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

October 12, 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™


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)

Court Approves $11M Settlement in Company Stock Suit
Excerpt: "The US District Court for the Southern District of Ohio has approved an $11 million settlement for a class of former employees of Broadwing Inc., which sued the company for fiduciary breaches under the Employee Retirement Income Security Act (ERISA) relating to offering company stock as a retirement plan investment." (; one-time registration required)

Overview: Automatic Enrollment Under the Pension Protection Act and DOL Proposed Regs
Excerpt: "[P]lans with automatic enrollment features that meet certain requirements -- so-called 'qualified automatic enrollment features' -- will be treated as satisfying the ADP and ACP nondiscrimination tests. Also, the top-heavy rules will not apply to plans consisting solely of contributions made pursuant to qualified automatic enrollment features. An automatic enrollment feature will be 'qualified' only if it satisfies certain requirements . . . ." (Deloitte)

Overview: SEC Finalizes Amendments to Market Timing Rules
Excerpt: "The Securities and Exchange Commission (SEC) has amended the final mutual fund market timing rules it released last year. . . . If a 401(k) plan fails to enter into a shareholder information agreement with a fund when required, or fails to provide shareholder information to a fund when requested, the plan's participants may lose the ability to invest in that fund." (Deloitte)

Overview: 401(k) Plans and the PPA -- Automatic Enrollment and the New ADP/ACP Safe Harbor (PDF)
5 pages. Excerpt: "The Pension Protection Act of 2006 (the 'Act') includes several significant changes which encourage 401(k) plan sponsors to consider an automatic enrollment feature. The Act removes state wage and withholding law impediments to automatic enrollment, simplifies administration and addresses fiduciary concerns." (Reinhart Boerner Van Deuren s.c.)

Life-Cycle Funds: All-In-One Investments
Excerpt: "Life-cycle funds give plan sponsors a vehicle that addresses the desire among many participants for a single, professionally planned investment that requires little or no maintenance by the individual. From a fiduciary perspective, life-cycle funds can also help plan sponsors mitigate their risks by improving key plan statistics, such as enrollment rates and plan diversification -- especially when used as a default fund option." (The Vanguard Group)

Opinion: Allow Investors to Own Their Retirement
Excerpt: "While life style funds make sense for some, a growing minority of individuals successfully make their own investment decisions. Their needs should not be ignored." (Society of Actuaries)

In New Jersey, Abuses and Gimmicks Bloat Public Pension System
Excerpt: "New Jersey's pension and health benefits programs for public employees have been crippled by billions of dollars in generous giveaways, financial gimmickry and outright abuse. Now these perks for state workers threaten to drain the state's budget for years to come." (GANNETT NEW JERSEY via Asbury Park Press)

Trust Company Subsidiary of Bank Covered by Bank Collective Investment Fund PTE
Excerpt: "A bank's wholly-owned subsidiary, which is a trust company that is trustee for collective investment funds in which employee benefit plans invest, will be considered a bank for purposes of the prohibited transaction exemption covering bank collective investment funds, according to an Employee Benefits Security Administration (EBSA) Advisory Opinion." (CCH Pension and Benefits)

PPA Series Webcast: Multiemployer Plans (PDF)
47 pages. Excerpt: "The Pension Protection Act of 2006 [includes] Important changes to the funding rules for multiemployer defined benefit plans, More stringent withdrawal liability rules, Increased reporting and disclosure requirements." (Morgan, Lewis & Bockius LLP)

New Teaching Handbook Describes Basics of Saving and Investing
Excerpt: "[T]he saving and investing material, with its worksheets, quizzes and lesson plans, can be easily integrated into high school and adult education classes. So far, state securities agencies have ordered more than 10,000 copies to distribute in their jurisdictions." (Kansas City Star)

Opinion: 401(k) Plans -- A Sensible Approach to Investments
Excerpt: "Could it be that life style portfolios are a better fit for the majority of Americans? Evidence for that argument is presented [in this article]." (Society of Actuaries)

Opinion: PPA-- Pension Protection or Pilfering?
Excerpt: "[S]omeone reading about the recently passed Pension Protection Act would probably conclude that the law does something to protect them and their pensions. Indeed, a look at the general provisions of the law reveals several items that help workers improve their ability to plan for their retirement. However, by making just a minor change that many would fail to notice, the law puts a major dent in the pensions of many workers." (The Motley Fool)

Overlooking VCP: Are Your Qualified Retirement Plans at Risk? (PDF)
2 pages. Excerpt: "Under VCP, plan sponsors have an opportunity to 'come clean' by disclosing problems to the IRS, correcting them, and paying a compliance fee. By submitting under VCP, these plans are protected from the disastrous tax and financial consequences of an IRS examination and disqualification." (MandMarblestone Group)

Working Paper: Americans' Dependency on Social Security (PDF)
59 pages. Excerpt: "In this paper [the authors] examine how potential Social Security benefit cuts would impact the wellbeing of different American households." (Michigan Retirement Research Center)

Working Paper: How Changes in Social Security Affect Retirement Trends (PDF)
39 pages. Excerpt: "Simulations with a structural retirement model suggest that the recent acceleration of the trend to early retirement for those in their fifties is not the result of the change in Social Security rules. According to our model, changes in Social Security rules are expected to reduce the number of those in their early sixties who are working." (Michigan Retirement Research Center)

A Report on Corporate Defined Contribution Plans (PDF)
200 pages. Excerpt: "Building Futures VII, the latest in Fidelity Investments' series of reports on defined contribution plans, finds that key performance measurements were largely stagnant in 2005, indicating that many American workers continue to risk being unprepared for a financially secure retirement." (Fidelity Investments)

IRS Provides Transition Relief for Indian Tribal Governmental Plans
Excerpt: "This notice provides much-needed relief for affected ITG plans to comply with the PPA amendment. The notice specifically does not address transition issues for ITG 401(k) plans and requests written comments on 401(k) and other issues relating to ITG plans to be submitted by January 22, 2007." (Employee Benefits Institute of America Inc.)

