Retirement Plans
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October 10, 2006
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ASC helps retirement plan professionals increase efficiency and profitability through its software systems, documents and education. Software includes DC 401(k) administration & valuation, Defined Benefit, Compliance Testing, DV Direct daily valuation, AIM case management and more. With ASCi plan documents you can quickly and easily create customized prototype/volume submitter plan documents, efficiently maintain historical plan information, create complete amendment packages for all your clients at one time and more. Click to learn more or email

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

Lawsuits Say 401(k) Costs Are a Breach of Trust
Excerpt: "The most interesting part of the suit is the accusation that the Northrop Grumman plan is filled with 'shadow index funds' that are collecting the much higher fees of managed funds. Northrop workers, in other words, are paying for something -- active management -- and not getting it. And that, the suit asserts, is where the company and its executives have breached their fiduciary duty." (The Boston Globe)

Overview: Enhanced PPA Disclosure Provisions & Update on Proposed Default Investment Regs (PDF)
3 pages. Excerpt: "The PPA includes a variety of new and revised notice requirements. This Regulatory Briefs Alert discusses the most significant notice requirements under the PPA [and the proposed regulations on qualified default investment alternatives]." (The Vanguard Group, Inc.)

Overview of Class Action Lawsuits Targeting 401(k) Fees and Expenses (PDF)
2 pages. Excerpt: "The Complaints typically allege, among other things, that the defendants (1) entered into agreements with third parties that allowed the plans to pay unreasonable, excessive fees, (2) failed to inform themselves of, and understand, the various methods by which vendors in the 401(k), financial and retirement industry collect payments and other revenue from 401(k) plans, and (3) failed to monitor the fees and expenses of the plan." (Reish Luftman Reicher & Cohen)

Details Reported on Boeing 401(k) Fee Suit
Excerpt: "A law firm has filed suit in federal court against Boeing Co., charging that the company failed to adequately monitor and disclose revenue-sharing fees to participants in its 401(k) plan." (; one-time registration required)

Small Companies Shop for 401(k)s, According to Fidelity Investments
Excerpt: "A study shows that more than a quarter, or 26%, of small companies will likely look for a new 401(k) plan provider within the year." (Investment News; registration or subscription required)

Overview: FASB Requires Projected Pension Benefit Obligations in Financial Statements
Excerpt: "The Financial Accounting Standards Board (FASB) has issued a standard that will require employers to fully recognize the obligations associated with single-employer defined benefit pensions and other postretirement plans in their financial statements as early as fiscal years ending after December 15, 2006." (CCH Pension and Benefits)

Opinion: Taxpayers Lost in Pennsylvania Pension Gamble
Excerpt: "There wasn't any controversy in spring 2001, when state lawmakers and Gov. Tom Ridge approved hiking their pensions by 50 percent, and those of current state employees and teachers by 25 percent." (Public Opinion Online)

Companies Still See Defined Benefit Plans as Manageable after PPA
Excerpt: "A survey conducted by Towers Perrin immediately following President Bush's signing of the Pension Protection Act (PPA) found more employers are likely to maintain their defined benefit pension plans than freeze them in response to the Act's more stringent requirements." (; one-time registration required)

Wisconsin Candidate for Governor Wants Tax Break for Retirees
Excerpt: "The pile of promises from gubernatorial candidates got a lot bigger Monday, as Republican Mark Green rolled out an expensive plan to keep retirees in the state by exempting part of their retirement income from state taxes." (Wisconsin State Journal)

Overview: Active-duty Reservists Get Relief on Retirement Plan Payments
Excerpt: "Military reservists called to active duty can receive payments from their individual retirement accounts, 401k plans and 403(b) tax-sheltered annuities, without having to pay the early-distribution tax, according to the Internal Revenue Service." (Infozine)

Overview: Pensions, Class Action Litigation and Oversight Role
Excerpt: "During the recent two-day Institutional Investor Forum, public pension trustees learned about a variety of tools and techniques to preserve the capital invested in Corporate America. Topics ranged from hedge fund activism to settlement amounts and attorneys' fees, electronic discovery, the fiduciary mandate, investor recoveries in the case of bankrup.tcy and early detection of corporate fraud." (Pension Risk Matters)

Overview: PPA of 2006 and Other Recent Developments Provide Guidance on Hybrid Plans (PDF)
6 pages. Excerpt: "These developments affect sponsors of and participants in hybrid plans, such as cash balance plans and pension equity plans. These developments also affect sponsors of qualified defined benefit pension plans that are considering converting traditional defined benefit plans to a hybrid plan design." (Prudential Retirement)

