Retirement Plans
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June 1, 2006
Today's sponsor: ASPPA • Working for America's Retirement™

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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

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

Electronic Filing of PBGC Premiums Becomes Mandatory
(Pension Benefit Guaranty Corporation (PBGC))

Text of Final PBGC Regs Requiring Electronic Filing of Premium Declarations (PDF)
6 pages. Excerpt: "The requirement becomes effective for plans with 500 or more participants for the prior plan year starting with filings for plan years beginning in 2006 that are made on or after July 1, 2006, and for smaller plans starting with filings for plan years beginning after 2006.... Like the proposed rule, the final rule does not require electronic payment, only electronic filing of premium information." (Pension Benefit Guaranty Corporation)

Abusive Transactions that Affect Availability of Programs under EPCRS
Excerpt: "A detailed explanation on how abusive transactions are affected by the new Employee Plans Compliance Resolution System eligibility requirements." (U.S. Internal Revenue Service)

Text of 'The Heroes Earned Retirement Opportunities Act' (H.R. 1499), as Enacted (PDF)
2 pages. Excerpt: "To amend the Internal Revenue Code of 1986 to allow members of the Armed Forces serving in a combat zone to make contributions to their individual retirement plans even if the compensation on which such contribution is based is excluded from gross income, and for other purposes." (U.S. Congress via American Benefits Council)

May 2006 Fiduciary Developments Bulletin -- Pension Reform Legislation in Congress
Excerpt: "2006 promises to be an eventful year for 401(k) plans. Both Congress and the DOL are working on rules that will change the landscape for plan sponsors and participants. This bulletin highlights changes that are likely to occur in the next few months." (Reish Luftman Reicher & Cohen)

Company Stock in Your 401(K)? It's Unwise to Roll It Over to IRA
Excerpt: "For most people, the very best place to park an old 401(k) is in an Individual Retirement Account. When you do this, your nest egg will repel all taxes as long as it stays put. If you're departing with a company stock bonanza, however, a wiser strategy could very well be to make sure your appreciated stock doesn't get anywhere near your new IRA. Instead, you'd park your shares inside a taxable account and pay income taxes." (Copley News Service via

401(k) Plans Limit Company Stock
Excerpt: "Facing a slew of worker lawsuits, companies increasingly are limiting how much of their stock can be held in employee 401(k) retirement plans." (The Wall Street Journal via Pittsburgh Post-Gazette)

Overview: Surrender Charges in 403(b) Plan Annuity Contracts
Excerpt: "Surrender charges (or 'contingent deferred sales charges'), and other compensation paid to insurance carriers upon termination of group annuity contracts raise significant issues regarding ERISA's prohibited transaction and fiduciary responsibility rules which plan fiduciaries cannot overlook." (Reish Luftman Reicher & Cohen)

Overview: 457(b) and Participant Investing
Excerpt: "The growth in popularity of participant-directed 457(b) plans creates an emerging fiduciary issue for the governments that set up the plans and for the officials and committees who oversee their operation. The issue is, who is legally responsible for the quality of the participant investing? That leads to a secondary issue of, what can be done to improve participant investing practices?" (Reish Luftman Reicher & Cohen)

The Golden Years -- At Work?
Excerpt: "Not too long ago, the concepts 'retirement' and 'work' were basically opposites. Now they're starting to merge" (Ellen Hoffman via BusinessWeek Online)

Opinion: Pension Pointers No. 7: Credit Balances (PDF)
3 pages. Excerpt: "A final bill should encourage employers to pre-fund their pension obligations by (1) adjusting the value of a credit balance to reflect the plan's actual rate of return; (2) not subtracting credit balances for purposes other than determining the company's minimum funding obligation; and (3) including the credit balance in determining whether a plan has met the funding target set out in the law." (American Benefits Council)

Easing Boomers' Retirement Savings Withdrawal Symptoms
Excerpt: "It won't be easy for baby boomers to spend their money in a tax-efficient way during retirement. So says Len Reinhart, the recently elected chairman of the Money Management Institute, the trade organization of the managed account industry." (OnWallStreet Magazine)

Overview: Final Regulation on Abandoned 'Orphan' Plans
Excerpt: "The Employee Benefit Security Administration (EBSA) final regulations on abandoned individual account plans were issued April 21, 2006. The final regulations consist of three new regulations and a prohibited transaction exemption (PTE) 2006-6." (McKay Hochman Co., Inc.)

Institutional Investor: Pension Pay-for-Play
Excerpt: "Claiming millions of dollars in damages, Chattanooga officials filed suit against fund advisor William Phillips, UBS Paine Webber and Morgan Stanley Dean Witter. The complaint, filed with the National Association of Securities Dealers in October 2004, alleges Phillips and the banks' brokerage arms illicitly gained by violating supervisory responsibilities." (Benchmark Advisory Services, Inc., and Benchmark Financial Services, Inc.)

