Retirement Plans
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April 3, 2006
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DOL Speaks: The 2006 Employee Benefit Conference

This is the conference for Title I ERISA issues. DOL Speaks is co-sponsored by The Department of Labor/EBSA and ASPPA.
Discuss employee benefits issues with colleagues. Interact with local, regional and national government employees from the Department of Labor.

Register Today!

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

With Other Retirement Vehicles in Dire Shape, Plan Sponsors Are Rethinking DC Offerings
Excerpt: "Smart companies know that if they are going to rely more on 401(k) plans to provide the bulk of retirement savings, they have to make them work better. They are searching for ways to take the muss and fuss out of their plans and encourage more employees to participate." (

Defined Benefit Pension Plan Freeze Part of Delphi Restructuring
Excerpt: "Auto parts supplier Delphi Corp. announced Friday that it will freeze pension benefits for hourly workers on October 1 and for salaried workers on January 1, 2007 and will replace them with defined contribution plans." ( one-time registration required)

A High-Octane Roth Plan Beckons to High Incomes
Excerpt: "The biggest beneficiaries of a Roth 401(k) are high-income earners. Because of the impact of taxes, they can save more earned income for retirement in the new Roth account than in a regular 401(k). To see why, consider a person under 50 who makes the maximum contribution allowed for a Roth 401(k), $15,000 a year. For an employee in the 35 percent tax bracket, that is equivalent to saving $23,000 before taxes instead of $15,000 in a traditional 401(k)." (The New York Times; one-time registration required)

Employee Ownership Update for March 31, 2006
NCEO Executive Director Corey Rosen discusses several items of note: There is little chance that the proposals from the presidential tax advisory panel, which among other things would abolish ESOPs, will go anywhere. There is a new IRS determination letter procedure for qualified plans such as ESOPs and 401(k) plans. Broad-based employee ownership is still in its infancy in most European countries, but there is growing interest. The NCEO seeks updates to its Employee Ownership 100 list. (National Center for Employee Ownership)

Overview: Retirement Benefits and the Lucent/Alcatel Deal
Excerpt: "As a merger between Lucent and Alcatel inches closer to completion, Lucent's retirees worry about what may happen to their benefits. Billed as a 'merger of equals,' concerns about Lucent's retirement accounts have been a speed bump. While Lucent has nearly a $2.7 billion surplus in its three of its pension plans, it faces a shortfall roughly twice as large in its healthcare plan." (Truth on the Market)

Steel Maker's Pension Plan to Continue
Excerpt: "In a rare victory for the federal pension insurance program, the government says it will stop going after the assets of the industrialist Ira L. Rennert because it has been assured that Mr. Rennert will keep a disputed steelworkers' pension plan going. That means that Mr. Rennert's $185 million estate in the Hamptons is safe." ( one-time registration required)

Overview: United Retired Pilots Lose Appeal
Excerpt: "Since no feasible remedy remains, the 7th Circuit has affirmed district court approval of decisions of the bankrup.tcy court permitting United Airlines to terminate its pilots pension plan without a hearing to determine whether retired pilots should receive replacement benefits. [United Retired Pilots Benefit Protection Association v. United Airlines, No. 05-3121]" (Pensions & Benefits Weblog)

Pension Benefit Options for Consideration Upon Retirement
Excerpt: "The wife will be entitled to receive a substantial pension in return for her years of service with her employer, but she must decide between two options. Option A provides the largest monthly check, but at her death all payments stop, leaving no benefit to her husband. Option B would provide her with about $3,000 less income per year for the rest of her life, but if the wife dies before her husband, he would continue to receive a monthly survivor benefit ...." (

Ninth Circuit Joins Others in Finding that Crime Victims Restitution Act Overrides ERISA Preemption
Excerpt: "A growing number of federal court decisions have found that the MVRA allows federal crime victims to be compensated from ERISA pension benefits (which include 401(k) plan benefits)." (Employee Benefits Institute of America Inc.)

Japan's Public Pension Becomes Independent, Pledges Continuity
Excerpt: "Japan's public pension fund, the world's largest pool of retirement funds, will keep the allocation of investments about the same after Prime Minister Junichiro Koizumi gave the institution the freedom to make its own decisions." (Bloomberg News)

U.S. Legislative Tracking Charts -- Retirement -- Updated March 30, 2006 (PDF)
18 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

Investment Advice Provision in Pension Legislation Proving to Be a Tough Sell
Excerpt: "A provision in federal legislation that allows insurance companies and their agents to provide investment advice to beneficiaries of 401(k) programs they administer is proving a tough sell, especially to key members of the Senate Finance Committee." (National Underwriter Life & Health; free one-time registration or paid subscription required)

Strategies for Serving the Boomers, Now and in Retirement
Excerpt: "The generation whose mantra was never to trust anyone over 30 now has members twice that age (bummer). Here's how financial services companies intend to help them have what's sure to be an unconventional retirement." (LOMA)

Social Security Programs Throughout the World: The Americas, 2005
Excerpt: "This report, which is part of a four-volume series, provides a cross-national comparison of the social security systems in 36 countries in the Americas." (U.S. Social Security Administration)

