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May 15, 2006
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House Subcommittee Blocks DOE Pension Costs Action
Excerpt: "A House of Representatives subcommittee Thursday approved an amendment to block the Department of Energy from implementing a plan to stop reimbursing its contractors for defined benefit pension plan costs associated with new employees." (Business Insurance)

May 6, 2006, Letter on GAO's Report, 'Private Pensions: Information on Cash Balance Pension Plans' (PDF)
Excerpt: "We are confident that a comparison of plans that actually converted would have demonstrated that cash balance conversions generally do not reduce future benefits for most workers in all age groups in actual cash balance conversions, contrary to one of the major conclusions in the GAO report, ...." (American Academy of Actuaries)

Assets Equal 80% Of Liabilities In 58 State Retirement Systems
Excerpt: "The market value of assets averages 80% of liabilities in 58 state retirement systems that reported actuarial values on or after June 30, 2005. This compares with a market-value-to-liabilities percentage of 79% for the same period in 2004, 74% in 2003, and 105% in 2000. The actuarial value (see below) of assets to liabilities for the 58 systems reached its low point in 2005 (80%), declining from 96% in 2000, 88% in 2002, and 82% in 2004." (Spencer's Benefits Reports)

Overview of the Revised EPCRS
Excerpt: "[The target page highlights] some of the more significant changes affecting 401(k) plan corrections." (Employee Benefits Institute of America Inc.)

Overview: IRS Updates and Expands Plan Correction Program
Excerpt: "Rev. Proc. 2006-27 expands the list of failures that can be corrected under EPCRS as well as the permissible correction methods." (Seyfarth Shaw LLP)

How Human Emotion & Behavior Impact Retirement Investing (PDF)
Pages 1-3 of 6 pages. Excerpt: "When faced with difficult decisions, financial or otherwise, a typical person tends to take the path of least resistance, or no path at all. In retirement speak, this means to elect not to participate, or to accept the default option-- rather than taking an active role in the planning and management of his or her retirement savings." (Invesmart)

Study Shows Target Date Funds Hold Their Own
Excerpt: "Six of the largest target date retirement fund groups are performing well enough to get a tentative thumbs up, according to a study scheduled for a late June release." (

An Actuary Looks at Theories of Dynamic Actuarial Optimization (PDF)
9 pages. Excerpt: "'Dynamic' refers to the economic gaming, that is, the interplay between government and other regulatory action and the private sector reaction and, subsequently, vice versa.... Postretirement income provision is a factor of demographic and financial market trends, overall industry competitiveness and health (the same for individual companies with an industry), as well as the regulatory environment." (Carol Caruthers, MSPA, EA)

Pension Bill Likely to Save Northwest Pension Plans
Excerpt: "The chairman of the Senate Finance Committee said the pension bill now being reconciled between the House and Senate will likely include a provision that will help Northwest Airlines save its pension plans, which are in danger of collapsing under a more than $3 billion shortfall." ( one-time registration required)

Bill Widens Pension Options --- Critics Think Real Estate Is Risky for Federal Workers
Excerpt: "A proposal before Congress that would add a real estate fund to federal workers' $186 billion retirement investment plan - the largest of its kind in the world - has attracted a frenzy of lobbying from commercial real estate interests and warnings from critics who say it is too risky." (The Baltimore Sun; one-time registration required)

Australian Budget Includes Proposals for Significant Changes to Superannuation
Excerpt: "Treasurer Paul Costello's 2006/2007 Federal Budget, which was laid before parliament on 8 May 2006, included proposals for sweeping changes aimed at simplifying and streamlining superannuation. If implemented as announced, these proposals will see a significant simplification of superannuation contributions and benefits rules from 1 July 2007, largely without complicated grandfathering. However, there is some devil in the detail." (Watson Wyatt Worldwide)

Compromise Reached for United Kingdom Pension Reform
Excerpt: "A tentative compromise for a pension reform measure has been reached between UK Prime Minister Tony Blair and Chancellor of the Exchequer Gordon Brown. Bloomberg reports that the agreement restores the link broken more than 25 years ago between state pensions and employee incomes, avoiding the need to increase taxes to fund more generous retirement benefits." ( one-time registration required)

Are You Ready for SEC Redemption Fee Rules?
Excerpt: "Market timing and other short-term trading patterns impose costs on mutual funds by disrupting management, forcing funds to maintain excessive liquidity, and driving up tax expenditures. The SEC issued final rules on mutual fund redemption fees last year to curb these abuses. .... Plan sponsors and administrators will want to determine how they and their service providers can best deal with the requirements of this new SEC 'Rule 22c-2.'" (Spencer Fane Britt & Browne LLP)

Do You Know the True Cost of Your Retirement Plan?
Excerpt: "That a relationship between investment performance and fees exists is hardly news. Fees matter. However, it's not quite as simple as it may seem. Fees vary by amount, timing and form." (Pension Risk Matters)

