Retirement Plans
To BenefitsLink home page Fill your job openings fast by advertising on BenefitsLink

September 29, 2006
Today's sponsor: ASPPA • Working for America's Retirement™

(Click on company name or banner to learn more.)
Banner ad for ASPPA • Working for America's Retirement™

The 6th Annual ASPPA 401(k) SUMMIT

Be in San Diego February 25-27, 2007 at the Manchester Grand Hyatt to join ASPPA and a few thousand of your colleagues for the industry event of the year. We will have all new workshops that target small, mid and large plan markets, world class speakers, luncheon discussion groups for networking and Pension Protection Act 2006 perspectives from industry experts. don't miss out on early registration incentives. The ASPPA 401(k) SUMMIT – The Forum for Retirement Sales and Investment Professionals.

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

Fall 2006 Issue of IRS 'Employee Plan News' Newsletter
17 pages. Includes Carol Gold's farewell message to EP employees, EP issues in the 2007 fiscal year work plan, an interview with the manager of the EP Field Actuaries Group, a letter from the EP Examinations director about the reasons for holding audits where the taxpayer's books and records are located (generally at the taxpayer's place of business), how to receive a favorable GUST determination letter for certain plans, and more. Wow! The IRS has hit a home run with these periodic newsletters. (Internal Revenue Service)

Technical Update 06-4: Use of Corporate Bond Rate for Certain PBGC Purposes Revised Sept. 28, 2006
Excerpt: "This Technical Update explains how the provisions of the Pension Protection Act of 2006 ('PPA') relating to PBGC's required interest rate for determining variable-rate premiums (the 'VRP interest rate' 1) apply to certain PBGC requirements (in particular, reporting and disclosure requirements)." (Pension Benefit Guaranty Corporation)

Text of FASB Press Release on New Accounting Standard for DB Plans and Other Postretirement Plans
Excerpt: "Under past accounting standards, the funded status of an employer's postretirement benefit plan . . . was not always completely reported in the balance sheet. . . . The requirement to recognize the funded status of a benefit plan and the disclosure requirements are effective as of the end of the fiscal year ending after December 15, 2006, for entities with publicly traded equity securities, and at the end of the fiscal year ending after June 15, 2007, for all other entities." (Financial Accounting Standards Board)

Text of FASB Summary of Statement 158
Excerpt: "[P]rior standards . . . for [DB] plans failed to communicate the funded status of those plans in a complete and understandable way. [They] did not require an employer to report in its statement of financial position the overfunded or underfunded status of a [DB] plan. Those standards did not require an employer to recognize completely in earnings or other comprehensive income the financial effects of certain events affecting the plan's funded status when those events occurred." (Financial Accounting Standards Board)

Text of FASB Statement 158: New Accounting Standard for DB Plans and Other Postretirement Plans (PDF)
176 pages. Excerpt: "This Statement requires an employer . . . to . . . [r]ecognize the funded status of a benefit plan -- measured as the difference between plan assets at fair value . . . and the benefit obligation -- in its statement of financial position. For a pension plan, the benefit obligation is the projected benefit obligation; for any other postretirement benefit plan, such as a retiree health care plan, the benefit obligation is the accumulated postretirement benefit obligation." (Financial Accounting Standards Board)

Overview: Labor Department Proposed Rules for Automatic 401(k) Investment Elections (PDF)
2 pages. Excerpt: "The proposed regulations implement a default investment safe harbor enacted this summer as part of the Pension Protection Act of 2006, which takes effect for plan years beginning in 2007." (Seyfarth Shaw LLP)

401(k) Plan Sponsor Client Case Study: When a 'Zero Fee' Is Too Much (PDF)
1 page. Excerpt: "Many plans with high average participant balances are paying too much, even with a 'zero' record keeping fee. In other words, whether your plan is paying a hard dollar fee, or not, is not a good determiner of whether your plan's fees are reasonable." (Plan Sponsor Advisors, LLC)

Overview: 401(k) Safe Harbor Default Rules
Excerpt: "ERISA provides relief from liability for investment outcomes to fiduciaries of individual account plans that allow participants to exercise control over the investment of assets in their plan accounts." (Fiduciary Investor)

