Retirement Plans
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September 5, 2006
Today's sponsor: ASPPA • Working for America's Retirement™

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Join us on October 22-25 at the Washington Hilton & Towers! Attend special sessions specifically related to the Pension Protection Act ’06. Hear the "Washington Update" from Brian Graff and the popular “Keeping Current” session given by Sal Tripodi. Visit over 80 vendors with new ideas and products in the Spacious exhibit hall. Register NOW @

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

Overview: Form 5500 Updates and the PPA
Excerpt: "Pension Protection Act of 2006 Form 5500 changes: A simpler Form 5500 requirements for plans with less than 25 participants will be created for use in the 2007 and later plan years; The Form 5500-EZ filing threshold is increased from $100,000 to $250,000, effective for the 2007 plan year and thereafter; Form 5500 information is to be electronically posted on the web within 90 days of the DOL's receipt, starting with the 2008 plan year Form 5500" (McKay Hochman Co., Inc.)

The PPA and 'The 401(k) Rules' by Pamela Yip
Excerpt: "The most potent change is the provision that smooths the way for employers to automatically enroll workers in 401(k) plans, bump up their contributions over the years, and put them in suitably aggressive investments to meet their retirement needs." (Dallas Morning News via The Mercury News; one-time registration required)

New Law Addresses Legal Ambiguities Discouraging Implementation of 401(k) Automatic Enrollment
Excerpt: "The law basically provides fiduciary cover in a number of places to plan sponsors. For example, the act instructs the Labor Department to issue guidelines on how default funds can be invested. Historically, companies have invested those funds in low-yielding, low-risk money market accounts." (Treasury & Risk Management)

Default Methods Undermine 404(c)-- but Does It Matter?
Excerpt: "Qualifying under Section 404(c) of ERISA has long been the Holy Grail of compliance for defined contribution plan sponsors. Meet the 20-plus conditions outlined by the US Department of Labor for satisfying 404(c), and you will not be liable for investment decisions made by plan participants. True enough but for this inconvenient fact: Few plan sponsors actually meet all those conditions . . . ." (; one-time registration required)

Federal Courts Reluctant to Hold Fiduciaries Liable for Company Stock Decisions
Excerpt: "Not only have the courts largely adopted the principles enunciated in the DoL's Field Assistance Bulletin, but the courts have demonstrated a reluctance to hold plan sponsors and other fiduciaries liable for investment losses where the value of the stock was reflected in the marketplace and information about the company's financial condition was publicly disclosed." (; one-time registration required)

Pension Reform's Company Stock Provision Delays Firm's IPO
Excerpt: "Provisions in the new Pension Protection Act (PPA) reform measure providing for new participant company stock diversification rights may have tripped up a San Diego company trying to issue an initial public stock offering (IPO)." (; one-time registration required)

Employee Ownership Update for September 1, 2006
NCEO Executive Director Corey Rosen discusses a Web site listing all the settlements involving employer stock as well as other ERISA class action litigation over the last 10 years; a study finding 887 companies accelerated stock option vesting to avoid accounting charges; and what companies with defined contribution plans such as ESOPs and 401(k) plans need to do to think through the new vesting rules. (National Center for Employee Ownership)

New York Local Government Pension Rates Decreasing Through 2008
Excerpt: "After a spike in pension rates for local governments in 2003, those percentages will decrease for the third straight year, state Comptroller Alan Hevesi announced [this past] Thursday." (The Evening Tribune)

Cost of Pensions Adds to Troubles of the Factory Town of Lockport NY
Excerpt: "Cities across New York State are only now starting to grapple with the so-called legacy costs of pensions and retiree health care benefits, and the situation in Lockport -- with its rising property taxes and strained budget -- is emblematic of what other cities may face in the future." (The New York Times; one-time registration required)

Report Leads to Hearing on Illinois Pension Systems Plight
Excerpt: "A congressional subcommittee met to discuss the funding plight of Illinois pension systems . . . ." (; one-time registration required)

Testimony: Examining the Retirement Security of State and Local Government Employees (PDF)
Testimony before U.S. House Committee on Education and the WorkforceSubcommittee on Employer-Employee Relations Field hearing on Wednesday, August 30, 2006, by Keith Brainard, Research Director, National Association of State Retirement Administrators (NASRA) submitted on behalf of NASRA and the National Council on Teacher Retirement (National Association of State Retirement Administrators)

Joint Statement for Hearing on Retirement Security of State & Local Government Employees (PDF)
4 pages. Excerpt: "On behalf of the twenty-six national organizations listed [on the testimony] -- representing state and local governments and officials, public employee unions, public retirement systems, and more than 20 million state and local government employees, retirees, and their beneficiaries -- [the comments were submitted] for the public record." (National Association of State Retirement Administrators)