Hewitt Federal Legislation Quick Guide Updated as of October 3, 2006, for Retirement Plans (PDF)
2 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding retirement plans. (Hewitt Associates)

Comments on Cash Balance Plans at Law Firms
Excerpt: "[T]he Legal Profession Blog debuted last month [and a recent post is on] cash balance plans in the law firm environment." (Workplace Prof Blog)

How Stable Are Stable Value Funds?
Excerpt: "[The] desire for safety has helped to make stable value funds -- for which returns can be higher than those of money market funds -- an immensely popular choice. In fact, stable value funds and their close cousins, guaranteed investment contracts, together accounted for 21.3 percent of the assets in such plans in September . . . ." (The New York Times; one-time registration required)

The New Pension Fund Investment Game
Excerpt: "Little old ladies and leveraged buyouts rarely appear in the same sentence. But some retirement funds are quietly beginning to plow billions of dollars of those ladies' pensions directly into supersized takeover deals, joining with -- and in some cases even sidestepping -- private equity funds." (The New York Times; one-time registration required)

The Payoff and Perils in 'Set It and Forget It' for Retirement Investments
Excerpt: "[An] example of simple advice that can become dangerously simplistic: Buy mutual funds that you can hold onto for a lifetime. A flock of such funds, known as target-date retirement or 'life cycle' funds, are on the market these days." (The New York Times; one-time registration required)

Quick Reference Tool: Chart of Pension Protection Act 2007 Provisions
Excerpt: "Pension Protection Act Provisions Effective in 2007 (excludes defined benefit provisions)" (ERISAdiagnostics, Inc.)

Before Making Defined Benefit Plan Changes, Design Studies Need to Be Expanded
Excerpt: "Today's pension environment, marked by funding and accounting reform and relatively high pension costs, is prompting many plan sponsors to reconsider the benefit all together. As part of this process, many plan sponsors traditionally turned to their actuaries for comprehensive plan evaluation studies and subsequently used those studies to guide decisions on changes." (Employee Benefit News)

Make Your Money Last Forever Cover Articles in Kiplinger's Personal Finance, Money, and Smart Money
Excerpt: "In what may be a first -- or at the very least an extremely rare event -- each of the financial advice publications at exactly the same time devotes scores of pages to 'how to make money last a lifetime.' They all use virtually the same language to describe the strategies that can keep you from outliving your money once you retire." (The New York Times; one-time registration required)

Comments on Determining the Pension Protection Fund's Equity Benchmark
Excerpt: "The UK's Pension Protection Fund, which covers insolvent UK pension funds, has published a Statement of Investment Principles that includes a 20% benchmark for equity investment. PPF's restriction of equity investment echoes that of the PBGC during recent years, reflecting the goal of minimizing mismatch between assets and liabilities for the fixed annuities under trusteed pension plans." (Pensions & Benefits Weblog)

Portugal's State Pension System to Be Reformed
Excerpt: "Portuguese state pensions are to be indexed to the country's economic performance and average life expectancy under sweeping welfare reforms announced [today]." (AP via BusinessWeek)

UK Official Says, Don't Break Corporate Pension Sponsorship
Excerpt: "UK pension regulators on Monday publicly expressed concern about pension plan sponsors approaching them to see how their companies can sever their ties to their pension program. Speaking at the European Pensions 2006 conference, Pensions Regulator chief executive, Tony Hobman warned trustees to be particularly cognizant of deals that would effectively separate the plan from the original sponsor." (; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Draft Practice Note on Valuation of Employee Stock Options, October 2006 (PDF)
39 pages. Excerpt: "This practice note has been prepared by the Stock Options Task Force of the Pension Practice Council of the American Academy of Actuaries. Our primary purpose is to provide guidance to actuaries and others performing valuations under the Financial Accounting Standards Board's (FASB's) Statement of Financial Accounting Standard (FAS) Number 123, Share-Based Payments, as amended in December 2004 (FAS 123R)." (American Academy of Actuaries)

Overview: Executive Compensation and Related Person Disclosure
Excerpt: "On July 26, 2006, after reviewing over 20,000 comment letters in response to its earlier proposal, the Securities and Exchange Commission adopted comprehensive changes to the disclosure requirements for executive and director compensation, related person transactions, director independence and other corporate governance matters, and security ownership of officers and directors." (Paul, Hastings, Janofsky & Walker LLP)

Text of Department of Labor's Strategic Plan for Fiscal Years 2006-2011 (PDF)
94 pages. Excerpt: "[T]he revised four goals listed . . . address the core of what the Department is all about: preparing workers to succeed; developing a demand-driven workforce system to remain competitive in the worldwide economy; protecting safety, health, wages, and other working conditions on the job; and ensuring that worker benefits, such as unemployment insurance and pension and health benefits, are there when they are needed." (U.S. Department of Labor)

Ford to Begin Buyout Offer Next Week
Excerpt: "Ford Motor Co. will begin offering its previously-disclosed buyout or early retirement packages to all 75,000 of its U.S. hourly employees starting next week." (AP via The Washington Post; one-time registration required)

Overview: Insurance Coverage for Options Backdating Claims (PDF)
Excerpt: "Directors & Officers Liability (D&O) insurance policies should cover many of the costs associated with the options backdating lawsuits and investigations." ( Securities in the Electronic Age via Westlaw)

Hewitt Federal Legislation Quick Guide for October 3, 2006, on Human Resources and Employment Law (PDF)
8 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates)

Tax Technical Corrections Bills Introduced in House and Senate
Excerpt: "The legislation contains technical corrections to prior tax acts, including the Tax Increase Prevention and Reconciliation Act of 2005, the American Jobs Creation Act of 2004, and the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)." (CCH Pension and Benefits)

Newly Posted Events
(Post Yours!)

2006 Fall Tour: IRA Essentials
in Virginia on November 7, 2006
presented by BISYS Retirement Services

2006 Fall Tour: IRA Essentials
in North Carolina on November 7, 2006
presented by BISYS Retirement Services

2006 Fall Tour: IRA Essentials
in Pennsylvania on November 9, 2006
presented by BISYS Retirement Services

2006 Fall Tour: IRA Essentials
in Oklahoma on November 14, 2006
presented by BISYS Retirement Services

2006 Fall Tour: IRA Essentials
in Oklahoma on November 16, 2006
presented by BISYS Retirement Services

2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in North Carolina on November 8, 2006
presented by BISYS Retirement Services

2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Virginia on November 8, 2006
presented by BISYS Retirement Services

2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Pennsylvania on November 10, 2006
presented by BISYS Retirement Services

2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Oklahoma on November 15, 2006
presented by BISYS Retirement Services

2006 Fall Tour: IRA Update: A seminar for serious IRA professionals
in Oklahoma on November 17, 2006
presented by BISYS Retirement Services

2007 Business Management Conference
in Arizona on January 13, 2007
presented by National Institute of Pension Administrators

MA Healthcare Reform Act
in Massachusetts on October 18, 2006
presented by WEB Worldwide Employee Benefits Network MA Chapter

NTSAA's 18th National Conference- Roll with the changes!
in Nevada on January 25, 2007
presented by National Tax Sheltered Accounts Association

The Default Investment Regulations - Beyond the Hype
Nationwide on November 29, 2006
presented by SunGard Corbel

To Do List - Amendments and Testing and 8905s: Oh My!
Nationwide on November 7, 2006
presented by SunGard Corbel

Newly Posted Press Releases
(Post Yours!)

Hewitt Associates Data Reveals Lowest U.S. Health Care Cost Increases in Eight Years
(Hewitt Associates LLC)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

DC Implementation Business Analyst
for CitiStreet
in MA

Compliance Director
for MassMutual Financial Group
in CT

Business Analyst
for Microsoft
in WA

Communications Specialist
for MassMutual Financial Group
in MA

OmniScript Analyst 1681223
in CO, NC

Health/Welfare Consultant - Benefits Evaluation Team
for Hufnell, Inc Executive Recruiters - Benefits Outsourcing, Benefits and HR
in PA

Benefits Administrator
for MidAmerican Energy
in IA

DB Analyst
for BeneTemps
in MA

Benefits Communications Consultant - Arlington, VA
for Watson Wyatt Worldwide
in VA

Benefits Specialist
for Milliman, Inc.
in WA

Benefits Administrator
for Milliman, Inc.
in WA

Benefit Plan Senior Administrator
in NC

Assistant Administrator (401(K))
for Qualified Benefits, Inc - QBI (a wholly owned subsidiary of BenefitStreet, Inc.)
in CA

Client Management Consultant
for CAPTRUST Financial Advisors
in NC

Manager of Retirement Plan Services
for Anthony Michael & Co. Retained Search Firm for Financial Service Co.'s

Business Development Manager
for SunGard ProNvest
in GA

Retirement Specialist - Implementation/Enrollment
for ProNvest
in GA

Vice President, Benefits Compliance
for 20th Century Fox
in CA

Benefits Consultant
for BeneTemps
in NY

DB Specialist
for BeneTemps
in MA

Executive Compensation Consultant
for Hewitt Associates
in IL

RFP Analyst
for 401(k) Advisors
in CA

Director of Benefits
for L'Oreal USA, Inc.
in NJ

Sales Representative/Government Sales
for The Hartford
in TN

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