Retirement Plans
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November 3, 2006
Today's sponsor: DATAIR Employee Benefit Systems, Inc.

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Software for DC/401(k) Plan Administration

DATAIR's IMPROVED BENEFIT ADMINISTRATION SOFTWARE for 401(k), Profit Sharing and all other Defined Contribution plans. Designed for administrators and consultants.

This Windows system features many important enhancements including flexible input for employee data, share and dollar accounting; redesigned easy-to-read report formats, a transaction database for time-weighting of allocations; electronic anniversary notification and data collection; and unlimited investment and source definitions. The system also allows for great flexibility in setting up graded class allocation (cross-tested new comparability) plans.

Training and support included. For free demo versions and pricing, contact or call 1-888-328-2474.

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

Overview: The Pension Protection Act and Employer Stock Divestiture
Excerpt: "Beginning with the 2007 plan year, certain plans holding employer stock must permit participants to immediately divest employer securities purchased with elective deferrals (or other employee contributions) and diversify the proceeds into other plan investment options." (McKay Hochman Co., Inc.)

How to Avoid the Most Common Malpractice Trap When Handling Qualified Domestic Relations Orders
Excerpt: "If your case includes a deferred distribution, it is not complete until the Qualified Domestic Relations Order is drafted, signed by the judge and submitted to the plan." (

Beneficiary Designation Form Entitled Decedent's Stepdaughter To 401(k) Benefits
Excerpt from Spencer's Benefits Reports: 'A decedent's stepdaughter was entitled to the decedent's 401(k) plan benefits in accordance with the most recent beneficiary designation form. This was the decision of the Eighth Circuit U.S. Court of Appeals in Alliant Techsystems, Inc., et al. v. Marks (No. 05-3614)." (Wolters Kluwer Law & Business)

First Steps in Building a 401(k) Plan Investment Menu
Excerpt: "After the investment categories are determined and the mutual funds have been chosen, the fiduciaries (e.g., the plan committee members) should review their work and decide what is needed for the participants to use those investments successfully: education, advice, professional management, lifestyle or lifecycle funds, asset allocation models, and so on." (PLAN SPONSOR Magazine via Reish Luftman Reicher & Cohen)

Overview: 401(k) Plans' Fee Litigation
Excerpt: "Plaintiffs allege that sponsors' failure adequately to disclose fees results in a loss of 404(c) protection. This is an interesting argument, and . . . DOL has a regulatory project to revise ERISA 404(c) regulations that is expected to require disclosure of indirect fees. But, again, it seems to us that damages will be hard to prove. Whatever indirect fees are paid, the gross fees paid by a fund generally are known by participants." (CCA Strategies, LLC)

Pension Funds for Illinois Teachers and State Workers Face a $45.8 Billion Shortfall
Excerpt: "Illinois' next governor must grapple with a problem 30 years in the making: keeping retirement promises to more than 660,000 active and retired teachers and state workers. Years of scrimping on pension contributions coupled with benefit increases have turned the state into a poster child for a growing national problem." (Chicago Tribune; one-time registration required)

Aon Consulting Announces Changes to its U.S. and UK Defined Benefit Pension Plans
Excerpt: "According to the announcement, effective January 1, 2007, future benefits in Aon's US DB plan will be calculated based on a 'career average pay' formula instead of a 'final average pay' formula. The change is anticipated to affect approximately 11,000 active employees covered by the US plan. In addition, the firm said it has proposed for board approval that future benefits based on salary and service be stopped for employees in its UK plan." (; one-time registration required)

Belo Corp. Joins Ranks of Firms Freezing Defined Benefit Plan
Excerpt: "Belo Corp, publisher of the Dallas Morning News and owner of a host of other media properties, announced Thursday that it intends to freeze the G. B. Dealey Retirement Pension Plan, effective March 31, 2007." (; one-time registration required)

