Retirement Plans
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October 13, 2006
Today's sponsor: DATAIR Employee Benefit Systems, Inc.

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Software for DC/401(k) Plan Administration

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

DOL Fee Project: Part 1 -- Revised Form 5500 Proposed
Excerpt: "The Department of Labor ('DOL') has proposed revisions to Form 5500 . . . that include a revised Schedule C 'Service Provider Information,' adding a requirement for detailed disclosure of fees paid directly or indirectly to plan service providers." (CCA Strategies, LLC)

Annuity Tax Breaks Might Boost Retirement Savings
Excerpt: "[E]conomists gathered in Washington, D.C. yesterday to present research ( outlining the economic benefits to tax credits for annuitization of 401(k)s, IRAs and other retirement savings." (BenefitNews Connect)

Overview: DOL Default Investment Proposals
Excerpt: "The new rules protect a fiduciary from responsibility for any loss which may occur as a result of investing participant funds in a qualified default investment alternative (QDIA). However, the fiduciary is responsible for prudently selecting the QDIA, and the regulatory preamble states that fees are a major factor to consider." (SunGard Corbel LLC)

Surviving Spouse Not Entitled to IRA Benefits
Excerpt: "The US District Court for the District of Arizona has ruled that the surviving spouse of man who rolled over a portion of his 401(k) balance to an individual retirement account (IRA) is not entitled to receive the IRA's funds." (; one-time registration required)

Embroidering on Early FAS 158 Boilerplate -- Excerpts from Recently Filed 10-Q Filings
Excerpt: "Stretching slightly farther is Lehman Brothers, whose 10-Q supplements the boilerplate norm with the most basic financial conclusion of a retrospective calculation that FAS 158 itself neither requires nor permits, but which can nonetheless provide some indication of potential effect, provided one factors in the rise in interest rates and the gains in the equity markets since the prior yearend . . . ." (Pensions & Benefits Weblog)

Overview of the Improvements in Mortality and the Impact on Company Pension Plans (PDF)
Pages 1-7 of 19 pages. Excerpt: "In the first half of the 20th century, to value pension liabilities and costs, actuaries used mortality tables that simply showed the probability of a person aged x dying before reaching age x+1. These calculations were based on the experience of a particular group of lives (for example, the general population, life office annuitants or pension fund members) at a specific point in time." (Mercer Human Resource Consulting LLC and Mercer Investment Consulting, Inc.; one-time registration required)

Fact Sheet on Pension Freezes
Excerpt: "There are various types of freezes based on whether some or all of the participants are permitted to continue earning benefits under the plan. Various terms have been adopted to label these different freezes, such as hard freezes, soft freezes and partial freezes." (Pension Rights Center)

Overview: An Improved Process for Year-End Disclosure (PDF)
Pages 8-11 of 19 pages. Excerpt: "With the move to make balance sheets more reflective of actual pension deficits, we anticipate that there will be yet more focus on the accuracy of postretirement liabilities. . . . This article takes a look at some of the trends we have seen over the past few years and gives some suggestions as to how to tame the maelstrom surrounding multinational pension disclosure." (Mercer Human Resource Consulting LLC and Mercer Investment Consulting, Inc.; one-time registration required)

UK Regulator Clears Up Rules on Lump Sum Death Benefits
Excerpt: "The UK's pension watchdog said that pension schemes that accept new participants for lump sum death benefits only when the scheme has already been closed to new members and future accruals have stopped may be in danger of breaching pension regulations." (; one-time registration required)

Working Paper: Financial Risk, Retirement, Saving and Investment (PDF)
32 pages. Excerpt: "This paper considers the prospects for adding choice of portfolio composition to a life cycle model of retirement and saving, while preserving the ability of the model to continue to explain the course of saving and retirement." (Michigan Retirement Research Center)

Fact Sheet: State Retirement Plans and Divorce
Excerpt: "Each state retirement system has its own rules relating to the division of state employees' pensions in divorce proceedings. [The target page provides] basic information on each state retirement system's rules." (Pension Rights Center)

Opinion: Employee Benefits and Ownership
Excerpt: "Stock options are now used not only to reward employees - but also as retention tools, building up long term loyalty of employees to their workplace. Multinationals the world over, in an effort to counter competitive pressures exerted by their US adversaries in the global labour market, have resorted to employee stock options plans (ESOP)." (Global Politician)

Use of the Efficient Market Hypothesis Relating to ERISA Retirement Plans that Hold Employer Stock
Excerpt: "Since one of ERISA's statutory commands to fiduciaries is to act prudently, presumably the fiduciary should refuse to honor the directions to purchase employer stock and should consider selling at least some of the employer stock if the fiduciary believes, or should believe, that the stock (at least if held in large amounts) is not a prudent investment for the plan." (BNA Pension & Benefits Blog)

Hewitt's Global Retirement Update, October 2006 (PDF)
Excerpt: "Our Global Retirement Update summarizes recent legislative developments and trends related to retirement and financial management and highlights recently passed and pending legislation that may require employers to take action to comply with new rules or review existing plans." (Hewitt Associates)

