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September 6, 2006
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ASPPA Fall 2006 Exams -- Early Registration Ends September 30

ASPPA’s 2006 fall proctored examination window will be November 1 - December 15. Early registration ends September 30, and the final registration deadline is October 31.
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2005/2006 Annual 401(k) Benchmarking Survey -- Results by Sector (PDF)
12 pages. Sectors reported on include financial services, health care, manufacturing, wholesale/retail, technology, media, and telecommunications, and, service. (International Society of Certified Employee Benefit Specialists)

2005/2006 Annual 401(k) Benchmarking Survey -- Results by Assets (PDF)
14 pages. Excerpt: "The survey of 830 plan sponsors nationwide and across all industries showed increases in eligible employee participation, but that employers believe the majority of participants are not using these plans to their full advantage to fund their retirement." (International Society of Certified Employee Benefit Specialists)

2005/2006 Annual 401(k) Benchmarking Survey -- Results by Number of Employees (PDF)
15 pages. Excerpt: "Despite increases in 401(k) plan participation, many employees are financially unprepared for retirement, according to the 2005-2006 Annual 401(k) Benchmarking Survey, conducted by Deloitte Consulting, the International Foundation and ISCEBS." (International Society of Certified Employee Benefit Specialists)

Making Better Investment Decisions by Improving Life Cycle Fund Knowledge
Excerpt: "[P]roviders, consultants and plans sponsors are experimenting with a variety of ways to improve participant knowledge and use of lifecycle products. The results from many of these interventions are promising. Plan sponsors in particular should be aware that these educational strategies -- much like the new lifecycle funds they are built around -- differ from what their employees may have been exposed to in the past." (Employee Benefits News via

Letter Sent to Employee Benefits Security Administration on Fee and Expense List Reference Tool
Excerpt: "[R]egarding the guidance the Department is developing under ERISA Section 408(b)(2) related to fee disclosure between plan fiduciaries and service providers [the] ICI, ABC, ACLI, ABA and SIA have worked together to develop [a] fee and expense reference tool." (Investment Company Institute)

List of Data Elements Related to Defined Contribution Plan Fee Disclosure (PDF)
3 pages. Excerpt: "The Investment Company Institute, American Benefits Council, American Council of Life Insurers, American Bankers Association and Securities Industry Association respectfully submit [this] list of data elements related to defined contribution plan fee disclosure. The list identifies service- and fee-related data elements [they] believe defined contribution plan sponsors and service providers may want to discuss when entering into agreements." (Investment Company Institute)

Automatic Enrollment in 401(k) Plan Is Only the First Step
Excerpt: "Supporters of automatic enrollment say it's the most effective way to combat the inertia that keeps people from signing up for their employer's savings plans. But automatic enrollment can create a new kind of inertia that could jeopardize your retirement security." (USA TODAY)

Editorial: Sober Thoughts for Labor Day -- The Bill Is Coming Due on Underfunded Pension Plans
Excerpt: "Companies need to be responsible for promises made to workers, and governments need to rein in easy overpromises to government workers. It's not exactly the most cheerful Labor Day message we could think of, but it's one Americans need to face, and the sooner the better." (The Orange County Register)

Judge OKs Termination of Delta Pilots' Pension Plan After Group Withdraws Objection
Excerpt: "Delta, the nation's third-largest carrier, must still go to the federal government's pension agency, the Pension Benefit Guaranty Corp., to officially end the plan. At that time, the PBGC will take over the plan and pay pilots reduced benefits." (AP via CBS News)

IBM Pension Case May Go to Supreme Court
Excerpt: "Plaintiffs expect to appeal to the U.S. Supreme Court a high-profile case that had exonerated International Business Machine Corp.'s cash-balance pension plan. On Sept. 1, a federal appeals court in Chicago refused to reconsider the case. The court denied a petition 'en banc,' which had asked all 11 active judges on the bench to review the opinion." (AP via

No Rehearing of IBM Cash Balance Ruling
Excerpt: "The full 7th U.S. Circuit Court of Appeals has, as expected, refused to rehear a landmark ruling by a 7th Circuit panel finding that IBM Corp.'s cash balance pension plan does not discriminate against IBM's older employees." (Business Insurance)

Overview: Regulations Limit the Deduction for Dividends Paid to an ESOP
Excerpt: "IRS has issued final regs that limit the Code Sec. 404(k) deduction for dividends paid to an employee stock ownership plan (ESOP) by precluding a deduction for payments in redemption of stock held by an ESOP. (TD 9282, 08/29/2006; Reg § 1.162(k)-1; Reg § 1.404(k)-3)" (Pension & Benefits Week via RIA News Briefings)

Interview with Don Trone on Fiduciary Standards of Care in Light of the New Pension Protection Act (PDF)
Pages 1-5 of 6 pages. Excerpt: "What do Congress, the SEC and the CFP Board have in common? They've all been wrestling with how to define a fiduciary." (Robert N. Veres via Fiduciary360)

Call for Papers: Improving the Predictability of DB Plan Costs for Canadian Pension Plan Sponsors
Excerpt: "[T]he Society of Actuaries Pension Section Research Team is issuing this Call For Papers, inviting plan sponsors, pension consultants, plan members and representatives, academic researchers and other interested parties to develop proposals for how Canadian DB plans could be reinvented to address (in particular) plan sponsors' concerns regarding cost predictability and volatility." (Society of Actuaries)