In Can.ada, Draft Federal Pension Regulations Propose Solvency Funding Relief
Excerpt: "The options proposed by the Draft Regulations offer alternatives to plan sponsors seeking solvency deficiency relief while protecting the security of existing pension benefits. However, it is important to note that the proposals only represent a stop-gap measure, and do not contain long-term reforms designed to redress the asymmetry between pension risks and rewards that is inherent in the current DB system." (Watson Wyatt Worldwide)

Pension Plans Must Be Considered in Aggregate When Employer in Chapter 11 Bankrup.tcy
Excerpt: "In In Re Kaiser Aluminum Corp., __F.3d__(3d Cir. 2006), 2006 U.S.App. LEXIS 18746 (July 26, 2006), the Third Circuit held that pension plans must be considered in the aggregate, not individually, when an employer in Chapter 11 bankrup.tcy seeks to terminate more than one plan." (Thelen Reid & Priest LLP)

Disputed Birth Date Gives Rise to Pension Benefit Lawsuit
Excerpt: "For ten years, Maria Zdzienicki apparently maintained to her employer, Con Edison, that she was born in 1939. She provided Con Edison with sworn documents, such as immigration papers, confirming this to be true. Years later, when her pension benefits were about to begin, she reportedly told the company that she had actually been born five years earlier, in 1934." (ERISA on the web; posted by John Wood)

Overview: Pension Protection Act Provisions for State and Local Governments (PDF)
8 pages. Excerpt: "[T]he Pension Act does include several provisions affecting state and local governmental plans and participants. These provisions clarify the rules related to service credit purchases and minimum distributions, and expand certain benefits to public safety employees, teachers, and school employees." (Gabriel Roeder Smith & Company)

Overview of PPA Provisions Affecting ESOPs and Employer Securities
Excerpt: "This article summarizes the key PPA changes affecting ESOPs and the use of employer securities in qualified benefit plans." (The Beyster Institute)

Employee Ownership: Operating Through Tough Times
Excerpt: "ESOPs are not a magic elixir for management problems, employee relations, or outright fraud. But, overall, they do very well by America's working people. So what happens to employees when an ESOP company stumbles?" (Leading Companies Online Magazine via The Beyster Institute)

Opinion: Provide Protections from Retirement's Pitfalls
Excerpt: "With Americans living longer and healthier than ever before, many aging baby boomers have rallied behind the cliché that 60 is the new 40. Some act as if they've discovered a fountain of youth that will extend their robust health and steady employment indefinitely. But as earlier generations discovered, many things can go wrong as people approach retirement." (Richard W. Johnson, Special to's ThinkTank Town)

Survey Finds Many Employees Disgruntled Over Benefits
Excerpt: "This Labor Day, workers are saying their biggest work problems are mostly economic. Their pay is not keeping up with increasing health-care costs or other increases in living expenses. They are disgruntled enough to look for work on the job. Retirement 'security' isn't secure." (The Washington Post; one-time registration required)

Bill Seeks Changes for Some IRA Contributions
Excerpt: "A bill is sitting in the Senate Finance Committee that would let disabled workers continue contributing to IRAs by allowing workers' compensation payments and disability benefits to be contributed to those accounts." (Investment News; registration or subscription required)

With the PPA, Major Changes Ahead for Multiemployer Pension System
Excerpt: "Unlike single employer defined benefit plans, multiemployer plans will have to submit summary reports, RIA Checkpoint says, in addition to an annual report. Additional information will be required for the filing of 5500's." (AccountingWEB, Inc.)

Editorial: Playing Wall Street Roulette with Retirement
Excerpt: "[The PPA] does nothing to reverse the larger, more ominous trend: that of employers walking away from traditional 'defined-benefit' pensions. Congress and the president have taken steps to resolve the immediate crisis, but the long-term problem of retirement security remains." (The Boston Globe)

Is Today's Pension Plan Environment Cause for Concern?
Excerpt: "Since the introduction of the Sarbanes-Oxley legislation, plan sponsor's must exercise control procedures over pensions. Jeffrey D. Mamorsky, Senior Partner at Greenberg Traurig, LLP explains what we must do to safeguard the future of our pension plans." (Chief Executive Officer)

Life-Cycle Funds Not a Retirement Cure All
Excerpt: "These funds are most often presented as a happy medium between the defined-benefit plan of old and the freedom of a defined-contribution plan like a 401(k) or IRA. Investors get a portfolio they never have to think about until retirement. Moreover, because the funds follow the strategies created by a specific asset management company, they essentially deliver investment advice through a product." (

Pension Protection Act: Effective Date List
The target page lists the effective dates of the major defined contribution and IRA provisions of the PPA. (McKay Hochman Co., Inc.)

