Retirement Plans
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September 8, 2006
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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)

Operational Challenges Come with Offering Advice
Excerpt: "The financial services profession is debating whether or not a practitioner is acting as a fiduciary when he or she delivers advice and services to clients. Let us address this issue briefly and then move on to the bigger issue of how to deal with this once you determine that you are, in fact, acting as a fiduciary. (And, you probably are.)" (Financial Advisor)

Opinion: The 401(k) Advantage -- Why it's Good More American Workers Will be Participating (PDF)
2 pages. Excerpt: "Now that 401(k) rules are permanent and the barriers to automatic enrollment removed, I believe that within five years as many as half the companies sponsoring defined contribution plans will have changed their plan philosophy from opt-in to opt-out. The result will be a dramatic increase in 401(k) plan participation . . . . [A]s this system will be the bedrock of retirement saving in the United States, it is important to review again why this is good for workers." (David L. Wray via Benefits & Compensation Solutions)

Overview: IRS Solutions to Common Problems with Participant Loans
Excerpt: "[F]or loans that are deemed in default, correction can be: a lump sum payment equal to what should have been made to the plan, plus interest; reamortization of the outstanding balance of the loan over the remaining payment schedule of the original term of the loan; or a combination of either of the above methods." (CCH Pension and Benefits)

With PPA, Congress Clears the Way for Cash Balance and Other Non-traditional Defined Benefit Plans (PDF)
6 pages. Excerpt: "The Pension Protection Act of 2006 amends ERISA, the Internal Revenue Code . . . and the Age Discrimination in Employment Act . . . to provide that a hybrid plan will not violate ERISA, fail to qualify for tax-exempt status under the Code, or discriminate on the basis of age if certain requirements are satisfied. The [target page] is a discussion of the background that led to the adoption of these new rules, as well as the requirements of these rules." (Sutherland Asbill & Brennan LLP)

U.S. Labor Secretary Elaine L. Chao Releases 2006 National Saver Summit Report
Excerpt: "U.S. Secretary of Labor Elaine L. Chao [said] 'This report is a useful tool for policymakers who are looking for ways to assist Americans in saving enough for a financially secure retirement.'" (Employee Benefits Security Administration, U.S. Department of Labor)

Report from Summit: Saving for Your Golden Years: -- Trends, Challenges and Opportunities (PDF)
40 pages. This report on the 2006 National Summit on Retirement Savings, held on March 1-2, 2006, in Washington, D.C., reflects the goal of the Summit -- 'to educate and motivate people to develop their own personal retirement saving strategies." (U.S. Employee Benefits Security Administration)

Updated CRS Report: Older Workers-- Employment and Retirement Trends (PDF)
20 pages. Excerpt: "[W]hile the number of people between the ages of 55 and 64 will grow by about 11 million between 2005 and 2025, the number of people who are 25 to 54 years old will grow by only 5 million. This trend could affect economic growth . . . ." (Congressional Research Service of the U.S. Library of Congress)

Administration Proposes $12M Enron Settlement
Excerpt: "The Labor Department proposed a $12 million agreement on Thursday with the estate of Kenneth Lay, the deceased founder of Enron Corp., to settle claims involving mismanagement of workers' pension plans." (AP via The Washington Post; one-time registration required)

U.S. Department of Labor Announces $12 Million Settlement with the Estate of Ken Lay
Excerpt: "The U.S. Department of Labor today announced an agreement with the estate of Kenneth L. Lay granting a $12 million claim against his estate on behalf of participants covered by Enron's pension plans. Lay died on July 5, 2006." (Employee Benefits Security Administration, U.S. Department of Labor)

Opinion: More Worries for Defined Contribution Plan Fiduciaries and Participants
Excerpt: "Apparently Vanguard believes that since the Department of Labor generally doesn't consider administrators and recordkeepers to be fiduciaries, why should they agree they are?" (

Whose Advice Is It Anyway? Debate Continues Over Law Encouraging 401(k) Assistance
Excerpt: "A provision of the Pension Protection Act would directly impact the financial planning field by encouraging employers to provide advisors for their 401(k) participants. But who exactly will be doling out that advice, and to what extent it will be regulated, are among the questions being raised as the bill makes its way to final approval." (Financial Advisor)

ERISA Advisory Council's Working Group on a Prudent Investment Process to Meet September 21
Excerpt: "The purpose of the open meeting . . . is for Working Group members to hear testimony from invited witnesses. The Working Group will study selected issues regarding the prudent investment process for both defined benefit plans and participant directed defined contribution plans. The Working Group will focus on plan asset valuations, soft dollars, and self-directed account plans under ERISA Section 404(c)." (Employee Benefits Security Administration, U.S. Department of Labor)

ERISA Advisory Council's Working Group on Plan Asset Rules, Exemptions, and Cross Trading to Meet
Excerpt: "The purpose of the open meeting [on September 20, 2006] . . . is for Working Group members to hear testimony from invited witnesses. The Working Group will study (1) the current applicability of the 1987 plan asset regulation, to determine whether the regulation should be modified or whether other DOL action is appropriate to clarify the existing regulation, and (2) cross trading, to determine whether the DOL should issue broader exemptive relief for cross-trading." (Employee Benefits Security Administration, U.S. Department of Labor)

Overview: Pension Protection Act of 2006 -- The Defined Benefit Plan Provisions (PDF)
20 pages. Excerpt: "[The provisions] include: Replacement of the minimum funding standards of ERISA and the [IRC] for single-employer defined benefit plans; Restrictions on benefit increases and other provisions tied to a plan's funded status; Increases in the maximum deductible contributions to defined benefit plans and to a combination of a defined contribution plan and a defined benefit plan; Changes in premiums payable to the Pension Benefit Guaranty Corporation . . . ." (Sutherland Asbill & Brennan LLP)

