Retirement Plans
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September 14, 2006
Today's sponsor: ASPPA • Working for America's Retirement™

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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.
Register online at To learn more about ASPPA exams, visit the Education and Examination Web page at Complete your exams this year. Sign up today!

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

Rebalance Your 401(k) With This Annual Checkup -- Part Two
Excerpt: "[This part on rebalancing] will show you how to apply quantitative techniques to complete the portfolio allocation." (

Rebalance Your 401(k) With This Annual Checkup
Excerpt: "With the average American's 401(k) balance remaining unchanged or even decreasing over the past year, it's definitely time to start examining your plan and fund choices more closely." (

Brokerage 401(k) Is a Success for Scott Burns, But May Not Be for All
Excerpt: "Nearly three years ago, I wrote that I was going to shift my 401(k) from the menu of funds offered by my employer to a 'brokerage window.' Today, I'm very glad that I made the change. . . . I can also tell you that making such a move isn't for everyone." (The Dallas Morning News; one-time registration required)

Fidelity Polls Small Business Owners & Decision-Makers at Companies That Do Not Offer a 401(k) Plan
Excerpt: "A Fidelity Investments study . . . shows that 43% of small businesses with fewer than 20 employees said cost was the major reason they don't offer a 401(k) plan to workers." (Investment News; registration or subscription required)

Abstract of Lurie on Valuing a Golden Egg: The FASB Revises Pension Accounting Rules
Excerpt: "Alvin Lurie, [in] a recent opinion piece that he wrote for Barron's Magazine on August 28, 2006 [discusses] the far-reaching consequences of a revision by the FASB of the pension accounting rules." (Workplace Prof Blog)

Text of Announcement 2006-70: Election of Alternative Funding Schedule for Airlines (PDF)
2 pages. Excerpt: "Section 402(a)(1) of the PPA permits an eligible plan to elect an alternative funding schedule to apply in lieu of the generally applicable minimum funding requirements. An eligible plan is a defined benefit plan (other than a multiemployer plan) that is sponsored by an employer that is a commercial passenger airline or whose principal business is providing catering services to a commercial passenger airline." (Internal Revenue Service)

CalSTRS Board Votes on Comprehensive Funding Strategy
Excerpt: "At its meeting [September 8], California's Teachers' Retirement Board took a major step in closing the California State Teachers' Retirement System's long-term funding gap of $20 billion. The board approved guiding principles CalSTRS staff will use to draft legislation. " (CalSTRS)

U.K. Watchdog Sees Participant Risks in Pension Reform Program
Excerpt: "Firms working under the United Kingdom's proposed national savings system could encourage people to switch unnecessarily out of existing funds into the scheme or buy unsuitable products, the Financial Services Authority said." (Reuters Limited via Business Insurance)

SmartMoney Magazine's Cover Story on How to Get Rich and Stay Rich -- In Retirement
Excerpt: "[I]f getting rich seems to be getting easier for many of us, the trick today may be staying rich. Indeed, when it comes to building wealth and sustaining it for a lifetime, the demographics of the baby-boom generation are rewriting the rules. The days are long gone when seniors could fund their retirement by simply collecting interest from T-bills." (SmartMoney)

Sweeping PPA changes -- What to Focus on Now
Excerpt: " In this article [CCA Strategies attempts] some preliminary sorting -- which issues presented by the new law require urgent attention?" (CCA Strategies, LLC)

Measuring Retirement Income Adequacy: Calculating Realistic Income Replacement Rates (PDF)
36 pages. Excerpt: "The limitations of traditional 'replacement rate' calculations: For decades, 'replacement rates' have been the primary 'rule-of-thumb' measure used in the retirement planning process. However, replacement rate calculations are overly simplistic and potentially inaccurate because they often are based on methodologies limited to replacement of preretirement cash flow after adjustment for taxes, savings, and age and/or work-related expenses." (Employee Benefit Research Institute)

Five Myths About Fees: The Truth Behind Analyzing Fees in the Context of Investment Goals (PDF)
20 pages. Excerpt: "Of the three dimensions of investment management -- return, risk, and cost -- investors have direct control only over cost. Yet while investors have some control over fees, and fees make up the bulk of costs, research seldom focuses on fees. As a result, several popular myths exist regarding fees. This article identifies and analyzes five of those myths." (The Journal of Portfolio Management via Barclays Global Investors)

The Qualified Plan Industry at a Glance: Trends, Direction, and the Road Ahead (PDF)
18 pages. Excerpt: "This article [discusses] the basics of the qualified plan service industry with an emphasis on the strategy employed by firms that provide services to plan sponsors and their participants." (

Americans Come Late to the Savings Game -- and They Know It
Excerpt: "A Principal Financial news release said its latest Well-Being Index found nearly half of American adult workers (45%) and just under a third of retirees (32%) indicated that their biggest financial planning regret was their delay in starting to save for their nest egg. Around one-quarter of respondents (27% of workers; 22% of retirees) said they regretted saving too little in their early working years." (; one-time registration required)

Overview: The Pension Protection Act of 2006 Significantly Affects Most Pension and 401(k) Plans
Excerpt: "Plan sponsors have until the last day of the first plan year beginning on or after January 1, 2009 to amend plans for compliance with the PPA and any regulations promulgated thereunder. Thus for calendar-year plans, plan amendments will be required by December 31, 2009." (Ballard Spahr Andrews & Ingersoll, LLP)

Links to Items on Executive Comp, Benefits in General

Plan Description Protects Against Inaccurate Benefits Estimates Provided to Participant
Excerpt: "The 8th US Circuit Court of Appeals has ruled that an administrative committee for a pension plan did not fail its fiduciary duties when it unintentionally gave a plan participant inaccurate benefits statements." (; one-time registration required)

Pension Protection Act Restricts Funding of Certain Nonqualified Deferred Compensation Arrangements (PDF)
2 pages. Excerpt: "In particular, the PPA amends Code Section 409A to provide that a 'covered employee' will be subject to taxation on amounts transferred to a trust (or other arrangement to be identified by the IRS) during certain 'restricted periods' for the purpose of paying nonqualified deferred compensation to the covered employee." (Gardner Carton & Douglas LLP)

Overview: Executive Compensation Disclosure Under the New Proxy Rules
Excerpt: "In this article, one of a series of articles on the final rule, [CCA Strategies discusses] the section that revises the Summary Compensation Table and associated disclosures [and highlights] the tabular disclosure of director compensation." (CCA Strategies, LLC)

Overview: Equity Compensation Disclosure Under the New Proxy Rules
Excerpt: "In this article, one of a series of articles on the final rule, [CCA Strategies discusses] the section of the rule dealing with equity compensation [with a] focus on the Outstanding Equity and Options Exercised and Stock Vested tables." (CCA Strategies, LLC)

Overview: Post-Employment Benefits in the New World of Proxy Disclosure
Excerpt: "In this article, one of a series of articles on the final rule, [CCA Strategies will] discuss the section of the rule dealing with retirement and other post-employment benefits. As most readers know, some disclosure about retirement benefits was included in prior proxy disclosures, but post-employment benefit disclosure is much more robust in the new proxy world." (CCA Strategies, LLC)

SEC Proxy Disclosure Rules Give Investors New Info about Executive Defined Benefit Retirement Plans (PDF)
4 pages. Excerpt: "The key intent of the newly finalized Securities and Exchange Commission's (SEC's) proxy disclosure rules is to give investors a handle on the total compensation that public companies pay to their senior executives. Until now, fully understanding this concept has been a complex undertaking because senior executives' total compensation is typically derived from numerous programs, and amounts were not disclosed for some of these programs." (Buck Consultants)

Chart: Comparison of SEC Rules on Compensation Disclosure (PDF)
45 pages. Excerpt: "This chart compares the final SEC rules on Compensation Disclosure adopted on July 26, 2006, and published in the Federal Register on September 8, 2006, with both the prior rules and proposed rules. This chart has been designed as a companion to Baker & McKenzie's client alert on the final rules (available at [The alert was posted on yesterday.]" (Baker & McKenzie)

The Dallas Morning News Completes Voluntary Severance Program
Excerpt: "The voluntary severance program was offered to almost all newsroom employees, and consists of a severance payment of two weeks of base pay per year of continuous employment up to 15 years, and three weeks of base pay for each year of service that exceeds 15. An additional lump-sum payment equal to 12 months of the employee's currently applicable COBRA health care premium is included." (WorldNow, WTNH, and Associated Press)

Abstract of David Walker's SSRN Piece on the Option Backdating Scandal
Excerpt: "David Walker posted on SSRN today an essay entitled Some Observations on the Stock Option Backdating Scandal of 2006. One of his suggestions: consider replacing options with simplified long-term incentive programs that are less susceptible to manipulation, such as tying compensation to gains in yearly average share prices." (Workplace Prof Blog)

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!)

DC Aspects of the Pension Protection Act
in Ohio on October 18, 2006
presented by ASPPA Benefits Council of Cleveland

Employee Benefits Planning: Creating & Managing The Group Benefits Package
Nationwide on September 26, 2006
presented by

Interactive Cafeteria Plan Seminar
Nationwide on October 4, 2006
presented by

Top Heavy: Basics and Beyond
Nationwide on September 26, 2006
presented by SunGard Corbel

Washington Update
in Ohio on September 26, 2006
presented by ASPPA Benefits Council of Greater Cincinnati

Newly Posted Press Releases
(Post Yours!)

New Survey Finds 69% of Plan Sponsors Require PBMs to Pass Through All Manufacturer Rebates
(International Foundation of Employee Benefit Plans)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Compliance Analyst
for The Newport Group
in FL

Relationship Manager
for MassMutual Financial Group
in OH

Senior Implementation Specialist
for CitiStreet
in NJ

Insurance/Benefits Consultant
for Austin Consulting Group, Inc.
in CO

Education/Enrollment Specialist
for ADP
in GA, MN, NJ, NY

Financial Planner/Investment Specialist
for Diversified Investment Advisors
in WA

Relationship Manager/Senior Relationship Manager (Retirement Plans)
for Mutual of Omaha

Retirement New Business Consultant/Senior Retirement New Business Consultant
for Mutual of Omaha
in NE

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