Want to Share Your Nest Egg Across the Generations? Try a Disclaimer
Excerpt: "A disclaimer works with the tax law because it creates a fiction, says Jere Doyle, senior vice president of Mellon Financial's Private Wealth Group. In the eyes of the IRS, the person disclaiming is considered dead. The concept is not as morbid as it sounds. 'For tax purposes, the person disclaiming is deemed to have predeceased the IRA owner, which allows all or part of the account to pass to the contingent beneficiary,' Doyle explains." (CFO Magazine)

Overview: Defined Benefit Plans Must Make Required Payments (PDF)
4 pages. Excerpt: "All qualified plans must begin making payments, called Minimum Required Distributions (MRDs), by a participant's required beginning date (RBD). Most defined benefit plans begin making pension payments at a participant's RBD, rather than making just an MRD payment. However, MRD rules do apply and may be most notable when an employee earns additional benefits after reaching his RBD." (The Prudential Insurance Company of America)

Pomeroy Lifetime Annuity Bill Lauded in ACCF Study
Excerpt: "In a study released October 12, 2006, the American Council for Capital Formation (ACCF) said that Pomeroy's legislation, The Lifetime Pension Annuity for You Bill (H.R. 2951), would provide a government subsidy in the form of a tax incentive to encourage the purchase of private annuities." (CCH Pension and Benefits)

Opinion: Anticipating the Demise of Private Defined Benefit Plans -- What Can You Do About It?
Excerpt: "Because the fate of the defined benefit plan will be so speculative over the next 20 years, what I advocate is a gradual transformation to the Qualified Domestic Relations Order as the principle tool to be used the distribution of marital retirement assets. This eliminates much of the guesswork as to whether a plan will survive and, if properly drafted, can insure an equitable distribution." (

Int'l Portability of Social Security -- Social Security in U.S. Treaties & Executive Agreements
Excerpt: "This article examines the role of tax treaties and executive agreements in the administration of the United States social security program, discusses some of the conflicts and issues that arise due to the use of multiple and potentially conflicting instruments, and suggests ways in which international coordination of social security could be improved in the United States." (Workplace Prof Blog)

Pension Reform Agreement to Encourage a Longer Working Life in Spain
Excerpt: "To encourage longer participation in the labor force, the government, trade unions and the employers' confederation have agreed on a proposal to reform the pension system. The agreement, which was announced on July 13, 2006, came after two years of negotiations and must still be approved by the Council of Ministers and the Congress." (Watson Wyatt Worldwide)

Should You Convert Your IRA?
Excerpt: "A number of calculators . . . let you analyze whether it makes sense for you to convert your existing traditional IRA to a Roth. In general, the question comes down to whether you'd pay more taxes to convert the account than you would save on subsequent tax-free withdrawals." (The Motley Fool)

The Future of Life-Cycle Saving & Investing, a Conference Held October 25-27, 2006
The target page includes links to the conference agenda, papers and comments, PowerPoint presentations, and participant biographies. (Boston University / Federal Reserve Bank of Boston / Research Foundation of CFA Institute)

Research Project Abstract: Housing Prices, 'Bubbles' and Retirement Timing
Excerpt: "[The authors] will use the HRS linked with local data on house prices and labor market conditions, to estimate whether unexpected increases in the house prices leads to earlier retirements." (Regents of the University of Michigan)

Links to Items on Executive Comp, Benefits in General

PPA Technical Corrections Unlikely This Year (PDF)
1 page. Excerpt: "The Pension Protection Act of 2006 (PPA), signed on August 17, 2006 by President Bush, is in need of numerous technical corrections to both clarify Congressional intent and fix clerical errors. Although technical corrections bills have been introduced in both the House and Senate, neither contain any provisions correcting PPA." (Buck Consultants)

Employee Benefits News Scan, October 2006 (PDF)
5 pages. This edition covers the following: IRS Issues Transition Relief for Indian Tribal Government Plans; IRS Issues Final Rules on Use of Electronic Media for Plan Notices and Elections; FASB Issues Statement on Accounting for Defined Benefit Pension and OPEBs; and, Census Bureau Reports 46.6 Million Americans Lacked Heath Insurance in 2005. (Gabriel Roeder Smith & Company)

