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May 30, 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™

Two Great ASPPA Conferences

You pick the focus and let ASPPA present the material.

Attend the new Advanced Actuarial Conference June 9-10 in Boston, MA. Targeting unique and specialized issues, this Conference is designed for practicing actuaries.

Attend the Northeast Area Benefits Conference in either Tarrytown, NY on June 7th or in Boston, MA on June 8th and get the most recent legislative and regulatory information available.

Better yet, attend them both! Sign up now at www.asppa.org


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

Congress Misses Memorial Day Deadline; Pension Reform Possible in June
Excerpt: "Members of Congress trying to reach a compromise on pension reform legislation fell short of a self-imposed Memorial Day deadline to move the bill but several high-ranking congressional leaders say they hope the bill will be enacted before July 4." (Watson Wyatt Worldwide)

Dig Deep to Find Costs of 401(k) -- Administrative Fees for Account Are Obtainable with Some Effort
Excerpt: "Mutual funds, where most 401(k) money is invested, collect a percentage of your account balance for management fees and operating costs. This charge, called the expense ratio, is disclosed in fund prospectuses and on many fund-company Web sites. In contrast, fees related to the administration of your 401(k) plan -- for record-keeping, employee education and other services -- are harder to find." (Los Angeles Times via redding.com)

Automatic 401(k) Enrollment Could Cause Compliance Headaches
Excerpt: "If a provision, currently being debated by Congress, passes into law, thousands of new employees will be automatically enrolled into their company 401(k) plans. This would likely mean new headaches for compliance officers at financial services firms who have to handle the automatic transfer of funds and keep records of those transfers." (Wolters Kluwer Financial Services)

Bill Would Ease 401(k) Rules for Companies
Excerpt: "With more companies abandoning traditional pension programs, Congress is looking for ways to help individuals build their own retirement nest eggs. A key part of Congress' efforts is encouraging more employers to offer automatic enrollment in 401(k) plans." (The Dallas Morning News; one-time registration required)

California Pension Protection Act Approved on Assembly Floor
Excerpt: "The Pension Protection Act (AB 2122), authored by Assembly member Johan Klehs (D-San Leandro), has been approved on the Assembly Floor by a vote of 42-28. The legislation would prohibit a corporation and its subsidiaries from making a dividend distribution to its shareholders if either has failed to pay a pension obligation." (California Chronicle)

Practical Results of Rejecting, Terminating Pension Plans Are Significant (PDF)
4 pages. Excerpt: "The exclusivity provision of Section 1341 of ERISA should not preclude rejection of the PPA under the Bankrup.tcy Code. The rejection of a PPA under the Bankrup.tcy Code and the distress termination of a pension plan under Section 1341 of ERISA are alternative remedies available to a debtor." (The Journal of Corporate Renewal via Gardner Carton & Douglas LLP)

Rep. Pomeroy Urges Labor Secretary to Release 2005 PBGC Annual Report
Excerpt: "A Democratic congressman asked Secretary of Labor Elaine Chao to release the annual report detailing the financial health of the Pension Benefit Guaranty Corporation (PBGC)-- the nation's private sector pension insurer." (PLANSPONSOR.com: one-time registration required)

Chemical Company Breached Pension Terms by Switching Lump-Sum Payment Interest Rates
Excerpt: "A US District Court judge in Philadelphia ruled that Hercules Inc. may have to pay up to $20 million in added retirement benefits to some of its retirees and current workers." (PLANSPONSOR.com: one-time registration required)

Court Strikes Down Increase in Pension Plan Benefits As a Fraudulent Transfer under Bankrup.tcy Code (PDF)
3 pages. Excerpt: "The Third Circuit Court of Appeals recently affirmed the avoidance of certain pension plan amendments by an employer as a fraudulent transfer under the Bankrup.tcy Code. Coming on the eve of the employer's bankrup.tcy filing, the amendments increased pension benefits as part of a larger employee retention program." (Powell Goldstein LLP)

Sixth Circuit Disregards Choice of Law Provision in Pension Plan to Decide Surviving Spouse Issue
Excerpt: "If you like to follow ERISA cases, you won't want to miss reading this interesting one here: Daimler-Chrysler v. Durden, 05-1662 (6th Cir., May 26, 2006). The case illustrates how the task of deciding who is the proper beneficiary of a pension, health or other benefit plan can sometimes be a tortuous process for the plan administrator as well as the courts." (Attorney B. Janell Grenier via BenefitsBlog.com)

Massachusetts Retirement Administration Sets Time Limit on Teachers' Longevity Pay
Excerpt: "The Massachusetts state agency that oversees public pension funds axed a union benefit that allowed public school teachers to hike their annual pensions by thousands of dollars." (PLANSPONSOR.com: one-time registration required)

Overview: IRS Update of Voluntary Correction Program for Retirement Plans (PDF)
4 pages. Excerpt: "The updated correction program, known as the Employee Plans Compliance Resolution System ('EPCRS'), allows for greater ease of use and more flexibility in the correction process, especially with regard to correcting the most common qualified plan errors, such as plan loan errors and mistakenly excluded employees." (Pillsbury Winthrop Shaw Pittman LLP)

Overview: ERISA Section 404(c) Rulemakings on the Way
Excerpt: "The Alexander Hamilton Institute's Benefits Alert Newsletter is reporting that there are a number of employee benefits-related rulemaking actions on tap for consideration this summer. Of particular note, the Department of Labor's Employee Benefit Security Administration (EBSA) is considering a number of amendments for ERISA Section 404(c) plans." (Workplace Prof Blog)

