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October 26, 2006
Today's sponsor: ASC & The ASC Institute

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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)

New Resource: ERISA and Employee Benefits Search of the Web's Best Articles and Sites
The ERISA and Employee Benefits Search of the Web's Best Articles and Sites is our new, customized search engine specifically designed for employee benefits professionals. It's powered by Google.com, and searches only the most important, thorough and timely articles and sites that have been handpicked by the editors at BenefitsLink.com over the past 10 years. If your job involves employee benefit plan compliance, administration, design and policy, the new search engine is for you! (BenefitsLink.com)

The IRS's Retirement Plans FAQs Regarding Plan Investments
Excerpt: "These frequently asked questions and answers are provided for general information only and should not be cited as any type of legal authority. They are designed to provide the user with information required to respond to general inquiries." (Internal Revenue Service)

Overview: PPA Combines Stricter Rules with New Savings Opportunities for Defined Contribution Plans
Excerpt: "The new rules will enable employers to safely provide more investment advice to participants. Employers will also face new mandates -- including faster vesting of employer nonelective contributions and more stringent diversification rules for employer securities. The effective dates vary, but most provisions will take effect in 2007 or 2008." (Watson Wyatt Worldwide)

Market Payouts from Immediate-Life Annuities: Trends and Volatility
Excerpt: "[M]ost defined contribution plan participants are left to figure out a distribution strategy on their own, and they continue to be vulnerable to the ups and downs of financial markets in their retirement years. Research shows that one of the most effective ways to reduce the risk of outliving one's assets is by converting at least some of those assets to a fixed-life annuity." (Watson Wyatt Worldwide)

Owens Corning Hit with Company Stock Suit
Excerpt: "A couple who are former employees of Owens Corning of Toledo, Ohio have sued their former employer, claiming restrictions on company stock investments in their 401(k) accounts caused them to lose thousands of dollars." (PLANSPONSOR.com; one-time registration required)

SEI Poll Says 29% of Defined Benefit Plans Will Be Closed or Frozen
Excerpt: "Almost a third (29%) of companies in U.S. and Can.ada with defined benefit plans that are currently active say they will either close, freeze or terminate their pensions by the end of 2007, according to a recent poll by SEI of a total of 302 executives --163 from Canadian companies, and 139 from U.S. companies . . . ." (The Advisor)

A Look at PPA Changes Primarily Affecting Defined Benefit Plans
Excerpt: "This newsletter summarizes some of the major defined benefit plan components of this new and important legislation and conveys some basic observations regarding them." (Littler Mendelson)

Overview of Employer Response to PPA Funding Changes As Gauged in Towers Perrin Survey
Excerpt: "The Towers Perrin survey results 'suggest that corporate financial executives have only begun to analyze the available financial strategies.' For example, 8% of the respondents indicated that their companies are very likely to increase the level of bonds in their pension asset mix, while 24% are somewhat likely to increase their level of bonds." (CCH Pension and Benefits)

UC Riverside Union Workers Protest a Proposal to Have Them Fund Their Own Pensions
Excerpt: "UC officials maintain that employees must contribute to the pensions to preserve them. UC employees did contribute to their pensions until the early 1990s, said Brad Hayward, a UC spokesman. The university's proposal calls for the reinstatement of employee contributions through a gradual increase over the next few years." (The Press-Enterprise)

Overview: Governmental 'Pick-Up' Plans Require Formal Adoption
Excerpt: "The new requirement took effect August 28, 2006. Governmental plans that currently pick up contributions without formal action by a duly authorized person have until January 1, 2009, to conform to the ruling." (Watson Wyatt Worldwide)

Trends and Issues: Annuities (PDF)
20 pages. Excerpt: "The purpose of this paper is three-fold: (1) to demonstrate that a life annuity is financially engineered to maximize the amount of living income payable to retirees; (2) to show the potential impact of deferring annuitization to a later age; and (3) to quantify the impact of delaying an annuity purchase during periods of rising interest rates." (TIAA-CREF Institute)

Living Longer and Income for Life
Excerpt: "There is a way to ensure that you will receive a constant stream of income for as long as you live. Annuities are contracts offered by most life insurance companies, including AIG . . ., Hartford . . ., and MetLife . . . . In addition, many low-cost financial services companies, such as Vanguard and TIAA-CREF, offer annuities as investment options." (The Motley Fool)

Congress Promotes National Save for Retirement Week
Excerpt: "ICMA-RC, a retirement plan provider for over 700,000 state and local employees, has launched National Save for Retirement Week in an effort to bring more attention to the benefits of saving for the future. This week, Oct. 22-28, is the first congressionally endorsed event that asks employers to support promotional and educational events that encourage employees to enroll in employer-sponsored plans." (BenefitNews Connect)

Overview: Court Rules that Service Cannot Define Normal Retirement Age
Excerpt: "The federal district court for the Southern District of New York recently ruled that defining a plan's normal retirement age (NRA) by years of service violates ERISA if it makes the NRA earlier than age 65. It also follows a majority of courts by ruling that cash balance plans are not inherently age-discriminatory." (Watson Wyatt Worldwide)

Towers Perrin U.S. Legislative Tracking Charts -- Retirement -- Updated October 24, 2006 (PDF)
13 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

Research Paper: Is It Time to Admit the Failure of an Employer-Based Pension System
Excerpt: "In her contribution to the Twelfth Annual Lewis and Clark Business Law Forum (The Aging of the Baby Boomers and America's Changing Retirement System), Susan Stabile paints a pessimistic picture of the state of retirement security in the United States." (Social Science Research Network)

Working Paper: Full Funding -- The Future of Social Security
Excerpt: "Three primary solutions have emerged to the problems posed by government investment of the Social Security Trust Fund: (1) personal accounts, (2) index investing, and (3) the incorporation of the Trust Fund into a government-owned private corporation as an investment vehicle for the trust fund." (Social Science Research Network)

Webinar: New Opportunities and Challenges for Hedge Fund and Pension Plan Investment Managers
Excerpt: "This program is designed for managers, compliance officers, and inside counsel of financial services firms, investment advisers, hedge fund advisers, broker-dealers, banks, and trust companies. [From the target page, you may perform a lengthy download to view an archived version of the Webinar presented in Los Angeles.]" (Kirkpatrick & Lockhart Nicholson Graham LLP)

Dutch Pension Law Headed for January 2007 Effective Date
Excerpt: "A new Dutch law that obligates pension funds to determine assets and liabilities on the basis of market rates will be effective as of January 1, 2007, the Dutch parliament decided [October 24]." (PLANSPONSOR.com; one-time registration required)


Links to Items on Executive Comp, Benefits in General

New Jersey Supreme Court Grants Full Rights to Same-Sex Couples
Excerpt: "New Jersey's highest court ruled Wednesday that the Garden State can no longer deny to same-sex couples the full legal benefits of marriage now afforded to heterose.xual couples." (PLANSPONSOR.com; one-time registration required)

Audio: Executive Compensation: Over the Top or On Track?
Excerpt: "Wharton accounting professor Wayne Guay talks with Knowledge@Wharton about his views on executive compensation, including the role of stock options in rewarding top managers." (Knowledge@Wharton)

Towers Perrin U.S. Legislative Tracking Charts — Human Resources -- Updated October 24, 2006 (PDF)
11 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)


Newly Posted Events
(Post Yours!)

Employee Benefits Legal Update
in Washington on November 17, 2006
presented by International Society of CEBS - Pacific NW Chapter

Summary Plan Descriptions for Health Plans (Including Health FSAs and HRAs)—How to Prepare and Deliver Effective SPDs
Nationwide on October 19, 2006
presented by Employee Benefits Institute of America Inc. (EBIA)

The Spotlight is on Fiduciary Issues
in California on November 16, 2006
presented by Western Pension & Benefits Conference - Orange County Chapter


Newly Posted Press Releases
(Post Yours!)

NIPA prepares for its 2007 Annual Forum & Expo
(National Institute of Pension Administrators)

New Survey Finds 92% of Employers Offer Flexible Benefit Plans
(International Foundation of Employee Benefit Plans)


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Director of Qualified Plan Marketing
for The National Life Group®
in VT

401(k) Plan Technician/Analyst
for YHB Retirement Services, LLC
in CT

Director of Sales and Marketing
for Lynchval Systems Worldwide Inc.
in VA

Compliance Administrator - Fund Accounting
for Vanguard
in PA

Retirement Services Associate
for Lenox Advisors
in NY




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