Retirement Plans
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June 5, 2006
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Fiduciary Focus: Non-Fiduciary Investment Consultants
Excerpt: "The investment consultants employed at large broker-dealers are particularly notorious for supplying plan fiduciaries with contracts that eviscerate any real fiduciary responsibility under ERISA section 3(21), ...." (

IRA Developments: Combat Pay and Rollover of Loan Offsets (PDF)
2 pages. Excerpt: "On May 29, 2006, the President signed the Heroes Earned Retirement Opportunities Act, which liberalizes IRA and Roth IRA contribution limits for military personnel receiving combat pay." (Sutherland Asbill & Brennan LLP)

Finding Missing Individuals: IRS Letter Forwarding Program for IRA Account Holders
Excerpt: "From time to time a financial organization may need to locate an individual retirement account (IRA) owner who has moved and not left a forwarding address. Or, it may be that an IRA owner has died and the financial organization has only limited beneficiary information. Regardless of the reason, how does a financial organization locate such individuals?" (Wolters Kluwer Financial Services)

Listing of IRS Published Guidance for January 2006 -- May 2006
The target page links to guidance published by the Service relating to retirement plans: Treasury Regulations; Revenue Rulings; Revenue Procedures; Notices; and, Announcements. (U.S. Internal Revenue Service)

Overview: IRS Update of the Voluntary Correction Program
Excerpt: "Plan sponsors should pay particular attention to the new plan document correction procedure. If a plan was not timely and properly amended for any of the changes required by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the plan sponsor may simply pay a $375 VCP fee, prepare a VCP filing and correct the defect." (McDermott Will & Emery)

When Your Company Retirement Plan Doesn't Include Socially Responsible Funds
Excerpt: "Has this happened to you? You want to invest responsibly, but your employer's retirement plan only offers funds that don't screen out objectionable companies. Is there a solution? Rob Thomas, founder of Social(k) in Springfield, Mass., has one. Here are edited excerpts of his talk with the Monitor's Laurent Belsie: ...." (The Christian Science Monitor)

Have 401(k) Fiduciaries Gone Astray? Creating a Prudent Process in Today's Turbulent World (PDF)
12 pages. Excerpt: "This paper will argue that fiduciaries must be able to demonstrate that their participant communications reflect this research and are designed to engage employees in retirement planning. Otherwise, the fiduciaries themselves will be setting the stage for allegations by class action attorneys that the difficulties of achieving retirement security were intentionally downplayed or ignored all together." (Richard D. Glass via

ETF-Only 401(k) Plans
Excerpt: "EXCHANGE-TRADED FUNDS are the current rock stars of the investment world. Assets held in ETFs topped $330 billion by March 31, according to Citigroup, up from $16 billion in 1998. Considering the wider acceptance they're gaining among individual investors, it's not surprising that some firms are trying to push ETFs into the lucrative arena of 401(k) retirement plans, long the domain of mutual funds." (

Experts Analyze Employees' Exodus from Company Stock
Excerpt: "Last year, 40.8% of 401(k) holdings were in company stock, according to Hewitt. Are employers and employees not heeding the lessons from Enron? " (Employee Benefit News)

Ex-PBGC Head Says Pension Underfunding Might Ease
Excerpt: "The overall funding of traditional U.S. pension plans has probably improved in recent months, largely because of higher interest rates, the former director of the federal agency that insures pensions told Reuters [last week]. " (Business Insurance)

Can.ada: Filing Requirements and Proposed Funding Relief for Defined Benefit Pension Plans (PDF)
3 pages. Excerpt: "The Minister of Finance today released proposed regulations to provide funding relief for defined benefit pension plans registered under the Pension Benefits Standards Act, 1985. The proposed regulations will be pre-published in the Can.ada Gazette on June 10, 2006, and interested persons will have 30 days from that date to provide comments." (Office of the Superintendent of Financial Institutions Can.ada)

Delta to Seek End to Pilots' Pension Plan
Excerpt: "Delta Air Lines Inc. will file a request to terminate its pilots' defined benefit pension plan 'fairly soon,' Chief Executive Gerald Grinstein said in an interview ... in which he also talked about employee pay cuts, his future and whether a merger is a good idea." (AP via The Washington Post; one-time registration required)

Court Rules that Participant's ERISA Rights Supersede State Prison's Order
Excerpt: "The 6th US Circuit Court of Appeals found that Michigan prisoners' rights as participants in pension plans were violated by orders of the state prison and department of corrections to forward the prisoners' pension payments directly to the prison without the prisoners' consent." ( one-time registration required)

New Jersey Democrats Propose Public Employee Salary and Benefits Cuts to Ease $30B Deficit
Excerpt: "Three Democratic New Jersey lawmakers have proposed a plan that would cut workers' salaries and benefits by 15%, saving the state an estimated $700 million." ( one-time registration required)

