Retirement Plans
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November 2, 2006
Today's sponsor: ASPPA • Working for America's Retirement™

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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)

Proposed Criteria for Required Annual Audit of PPA's 'Fiduciary Adviser' and Computer-Based Model (PDF)
9 pages. Excerpt: "[Fiduciary360] has prepared the following auditing criteria. The actual auditing procedures are based on those defined by ISO-19011 (, a globally recognized auditing standard, and CEFEX (, the international certifying body for investment fiduciaries." (Fiduciary360)

Table of Contents: Current Pension Actuarial Practice in Light of Financial Economics Symposium
You may download the papers from the symposium. (Society of Actuaries)

Think Twice Before Borrowing from Your 401(k)
Excerpt: "The main reason people tap their retirement accounts is that they're borrowing their own money and paying it back with interest that's usually set at a favorable rate, often close to the prime rate banks reserve for their best customers." (The Washington Post; one-time registration required)

Overview: The Pension Protection Act of 2006-- Action Required (PDF)
10-page overview of the PPA with comments and recommendations by attorneys Jeffrey Mandell and John C. Hughes. (The ERISA Law Group, P.A.)

Opinion: The Roth 401(k): Because It's Not Nice to Tax Skimpy Nest Eggs
Excerpt: "While some employers have been reluctant to embrace the Roth option - a Deloitte Consulting survey early this year found only 12% of employers were planning to offer it - our question is: Why did we have anything else but Roths from the get-go?" (

How to Speed Up 401(k) Plan Closures
Excerpt: "Fortunately, it's possible to expedite the closure of defunct 401ks by knowing the correct steps in the process, and coordinating with recordkeepers and plan sponsors. What's more, sponsors can enlist the help of third-party experts to simplify the entire process and evade common pitfalls." (Doug Johnson via

Aon Moves Its Pension Plan Formula from 'Final Average' Pay to 'Career Average' Pay
Excerpt: "The change is anticipated to affect approximately 11,000 active employees covered by the U.S. plan. The U.S. plan was closed to new entrants effective January 1, 2004." (Aon (press release))

Hearings Begin in Philip Morris Hardship Withdrawal Firings
Excerpt: "A North Carolina arbitrator has started hearings into whether about 70 Philip Morris USA workers fired for lying on hardship withdrawal documents from the firm's profit-sharing plan should be rehired." (; one-time registration required)

Overview of New Rules for Rollovers by Non-Spouse Beneficiaries
Excerpt: "Another significant difference is that a non-spouse beneficiary rollover must be transferred in a 'direct rollover' from the trustee or custodian of the plan to the trustee or custodian of the IRA. If the non-spouse beneficiary receives a distribution from the plan, he or she cannot then make a rollover to an IRA, even if the beneficiary acts within 60 days." (Faegre & Benson LLP)

Recap of Public Safety Employees Pension & Benefits Conference, October 2006
Excerpt: "[The target page summarizes] the sessions and [provides links to] associated presentation materials." (National Conference on Public Employee Retirement Systems)

Comments on the Southern District of New York Allowing Cash Balance Plan Case to Proceed
Excerpt: "Well, apparently Judge Baer of the Southern District of New York is not buying the reasoning of Easterbrook's Cooper decision. Here's what he had to say in partially denying a motion to dismiss in the case of In re J.P. Morgan Chase Cash Balance Litigation, No. 06-732 (S.D.N.Y. Oct. 30, 2006) . . . ." (Workplace Prof Blog)

White Paper: Institutional Demand for Hedge Funds 2 -- A Global Perspective (PDF)
31 pages. Excerpt: "The objective of [the] report is to provide a perspective on the institutional hedge fund market today and a glimpse of what the industry will look like in 2010. [The] paper is organized into three primary sections: Chapter 1, Drivers of Institutional Demand . . . . Chapter 2, Global Institutional Demand Today . . . . Chapter 3, The Industry in 2010 . . . ." (The Bank of New York)

Comments on Pension Consultants and Hedge Funds
Excerpt: "In 'Retirement funds fear untested consultants' (HFM Week, August 17-30, 2006), Jefferson Wells engagement manager Aileen Doherty describes a need for independent hedge fund valuations and a concern that pension consultants may not be doing as much as possible to vet valuation issues." (Pension Risk Matters)

Opinion: On Fee Disclosure and Clarity
Excerpt: "I, for one, am sick and tired of having to fork over redemption fees self-righteously imposed by firms that not so long ago saw fit to profit richly from illicit and profitable arrangements they deliberately struck. I'm weary of 12b-1 fees ostensibly imposed to benefit investors with lower fees resulting from broader fund distributions -- but that somehow never seem to achieve that result no matter how broad that dissemination." (Nevin Adams via PLANSPONSOR Perspectives)

Ownership of Mutual Funds Through Employer-Sponsored Retirement Plans and Outside the Plans (PDF)
10 pages. Excerpt: "Today, 38.3 million U.S. households own funds through workplace retirement plans and 40.6 million households own funds outside these plans." (Investment Company Institute)

PPA Added Clarity to Cash Balance Plan Rules, But More Guidance Needed, Panelists Say
Excerpt: "[A] recent CCH audio conference . . . 'Cash Balance Plans After the PPA: Is There a Future?,' was held on October 19, 2006, and featured three speakers from Hewitt Associates: Dan Schwallie, an attorney, Paul Rangecroft, a Principal and consulting actuary, and Barbara J. Hogg, a Principal and senior retirement consultant." (CCH Pension and Benefits)

Employment-Based Retirement Plan Participation -- Geographic Differences and Trends, 2005 (PDF)
36 pages. Excerpt: "Sponsorship Rate: About 58 percent of all working-age (21–64) wage and salary employees work for an employer or union that sponsors a retirement plan. Of these working-age employees, slightly less than half (47 percent) participate in a retirement plan." (Employee Benefit Research Institute)

Links to Items on Executive Comp, Benefits in General

Tenth Circuit Rejects 'Make Whole' Relief under ERISA Section 502(a)(3)
Excerpt: "Joining the Second and Fourth Circuit Courts of Appeal, the Tenth Circuit Court of Appeals rejected an interpretation of Section 502(a)(3) that would allow some form of 'make whole' relief against plan fiduciaries. Lind v. Aetna Health, Inc., 2006 WL 3072606 (C.A.10 (Okla.)) (October 31, 2006)" (Health Plan Law blog by Attorney Roy F. Harmon III)

Research Project Abstract: A Cross-National Comparison of Self-Employment Dynamics at Older Ages
Excerpt: "Using variation arising from differences in retirement, employment and health policies across countries, over time, and for groups of workers, we examine the effects of pensions and health insurance on transitions between self-employment, wage and salary work and retirement." (Regents of the University of Michigan)

Human Resources' New Expanded Role in Executive Pay
Excerpt: "The new federal rules requiring detailed public disclosure of top executives' compensation are putting HR professionals in the spotlight -- not for the size of their paychecks but because of their important role in assembling the information." (Society for Human Resource Management)

IRS Seeks Applications for TE/GE Advisory Committee
Excerpt: "The Internal Revenue Service is seeking applications for vacancies on the Advisory Committee on Tax Exempt and Government Entities (ACT). The committee provides a venue for public input into critical tax administration areas. Vacancies exist in the following customer segments: Employee Plans - two vacancies, Exempt Organizations - two vacancies, Tax Exempt Bonds - one vacancy, and Indian Tribal Governments - one vacancy." (Internal Revenue Service)

Tax Court Again Applies Dollar Limitations to ISO Stock Losses in Computing AMT
Excerpt: "The Tax Court has sustained IRS's disallowance of a taxpayer's claimed alternative minimum tax (AMT) adjustment stemming from large losses realized from a sale of stock acquired by exercising an incentive stock option (ISO), which gave rise to a large AMT liability in the prior year." (Pension & Benefits Week via RIA News Briefings)

Research Project Abstract: Errors in Subjective Survival Probabilities Relative to Life Table Data
Excerpt: "Recent SSA-supported research has demonstrated that retirement planning and well-being are closely tied to probabilistic forecasts about future events. This project will use longitudinal data from the Health and Retirement Study to show that individuals' subjective survival forecasts exhibit systematic biases relative to life table data." (Regents of the University of Michigan)

Compensation Costs in Private Industry Up 3.0 Percent Over the Year
Excerpt: "Compensation costs in private industry rose 3.0 percent in the year ended September 2006, compared with a 2.9-percent increase in September 2005." (U.S. Bureau of Labor Statistics)

Newly Posted Events
(Post Yours!)

2006 Pension Protection Act - Web Seminar
Nationwide on November 10, 2006
presented by Nicholas Paleveda, David M. Camp, Charles B. Gramp

Do-It-Yourself Compliance Reviews for Caf Plans & Health Plans—Ten Ways to Identify and Fix Problems Before They Cost You
Nationwide on November 30, 2006
presented by Employee Benefits Institute of America Inc. (EBIA)

Fiduciaries and Fees: Managing Risks and Improving Your 401K Plan
in Illinois on November 21, 2006
presented by Katten Muchin Rosenman LLP

Fiduciaries and Fees: Managing Risks and Improving Your 401K Plan - Webcast
Nationwide on November 21, 2006
presented by Katten Muchin Rosenman LLP

Pension Protection Act of 2006: What You Need to Know
in Idaho on November 14, 2006
presented by The ERISA Law Group, P.A.

Newly Posted Press Releases
(Post Yours!)

Form 5500 Data now available at
(Pension Data Resources, Inc.)

More Women Workers Than Men Have a Retirement Plan in Key Employment Group
(Employee Benefit Research Institute (EBRI))

The Principal Financial Group Unveils New Tools to Help Navigate Pension Protection Act
(Principal Financial Group)

Aon Proposes Changes in U.S. and U.K. Pension Plans to Maintain Competitive Benefit Plans and Reduce Pension Costs
(Aon Consulting)

Year-end Tax Planning Opportunities with Long Term Care Insurance
(Republic Marketing Group, Inc.)

Chrysler Group Launches 'BP Success - You Auto Know' to Improve Blood Pressure Control Among Employees
(Chrysler Group)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Pension Assistant
for R.J.L. Pension Services, Inc.
in FL

Relationship Manager / Senior Pension Analyst
for Boyce & Associates, Inc.
in AZ

Internal Sales Consultant - Boston, MA & Philadelphia, PA
for Transamerica Retirement Services
in MA, PA

Stop-Loss Senior Underwriter
for Great-West Healthcare
in CO

Account Manager
for CitiStreet
in NJ

Client Relations Manager
for ING
in MA

Senior Account Manager - Micro/Small Market
for CitiStreet
in NJ

Chaired Professorship
for University of Pennsylvania
in PA

Senior Business System Analyst
for CitiStreet
in NJ

Strategic Project Manager
for CitiStreet
in NJ

401K Compliance Analyst
for Stanton Group
in MN

Compliance Consultant
for Milliman, Inc.
in TX

Project/Transition Manager
for MassMutual Financial Group
in MA

Pension Administrator
for Advantage Benefits Consultants, Inc.
in CT

401 (k) Administrator
for B & B Benefits
in CA

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