Presentation by the Comptroller General: Retirement Challenges in the 21st Century (PDF)
46 pages. The presentation was made before the annual employee benefits conference sponsored by the International Foundation of Employee Benefit Plans, in Las Vegas, Nevada, on October 10, 2006. (U.S. Government Accountability Office)

Working Paper Abstract: Labor Market Shocks and Retirement: Do Government Programs Matter?
Excerpt: "[The authors] find that downturns in the labor market increase retirement transitions. The magnitude of this effect is comparable to that associated with moderate changes in financial incentives to retire and to the threat of a health shock to which older workers are exposed. " (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve full-text)

Links to Items on Executive Comp, Benefits in General

Overview: New FASB Standard on Accounting for Pensions and Other Postretirement Benefits
Excerpt: "Statement No. 158, which amends FASB Statements No. 87, 88, 106, and 132R, represents the completion of the first phase of FASB's comprehensive project on the accounting and reporting standards for defined benefit pension and other postretirement plans. The second phase is supposed to focus on the methodology of pension accounting. Specific issues to be addressed include: . . . ." (Deloitte)

SERP Shifts and IRC § 409A
Excerpt: "In recent years, many companies have transferred executives' retirement benefits from nonqualified to qualified plans, using a technique commonly known as a 'SERP shift'. . . . With the enactment of IRC § 409A . . . these arrangements need to be scrutinized to make sure that they comply with the new law. Fortunately, the IRS's proposed regulations under IRC § 409A offer broad leeway for the continued use of SERP shifts." (Deloitte)

Overview: Extension of Section 409A Plan Amendment Deadline and Other Transition Relief (PDF)
Excerpt: "None of the transition relief applies to certain discount stock options that are the result of backdated options. Accordingly, any action to avoid the application of Section 409A to these options must be taken by the end of 2006." (Frederic W. Cook & Co., Inc.)

Restricted Stock Award Value Higher than Options, According to Study
Excerpt: "Researchers at an executive compensation firm found the value of restricted stock awards exceeded stock option values for CEOs of companies that voluntarily adopted the new options expensing rule earlier than required." (; one-time registration required)

Stock Option Backdating Webinar: The Option Practices Scandal and What You Should Do to Avoid It (PDF)
25 pages. Excerpt: "Leading authorities Thomas O. Gorman and Robert J. Tannous provided an in-depth review of the latest corporate scandals involving backdating, spring loading and bullet dodging stock options in a recent one-hour webinar." (Porter, Wright, Morris & Arthur LLP)

Scandal Grows Over Backdating of Options
Excerpt: "The heads of three well-known technology companies lost their jobs this week as the result of a scandal sweeping through the business world over the improper backdating of stock options, a practice often designed to inflate the value of stock grants to employees." (The Washington Post; one-time registration required)

Study of Employee Benefits: 2006 & Beyond Master Report (PDF)
44 pages. Excerpt: "Simply understanding employee benefits is not enough. New market research delves into the depths of the driving forces behind employee benefits trends. The Prudential-sponsored Study of Employee Benefits: 2006 & Beyond uncovers the present state of the benefits industry, identifies five critical themes, and explores where current trends may lead us in the years to come." (The Prudential Insurance Company of America)

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)

Health & Welfare Plan Record Retention and Document Disclosures -- How to Avoid Penalties, Keep the Feds Happy, and Prevent Compliance Headaches
Nationwide on November 9, 2006
presented by Employee Benefits Institute of America Inc. (EBIA)

HR Strategies Briefing
in Illinois on November 8, 2006
presented by Ogletree Deakins

HR Strategies Briefing
in Illinois on November 28, 2006
presented by Ogletree Deakins

Interactive Seminar: Integrating FMLA, ADA, COBRA, & Workers Comp
Nationwide on November 1, 2006
presented by

Maximizing 401(k) Plan Effectiveness and Minimizing Fiduciary Risk
Nationwide on October 24, 2006
presented by The VisionLink Advisory Group

PHR / SPHR Recertification Suite
Nationwide on October 15, 2006
presented by

Newly Posted Press Releases
(Post Yours!)

U.S. Labor Department Gives Filers Affected By Hurricane Katrina Additional Extension of Deadline to File Annual Reports on Benefit Plans
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

Great-West Healthcare CD Eases Implementation, Drives Participation in Workplace Wellness Programs
(Great-West Life & Annuity Insurance Company)

International Foundation Telewebs Now Available On Demand
(International Foundation of Employee Benefit Plans)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Large Market Relationship Manager
for Vanguard
in PA

Pension Administrator
for Howard A. Feinstein & Associates, Inc.
in IL

Associate Benefit Administrator
for Independent Benefit Services
in MD

Internal Wholesaler - 401K
for MassMutual Financial Group
in MA

Client Relationship Representative
for The Online 401(k)
in CA

Plan Enhancements Supervisor
for Merrill Lynch
in GA

Institutional Trust Consultant
for BB&T
in DC

Annual Plan Reporting Administrator
for Vanguard
in PA

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: