Retirement Plans
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July 13, 2006
Today's sponsor: ASPPA • Working for America's Retirement™

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

FASB Okays Use of Projected Benefit Obligation to Account for Pension Liabilities on Balance Sheet
Excerpt: "Overriding the objections of employers and actuaries, the Financial Accounting Standards Board unanimously agreed [yesterday] to require companies to include estimates of their future pension liabilities on their balance sheets." (

PBGC Technical Update 06-2 Extends the Reporting Relief Provided in Technical Update 06-1
Excerpt: "In ... Technical Update [06-1], the PBGC stated that reporting is waived for certain employers because pending legislation created uncertainty as to which interest rate will be applicable for determining if reporting under section 4010 of ERISA is required. Because of continuing uncertainty, this Technical Update 06-2 extends the relief provided in Technical Update 06-1 as provided [in the target document]." (Pension Benefit Guaranty Corporation)

Overview: Calculation of PT Excise Tax Based on Interest on Untimely Paid Elective Deferrals
Excerpt: "For purposes of calculating the excise tax on prohibited transactions, the 'amount involved' if an employer does not timely pay the participant deferrals or contributions to a 401(k) plan is based on the interest on those untimely deferrals, according to an IRS revenue ruling." (CCH Pension & Benefits)

Overview: Calculation of Excise Tax on Late Deposit of Deferrals
Excerpt: "If the employer maintains a 401(k) plan and does not deliver timely the employees' elective deferrals, the employer engages in a prohibited transaction: the employer, a plan fiduciary and a disqualified person with respect to the plan, is using plan assets for its own account." (SunGard Corbel LLC)

Milwaukee Firm Agrees to $10.8M 401(k) Company Stock Settlement with 401(k) Participant Employees
Excerpt: "Representatives of about 4,700 current and past employees hammered out the lawsuit in federal court in Boston. The complaint alleged that the employees should have been warned about investing in shares of company stock when their former company, Harnischfeger Industries, sought bankrup.tcy protection, according to the Milwaukee Journal Sentinel." (; one-time registration required)

U.S. Plan to Help Retired Pilots Unlikely to Fly
Excerpt: "U.S. lawmakers writing legislation to stabilize pensions are unlikely to embrace a plan boosting the benefits airline pilots get from federal pension insurers, congressional aides said [yesterday]." (Reuters via The Washington Post; one-time registration required)

Lessons for Retirement Plan Fiduciaries Following Recent ERISA Litigation (PDF)
3 pages. Excerpt: "As a result of the highly publicized financial decline of several companies' retirement plans, courts are examining the actions of companies and plan fiduciaries with increasing scrutiny. Plan fiduciaries are again reminded that they cannot simply manage their retirement plans on 'autopilot.'" (Gardner Carton & Douglas LLP)

Massachusetts Towns Leery of Public Pension Merger Idea
Excerpt: "Local public pension fund managers are criticizing suggestions that the state's network of 106 retirement systems be combined to save taxpayers money and provide better oversight." (The Boston Globe)

Americans for Secure Retirement Study Shows Many People Not Prepared to Retire
Excerpt: "A study of the economic and demographic variables in 250 of the nation's largest counties finds that residents in more than half of them are not well prepared for retirement. The analysis, to be released Thursday, was designed to draw attention to the lack of retirement preparedness nationwide and the need for individuals and governments to take action." (AP via The New York Times; one-time registration required)

Hewitt Federal Legislation Quick Guide Updated as of July 11, 2006, for Retirement Plans (PDF)
11 pages. This 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 retirement plans. (Hewitt Associates)

Model Letter to Senate on Hybrid Pension Plans
1 page Word document. The letter calls for design-based clarification for hybrid plans. (American Benefits Council)

Conference: The Employment-Based Pension System: Evolution or Revolution?
Excerpt: "[AARP] and the Employee Benefit Research Institute hosted a conference on the pension system and retirement savings on May 15, 2006. [The target page provides links to the proceedings' summary, conference related research, and individual presentations by conference participants.]" (AARP)