Updated Report: Summary of Recent Trends in Pension Sponsorship and Participation (PDF)
19 pages; updated August 31, 2006. Highlights: The percentage of workers whose employer sponsored a retirement plan fell from 61.8% in 2004 to 59.7% in 2005. Only 25.3% of workers at firms with fewer than 25 employers participated in an employer-sponsored retirement plan in 2005, compared to 45.2% of workers at firms with 25 to 99 employees and 65.4% of workers at firms with 100 or more employees. (Congressional Research Service of the U.S. Library of Congress)

Links to Items on Executive Comp, Benefits in General

Congress's Agenda Includes Federal Employee Pay Raise and Other Personnel Issues
Excerpt: "House aides also are looking into whether to allow federal employees to contribute their bonuses as lump sums into the Thrift Savings Plan, a 401(k)-type retirement program. If performance-based pay systems spread across government as planned, an increasing number of employees will be getting their raises in bonuses rather than as salary adjustments, the aides said." (The Washington Post; one-time registration required)

Hearing Set on Executive Compensation Including Stock Options Backdating (PDF)
2 pages. Excerpt: "Chairman Grassley will convene a hearing exclusively on executive compensation on Wednesday, Sept. 6, at 10 a.m. in 215 Dirksen Senate Office Building. The working title is, 'Executive Compensation: Backdating to the Future/Oversight of current issues regarding executive compensation including backdating of stock options; and tax treatment of executive compensation, retirement and benefits.'" (U.S. Senate Committee on Finance)

Opinion: Attacking Inequality -- Tax Reform Has the Greatest Potential to Narrow the Gap
Excerpt: "By now almost everyone agrees that inequality is serious. Economic growth no longer seems to help the majority of workers; the proceeds flow to the top fifth or so of the workforce, and the top within the top has done especially handsomely. But the tough debate is what to do about this trend. The surprising answer is: tax reform." (Sebastian Mallaby via The Washington Post; one-time registration required)

Fifth Circuit Holds Merger Agreement Can Act as a Plan Amendment
Excerpt: "Very rarely do you see court cases where mergers and acquisition issues and benefits issues intersect. That is what happened in this recent Fifth Circuit case of Halliburton Company Benefits Committee v. Graves et al. which is a must-read for benefits lawyers who are involved in transactional work." (Attorney B. Janell Grenier via

Listing of IRS Published Guidance for January 2006 -- August 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)

Rising Efficiency and Technology Adding Work for Highly Paid While Taking It Away from Low-Skilled
Excerpt: "Millions, often among the economy's most successful professionals, say they feel overworked while millions more, particularly among low-skilled workers, are starved for a paycheck or more work hours. Experts say the two ends of the labor market are in fact the Janus faces of the same economic force." (The Christian Science Monitor)

We thank and invite your attention to our additional sponsor: Mid-Sized Pension Management Conference

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Banner ad for Mid-Sized Pension Management Conference

Managing a Retirement Plan? Timing Is Everything!

Trying to play "beat the clock" when it comes to solving the many questions facing your retirement program? Automated features may be right for your 401(k) plan, but should you implement them right away? Perhaps your DB plan has seen better days. When will you take a closer look at alternatives? Setting a schedule for plan management strategy can be a challenge. Luckily, the countdown to management solutions has begun. Set your alarm for the 14th annual Mid-Sized Pension Management Conference in Chicago.

(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!)

Personal Health Record--A Missing Part of a Consumer Driven Plan
Nationwide on September 7, 2006
presented by MediKeeper

Newly Posted Press Releases
(Post Yours!)

Still River Announces Early Retirement Offer Analysis
(Still River Retirement Planning Software, Inc.)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

401(k) Administrator - Analyst
for The Pension Group, Inc.
in CA

Regional Vice President - Third Party Administrator
for Zenith Administrators
in WA

Regional Vice President - Third Party Administrator (CA)
for Zenith Administrators
in CA

Testing & Reporting Consultant
for Fidelity Investments
in KY, MA, TX

Internal Sales Support Consultant
for Transamerica Retirement Services
in CA, GA, IL, MA

Account Manager (Mid-Market) ~ Financial Services
for CitiStreet
in NJ

Investment Services Administrator
for Financial Architects Partners
in RI

Manager, Data Consulting
for Fidelity Investments
in NC

Benefits Sales Consultant
for BenefitStreet, Inc.
in CA

Licensing & Commissions Coordinator
for Transamerica Retirement Services
in CA

Retirement Plan Specialist (Administrator)
for First National Bank of Omaha
in NE

Retirement Admin Exp Analyst
for Hewitt Associates
in TX

401(k) Administrators
for Pension Management Corporation, Inc
in NY

Relationship Manager / Senior Pension Analyst
for Boyce & Associates, Inc.
in AZ

Trust Administrator II or III
for Associated Pension Consultants
in CA

Actuarial Assistant
for Hand Benefits and Trust
in TX

Retirement Rollover Specialist
for Dreyfus Corporation
in AZ, CA, CO, NV, WA

Daily Valuation Specialist
for R-Tech Consultants, Inc.
in CA

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