Managed Accounts: The Recent Surge (PDF)
2 pages. Excerpt: "Recently, managed accounts have taken a surge in popularity among investors, plan administrators and plan sponsors. These accounts are not a new phenomenon. They have actually been around for approximately 30 years, but have gained momentum in recent years due to the promotion by Wall Street." (National Association of Government Defined Contribution Administrators)

Individual Financial Planners May Be ERISA Fiduciaries
Excerpt: "An Advisory Opinion recently issued by the Department of Labor may come as quite a shock to many personal financial planners and investment advisors. According to the DOL, ERISA's prudence, exclusive benefit, and prohibited transaction rules apply to many of the bread-and-butter recommendations that these professionals give, if their advice relates to assets held in qualified individual account plans." (BNA Tax Management)

Building a Nest Egg Doesn't Come with Blueprints
Excerpt: "A recent survey by a brokerage firm found that 58 percent of Americans contemplating retirement don't know how big a nest egg they need to assure themselves of a comfortable life in old age.That's no surprise. What's surprising is the 42 percent who think they do know." (The Washington Post; one-time registration required)

Northern Trust Company Settles Enron Company Stock Case
Excerpt: "Northern Trust Company has settled a retirement plan participant lawsuit filed against it in connection with the collapse of the Enron Corporation for $37.5 million, the Chicago financial services company announced [March 31]." ( one-time registration required)

Links to Items on Executive Comp, Benefits in General

Overview: Proposed Pension/OPEB Accounting -- Old Transition Balances
Excerpt: "Shorthand, proposed new GAAP for employers' accounting for pensions and other postemployment benefits would move unrecognized balances currently disclosed in financial statement footnotes up to the sponsor's balance sheet, effective for fiscal years ending after 12/15/2006." (Pensions & Benefits Weblog)

FASB Issues Proposed Accounting Changes for Pensions and OPEB
Excerpt: "The Financial Accounting Standards Board (FASB) has issued the long-awaited draft of proposed rules requiring employers to recognize the overfunded or underfunded positions of defined benefit pension plans and other postemployment benefits (OPEB) in their balance sheets." ( one-time registration required)

Overview: Massachusetts High Court Rules on Out-of-State Same-Sex Marriages
Excerpt: "The Massachusetts Supreme Judicial Court ruled on March 30 that the state's marriage evasion statute adopted in 1913 is constitutional and bars issuing marriage licenses to same-sex couples from out-of-state if their home state's laws forbid same-sex marriages." (Thanks to John Mouser of DPA, Inc. for recommending the link!) (Arthur S. Leonard via Leonard Link)

Survey Results: Domestic Partner Retirement Benefits -- Public Employee Plans in the 50 States
Excerpt: "Survey Question: How many states in the U.S. now extend retirement benefits to domestic partners?" (National Conference of State Legislatures)

Overview: SEC Chairman Cox Comments on Proposed Executive Pay Disclosure Requirements
Excerpt: "Last week SEC Chairman Christopher Cox, in a speech before the Council of Institutional Investors, commented on the new executive pay disclosure requirements issued by the SEC at the end of January. ... [The target page presents] an excerpt from his speech pertaining to the proposed disclosure rules for perks and retirement benefits: ...." (Attorney B. Janell Grenier via

U.S. Legislative Tracking Charts - Human Resources -- Updated March 30, 2006 (PDF)
10 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

Stock Appreciation Rights: The New Stock Options?
Excerpt: "Sometimes referred to as 'phantom stock' ..., SARs offer exactly the same fundamental economic arrangement that stock options do. That is, they offer employees none of the current value of the company, but a share in any value growth that occurs after receiving an award." (Leading Companies Online Magazine)

Newly Posted Press Releases
(Post Yours!)

PBGC Announces Online Database Of Appeals Board Decisions
(Pension Benefit Guaranty Corporation (PBGC))

FASB Issues Exposure Draft to Improve Accounting For Postretirement Benefit Plans, Including Pensions' Proposed Statement Would Increase Transparency and Completeness of Financial Statements
(Financial Accounting Standards Board (FASB))

U. S. Secretary of Labor Elaine L. Chao Appoints 2006 ERISA Advisory Council and Leadership Posts
(U.S. Department of Labor, Employee Benefits Security Administration)

Caterpillar Retirees File Class Action Lawsuit To Protect Promised Healthcare Benefits
(Lieff, Cabraser, Heimann & Bernstein, LLP)

$865MM in CEO Compensation While Shareholders Suffer $640BN In Losses
(The Corporate Library)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Compliance Manager - AZ
for Vanguard
in AZ

Defined Contribution Administrator
for Pension Plan Professionals, Inc.
in FL

Compliance Administrator
for BISYS Retirement Services
in PA

Administrative Assistant
for Professional Plan Administrators, Inc.
in CA

OmniScript Writer
for Wells Fargo
in MN

Health Law Associate (Employee Benefits/Tax)
for McDermott Will & Emery LLP
in IL

Plan Implementation Specialist
for The Newport Group, Inc.
in FL

Retirement Services Specialist
for Administaff
in TX

Trading Associate
for Sentinel Benefits Group
in MA

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Copyright 2006, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.

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