Overview: Advisory Opinion Allows 12b-1 Fees to Unrelated Broker under Mutual Fund's In-house Plan (PDF)
2 pages. Excerpt: "On the facts of this new advisory opinion, the DOL reached the same conclusion as in Advisory Opinion 2002-05A and determined that the 12b-1 fees paid to the unrelated broker would not be 'sales commissions' under PTE 77-3." (Sutherland Asbill & Brennan LLP)

Private Equity Update: Pension Act Liberalizes ERISA 'Plan Asset' Rules (PDF)
3 pages. Excerpt: "The Act removes government benefit plans, certain church benefit plans, and foreign benefit plans from the ERISA definition of 'plan assets.' This change is a significant benefit to many private equity, venture capital and hedge funds (collectively, 'private equity funds') because they will no longer be subject to ERISA fiduciary duties or need to meet the Venture Capital Operating Company ('VCOC') requirements to avoid ERISA fiduciary responsibilities." (Powell Goldstein LLP)

Short Term Redemption Fee Information for Retirement Plan Participants
Excerpt: "The United States Securities and Exchange Commission (SEC) has proposed that mutual fund companies start to assess short term redemption fees on selected funds. . . . This new fee is intended to reduce or combat market timing and other abusive short term trading. It is important to state that this practice is intended to protect the interests of plan participants and each investor in the mutual fund." (Invesmart, Inc.)

Effects of EGTRRA of 2001 on Retirement Savings & Income Security: Final Report, Dec. 9, 2004 (PDF)
64 pages. Excerpt: "This report examines the effects of EGTRRA on private and national saving and on the distribution of federal tax benefits for saving. [The authors] find that, while the new tax incentives may induce some increase in private saving, that is likely to be more than offset by the increase in deficits (reduced public saving). As a result, the net effect is likely to be a reduction in national saving that could be as large as 1 percent of GDP from 2002 to 2011." (The Urban Institute)

Overview: DOL Clarifies Definition of 'Sales Commissions' Under PTCE 77-3 (PDF)
3 pages. The overview discusses sales of open-end registered funds to 'in house' plans. (Dechert LLP)

Report of Key Findings and Issues: The Impact of Retirement Risk on Women
18 pages. Excerpt: "This report, based on the [2005 Risks and Process of Retirement Survey Report], provides key results and discusses issues of particular importance to women, and relates them to the life circumstances of women and to other studies. The report also focuses on differences and similarities in the retirement risks faced by men and women." (Society of Actuaries)

Links to Items on Executive Comp, Benefits in General

Overview: 2006-2007 Employee Benefit, Executive Compensation and Insurance Tax Guidance (PDF)
5 pages. Excerpt: "On August 15, 2006, the Treasury and Internal Revenue Service released their Priority Guidance Plan for regulations and other guidance they are undertaking to complete from July 2006 through 2007. Of the 264 priority projects listed, a significant number are relevant to employee benefits, executive compensation, and insurance arrangements." (Sutherland Asbill & Brennan LLP)

Overview: Employer Obligations under Federal and Wisconsin Law to Employees Serving in the Military (PDF)
4 pages. Excerpt: "These state and federal laws, which apply to virtually all employers regardless of size, provide employees serving in the United States Armed Forces or the National Guard with three basic types of employment protections: (1) protection from discrimination; (2) reemployment rights; and (3) protection of employee benefits." (von Briesen & Roper, s.c.)

Overview: Advance Copy of 2006 Form 5500 and Instructions Now Available
Excerpt: "The PPA does make changes to the Form 5500 annual reporting requirement, although it does not appear the PPA will require significant changes -- and perhaps not any changes -- to the 2006 Form 5500. In fact, the most notable changes will not apply until plan years beginning in 2008 and beyond." (Deloitte via

Newly Posted Events
(Post Yours!)

ERISA Workshop - With Significant Coverage of PPA 2006
in Illinois on October 17, 2006
presented by SunGard Corbel

ERISA Workshop - With Significant Coverage of PPA 2006
in North Carolina on October 17, 2006
presented by SunGard Corbel

ERISA Workshop - With Significant Coverage of PPA 2006
in Iowa on October 17, 2006
presented by SunGard Corbel

PSCA's 59th National Conference
in Florida on September 13, 2006
presented by Profit Sharing/401(k) Council of America (PSCA)

Newly Posted Press Releases
(Post Yours!)

U. S. Labor Secretary Elaine L. Chao Releases 2006 National Saver Summit Report
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

U.S. Department of Labor Announces $12 Million Settlement with the Estate of Kenneth L. Lay
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

U.S. Labor Department Seeks Comments on Independence Guidelines for Employee Benefit Plan Accountants
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

Nationwide Announces Integrated Health and Productivity Solutions as the Answer to Soaring Health Care Costs
(Nationwide Mutual Insurance Company)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Plan Administrator
for Acuff & Associates, Inc.
in TN

Plan Administrator Apprentice
for NestEggs, Inc.
in FL

Pension Administrator
for Jordan & Andrews
in CA

Pension Analyst (Retirement Plans)
for Mutual of Omaha
in NE

Pension/401(k) Analyst
for Long Island Employee Benefits Group, Ltd.
in NY

Relationship Manager
for Pension Specialists, Inc.
in IL

Client Relationship Manager
for Freedom One Financial Group
in MI

Employee Benefit Plan Consultant/Manager
for Olsen Thielen & Co., Ltd.
in MN

IRA Client Service Representative
for Janney Montgomery Scott, LLC
in PA

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