Opinion: Retirement Reforms Could Worsen Plight of Older Women
Excerpt: "Today, one in five of America's retired single women and widows lives in poverty -- and millions more may be just one tragedy or illness away from sharing that fate. But the Bush administration continues to explore Social Security and Medicare 'reforms' that are likely to make the status of retired women even more unstable." (Teresa Heinz Kerry, and Jeffrey R. Lewis via

Index Ranks Best-Saving Cities and States
Excerpt: "The [A.G. Edwards' financial services second annual Nest Egg Index shows] the geographic regions where people are succeeding and where they face the greatest difficulty in building and nurturing their nest eggs." (

Overview: The Pension Protection Act of 2006 (PDF)
8 pages. Excerpt: "Effective immediately, the Act expands permissible excess asset transfers to include future medical cost and amounts negotiated under a collective bargaining agreement. The Act provides significantly more flexibility with respect to such transfers." (Dechert LLP)

Opinion: Meeting Social Security's Long-Range Shortfall -- Coping with a Manageable Challenge
Excerpt: "Longtime Social Security Commissioner Robert M. Ball has developed a comprehensive plan to resolve the program's projected financial shortfall through a simple combination of revenue increases and cost reductions." (Robert M. Ball via The Century Foundation)

Working Paper Abstract: Tradeoff between Mortgage Prepayments and Tax-Deferred Retirement Savings
Excerpt: "[The authors] show that a significant number of households can perform a tax arbitrage by cutting back on their additional mortgage payments and increasing their contributions to tax-deferred accounts (TDA)." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve full-text)

Audio and Text Versions: Pensions vs. 401ks -- Review of New Center for Retirement Research Study
Excerpt: "A study out September 5 says the much-maligned pension still has many benefits over 401k accounts. Turns out pensions have lower fees and better financial performance." (Marketplace via American Public Media)

Taking the Measure of Growth Stocks for Retirement Plan Investing
Excerpt: "Sponsors should not rely on a manager's own description of his style as growth or value, says Ron Schmitz, director of investments for the Oregon Investment Council, which runs the state's $50 billion pension plan. 'We pay attention to just where in the spectrum of growth and value the managers are,' he explains." (; one-time registration required)

Investment Returns: Defined Benefit vs. 401(k) Plans
The brief's key findings are: Defined benefit plans earned one percentage point more than 401(k) plans during 1988-2004; This outcome occurred even though 401(k)s held more equities for most of the period; Focusing on employer-sponsored plans, however, ignores IRAs; IRAs now hold more assets than either defined benefit or 401(k) plans; and, Their investment performance merits more attention. (Center for Retirement Research at Boston College)

UK Pensions Regulator Finds a Few Governance Issues, According to Survey Report
Excerpt: "In a report on its first annual occupational pension scheme governance survey, the UK Pensions Regulator found that a few of the schemes have 'shortcomings in important areas.' Some of the pension scheme shortcomings in the report include: 70% of defined benefit schemes have no specified policy to manage conflicts of interest. 37% of defined benefit schemes do not review the sponsoring employer's credit rating or its covenant." (; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Overview: SEC Adopts Final Rules Changing Form 8-K Reporting (PDF)
4 pages. Excerpt: "[I]ncluded in these final rules are significant changes to the requirements for disclosing new and modified executive and director compensation plans and arrangements under the Form 8-K reporting regime. This Alert focuses on those changes and addresses both technical and practical compliance issues with the new rules." (Kirkpatrick & Lockhart Nicholson Graham LLP)

Text of Present Law and Background Relating to Executive Compensation (PDF)
47 pages. Excerpt: "This document, prepared by the staff of the Joint Committee on Taxation, provides a description of present-law tax rules and issues relating to certain types of executive compensation arrangements, including the $1 million dollar cap on the deduction for executive compensation, nonqualified deferred compensation, stock-based compensation (including the tax issues relating to backdating stock options), and golden parachute payments." (Joint Committee on Taxation)

Congress Examining Stock Options Timing
Excerpt: "Congress is taking a close look at suspiciously timed stock options for top company executives, a corporate practice that is a source of anger for shareholders and the subject of federal investigations." (AP via The Washington Post; one-time registration required)

CEOs Lack Knowledge on Specifics of Employee Benefit Preferences, According to Survey
Excerpt: "[R]oughly 43% of CEOs say their firms understood 'somewhat' or 'not at all' what their employees wanted from benefit packages. Only 13% say their businesses recognized employee benefits preferences 'extremely well.'" (Employee Benefits News)

Newly Posted Events
(Post Yours!)

Claim Denials for Self-Funded Health Plans (Including Health FSAs and HRAs) -- What to Do, What Not to Do, and How to Monitor Your Claims Administrator
Nationwide on October 5, 2006
presented by Employee Benefits Institute of America Inc. (EBIA)

Newly Posted Press Releases
(Post Yours!)

Labor Department Requests Proposals for EFAST2 Project
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

JPMorgan Retirement Plan Services to Acquire CCA Strategies LLC
(CCA Strategies LLC)

Newly Posted or Renewed Job Openings
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Pension Administrator
for Primark Benefits
in CA

Internal Marketing Associate - Retirement Plan Services
for Simpkins & Associates
in TX

Software Quality Assurance Engineer
for SunGard
in CO

Personnel Assistant - Personnel Services
for Reedy Creek Improvement District
in FL

Pension Sales Specialist
for CUNA Mutual Group
in AL, AR, LA, MS, TN, TX

Benefits Analyst
for Wells Fargo
in MN

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