Retirement Plans
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April 26, 2006
Today's sponsor: ASPPA • Working for America's Retirement™

(Click on company name or banner to learn more.)
Banner ad for ASPPA • Working for America's Retirement™

Attend the 2006 ASPPA Mid-Atlantic Benefits Conference!

On May 8-9, the Marriott Philadelphia Downtown Hotel will be the site of this valuable conference, sponsored by the IRS and ASPPA.

Attorneys can earn Ethics Credits and ASPPA members can earn 15 CE credits. Register NOW at

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

DOL Official Reveals Work on Safe Harbor for Provision of Default Investment Fund
Excerpt: "In order to qualify for that safe harbor ... fiduciaries have to allow participants the opportunity to move their investments into a different account, provide advance notice of the default alternative and invest the assets in a certain kind of qualified default investment alternative." (

California Governor Closes Loophole on Firefighters' Big Pensions
Excerpt: "The Schwarzenegger administration yesterday closed a pension loophole that would have allowed some state firefighters to retire with pensions higher than their final salaries." (

Cash Balance Plans: What Are They? Why Are They Controversial? What is Their Future? (PDF)
Nice overview at pp. 1-4 of 6-page newsletter. (Adams and Reese)

Actuarial Issue Brief: Modernizing America's Retirement Programs to Keep Pace with Longevity (PDF)
7 pages. Excerpt: "For employers with traditional defined benefit pension plans, the higher costs associated with increases in longevity may be a factor in the decline of defined benefit plans. For employees, increasing longevity may have resulted in a redefining of retirement as a gradual process ... Although gradual retirement has benefited employers and employees alike, current laws and regulations present significant obstacles." (American Academy of Actuaries)

Corrected Address for Alvin D. Lurie, Author of 'This Time is the Sky Really Falling on DB Plans?' (PDF)
An earlier version of Mr. Lurie's splendid article contained an outdated address and phone number at the end of the article; a corrected version of the article is available at this link, showing his correct address (Larchmont NY, phone (914) 834-6725). We regret the error! (Alvin D. Lurie)

Opinion: With Pension Funds Sailing Into the Perfect Storm, All Parties Must Bear Part of Burden (PDF)
Excerpt: "For the companies that found themselves in financial distress during the 'perfect storm,' they had no realistic options other than reorganizations and distress terminations of their pension plans.... [C]urrent and former employees ... should understand that many others who relied on a company's promises of future payments also won't receive what they had been promised." (Haynes and Boone)

New Jersey Transit Switching to 401(k)s to Save Cash
Excerpt: "The shift will apply only to workers who are not part of employee unions. Members of workers' unions will have the option to switch into the 401(k) system, while keeping the value of their current pension. Republicans have called recently for shifting all public workers to 401(k) accounts to save money ..." ([Central Jersey Home News Tribune]

PBGC Provides Disaster Relief for Certain Counties in MO, IL, AK, TN and OK
Announcements 06-5, 06-6, 06-7, 06-8, 06-9 and 06-10 were issued on April 21 for specified counties affected by recent severe storms, tornadoes and flooding. (Pension Benefit Guaranty Corporation)

Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth
Working paper by Annamaria Lusardi and Olivia S. Mitchell. Excerpt: "Since many members of this [early baby boomer] cohort are reaching retirement with a substantial portion of its wealth in housing, they are particularly vulnerable to housing value shocks. By contrast, holders of stocks, IRAs, and business equity are concentrated in the top quartiles." (University of Michigan Retirement Research Center)

Links to Items on Executive Comp, Benefits in General

Aon Consulting's 2006 National Employee Benefits Trends Survey: Key Findings (PDF)
Excerpt: "In 2006, the most commonly implemented cost-control features include: disease management (37%); conducting a vendor search to ensure competitive rates (36%); enabling Internet- or Intranet-accessed health care tools (36%); and developing wellness communication campaigns (32%)." (Aon)

2nd Circuit Clarifies ERISA Notice Requirements for Benefit Plans
Excerpt: "Workers who are required to provide proof of work performed in order to receive the appropriate credit under a benefit plan must get notice of this requirement in the plan description, the 2nd U.S. Circuit Court of Appeals has ruled." (

Deferred Compensation Planning Opportunities For Executives of Tax-Exempt Entities
Excerpt: "[C]hanges in the Code, which became effective in 2002, eliminated the offset of amounts deferred under an eligible Code Section 457 plan against deferrals that the executive may make under a tax-sheltered annuity or a 401(k) plan, thereby permitting an executive to 'double up' his or her pre-tax deferrals." (Buchanan Ingersoll)

Deferred Compensation Planning Opportunities For Physicians Employed by Hospital-Controlled Entities
Excerpt: "[B]y carefully tying additional deferrals to the physician's targeted retirement date and inserting appropriate provisions in the physician's employment agreement, the physician can effectively defer significant additional compensation, subject only to a risk of forfeiture in the event that the physician elects to voluntarily terminate employment prior to the targeted retirement date." (Buchanan Ingersoll)

We thank and invite your attention to our additional sponsor: International Foundation of Employee Benefit Plans

(Click on company name or banner to learn more.)
Banner ad for International Foundation of Employee Benefit Plans

Convenient, affordable training courses from the International Foundation

Ideal for those new to benefits and compensation, courses include
  • Introduction to Retirement Plans
  • Introduction to Health Care and Group Benefit Plans
  • Introduction to Compensation
Developed by industry professionals, courses can be taken at any time from any computer within a six-month period. Content is updated continuously. These courses are an ideal way to economically train your support staff.

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

Newly Posted Events
(Post Yours!)

Code Section 409A Workshop
Nationwide on June 7, 2006
presented by SunGard Corbel

Newly Posted Press Releases
(Post Yours!)

Gilsbar, Inc. Announces New Product Developer to Launch Innovative Health Plan Services
(Gilsbar, Inc.)

Actuaries: How will Boomers Pay for Retirement?
(American Academy of Actuaries)

Patients With Over $680K In Medical Bills Call For Ban On Junk Health Insurance
(Foundation for Taxpayer and Consumer Rights)

2006 Environmental, Social Shareholder Proxy Resolutions Up From 2005, With Emphasis on Global Warming, Toxics and Political Donations
(Social Investment Forum)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Employee Benefits Administration
for Primary Consulting, Inc.

Plan Administrator
for Alliance Pension Consultants, LLC
in IL

401(k) Coordinator
for Beneco, Inc.
in AZ

Relationship Manager
for Principal Financial
in IL

Operations Delivery Director
for Fidelity Investments
in NC

401(K) Plan Administrator
for Fringe Benefit Administrators, Ltd.
in LA

Pension Administrator
for The Bay Ridge Group
in NY

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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Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

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