Public Fund Survey: Summary of Findings for FY 2005 (PDF)
15 pages. Excerpt: "The Public Fund Survey is an online compendium of key characteristics of most of the nation's largest public retirement systems. The Survey is sponsored by the National Association of State Retirement Administrators and the National Council on Teacher Retirement." (National Association of State Retirement Administrators)

Pennsylvania Teacher and State Worker Pension Systems Short $11 Billion
Excerpt: "Taxpayers will have to pay billions of dollars in the next six years for retired state employees and teachers if changes aren't made to the two pension systems, according to a report the Pennsylvania auditor general released Tuesday." (The Morning Call Online)

CalSTRS' Contributions Will Be Slashed by 11% Next Year
Excerpt: "The California State Teachers' Retirement System (CalSTRS) will see its state contributions cut by 11% next year, while its counterpart, the California Public Employees' Retirement System's (CalPERS), will enjoy a US$237m increase. The changes were announced as part of the 2006-07 California budget." (Global Pensions)

Overview: IRS Provides Alternative Funding Schedule Election for Airline DB Plans
Excerpt: "The IRS has announced procedures that commercial airlines and airline caterers can use for electing the alternative funding schedule for contributions to their defined benefit plans described in section 402(a)(1) of the Pension Protection Act of 2006 (PPA, P.L. 109-280)." (CCH Pension and Benefits)

Working with Offsetting Retirement Benefits in Divorces
Excerpt: "If both the husband and the wife work in the private sector, and have a form of retirement savings benefits, dealing with two defined contribution plans is relatively easy. Whomever has the larger account balance owes 50% of the difference (assuming it is all marital) to the other partner. Distribution can be handled by offset against another marital asset or by use of a Qualified Domestic Relations Order . . . ." (Divorce, Pensions and Retirement Benefits Newsletter)

Overview: Final Regulations Under Section 411(d)(6) Protected Benefits
Excerpt: "The final regulations modify the previous final rules for the elimination of redundant forms of payment when a plan provides separate elections with respect to portions of a participant's benefit." (Hewitt Associates)

Knox County, Tennessee, Deputies' Push for Real Pension
Excerpt: "Knox County Sheriff's Officers claim it's about fairness, buying the same-type retirement security offered Knoxville Police. But Volunteer TV's Gordon Boyd found out some county leaders have doubts about paying for it." (WVLT-TV)

Overview: Prohibited Transactions and IRAs
Excerpt: "A DOL advisory opinion letter issued at the beginning of this year (AO 2006-01A) exemplifies the importance of looking for prohibited transactions in IRA investments in related entities." (BNA Pension & Benefits Blog)

Text of the Women's Retirement Security Act, S. 3951 (PDF)
100 pages. (U.S. Senate via American Benefits Council)

The Old Saw of Retirement Planning--The Three-Legged Stool--Can Be Replaced with a Four-Legged One
Excerpt: "Out of the dynamic changes reshaping the U.S. retirement system, a new metaphor is emerging that holds out some hope for boomers' financial future: a four-legged stool designed to replace the rickety three-legged one. . . . This revamped stool consists of two familiar components--Social Security and employer retirement plans--along with two newer elements: home equity and work." (On Wall Street)

Opinion: On Establishing a Savings Goal Early
Excerpt: "Today's approach to retirement savings is largely predicated on accumulating enough money to ultimately be able to buy that annuity--one that provides the right income. The problem is that if you get to retirement with the wrong amount of savings, it's darned near impossible to steer the ship back on course." (On Wall Street)

Working Paper: The Sufficiency of Retirement Savings: Comparing Cohorts at the Time of Retirement
Excerpt: "Assessing savings sufficiency requires detailed information on both potential retirement benefits and the characteristics of a national sample of older citizens. This chapter uses the Health and Retirement Survey and the New Beneficiary Survey linked to administrative records to assess and compare the saving adequacy of two different cohorts." (Pension Research Council; registration required to download full-text of paper)

Working Paper: Cohort Differences in Retirement Expectations and Realizations
Excerpt: "This chapter compares retirement expectations, retirement patterns, and expectations of future work across different cohorts of the Health and Retirement Study, including the new cohort of Baby Boomers currently in their late 50's." (Pension Research Council; registration required to download full-text of paper)