A Response to the PBS Documentary 'Can You Afford to Retire'
Excerpt: "The PBS documentary, 'Can You Afford to Retire,' gave me the chills. Even as close as I am to the retirement industry, it scared the living daylights out of me. And the worst part was the fact that the documentary only scratched the surface." (Donald B. Trone via 401khelpcenter.com)


Links to Items on Executive Comp, Benefits in General

With Expensing Implementation Not Far Away, Companies Must Settle on Valuation Method
Excerpt: "The two most common valuation models are the Black-Scholes model and the lattice, or binomial, model (see 'Valuation Models,' page 42). When the exposure draft first came out, says Paul Allen, director of Equity Award Services at Merrill Lynch, FASB expressed a preference for the lattice model, because it appeared to be the model that would be more accurate and complete." (PLANSPONSOR.com: one-time registration required)

Plan Administrator Cannot Enforce SPD Terms that Are Not Accurate and Comprehensive
Excerpt: "We bring this case to your attention for two reasons. First, it reminds us that, because ERISA requires full disclosure in the SPD of any material terms that could affect benefits, most courts do not give weight to SPD disclaimers. Second, this case once again illustrates that courts will enforce the terms of even inadequate SPDs over inconsistent terms in the underlying plan document, if doing so will favor the participant." (Employee Benefits Institute of America Inc.)

Overview: Prepare Now for Revamped SEC Executive Compensation Disclosure Requirements (PDF)
5 pages. Excerpt: "On January 27, 2006, the U.S. Securities and Exchange Commission (SEC) proposed significant changes to the rules governing public company disclosure of executive and director compensation arrangements and related party transactions. While technical refinements to the proposed rules are anticipated, it is expected that final rules substantially similar to those proposed will be adopted, most likely by late summer or early fall, ...." (McDermott Will & Emery)

Aon's Quarterly Update on HR Regulatory News (PDF)
4 pages. (Aon Consulting)

Update on Social Security Mismatch Letters' Issue (PDF)
4 pages. Excerpt: "Many employers throughout the United States have received the now infamous 'mismatch letter' from the Social Security Administration (SSA). In essence, the letter advises that employees have a social security number (SSN) which does not match the information appearing in the SSA database. In most instances, the employee's name does not 'match' an otherwise valid SSN." (Seyfarth Shaw LLP)

Employee Ownership Update for May 26: Option Backdating Becomes Major Concern
NCEO Executive Director Corey Rosen discusses the stock option backdating controversy, in which companies backdated options to points when the stock price was at a low so executives could increase their gains when exercising the options. The SEC is investigating dozens of companies, and shareholder lawsuits are being filed. (National Center for Employee Ownership)


We thank and invite your attention to our additional 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™

Don't miss the 2006 Western Benefits Conference!

The famed Bellagio Hotel is the site of this year's WBC, held July 16-19. Sponsored by the Western Pension & Benefits Conference and ASPPA, there are more than 50 educational sessions on retirement, health, welfare, fiduciary issues and more plus networking activities such as an exhibit hall, golf outing, Sunday reception and entertainment on Monday evening.

(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!)

Advanced IRA Seminar
in South Dakota on June 20, 2006
presented by Wolters Kluwer Financial Services

Advanced IRA Seminar
in Arkansas on June 21, 2006
presented by Wolters Kluwer Financial Services

Advanced IRA Seminar
in Kansas on June 21, 2006
presented by Wolters Kluwer Financial Services

Advanced IRA Seminar
in North Dakota on June 21, 2006
presented by Wolters Kluwer Financial Services

Advanced IRA Seminar
in Oklahoma on June 21, 2006
presented by Wolters Kluwer Financial Services

Advanced IRA Seminar
in Minnesota on June 22, 2006
presented by Wolters Kluwer Financial Services

Beginner IRA Seminar
in Kansas on June 20, 2006
presented by Wolters Kluwer Financial Services

Beginner IRA Seminar
in Texas on June 20, 2006
presented by Wolters Kluwer Financial Services

Beginner IRA Seminar
in Oklahoma on June 22, 2006
presented by Wolters Kluwer Financial Services

Beginner IRA Seminar
in Florida on June 22, 2006
presented by Wolters Kluwer Financial Services

Beginner IRA Seminar
in Illinois on June 22, 2006
presented by Wolters Kluwer Financial Services

Fundamentals of Employer Health Management
in Washington on June 9, 2006
presented by International Society of CEBS - Pacific NW Chapter

The Sereboff Case: Supreme Court Upholds Reimbursement Rights of ERISA Health Plans
Nationwide on June 13, 2006
presented by ABA Joint Committee on Employee Benefits

Webcast: Is the Massachusetts Health Plan a Model for the Nation?
Nationwide on May 26, 2006
presented by Kaiser Family Foundation


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Plan Administrator
for Third Party Administration Firm
in FL

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

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

401(k) Account Analyst
for BWD Group LLC
in NY

Financial Planners / Investment Specialists (3)
for Diversified Investment Advisors
in CA

Plan Administrator
for RSM McGladrey
in IL

Bilingual Communication Specialist
for MassMutual Financial Group
in ANY STATE

401(k)/Defined Contribution Administrator
for The Pension Service
in CT, MA, ME, NH

Sr. Manager Balance Forward
for TPA Firm

Systems Analyst
for Buck Consultants
in GA




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