South Carolina Supreme Court Sets State Timetable to Refund $30M to Retirees
Excerpt: "The South Carolina Supreme Court issued a July 1 deadline for the state to refund the money to about 14,000 working retirees who were forced to contribute toward retiree pension plans." ( one-time registration required)

Retirees' Best Asset May Be Home Equity
Excerpt: "It's no secret that baby boomers have not been very diligent about saving for retirement, but that doesn't mean they don't have assets. Many live in homes that have appreciated greatly in value in recent years as real estate prices have soared. Some financial experts believe that's going to be the boomers' salvation because they will be able to tap that home equity to help fund their retirements." (The Washington Post; one-time registration required)

White Paper: The Clueless Investor
Excerpt: "To test if investors consider fees when selecting mutual funds, the authors gave Wharton and Harvard students prospectuses of four S&P 500 Index funds and had them create a hypothetical $10,000 portfolio. Front-end loads ranged from 2.5% to 5.25%. Expense ratios ranged from 0.59% to 0.80% The ideal allocation would have been 100% to the lowest-cost fund." (

IRS Weighted Average Interest Rate Table Updated for June 2006
Weighted average for June 2006: 4.82% (U.S. Internal Revenue Service)

Report: Retirement Planning Survey Among U.S. Adults Age 40 and Older (PDF)
41 pages. Excerpt: "The main purpose of this AARP Bulletin poll of a nationally representative sample of 1,782 U.S. adults age 40 or older was to provide some insight into how well adults are financially prepared for their retirement." (AARP)

Links to Items on Executive Comp, Benefits in General

Comments: Financial Acc'ting for DB & Other Postretirement Plans Amending FASB 87, 88, 106 and 132(R) (PDF)
4 pages. Excerpt: "It would be best to allow adequate time to consider the implications of the pending legislation, determine whether adjustments to the proposed Exposure Draft are indicated and to provide a staggered timing of effective dates for certain entities, to ensure a better implementation and to allow affected entities to plan and properly address issues such as the effects of the changes on the organization, its employees and participants of affected plans, ...." (National Coordinating Committee for Multiemployer Plans)

Comment Letters to Financial Accounting Standards Board, May 31, 2006 (PDF)
5 pages. Excerpt: "[The letters concern the] Proposed Statement of Financial Accounting Standards-- Employers' Accounting for Defined Benefit pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R) [The 4-page letter at is on retiree health benefits.]" (American Academy of Actuaries)

3rd Circuit Analyzes 'Top Hat' Exemption under ERISA.
Excerpt: "The Court noted that ERISA defines a top hat plan as 'a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.' The primary question before the Court in IT Group was what constitutes an 'unfunded plan.'" (erisa on the web)

Overview: DOL Continues to Expand and Improve the Voluntary Fiduciary Correction Program (PDF)
4 pages. Excerpt: "In April of 2005, the DOL proposed to revise to the VFC Program and PTCE 2002-51 (the '2005 Proposals'). The DOL has now adopted final changes to the VFC Program, based on the 2005 Proposals, with some additions and modifications, and has finalized and expanded the proposed revision to PTCE 2002-51, all effective as of May 19, 2006." (Dechert LLP)

Transforming Pay Plans: 2006 Hudson Compensation and Benefits Report
Excerpt: "Most workers are satisfied with their compensation, but given the chance, many would change their mix of cash and benefits." (Hudson)

Newly Posted Events
(Post Yours!)

Web/Telephone Seminar: Advanced HSAs
Nationwide on July 13, 2006
presented by BISYS Retirement Services

Web/Telephone Seminar: Basic IRAs
Nationwide on July 12, 2006
presented by BISYS Retirement Services

Web/Telephone Seminar: Introduction to Health Savings Accounts (HSAs)
Nationwide on July 11, 2006
presented by BISYS Retirement Services

Web/Telephone Seminar: IRA-to-IRA Transfers and Rollovers
Nationwide on July 20, 2006
presented by BISYS Retirement Services

Newly Posted Press Releases
(Post Yours!)

CFDD Announces 2007, 2008 & 2009 Advisor Conference Date & Locations
(Metrics Partners)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Contribution Consultant (Administrative Accountant)
for First Mercantile
in TN

Customer Service/Call Center Manager
for Growing Benefits Consulting Firm
in GA

Account Manager
for Alerus Retirement Solutions
in MN

Compliance Analyst
for Transamerica
in CA

401(k) Customer Service Manager
for Professional Capital Services, LLC
in PA

Pension Analyst/Manager
for Graphic Arts Industry Joint Pension Trust
in DC

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