Working Paper: Investment Patterns in Singapore's Central Provident Fund System
Excerpt: "Rising elderly life expectancies imply the need for more saving throughout the Asia-Pacific region. This paper investigates the role of recent changes in the investment offerings of the Singaporean Central Provident Fund (CPF) in this process. Our research explores investment patterns of CPF participants and comments on alternative paths for retirement system redesign." (Pension Research Council; registration required to download full-text of paper)

Federal Reserve Statistical Release: Flow of Funds Accounts of the United States, 2nd Quarter 2006 (PDF)
49 pages. Excerpt: "This quarterly report includes statistics on funds kept in different types of retirement accounts in aggregate. Private and public pension funds can be found in Tables F.118-F.120 on pages 30-31 (pp. 23-24 of the PDF). [Thanks to the Pension Rights Center for the notice of the report and for noting the retirement fund charts.]" (Federal Reserve)

As of 1 October 2006, New United Kingdom Laws on Mandatory Retirement (PDF)
4 pages. Excerpt: "Age discrimination will be outlawed in the UK from 1 October 2006. The UK Employment Equality (Age) Regulations 2006 ('Age Regulations') implement the age-related provisions in Council Directive 2000/78/EC, the European Directive establishing a general framework for equal treatment in employment and occupation." (Paul, Hastings, Janofsky & Walker LLP)

Links to Items on Executive Comp, Benefits in General

Senators Seek Domestic-Partner Benefits for Federal Workers
Excerpt: "Sens. Gordon Smith (R-Ore.) and Joseph I. Lieberman (D-Conn.) have introduced legislation that would permit unmarried federal employees to apply for health, dental and vision insurance, retirement and other benefits for their domestic partners." (The Washington Post; one-time registration required)

Overview: Stock Option Grant Practices Under Scrutiny by the SEC (PDF)
5 pages. Excerpt: "Although the primary abuse under scrutiny involves a purposeful back-dating, or looking back at stock prices to pick the lowest price for a grant (and thereby maximizing the gain for those who receive the back-dated grant), other option grant practices more appropriately characterized as involving mis-dating have drawn scrutiny . . . ." (Paul, Hastings, Janofsky & Walker LLP)

Overview: SEC Adopts Amendments to Rule 22c-2 (PDF)
2 pages. Excerpt: "The SEC noted that it is up to each fund to determine how often to request information from intermediaries. In addition, the SEC stated that, under appropriate circumstances, a fund could reasonably conclude that an intermediary's frequent trading policies sufficiently protect fund shareholders and could therefore defer to the intermediary's policies with adequate prospectus disclosure." (Morgan, Lewis & Bockius LLP)

SEC Gives Final Passage to 22c-2 Changes
Excerpt: "Federal regulators this week gave final approval to the much anticipated redemption fee rule amendments designed to help funds enforce bans against market timing and other abusive trading practices." (; one-time registration required)

Newly Posted Press Releases
(Post Yours!)

IRS Announces New Senior Technical Advisor in Tax Exempt and Government Entities Division
(Internal Revenue Service (IRS))

CitiStreet Execs Look Into Industry Future at Consultant Forum

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Benefits Administration Conversion Specialist
for Lynchval Systems Worldwide Inc.
in TX, VA

Relationship Manager II
for AST Trust Company
in AZ

Defined Benefit Terminal Funding Senior Consultant
for MassMutual Financial Group
in MA

Retirement Plan Consultant
for Invesmart, Inc.
in WA

401(k) Administrator
for Iron Administration, LLC
in IL

Handy Links:

NOTE TO AOL MEMBERS: PLEASE DO NOT REPORT THIS EMAIL AS SPAM. This email is not unsolicited. We do not send unsolicited email. This email is coming to you because you asked to receive it by entering your email address on our web page at

These emails are sent each workday except federal holidays.

This email has been published by:, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

David Rhett Baker, J.D., Editor

Copyright 2006, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.

Anyone can receive these emails; just have them sign up at this web page:

Other useful links: