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August 2, 2006
Today's sponsor: RELIUS® Education-- Seminars and Conferences for Pension Professionals

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Chicago Advanced Pension Conference

September 6-8, 2006 - Chicago, IL. Join the nation's leading experts as they share their knowledge and expertise to keep you current with the latest legislative developments. With a dynamic combination of general and concurrent sessions, this conference affords you an opportunity to learn and understand the rules affecting employer-sponsored plans. Most important and timely topics include: changes made by the Pension Protection Act of 2006, the latest on EFAST changes, proposed regulations on default investments, document restatement issues, defined benefit funding rules, Pension Jeopardy, and Ask The Experts workshop. Register by August 4 and save.

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

Legislative Matchmaker: Hedge Funds and ERISA
Excerpt: "A provision in the pension bill just passed by the U.S. House of Representatives could permit hedge funds to increase Employee Retirement Income Security Act ('ERISA') holdings before having to wear the fiduciary hat (for those that don't voluntarily assume the role now). The current limit is twenty-five percent of a hedge fund's total assets. The precise way ERISA assets are calculated is likewise expected to change." (Pension Risk Matters; posted by Susan Mangiero)

Audio: Senate Considers Changes to Pension Rules
Excerpt: "The Senate is working on a bill that would tighten funding and accounting rules for corporate pension funds. Backers believe the new rules would shore up traditional pensions. But some experts think that the bill would actually force some companies to drop their pension plans altogether." (Morning Edition via National Public Radio)

A Cure that Could Kill Pensions
Excerpt: "Congress is considering overhauling funding rules to make companies pony up more money, disclose more about the health of their plans and provide more funding for the federal insurer of pensions, the Pension Benefit Guaranty Corp. (PBGC). But companies could find the new rules too onerous." (

Progress on Pension Reform: House of Representatives Acts (PDF)
3 pages. Excerpt: "Segal's [August] Bulletin for sponsors of corporate retirement plans discuss[es] the Pension Protection Act (H.R. 4), the long-anticipated pension reform bill that the House of Representatives passed [last Friday]." (Segal/Sibson)

New Tax Law Affects Benefit Plans, IRAs-- and Possibly Pension Reform
Excerpt: "The act could also affect pension reform legislation, which remained under conference committee negotiations as this issue went to press. To retain the special protections that govern reconciliation legislation, legislators had to drop several provisions from the Tax Increase Prevention and Reconciliation Act. Lawmakers are now looking at pension reform legislation as a possible vehicle for those and other tax changes." (Watson Wyatt Worldwide)

Effective Dates and MANY Other Key Dates in the Pension Protection Act of 2006
Excerpt: "The 2008 delayed effective date of new minimum funding standards for pension plans may be the date to get the most press of the Pension Protection Act of 2006, but one of our first practical tasks needs to be to sort through the entire tangle of dates set by the legislation." (Pensions & Benefits Weblog)

Pension Bill Lifts Big Three: Lobbying Helps Advance Legislation Allowing Slower Funding Schedule
Excerpt: "At a time when some have said the clout of Detroit's Big Three automakers is waning, the bill was a win. But GM wasn't declaring victory . . . and didn't want to talk about its behind-the-scenes success, noting that the U.S. Senate has not yet acted on the compromise because it is struggling with whether to approve an unrelated tax cut bill." (The Detroit News)

Reforms in the Works for 401(k) Plans
Excerpt: "[The pension bill] will make some important changes to 401(k) plans. It maintains the higher annual contribution limits for 401(k) and individual retirement accounts that were set to expire after 2010. It also encourages employers to automatically enroll new hires in 401(k) plans unless they opt out." (San Francisco Chronicle)

Commentary: The Pension Protection Act of 2006 -- Lump Sum Distributions
Excerpt: "Various provisions under the Pension Protection Act of 2006 (H.R. 4) affect the valuation and distribution of lump sum distribution of the value of a participant's accrued benefits under a defined benefit pension plan. [The target page focuses] on distributions from single-employer qualified pension plans . . . ." (Pensions & Benefits Weblog)

Editorial: The Pensions Endgame -- the Airlines Win, Again
Excerpt: "The House bill offers some remedies. It tells companies to close their pension funding gaps, though it gives them seven years to do so. . . . [The House] has been especially lenient toward airlines. Northwest and Delta are getting an astonishing 17 years in which to fund their pension promises, and they are allowed to assume that the investment returns on their pension assets will be 8.85 percent -- about a third higher than other companies are permitted to assume." (The Washington Post; one-time registration required)

Policy Digest: Making Saving for Retirement Automatic
Excerpt: "Under a pension overhaul bill that the House approved Friday and the Senate is due to take up this week, companies would be granted explicit legal assurance that they could unilaterally shift some of a worker's pay into a retirement savings plan, such as a 401(k) program, unless the employee specifically opted out." (National Center for Policy Analysis)

401(k) Sponsors Addressing Challenges Raised by Stock Market Volatility and Corporate Scandals
Excerpt: "[C]orporate scandals and the stock market's ups and downs have created new challenges for 401(k) plan sponsors and fiduciaries as well. The 2005/2006 edition of Deloitte's Annual 401(k) Benchmarking Survey . . . indicates plan sponsors and fiduciaries are rising to these challenges by offering a diverse variety of investment options, regularly evaluating and benchmarking the performance of their plans' investments, and replacing funds that perform poorly." (Deloitte's Washington Bulletin via

Overview: Regs on Exclusion of Exempt Organization Employees from Testing for 401(k), 401(m) Plans
Excerpt: "The regulations allow a tax-exempt organization to continue to maintain both a 403(b) plan and a 401(k) plan without having to provide coverage for employees under both plans." (CCH Pension & Benefits)

Overview: Final Regs Give Minimum Coverage Testing Break to Exempt Orgs with 401(k) Plans
Excerpt: "Effective date. The regs apply for plan years beginning after December 31, 1996. However, the preamble to the proposed regs provided that to the extent that the final regs were more restrictive, they would be prospective." (RIA News Briefings -- Pension & Benefits)

NCPERS Statement on Deloitte Public Employee Pension Research Study
Excerpt: "In a press release late last week, NCPERS called into question the results of a study by Deloitte on public pensions. According to NCPERS' analysis of the study, Deloitte provides little in the way of well-researched facts on public pension plans, and instead relies on misleading information and commonly perpetuated myths to create the impression that public pensions are in bad condition." (National Conference on Public Employee Retirement Systems)

Paying for Tomorrow: Practical Strategies for Tackling the Public Pension Crisis (PDF)
28 pages. Excerpt: "Mounting public-sector retirement costs pose a serious threat to state and local governments. Public officials must confront runaway public pension and retiree health benefit expenses or risk voter backlash as these costs hit taxpayers in the pocketbook and force states to spend tax dollars on legacy obligations that could have been used for education, services and infrastructure." (Deloitte Research)

California Dreaming: Pension Bill Fails
Excerpt: "A recent legislative attempt in California has apparently caused quite a stir. Assembly Bill (AB) 2122 sought to preclude companies from paying dividends to shareholders before satisfying pension obligations and to 'make directors and officers of a corporation jointly and severally liable for improper distributions' under certain circumstances." (Pension risk Matters)

Rollovers and Transfers: How Do You Know Which Is Which?
Excerpt: "Although what constitutes an IRA-to-IRA rollover is clear, exactly how a transfer works is less than clear. Financial organizations should consider adopting the best practice as policy and include procedures for what to do when an individual hand-carries a check." (Wolters Kluwer Financial Services)

SPARK Voices Concerns Over SEC Settlement Distribution Plan
Excerpt: "In a comment letter to the Securities and Exchange Commission (SEC), The SPARK (Society of Professional Administrators and Recordkeepers) Institute voiced concerns regarding the distribution plan issued by the SEC for restitution payments from Pilgrim Baxter & Associates to account holders of PBHG funds." (; one-time registration required)

Links to Items on Executive Comp, Benefits in General

What's Behind Lower Stock Option Costs?
Excerpt: "By one calculation, stock option costs have plunged from a peak of $104 billion in 2000 to $30 billion last year for companies in the Standard & Poor's 500 index, according to Credit Suisse." (AP via The Washington Post; one-time registration required)

Employee Benefits Alert -- Have You Checked Your Stock Options Lately? (PDF)
2 pages. Excerpt: "Recently, the SEC and the Department of Justice provided a preview of what their charges could look like in the complaints filed against key executives of Brocade Communication Systems, Inc. The civil complaint (SEC v. Reyes et. al) alleges that Brocade's CEO, CFO, and VP of Human Resources altered records, including committee minutes and personnel documents, to create the false impression that options had been granted at an earlier date . . . than the actual grant." (Miller & Chevalier Chartered)

Comments on a Reminder About Moral Hazard
Excerpt: "There is an interesting post at, the blog of Steven D. Rosenberg of the McCormack Firm in Boston relevant to reviews of claims decisions by benefit plan administrators. Those of us who do not subscribe should thank Mr. Rosenberg." (Thomas L. Geer, J.D., LL.M. on

Delray Beach, FL and Florida Atlantic University Latest to Sanction Domestic Partner Benefits
Excerpt: "Delray Beach joins other public employers locally in agreeing to provide domestic partner employee benefits. As well, a new nondiscrimination policy at Florida Atlantic University (FAU) is being viewed as 'a victory' for g.ay and les.bian students and employees, according to Rand Hoch, founder of the Palm Beach County Human Rights Council (HRC)." (Boca Raton News)

Overview: SEC Approves Final Rules on Executive Compensation Disclosure
Excerpt: "The SEC approved final executive compensation disclosure rules that will be effective for the 2007 proxy season on July 26, 2006. The rules largely follow the framework of the proposed rules issued in January, but [Groom Law Group has] summarized [the] significant changes in the final rules." (Groom Law Group)

Fiduciary Case Study: Measuring the Impact and Effect of Fiduciary Decisions
Excerpt: "An employer with approximately 2,600 employees wanted to investigate the nature of fees and operational processes with their plan. The objective was to resolve lingering questions the committee had about how their service providers were paid. This article outlines their approach using an independent fiduciary." (Matthew D. Hutcheson via

New Jersey Public Employee Pensions and Benefits to Be Scrutinized
Excerpt: "One of the four special legislative committees formed this week to debate how to lower property taxes plans to consider altering public worker benefits. A report ordered last year by then-Gov. Richard J. Codey, estimated that changes could save state and local governments as much as $1.7 billion per year." (AP via

Milliman's Monthly Benefit News and Developments, August 2006 (PDF)
2 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee Benefits. (Milliman)

Treasury Secretary Seeks to Curb Benefit Entitlement Costs
Excerpt: "Delivering his first address as Treasury secretary, former banking titan Henry M. Paulson pledged yesterday to seek a bipartisan compromise with Congress to shore up federal benefit programs such as Social Security and Medicare, whose runaway costs threaten the nation's long-term financial health." (The Boston Globe via BlueCross BlueShield Association)

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

Overview: DOL Mandates Electronic Filing of Form 5500 Beginning with 2008 Plan Years
Excerpt: "The electronic filing mandate applies only to Form 5500 annual reports required by ERISA Title I. However, the IRS has advised DOL that electronically filing a Form 5500 together with the required schedules and attachments will satisfy the annual reporting requirements under IRC §§ 6058(a) (information about qualification, financial condition, and operations of deferred compensation plans) and 6059(a) (actuarial report for defined benefit plans)." (Deloitte's Washington Bulletin via

Newly Posted Events
(Post Yours!)

409A: What Does It Mean for Me? - Webcast
Nationwide on September 6, 2006
presented by Beyster Institute

Patient Advocacy Programs: Do They Aid Productivity and Increase Quality in Health Plans?
Nationwide on August 17, 2006
presented by International Foundation of Employee Benefit Plans

Web/Telephone Seminar: Direct Rollovers and Other Portability Issues
Nationwide on September 14, 2006
presented by BISYS Retirement Services

Web/Telephone Seminar: Handling IRA Legal Issues
Nationwide on September 7, 2006
presented by BISYS Retirement Services

Web/Telephone Seminar: Individual(k) Plans
Nationwide on September 28, 2006
presented by BISYS Retirement Services

Web/Telephone Seminar: Introduction to Health Savings Accounts (HSAs)
Nationwide on September 21, 2006
presented by BISYS Retirement Services

Web/Telephone Seminar: IRA Contributions
Nationwide on September 12, 2006
presented by BISYS Retirement Services

Newly Posted Press Releases
(Post Yours!)

YMCA Selects Automated 403(b) Loan Origination and Documentation Solution from 401kLoans, LLC
(Metrics Partners)

Buck Consultants Survey Finds Higher Salary Increases Expected in 2007
(Buck Consultants)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

OmniPlus Consultants
for Chesapeake Benefit Partners

Account Managers - Retirement Services
for MassMutual Financial Group
in MA

Manager, Retirement Operations
for Yum!
in KY

VP Employee Benefit Administration
for Unified Trust Company, N.A.
in KY

Actuarial Analyst Advanced
for Hewitt Associates
in GA

Tax/Employee Benefits Attorney
for Harter, Secrest & Emery LLP
in NY

401(k) Administrator
for BMI
in MO

Retirement Plan Sales Representative
for Boyce & Associates, Inc.
in AZ

Pension Administrator
for FBD Consulting, Inc.
in KS

Transitions/Conversions Project Manager
for M&I Bank
in WI

Benefits Analyst
for Knowledge Learning Corporation
in OR

Senior Principal, Retirement Plan & Pension Plan Consultant
in VA

Qualified Plan Administrator
for DST Systems
in MO

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