Group Pitches New Retirement Savings Initiative
Excerpt: "Former vice presidential nominees -- Democrat John Edwards and Republican Jack Kemp -- are teaming up to promote the concept of saving money for retirement." (

Opinion: Small Biz Can Save Retirement for Employees
Excerpt: "One could argue that the actions of any single small business may not have a big effect on the country or the economy, but how small-business owners or managers make decisions about employees can and will affect a great many lives. It's time small businesses step up to the plate." (

Opinion: What the Mutual Fund Industry Should Say, But Won't
Excerpt: "Right now, people in the industry are talking about how the bad seeds have been exposed and rooted out. Insiders do not believe it, and the public should not either; the fund industry needs to preach vigilance and zero tolerance, rather than hyping how the worst is over. There are bad apples in every bunch, and the fund world is no exception." (Charles A. Jaffe via The Philadelphia Inquirer; one-time registration required)

Commentary: Suffering Through Pension Agony
Excerpt: "Hedrick Smith, the New York Times reporter who has carved out a unique place for himself in documentary television, paints a chilling picture of the future of the American private pension system. Smith talked to experts who concluded that the corporate retirement system is so shaky that baby boomers should have a nest egg as much as 15 to 18 times their annual earnings before contemplating retirement." (The Albuquerque Tribune)

Letter to the Editor: Saving Social Security
Excerpt: "We agree with everything in your fine editorial 'Social Security Endures' (May 8) except the last sentence, which advocates benefit cuts, in addition to tax increases." (Robert M. Ball and Nancy J. Altman via The New York Times; one-time registration required)

Still River's Retirement Income Planning, Part 10: Risk Analysis and Calculation Methods (PDF)
5 pages. Excerpt: "This paper looks at deterministic vs. Monte Carlo and other stochastic models for computing and illustrating the financial risks that retirees face and weighs the pros and cons of each. It further suggests that a combination model is most appropriate for this market and looks at several possible mixed models." (Still River Retirement Planning Software, Inc.)

Links to Items on Executive Comp, Benefits in General

Overview of Employee Benefits Developments, April 2006
The April edition covers: HHS provides guidance on the permitted disclosure of PHI; EBSA extends mental health parity rules; Limited 409A transition relief for prohibited plans; ESOP escrow account is a plan asset; Nationwide's 401(k) product comes under attack; ERISA benefits not protected against victim restitution recovery; and, COBRA small employer exception: corporate officers not counted if not paid employees. (Hodgson Russ LLP)

Clear Language in Plan Summary Trumps HR Director's Conflicting Statements
Excerpt: "Generally, informal representations conflicting with the terms of the plan document are unenforceable. But given the possibility of successful claims, plan administrators (and others who have administrative responsibilities) must be vigilant about providing accurate and complete answers to plan participants and beneficiaries who ask questions." (Employee Benefits Institute of America Inc.)

Severance... It's Not What It Used To Be
Excerpt: "In enacting § 409A of the Internal Revenue Code (the 'Code'), Congress sought to comprehensively regulate 'deferred compensation.'1 From the start, the regulators have made clear in their public comments that the new deferred compensation rules would result in fundamental changes. The treatment of severance or 'separation pay' (as the IRS has taken to calling it) under these new rules illustrates the point." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. via BNA Tax Management)

Newly Posted Events
(Post Yours!)

Fundamentals of Health & Welfare Plans
in Arizona on June 14, 2006
presented by International Society of Certified Employee Benefit Specialists--Phoenix Chapter

Fundamentals of Health of Welfare Plans and Fundamentals of Retirement Plans
in Texas on June 6, 2006
presented by Houston Chapter of the International Society of Certified Employee Benefits Specialists

Newly Posted Press Releases
(Post Yours!)

White Horse Advisors Hosts Successful Educational Workshop For CPAs
(White Horse Advisors, LLC)

Chemical Financial Corporation to Partially Freeze Chemical Financial Corporation Employees' Pension Plan
(Chemical Financial Corporation)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Contribution Plans Administrator
for Benefit Associates Inc.
in CA

401(k) Administrator - Analyst
for The Pension Group, Inc.
in CA

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

401(k) Plan Administrator
for Pollard & Associates, Inc.
in MD

Assistant Pension Administrator
for Pollard & Associates, Inc.
in MD

Senior Consultant - Total Rewards
for Deloitte Consulting LLP
in NY

Human Resources, Benefits Specialist
for Toyota Motor Engineering & Manufacturing North America, Inc (TEMA)
in OH

Human Resources Officer (Benefits)
for Administrative Office of the U.S. Courts
in DC

Senior Health & Welfare Plans Administrator #0612
for Ball Corporation
in CO

Disability and Retirement & Savings Administrator #0623
for Ball Corporation
in CO

Benefits Consultant 1
for Wells Fargo & Company
in MN

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