Retirement Plans
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April 10, 2006
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Practitioner's Forum Discussion on DOL Advisory Opinion 2005-23A
Excerpt: "The [target page] is a transcript of an informal discussion of employee benefit practitioners held in Washington, D.C. on February 15, 2006. The topic involved DOL Advisory Opinion 2005-23A, which addresses the extent to which the fiduciary provisions of ERISA may apply to financial planners and investment advisers hired by retirement plan participants." (BNA Tax Management)

Opinion: The Financial Services Industry Shares the Blame for Empty Nest Eggs
Excerpt: "The bad news is official, again: EBRI's Retirement Confidence Survey announced last week that 65% of people aren't saving enough for retirement. The conventional wisdom is that these folks are ignoring prudent investment advice offered by their 401k plan advisers by choosing to spend for today rather than saving for tomorrow. However, we contend that these advisers fail them by ...." (

401(k)s End Up Short for Some Participants
Excerpt: "[T]he growing dominance of 401(k) plans worries some retirement experts, because many of the accounts aren't big enough to provide a comfortable retirement, even when combined with Social Security." (Newsday Inc.)

Opinion: Coming Up Short in Retirement
Excerpt: "American workers banking on the retirement security provided by a hard-earned company pension are learning that nothing can be taken for granted. Numerous businesses are freezing or terminating traditional defined-benefit pension plans. And some highly paid workers such as airline pilots are losing large chunks of retirement income when their longtime employers file for bankrup.tcy." (; one-time registration required)

Opinion: Who'll Pay the Public Pension Piper?
Excerpt: "A numbing barrage of reports has highlighted how states and cities are underfunding their legally mandated pension funds for retirees -- clerks to judges, firefighters to teachers." (The Seattle Times)

San Diego Mayor Wants to Borrow $674M for Pension
Excerpt: "The city of San Diego would borrow $674 million to inject into its deficit-laden pension system in the next two and a half years, according to a plan Mayor Jerry Sanders is scheduled to unveil Monday." (

Early Retirement Behaviour in the Netherlands: Evidence from a Policy Reform
Excerpt: "In the early 1990s, the Dutch social partners agreed upon transforming the generous and actuarially unfair PAYG early retirement schemes into less generous and actuarially fair capital funded schemes. The starting dates of the transitional arrangements varied by industry sector. In this study, we exploit the variation in starting dates to estimate the causal impact of the policy reform on early retirement behaviour." (IZA Discussion Paper via Social Science Research Network)

Pension Gap Widens Between Public and Private Workers
Excerpt: "No one wants to give up anything when it comes to retirement. But the gap between public and private employees is widening as American corporations scramble to cut back or eliminate traditional pension plans. Only about one of every five private sector employees still has one, and every month more major U.S. corporations announce the end of their plans." (Newsday Inc.)

Portfolio on International Pensions
Excerpt: "The [target page] is a collection of recently released international comparative resources on public, private and occupational pensions." (AARP)

Overview: GM and ERISA Stock Drop Litigation
Excerpt: "Stock drop litigation occurs when a company stock loses value and drops in price and, as a result, the company's retirement funds which own sometimes substantial amount of company stocks (either through an employee stock ownership plan (ESOP) or an eligible individual account plan (EIAP), suffers significant losses too." (Workplace Prof Blog)

Testimony: Current Saving Decisions Have Profound Implications for Our Nation's Future Well-Being
23 pages. Testimony by Thomas J. McCool, director, Center for Economics, before the Senate Committee on Finance April 6. (U.S. Government Accountability Office)

Delphi Gets Court OK on Retirement Plan
Excerpt: "Auto parts maker Delphi Corp. is free to move ahead on its plan to offer thousands of hourly employees the chance to retire, a bankrup.tcy judge ruled Friday, marking a key milestone in the company's effort to tame staffing levels amid falling production." (AP via The Washington Post; one-time registration required)

Ready to Retire? Better Make Sure You Can Afford It
Excerpt: "Smart preretirement planning begins with a budget -- one that takes a first pass at separating future wants from needs." (Newsweek via MSNBC)

Links to Items on Executive Comp, Benefits in General

Solving the Dependent Definition Dilemma in Employee Benefit Plans (PDF)
13 pages. Excerpt: "In this article, the authors set forth action steps employers should take to address this dependent definition dilemma. Also included is a description of the individuals who qualify for tax-favored status as 'dependents' after the WFTRA as well as model plan document language employers can use to describe the dependents their plans cover." (Benefits Law Journal via Aon Consulting)

If SPD and Plan Document Differ, Participants Must Show Reliance in Order to Enforce SPD Terms
Excerpt: "Although the SPD is the document that must be provided to plan participants to inform them of a plan's terms, it might not be the only statement of the plan's terms. Different courts have taken different views of what is required to enforce the terms of an SPD over the terms of other plan documents, with many courts requiring proof that the participant relied on the SPD to the participant's detriment." (Employee Benefits Institute of America Inc.)