Links to Items on Executive Comp, Benefits in General

Letter to FASB on Employers' Accounting for DB Pension and Other Postretirement Plans, May 31, 2006 (PDF)
5 pages. Excerpt: "Piecemeal Accounting Reform -- Pension accounting is, by its nature, complex. While it may appear that Phase I represents a 'simple' movement of information from the notes to the balance sheet, it is a major change. Such an action seems premature and counterproductive when the Financial Accounting Standards Board (FASB) indicated that it will undertake a comprehensive review of pension accounting, including measurement issues." (Committee on Investment of Employee Benefit Assets)

More Companies Are Targeting Benefits Communications to Different Demographics
Excerpt: "Add it all up -- dwindling pensions, rising health-care costs, demand for benefits and the need for education -- and targeting demographics seems like a bottom-line necessity, perhaps akin to balancing the budget. Of course, reaching these demographics isn't easy. What works for baby boomers isn't necessarily going to work for Gen-Xers (generally, those born between 1965 and 1980), and especially the new kids in town, Gen-Yers (born in the 1980s and 1990s)." (LRP Publications via Human Resource Executive Online; one-time registration required)

Same-Sex Marriage Developments Force Benefit Plan Sponsors to Reconcile Conflicting Messages: Pt 2
Excerpt: "This [newsletter based on a publication] published June 29, 2006, analyzes the effects of two recent court decisions on the same-gender marriage debate. On July 6, 2006 the New York Court of Appeals refused to recognize same-gender marriage. Also on July 6, the Georgia Supreme Court reversed a lower court decision and reinstated its constitutional amendment banning same-gender marriage." (McDermott Will & Emery)

Hewitt Federal Legislation Quick Guide As of July 11, 2006, on Human Resources and Employment Law (PDF)
7 pages. This 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 human resources and employment law. (Hewitt Associates)

Employee Benefit Plans Form 5500 -- Are You In Compliance?
Excerpt: "A recent poll of 74,000 employers regarding compliance with Form 5500 filing requirements, showed that about 47% of them did not file the Form 5500 as required by federal authorities in 2003. Larger businesses fared better, with 22% of firms with more than 4,000 workers noncompliant, compared to 57% for businesses with 100 to 300 workers." (CCA Strategies LLC)

We thank and invite your attention to our additional sponsor: The Center for Tax Law and Employee Benefits at The John Marshall Law School

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You Have the Potential. We Have the Programs.

Are you working in human resources? Are you dealing with health insurance plans or pension benefits? Learn how you can broaden your experience with an M.S. degree (for non-lawyers) or LL.M degree (for attorneys) in employee benefits from The John Marshall Law School in Chicago during an information session from 5 to 7 p.m., Wednesday, August 2. Learn how these unique programs can help advance your career.

(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!)

401(k) Liability Management for Top Executives
in Georgia on August 10, 2006
presented by Schiff Hardin LLP

Annual Enrollment: Clear Communications vs Legal Requirements - How Can a Plan Sponsor do Both?
in Texas on July 20, 2006
presented by Houston Chapter of the International Society of Certified Employee Benefits Specialists

Eligibility-- Basics and Beyond
Nationwide on July 25, 2006
presented by SunGard Corbel

New Electronic Payment Card Guidance for Health FSAs, HRAs, and DCAPs-- Will the New Rules Make Substantiation Easier?
Nationwide on August 1, 2006
presented by Employee Benefits Institute of America Inc. (EBIA)

Newly Posted Press Releases
(Post Yours!)

HMO Rate Increases Continue to Decline for Fourth Consecutive Year
(Hewitt Associates LLC)

ERISA Sec. 4010 Reporting Waiver For Certain Employers Is Extended
(Pension Benefit Guaranty Corporation (PBGC))

PERFORMAX Publishes 'COBRA/HIPAA Made Simple'

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Senior Defined Contribution Administrator
for Benefit Associates Inc.
in CA

Business Analyst
for Merrill Lynch
in NJ

Client Service Manager
for BISYS Retirement Services
in PA

Sr Client Communication Specialist/Sr. (Defined Contribution Plan Administration)
for Standard Insurance Company
in OR

Manager, Regulatory Services - Individual Markets
for Great-West Financial Services
in CO

Membership Coordinator and Office Manager
for National Tax Sheltered Accounts Association
in MO

Plan Document and Compliance Specialist/Paralegal
for Tax Sheltered Compensation, Inc.
in MN

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