Spotlight on Best Practices: Investment Policy Statements
Excerpt: "An Investment Policy Statement is a written document that provides a record of the agreements reached between client and advisor. The statement outlines the most important issues, including goals, policies, and procedures to be followed by the advisor for the purpose of managing the client's money." (The McHenry Group)

IRA Could be Tapped To Cover Criminal Fines
Excerpt: "The US District Court for the Eastern District of Washington said in a memorandum opinion that an individual retirement account (IRA) could be considered part of a defendant's income, and might be used to cover a criminal fine." ( one-time registration required)

Retirement Plan Industry Rule 22c-2 Readiness Report -- Summary of Survey Results (PDF)
4 pages. Excerpt: "The SPARK Institute conducted a survey among its members in order to determine whether retirement plan record keepers will be ready to help their mutual fund trading partners comply with Rule 22c-2 by October 16, 2006." (The Spark Institute)

Links to Items on Executive Comp, Benefits in General

Overview: Corporate Governance & Fiduciary Responsibilities -- Board & Compensation Committee (PDF)
7 pages. Excerpt: "Public companies should seek the assistance of experienced counsel in drafting annual proxy statements, including executive compensation disclosures updated for best practices. Critical issues in the executive compensation area include: Code Section 162(m), New FAS 123R, Compensation Committee reports, The trend toward much more fulsome disclosure of executives' total compensation, and The impact of ISS and its policies on the foregoing." (The Cochlan Group, Inc.)

Considerations In Selecting Your COLI Insurance Carrier (PDF)
2 pages. Excerpt: "Because of the long term nature of COLI (sometimes insurance may stay in place for 40 years or more), appropriate due diligence should be performed in making the selection of an insurance carrier. This article will outline the areas that should be covered in such a review." (The Cochlan Group, Inc.)

Overview: Further IRS Section 409A Guidance and Possible Impact on 2006 Amendment Deadline (PDF)
2 pages. Excerpt: "As you may know, further IRS guidance is necessary before employers can fully implement Internal Revenue Code Section 409A. .... The next round of IRS guidance is expected to deal with the distribution requirements of Section 409A among many other things. Senior IRS representatives have consistently predicted that such guidance would be published 'this summer.'" (Gardner Carton & Douglas LLP)

Overview: A New Landscape for Executive Deferred Compensation Plans (PDF)
6 pages. Excerpt: "The American Jobs Creation Act of 2004 was signed into law on October 22, 2004, adding a new Code Section-- § 409A. The new Section deals with both the taxation of executive deferred compensation arrangements, as well as reporting and disclosure of such compensation. The new rules are radically different than the prior rules, and reduce the flexibility, security and appeal of executive deferred compensation arrangements." (The Cochlan Group, Inc.)

Hewitt Federal Legislation Quick Guide Updated as of May 30, 2006
Excerpt: "Hewitt's Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding health and welfare benefit plans, retirement plans, and human resources and employment law." (Hewitt Associates)

Investors Should Get Fit on When to Exercise Options
Excerpt: "Despite their lower public profile since the height of the dot-com era, stock options and equity compensation still are widely used. According to April 2005 estimates by the National Center for Employee Ownership, there were 10 million participants controlling several hundred billion dollars of paper wealth in more than 4,000 broad-based company stock options plans." (The Journal Gazette)

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!)

HIPAA Special Enrollment-- Who’s Entitled, Who’s Not, and What Documents Are Needed
Nationwide on May 4, 2006
presented by Employee Benefits Institute of America Inc. (EBIA)

MBGH's Learning Network Seminar: Creating a Culture of Health in your Workforce
in Illinois on August 16, 2006
presented by Midwest Business Group on Health

MBGH's Learning Network Seminar: Diabetes and Your Workforce
in Illinois on November 8, 2006
presented by Midwest Business Group on Health

MBGH's Learning Network Seminar: The Benefits of Minimally Invasive Surgery: Best practices in Obesity/Weight Management and Bariatric Surgery
in Illinois on September 13, 2006
presented by Midwest Business Group on Health

MBGH's Learning Network Seminar: The Many Faces of Depression: Identifying and Managing Your Workforce during the Holiday Season
in Illinois on December 6, 2006
presented by Midwest Business Group on Health

Midwest Business Group on Health's 26th Annual Conference -- Extreme Makeover: Health Benefits Edition
in Illinois on July 27, 2006
presented by Midwest Business Group on Health

Webcast: Retirement, Deferred Compensation, and Welfare Plans of Tax-Exempt and Governmental Employers
Nationwide on September 7, 2006
presented by ALI-ABA (American Law Institute-American Bar Association)

Newly Posted Press Releases
(Post Yours!)

MetLife's Employee Benefits Benchmarking Report and Companion Web Tool Provide Peer Comparisons by Size, Industry and Geography

AK Steel to Modify Current AEIF Retiree Health Care Benefits
(AK Steel)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Employee Benefits Manager
for Catholic Health Initiatives
in KY

Annual Plan Reporting Services Manager - PA
for Vanguard
in PA

Retirement Plan Administrator
for Northern California Retirement Plan Administration and Consultancy Firm
in CA

401(k) Plan Administrator
for E.I.P., Inc.

Conversion Specialist
for Professional Capital Services
in PA

Pension Administrator
for Howard A. Feinstein & Associates, Inc.
in IL

Enrollment Specialist
for The Newport Group, Inc.
in FL

Project Management
for Randstad USA
in DC

Sales/Business Development
for Retirement Alliance, Inc.
in FL, GA

ESOP Administrator
for Matthews, Gold, Kennedy & Snow, Inc.
in AZ

Account Executive
for Valley Forge Enterprises, Ltd.
in DE, NJ, PA

New Business Review Specialist ~ Financial Services
for CitiStreet
in NJ

Client Services & Administrative Officer
for Fulton Financial Corporation
in PA

Defined Contribution Pension Plan Administrator
for Angell Pension Group, Inc.

Defined Benefit Pension Administrator
for RSM McGladrey
in AZ

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