Retirement Plans
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December 1, 2006
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EBIA's 401(k) Plans Manuals and Seminars!

A must-have resource for employers, administrators, and advisors, our 401(k) Plans manual explains the Internal Revenue Code and ERISA requirements for 401(k) plans, and it explores all sorts of plan design and administration issues. Subscribers love the depth of our legal analysis and our practical, real-world tips. Topics include eligibility, vesting, contributions, distributions, plan loans, hardship withdrawals, discrimination testing, fiduciary duties, plan investments, plan corrections, and much more.

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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)

PBGC Flat Premiums for 2007: $31 per Participant for Single-Employer, $8 for Multiemployer Plans
Excerpt: "The Deficit Reduction Act of 2005 . . . changes the per-participant flat premium rate for plan years beginning in 2006 . . . and provides for inflation adjustments to the flat rates for future years. The adjustments are based on changes in the national average wage index . . . . [T]he 2007 flat premium rates for PBGC's two insurance programs will be $31.00 per participant for single-employer plans and $8.00 per participant for multiemployer plans." (Pension Benefit Guaranty Corporation)

Text of IRS Notice 2006-107: 2007 Rules for Diversification of Publicly Traded Stock in DC Plans (PDF)
14 pages. Excerpt: "This notice provides transitional guidance on § 401(a)(35) of the Internal Revenue Code, added by section 901 of the Pension Protection Act of 2006 . . . , which provides diversification rights with respect to publicly traded employer securities held by a defined contribution plan. . . . The diversification requirements of § 401(a)(35) are generally effective with respect to plan years beginning after December 31, 2006 . . . ." (Internal Revenue Service)

Overview: Update on Notice of Participant Right to Divest Publicly Traded Employer Securities
Excerpt: "Section 901 gives certain participants a right to divest (i.e., reinvest) any publicly traded employer securities held in a non-ESOP plan on their behalf. Section 507 requires the plan administrator to notify participants of their divestment rights." (SunGard Corbel LLC)

IRS Issues Guidance on Employer Stock Account Diversification
Excerpt: "The Treasury Department and IRS have issued Notice 2006-107 providing transition guidance on the provision of the Pension Protection Act of 2006 (PPA) relating to diversification rights of plan participants and beneficiaries who have accounts held in publicly traded employer securities." (; free registration required)

Text of Model Notice to Participants and Others of Pending Election of Multiemployer Plan Status (PDF)
Excerpt: "This notice is to inform you that [insert pension plan name] . . . will be submitting to the [PBGC] an election to be treated as a multiemployer pension plan for purposes of federal law. . . . A plan's status as a single-employer plan or a multiemployer plan determines how your pension benefits will be guaranteed by the PBGC . . . should the plan terminate without enough money to pay pension benefits." (Employee Benefits Security Administration, U.S. Department of Labor)

DOL Provides Multiemployer Plan Election Model Notice
Excerpt: "The Department of Labor (DoL) has announced that a model notice, which may be used by employee benefit plans electing to be treated as a multiemployer plan under the Employee Retirement Income Security Act (ERISA), will be published in the Federal Register for December 1, 2006." (; free registration required)

Retirement Programs Comparison Chart (PDF)
11 pages. Excerpt: "*This chart compares retirement programs that are 'tax-qualified' under the Internal Revenue Code. In addition to these options, a governmental or tax-exempt employer can establish a Code Section 457(f) ineligible deferred compensation plan. A governmental employer can also establish a qualified governmental excess benefit arrangement (QEBA) under Code Section 415(m)(3)." (Ice Miller LLP)

Fees on 401(k) Retirement Plans Questioned by GAO
Excerpt: "Participants in 401(k) plans may be losing thousands of dollars in retirement savings because of sponsor fees, a report said yesterday. It urged that investors be given a clearer picture of the fees they pay." (AP via The Washington Post; free registration required)

GAO: Changes Needed to Provide 401(k) Plan Participants and the DOL Better Information on Fees (PDF)
Excerpt: "Because of concerns about the effects of fees on participants' retirement savings, GAO examined (1) the types of fees associated with 401(k) plans and who pays these fees, (2) how information on fees is disclosed to plan participants, and (3) how the Department of Labor (Labor) oversees plan fees and certain business arrangements." (U.S. Government Accountability Office)

New Pension Rules Supposed to Secure Employees' Retirement -- Employers' Response May Differ
Excerpt: "Taken together, the new rules enacted by Congress and FASB 'will make the true cost of defined-benefit plans transparent to investors and accelerate the closing of defined-benefit plans by financially healthy plan sponsors,' predicts Zvi Bodie, a professor of finance and economics at Boston University." (CFO Magazine)