Policy Backgrounder: Work and Retirement (PDF)
23 pages. Excerpt: "This paper examines several ways to increase the labor supply of older Americans and update Social Security to keep pace with changing life expectancies and labor market conditions. The reforms would give seniors greater freedom and flexibility to time their retirement, provide employers with incentives to retain older workers and increase incentives for older Americans to stay in the workforce longer." (National Center for Policy Analysis)

AARP Honor Roll: Diverse Group of Employers Use Flexible Work Options to Retain 50-Plus Workers
Excerpt: "To capture and retain older workers, employers will have to offer flexible work options and benefits. As AARP's CEO Bill Novelli points out about the companies on the list, 'These dynamic employers recognize the importance of creating a mutually beneficial work environment. Flexible arrangements can be a big part of that positive environment, enabling workers to balance both work and family obligations.'" (Employee Benefit News)

Alaska Seeks High Court Ruling on Implementing Same-Sex Benefits
Excerpt: "The State of Alaska is asking the state's highest court to review an order requiring changes in its proposal to provide same-sex benefits for domestic partners of state employees and retirees. The Superior Court issued an order Monday directing the state to rewrite the regulations." (The Anchorage Daily News)

State and Local Government Benefits Costs Up 1.4 Percent from June to September
Excerpt: "Benefit costs for state and local government workers increased 1.5 percent in the September quarter, unchanged from the gain in June." (U.S. Bureau of Labor Statistics)

Communicating with Participants in a Wired World: Multiemployer Fund Web Sites (PDF)
4 pages. Excerpt: "The latest issue of Segal's NewsLetter which discusses multiemployer fund office Web sites, . . covers the following topics: Developing a Web site strategy (informational or transactional), Evaluating an existing Web site, and Developing a design and structure and drafting content." (The Segal Group, Inc.)

2006 Rewards of Work Study -- The Fourth Sibson Has Conducted Since 1997 (PDF)
6 pages. Results from Sibson's 2006 Rewards of Work (ROW) Study will be released as a series of brief reports. The first of the 2006 ROW Study reports summarizes the key findings about how employees perceive a broad range of rewards. (The Segal Group, Inc.)

Research Project Abstract: Labor Force Participation and Economic Resources of the Early Baby-Boomer
Excerpt: "[The authors] propose to forecast the retirement patterns and resources of the Early Baby-Boomers by estimating forward-looking dynamic models of labor force participation, wealth accumulation and pension and Social Security benefit claiming for older workers using seven waves of HRS-data." (Regents of the University of Michigan)

Newly Posted Events
(Post Yours!)

Current Issues with 401(k) Plans
Nationwide on May 1, 2007
presented by McKay Hochman Co., Inc.

Default Investments - The DOL Regulations
Nationwide on March 20, 2007
presented by McKay Hochman Co., Inc.

Overview Of Form 1099-R eSeminar
Nationwide on December 11, 2006
presented by McKay Hochman Co., Inc.

Participant Disclosure and Communications
Nationwide on April 18, 2007
presented by McKay Hochman Co., Inc.

Why Go Broke? Retirement Planning for the 21st Century Worker
in Pennsylvania on November 15, 2006
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Newly Posted Press Releases
(Post Yours!)

U.S. Labor Department Sues D.C. Attorney for Alleged Violations Involving 2 Pension Plans of Bankrupt Tennessee Company
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Retirement Plan Administrator
for Valley Forge Pension Management, Inc.
in PA

Employee Benefit Attorney With at Least 5 Years Experience
for Chang, Ruthenberg & Long PC
in CA

Employee Benefit Attorney With ESOP Experience
for Chang, Ruthenberg & Long PC
in HI

Client Services Director
for JPMorgan Retirement Plan Services
in MO

Cafeteria Plan Administrator
for FlexSource, LLC
in IL

for MassMutual Financial Group
in MA

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