Overview: Pension Plans in Mexico (PDF)
Pages 12-16 of 19 pages. Excerpt: "Today, more changes are in the pipeline [that] will have a strong influence on the Mexican retirement system. This evolving retirement landscape offers multinational companies opportunities to restructure their retirement arrangements around solid fiscal principles and adapt to the changing needs of employees while aligning retirement benefits with their own broader business objectives." (Mercer Human Resource Consulting LLC and Mercer Investment Consulting, Inc.; one-time registration required)

Will You Have Enough Pension Income to Stop Laboring Some Day?
Excerpt: "Under the new law, if a company uses automatic enrollment and wants to get out of the nondiscrimination test, it need only give a 3% contribution to a worker who saves 5%. Moreover, that 3% doesn't have to be fully vested until an employee has been with the company two years." (

Small Business Employees Have More Retirement Saving Options Than They Think
Excerpt: "The paucity of retirement options at small companies makes it especially crucial for their employees to start saving as early, and as much, as possible, says Sue Stevens, director of financial planning at Morningstar." (USA TODAY)

Opinion: The Perils of Asset Allocation Models
Excerpt: "In 2003, for example, Vanguard published a study of the role of asset allocation in portfolio performance. Their results confirm earlier results that asset allocation is the single most important factor in explaining performance. Their results from an analysis spanning forty years of is compactly summarized in one sentence from that study: Asset allocation remains the investor's most important decision." (Seeking Alpha Ltd.)

Working Paper: Probabilistic Thinking and Early Social Security Claiming (PDF)
23 pages. Excerpt: "This study analyzes the extent to which an individual's survival expectations influence his or her decision to claim social security benefits at an early age." (Michigan Retirement Research Center)

Working Paper: How Accurate are Estimates of Expected Retirement Savings? (PDF)
39 pages. Excerpt: "This paper examines the ability of workers nearing retirement to report their expected retirement savings, where retirement savings refers to funds held in savings, checking, and investment-type accounts." (Michigan Retirement Research Center)

Experts Say Danger in Individuals Taking on Too Much Retirement Responsibility
Excerpt: "The US retirement scene has gradually been morphing into one in which defined contribution plans play the lead, while defined benefit plans are declining, but some experts wonder whether current DC plan offerings can take up the slack." (; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Business Executives' Attitudes Toward the Aging Workforce: Aware But Not Prepared? (PDF)
30 pages. Excerpt: "AARP recently contracted with BusinessWeek Research Services to conduct a survey of business decision makers. The purpose of the survey was to understand business executive’s views toward 50+ workers and corporate America's preparedness for the aging of the workforce." (AARP)

Overview: Disclosure Requirements Concerning Executive Compensation and Related Matters (PDF)
31 pages. Excerpt: "The SEC is taking several steps in adopting its amendments to Regulation S-K Item 402: (i) the tabular approach to named executive compensation has been retained, with additional and reorganized disclosure requirements; (ii) the SEC confirmed that all elements of compensation must be included in the tables; and (iii) the SEC new format now requires disclosure of a single figure for total compensation." (Buchanan Ingersoll & Rooney PC)

International Headlines: Developments in Benefits, Compensation, and HR Around the World
Excerpt: "This weekly compilation of stories from wire services, newspapers, and other sources is intended to keep Mercer employees and registered visitors to informed of benefits, compensation, and HR developments around the world." (Mercer Human Resource Consulting LLC and Mercer Investment Consulting, Inc.; one-time registration required)

Milliman's Monthly Benefit News and Developments, October 2006 (PDF)
2 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee Benefits. (Milliman)

IRS Employee Plans Division to Heighten Enforcement Actions Against Abusive Tax Schemes
Excerpt: "Among the EP's operating priorities are to detect and deter abusive tax schemes through accelerated enforcement actions, educational strategies and the identification of new abusive schemes. EP plans an aggressive stance toward all identified abusive tax avoidance transactions (ATAT)." (CCH Pension and Benefits)

Newly Posted Events
(Post Yours!)

2nd Annual Consumer-Centric Health Care Congress
in District of Columbia on November 8, 2006
presented by World Congress

2nd Annual Health & Human Capital Management Congress
in District of Columbia on January 17, 2007
presented by World Congress

Care Continuum Congress
in District of Columbia on October 23, 2006
presented by World Congress

The 2nd Annual World Healthcare Innovation and Technology Congress
in District of Columbia on November 1, 2006
presented by World Congress

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Pension Administrator
for Benefit Strategies, Inc.
in CA

Retirement Plan Administrator
for PEN-CAL Administrators, Inc.
in CA

Employee Benefits Attorney
for Nyemaster, Goode, West, Hansell and O'Brien, P.C.
in IA

Pension Analyst
for BeneTrends, Inc.
in PA

Compliance Account Manager
for First Niagara Benefits Consulting
in NY

Benefits Consultant
for Northwestern Benefit Corporation of Georgia
in GA

Retirement Plan Coordinator
for Capital Group Companies
in CA

Plan Sponsor Consultant
for Merrill Lynch
in NJ

Plan Sponsor Consulting Associate
for Merrill Lynch
in NJ

Pension Plan Administrator
for Pension Administration Firm
in PA

Manager, Department Of Eligibility
for 32 BJ Benefit Funds
in NY

Compliance Analyst
for 32BJ Benefit Funds
in NY

Benefit Specialist (Aon Corporation)
for Aon Corporation
in FL

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