirement." ( one-time registration required)

Asset Allocation and Information Overload
Excerpt: "As this article suggests, fiduciaries should consider offering a limited number of quality investment options to the participants--and then undertake to provide the supporting education and services that allows the participants to utilize those investments successfully." (Reish Luftman Reicher & Cohen)

Pennsylvania Lawmakers Still Benefit from Repealed Raise
Excerpt: "A widely criticized pay raise for Pennsylvania legislators will generate years worth of pension dividends for some retiring lawmakers -- even though it was repealed after just four months." (AP via The New York Times; one-time registration required)

International Group Backs Uniform Pension Management Standards
Excerpt: "A Paris-based good governance lobbying group [last] Thursday called for private pension managers around the world to adopt strict transparent management standards and for pension boards to pay close attention to their activities." ( one-time registration required)

OECD Guidelines on Pension Fund Asset Management: Recommendation of the Council (PDF)
14 pages. Excerpt: "These guidelines, prepared by the OECD Insurance and Private Pensions Committee and Working Party on Private Pensions, were adopted by the OECD Council on 26 January 2006." (Organisation for Economic Co-operation and Development)

Overview: Post-Spinoff DB/DC Deductibility
Excerpt: "A recent IRS private letter ruling addressed deductibility of employer contributions after spin-off of a portion of a multiemployer defined benefit plan, constituting assets and liabilities attributable to former employees who had never been eligible to participate under a separate multiemployer defined contribution plan." (Pensions & Benefits Weblog)

Baucus Bill Boosts Savings Incentives
Excerpt: "A key Democratic member of the Senate Finance Committee has introduced legislation that, if enacted, would provide insurers and agents even more incentives to offer products for consumers to save for retirement." (National Underwriter Life & Health; free one-time registration or paid subscription required)

Senate Rejects Personal Social Security Accounts
Excerpt: "The Senate's decision to reject emphatically the creation of personal accounts in Social Security is being greeted with a discreet sigh of relief by the life insurance industry." (National Underwriter Life & Health; free one-time registration or paid subscription required)

Chart: The Complex Web of Tax-Advantaged Savings Programs (PDF)
3 pages. Excerpt: "Duplication among retirement savings plans has created a system with overlapping and inconsistent nomenclature. For example, the contribution limits in the health savings accounts are laughably small considering current medical cost trends. While each plan has its justifications and target group, the sheer number of plans and the rules that govern them is unnecessarily complex." (HR Policy Association)

Opinion: Pension Reform Politics
Excerpt: "The pension reform bill now being worked on by a House-Senate conference is teetering on the verge of being worse than worthless. The nation cannot afford to miss this opportunity to protect workers who count on company retirement plans to see them through their old age. There is still time to rescue this critical legislation -- if key lawmakers give up political horse-trading and put public good above corporate interests." (The New York Times; one-time registration required)

Opinion: A Fine that Fits the Crime -- SEC Needs to Make Wall Street Firms at Least Wince
Excerpt: "Professional traders, mostly at hedge funds, had engaged in rapid-fire trading of otherwise innocent-looking mutual funds. This seesaw damaged the funds' net asset values and thus the IRA's and 401(k)'s of small investors. By some accounts, traders had been doing that kind of thing for many years, until regulators and, particularly, Eliot Spitzer, the New York State attorney general, nabbed them." (Gary Weiss via The New York Times; one-time registration required)

With Changes Looming for U.S. DB Plans -- Discussion of the Need for Liability-Directed Investment
Excerpt: "With important and expensive changes looming for both the accounting and funding rules for US defined benefit plans, there is plenty of discussion of the need for liability-directed investment -- and, in response, fixed-income managers are sprucing up their old long-duration offerings, or developing new ones." ( one-time registration required)

Overview: SIMPLE IRA Amendment Relief
Excerpt: "When IRS auditors started examining SIMPLE IRA plans in January 2005, they were looking for plan documents whose plan provisions had been updated for EGTRRA. To their surprise they found a significant number of sponsoring employers were unaware of the requirement to restate their SIMPLE IRA document for EGTRRA, and thus had not been amended." (McKay Hochman Co., Inc.)

Links to Items on Executive Comp, Benefits in General

Executive Summary: Private Enterprise, Public Trust: State of Corporate America after Sarbanes-Oxley (PDF)
2 pages. Excerpt: "Relations between corporations and investors have suffered wrenching change in the last five years, from both corporate misdeeds and the legislative reaction to them. For all of the damage and pain, the potential exists for ultimate benefit to all parties, as better and more transparent information breeds renewed investor confidence and higher standards of behavior and openness." (Committee for Economic Development)

Private Enterprise, Public Trust: The State of Corporate America after Sarbanes-Oxley (PDF)
66 pages. Excerpt: "March 21, 2006, CED released ... a policy statement that examines the state of corporate governance in the United States and offers practical recommendations for restoring public trust in business." (Committee for Economic Development)

Advantages of Voluntary Compliance Programs in Merger and Acquisition
Excerpt: "The failure to identify an employee benefit issue early can make complicated transactions more complicated. The following is a story about how a minor retirement plan document provision complicated a series of acquisitions ...." (Reish Luftman Reicher & Cohen)

Overcoming a Costly Legacy
Excerpt: "For Ford Motor Co. and other Detroit automakers, on[e] of the most confounding challenges revolves around so-called 'legacy costs,' the financial burden of pension and health benefits for retirees." (Workforce Management; one-time registration required)

Overview: IRS Release of Offshore Trust Transition Relief
Excerpt: "As expected, the Internal Revenue Service released Notice 2006-33 ... on March 21, 2006. The Notice gives employers until December 31, 2007 to comply with the IRC § 409A(b) rules that prohibit use of offshore trusts or arrangements that use restrictions on assets in connection with a change in the service recipient's financial health ... in connection with nonqualified deferred compensation plans." (Deloitte's Washington Bulletin via

Overview: Grace Period for Restrictions on Funding Nonqualified Deferred Compensation (PDF)
3 pages. Excerpt: "The IRS has issued Notice 2006-33 to provide a transition period for bringing nonqualified deferred compensation (NQDC) plans funded with offshore trusts or funding arrangements with financial health triggers into compliance with Internal Revenue Code section 409A(b). The grace period continues until December 31, 2007 for assets that are held in a funding arrangement as of March 21, 2006." (Sutherland Asbill & Brennan LLP)

Overview: SEC Offers 2006 Proxy Season Guidance (PDF)
3 pages. Excerpt: "This Client Memorandum highlights recent guidance from the Securities and Exchange Commission ('SEC') regarding the interpretation of the SEC's executive compensation disclosure rules as currently in effect. Public companies should heed this guidance in preparing their 2006 proxy statements." (Gardner Carton & Douglas LLP)

Overview: DOL Extends Deadline for LM-10 Reporting (PDF)
3 pages. Excerpt: "To give employers an opportunity to review and apply the DOL's updated Form LM-10 guidance, the DOL has extended the deadline for filing Form LM-10 from March 31, 2006, until May 15, 2006, for employers whose fiscal year ended on December 31, 2005." (Epstein Becker & Green, P.C.)

How to Look at a Gift Horse -- The GM Employee Buyout
Excerpt: "Last week, General Motors, in a cost-cutting move, offered to pay 113,000 hourly workers and 13,000 workers at the Delphi Corporation to quit their jobs. That may sound like dream fulfilled to many people, but are G.M.'s buyouts really a good deal?" (The New York Times; one-time registration required)

Newly Posted Events
(Post Yours!)

401(k) Plan Workshop
in Tennessee on April 26, 2006
presented by SunGard Corbel

401(k) Plan Workshop
in Illinois on April 27, 2006
presented by SunGard Corbel

401(k) Plan Workshop
in Ohio on April 28, 2006
presented by SunGard Corbel

401(k) Plan Workshop
in Pennsylvania on April 28, 2006
presented by SunGard Corbel

401(k) Plan Workshop
in California on April 28, 2006
presented by SunGard Corbel

Form 5500 Workshop
in Tennessee on April 25, 2006
presented by SunGard Corbel

Form 5500 Workshop
in Illinois on April 26, 2006
presented by SunGard Corbel

Form 5500 Workshop
in California on April 27, 2006
presented by SunGard Corbel

Form 5500 Workshop
in Ohio on April 27, 2006
presented by SunGard Corbel

Form 5500 Workshop
in Pennsylvania on April 27, 2006
presented by SunGard Corbel

Using ESOPs in Corporate Transactions
Nationwide on April 11, 2006
presented by Morgan Lewis & Bockius LLP

Newly Posted Press Releases
(Post Yours!)

ECFC Elects New 2006-2007 Leadership
(Employers Council on Flexible Compensation (ECFC))

Participate in PSCA's 49th Annual Survey of Profit Sharing and 401(k) Plans
(Profit Sharing/401(k) Council of America (PSCA)) Announces the Release of the 2006 PBGC 1 Forms

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

401(k) Account Manager
for BISYS Retirement Services
in PA

Data Management Implementations and Service Delivery Management
for Constantin Control Associates
in NJ

Benefits Manager
for Gatti & Associates
in CA

Enterprise Operations Specialist
for Wachovia Corporation
in NC

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

Plan Consultant Opportunity
for Weaver Partners, Inc.

Handy Links:

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.