Ban on G.ay Benefits Sputters in Juneau
Excerpt: "A measure before the state Legislature would amend the Alaska Constitution's ban on g.ay marriage to also deny health and other spousal benefits to the same-sex partners of public employees. The state Supreme Court ordered the benefits last fall, but efforts to overturn the decision appear to be sputtering in the wake of emotional legislative hearings." (The Anchorage Daily News)

Commentary: CEOs Cut Worker Pensions, Pad Their Own
Excerpt: "Some executives who slash workers' pensions are keeping or even padding their own fat retirement packages. And some even reap bigger bonuses as pension cuts boost profits." (MSN Money)

Audio: In an Age of Employee Benefit Cuts, Some CEO Pensions Total Millions
Excerpt: "According to the Corporate Library, a big-business watchdog firm, the five best-compensated CEOs will bring in an average of $5.5 million a year from their pensions." (Morning Edition via National Public Radio)

C.E.O. Pay Keeps Rising, and Bigger Rises Faster
Excerpt: "Chief executives' pay continued to rise in 2005, although at a slightly slower pace than in 2004. The average total pay for chief executives rose 27 percent, to $11.3 million, according to a survey of 200 large companies by Pearl Meyer & Partners, the compensation practice of Clark Consulting." (The New York Times; one-time registration required)

Spotlight on Executive Pay Could Be a Wild Card
Excerpt: "THE power of sunlight as an antiseptic will be put to the test in the coming months, as the Securities and Exchange Commission completes its most significant overhaul in 14 years of the rules governing what companies must disclose about their compensation of top executives." (The New York Times; one-time registration required)

Outside Advice on Boss's Pay May Not Be So Independent
Excerpt: "Executive pay has been a subject of criticism for decades. Even though last year's pay figures showed slower growth than in previous years, the fact that executive compensation often has little relationship to the performance of the company has contributed to a growing sense among investors that pay is diminishing shareholder returns." (The New York Times; one-time registration required)

Executive Pay -- A Special Report: Off to the Races Again, Leaving Many Behind
Excerpt: "New technology and low-cost labor in places like China and India have put downward pressure on the wages and benefits of the average American worker. Executive pay, meanwhile, continues to rise at an astonishing rate." (The New York Times; one-time registration required)

How the Executive Compensation Figures Were Calculated for the New York Times Special Report
Excerpt: "To measure executive compensation, Sunday Business studied 200 large public companies that filed proxies by March 31 for last year. Pearl Meyer & Partners, the compensation practice of Clark Consulting, compiled and analyzed the data from corporate filings." (The New York Times; one-time registration required)

Alberta, Can.ada Oil-Sands Boom Has Companies Piling on Perks to Draw Workers
Excerpt: "From air commuting to housing assistance, petroleum firms are sparing little expense while an industry HR group calls for a strategy to keep labor costs from spiraling out of control." (Workforce Management; one-time registration required)

PEO Options to Purchase Clients Must Have Substantial Business Purpose to Avoid MEWA Status
Excerpt: "Responding to an inquiry by the Washington State insurance commissioner, the DOL addressed the issue of whether a professional employer organization (PEO) and its clients would be considered a single employer under the control group rules (and therefore avoid MEWA status and state insurance laws) if the PEO had agreements with the clients under which the PEO had an option to purchase an 80% interest in each client company." (Employee Benefits Institute of America Inc.)

Newly Posted Events
(Post Yours!)

DOL Audit Issues and Update
in Ohio on April 25, 2006
presented by ASPPA Benefits Council of Greater Cincinnati

Introduction to Retirement Plans
in Illinois on June 13, 2006
presented by McKay Hochman

Introduction to Retirement Plans
in Massachusetts on August 8, 2006
presented by McKay Hochman

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

for Benefit Plans Plus, L.L.C.
in MO

401(k) / Defined Contribution Administrator
for Pension Investors Corporation

Client Relationship Manager
for The Newport Group, Inc. (Lake Mary/Orlando, FL location)
in FL

Manager, Individual Products and Life Insurance
in VA

Retirement Services Manager
for Sage Recruiting
in IA

Conversion Specialist
for Benefit Systems, Inc.
in TX

Pension Administrator
for Benefit Systems, Inc.
in TX

Financial Services Individual Underwriter
for Great-West Financial Services
in CO

Pension Plan Administrator
for Ingham Group
in FL, SC

Actuarial Assistant
for Gucciardi Benefit Resources, a division of Summit Benefit & Actuarial Services, Inc.
in WI

Retirement Services Program Manager
for Microsoft
in WA

Handy Links:

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