Overview: IRS Deadline for Employer Stock Diversification Notices and Model Notice
Excerpt: "One of the new requirements is that employees must receive a Notice describing their diversification rights and explaining the importance of diversification of the investment of their retirement assets." (Faegre & Benson LLP)

Hewitt's Global Retirement Update, December 2006 (PDF)
3 pages. Excerpt: "[The] 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)

When Is a Keogh a Better Investment Than an IRA?
Excerpt: "The main advantage to a Keogh plan is that you can contribute much more money than an IRA. In 2006, the maximum IRA contribution is $4,000 ($5,000 if older than age 50). With a Keogh plan, you can contribute up to the lesser of 25 percent of earned income or $44,000 (for a profit-sharing-type plan)." (

WP: Consumption, Retirement, & Social Security: Evaluating Reform Efficiency with a Life-Cycle Model (PDF)
44 pages. Excerpt: "This paper analyzes the effect of a potential reform to the Social Security system on individuals' retirement and consumption choices." (Michigan Retirement Research Center)

Working Paper: Social Security Privatization with Income-Mortality Correlation (PDF)
43 pages. Excerpt: "It has been known for some time that shutting down ('privatizing') a pay-as-you-go social security system would simply reallocate resources between generations when all economic variables are deterministic and labor supply is inelastic." (Michigan Retirement Research Center)

Working Paper: Self-Assessed Retirement Outcomes: Determinants and Pathways (PDF)
35 pages. Excerpt: "Retired respondents are asked how satisfying their retirement has turned out to be, how retirement years compare to pre-retirement years and whether they are worried about not having enough income to get by in retirement." (Michigan Retirement Research Center)

Links to Items on Executive Comp, Benefits in General

Text of IRS Notice 2006-100: 2005, 2006 Reporting Rules for Taxable, Nontaxable Amounts Under 409A (PDF)
21 pages. Excerpt: "For calendar years 2005 and 2006, an employer is not required to report amounts deferred during the year under a nonqualified deferred compensation plan subject to § 409A in box 12 of Form W-2 using code Y. . . . [F]or calendar year 2006, an employer must treat amounts includible in gross income under § 409A as wages for income tax withholding purposes. An employer is required to report such amounts as wages paid . . . in box 1 of Form W-2." (Internal Revenue Service)

Notice 2006-100 Guidance Provides Relief for 409A Income Reporting
Excerpt: "The Treasury Department and the Internal Revenue Service (IRS) have issued Notice 2006-100 providing guidance to executive compensation plan sponsors and participants on how to report certain amounts deferred from executive compensation on Forms W-2 or 1009-MISC for calendar years 2005 and 2006." (; free registration required)

Democrats Set to Take on Pension and Health Industries, According to Rep. Miller and Stark
Excerpt: "Two senior Bay Area congressmen sent warning shots [yesterday] to two giant industries -- 401(k) providers and private health insurance companies -- that they will be overseeing starting in January.' Miller, Stark focus on 401(k) providers, Medicare Advantage (San Francisco Chronicle via BlueCross BlueShield Association)

Newly Posted Events
(Post Yours!)

Key Issues In Qualified Retirement Plan Development: What's New And A Review
Nationwide on December 18, 2006
presented by

Newly Posted Press Releases
(Post Yours!)

Treasury and IRS Issue Notice on Reporting and Withholding for Amounts Includible in Gross Income Under Code Section 409A
U.S. Treasury Department and Internal Revenue Service

Treasury and the IRS Issue Notice Regarding Participants’ Diversification Rights for Employer Securities Held in Retirement Plans
U.S. Treasury Department and Internal Revenue Service

2007 Health Care Purchasing Coalitions Directory Now Available
International Foundation of Employee Benefit Plans

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Pension Administrator
for FBD Consulting, Inc.
in KS

OmniScript Analyst 1681223
in CO, NC

Retirement Specialist -- Implementation/Enrollment
for ProNvest
in GA

Business Development Manager
for SunGard ProNvest
in GA

Senior Actuarial Analyst
for Charles Schwab
in OH

Technical Research Consultant
for Diversified Investment Advisors
in NY

Plan Consultant Opportunity
for Weaver Partners, Inc.

401 (k) DC/DB - all experience levels
for Polycomp Administrative Services in San Diego and Woodland Hills
in CA

Senior Analyst-Data Consulting
for Fidelity Investments
in MA, NC, NH

Defined Benefit Consultant with Project Management-Data Consulting
for Fidelity Investments
in MA, NC, NH

Account Administrator
for Pension, Inc.
in IA

Investment Advisory Regional Director
for The Newport Group
in CA, FL

Pension Services Consultant
for CUNA Mutual Group
in WI

Retirement Plan Administrative Accountant
for First Mercantile
in TN

Financial Benefits Manager (Including non-qualified plans)
for Piper Morgan Associates
in TX

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