Retirement Plans
To BenefitsLink home page Fill your job openings fast by advertising on BenefitsLink

December 7, 2006

Sponsored by: ASPPA • Working for America's Retirement™

(Click on company name or banner to learn more.)
Banner ad for ASPPA • Working for America's Retirement™

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.

Court OKs Class Action in Aon 401(k) Company Stock Suit
Excerpt: "A federal judge in Chicago has certified as a class action a lawsuit against Aon Corp. over allegations 401(k) participants lost ten of millions of dollars when its overvalued company stock price collapsed two years ago." (; free registration required)

Fixing the Problem: Correcting Errors in Qualified Plans
20 pages. Excerpt: "The Internal Revenue Service (IRS) has long had an informal policy of allowing qualified plans to correct operational and other errors with varying levels of sanctions. [T]he IRS developed specific procedures that plan sponsors can use to correct their plan defects. These procedures, called the Employee Plans Compliance Resolution System (EPCRS), were recently updated. This column answers basic questions about EPCRS and how plan sponsors can use the program." (Steptoe & Johnson LLP)

Retirement Income Planning -- Are We Missing the Boat on Retiree Expenses? (PDF)
5 pages. Excerpt: "To state the obvious: if there were no retirement expenses, there would be no need for retirement income. Therefore, if we don't understand what the expenses are, and if we cannot project with reasonable accuracy what they will be in the future, no amount of sophisticated manipulation on the income side is worth much. This paper explores what we're doing wrong, and how to do it better." (Still River Retirement Planning Software, Inc.)

Spend Now, Spend Later: New Protections for Retirement Account Assets in Bankrup.tcy
Originally published Summer 2006. Excerpt: "This column provides a brief overview of the bankrup.tcy law provisions applicable to employee benefit plans and the amendments to existing law which were included in the act." (Steptoe & Johnson LLP)

Overview: IRS Model Notice and Transitional Guidance on Diversification Rights (PDF)
2 pages. (Milliman)

Overview: IRS Issues PPA Diversification Guidance; Initial Notice Deadline Extended to January 1 (PDF)
5 pages. Excerpt: "The transition rules: Extend the initial notice deadline to January 1, 2007, for calendar year plans, Supply a model notice, and Provide additional transition relief for some restrictions on diversification rights." (Lockton Benefit Group)

Asset Allocation Funds: Investing Simplified (PDF)
4 pages. Excerpt: "The issue discusses asset allocation funds, both lifestyle and lifecycle funds. Sponsors of defined contribution plans looking to add an automatic enrollment feature need to understand that lifecycle funds can be used as a default option." (Segal Advisors, Inc.)

Overview: Electronic Notices and Consents -- New Regulation Allows Internet Waivers of Rights
Excerpt: "The Treasury Department issued final regulations under the Paperwork Reduction Act permitting private retirement plans to provide certain required notices by computer rather than first-class mail. The regulation also permits employees and their spouses to give up specified rights by electronic means." (Pension Rights Center)

Overview: IRS Guidance and Model Notice under PPA Diversification Requirements (PDF)
2 pages. (PricewaterhouseCoopers LLP)

New York City Police and Firefighter Retirement Bills Rejected
Excerpt: "Gov. George E. Pataki vetoed two bills yesterday that would have increased retirement and pension payments for New York City's police officers and firefighters." (AP via The New York Times; free registration required)

Can.ada: Pension Splitting to Be Implemented
Excerpt: "Beginning in 2007, pensioners will be able to allocate up to half of their pension income to their spouses or common-law partners throughout the tax year, if both parties agree. Following the changes to the tax treatment of income trusts announced in October 2006, the government plans to enact new legislation on pension income-splitting in part to provide some relief from the introduction of taxes on income trust returns, which will have a negative impact on some seniors." (Watson Wyatt Worldwide)

Portugal: Social Security Overhaul Would Cut Benefits and Encourage Extension of Working Years
Excerpt: "Social Security benefits would be reduced for most employees except those who agree to work past age 65 under a far-reaching overhaul of the retirement system that won approval from the government, trade unions and employer federations on October 10, 2006. The long-discussed proposal will next be debated in the National Assembly. Most provisions are expected to take effect as of January 1, 2007, although some would not be implemented until 2008 or later." (Watson Wyatt Worldwide)

Hewitt Federal Legislation Quick Guide Updated as of December 5, 2006, for Retirement Plans (PDF)
2 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding retirement plans. (Hewitt Associates)

Opinion: Germany -- A Retirement Trendsetter
Excerpt: "Most of our political leaders are aware that our Social Security system faces challenges similar to Germany's. Many of them endorse the German model of raising taxes and cutting benefits, others support a saving and investment system. Given Germany's projected taxes and benefits, it is worthwhile to compare the two approaches." (William Shipman via Cato Institute)

Links to Items on Executive Comp, Benefits in General

Chicago Group Sounds Pension and Health Funding Alarm for State Workers
Excerpt: "A Chicago business group has sounded major alarm bells about the state's ability to fund retirement and health coverage costs for state workers, claiming that taxpayers will have to pay more than $100 billion in unfunded pension liabilities and nearly $50 billion in unfunded health coverage expenses." (; free registration required)

Surprises in Severance Packages: New Deferred Compensation Rules Limit Flexible Arrangements
Originally published Spring 2006. Excerpt: "[Plan documents,] which in some cases may be the separation pay contract itself, may need to be amended to incorporate the terms required by Section 409A. As the deadline for the amendments approaches, employers should also seek legal guidance on reaching good faith compliance with the terms of the statute, as enunciated in Notice 2005-1 and the IRS's proposed regulations." (Steptoe & Johnson LLP)

Overview: 409A Reporting May Require 2006 Inclusion with Respect to Discounted Stock Options (PDF)
3 pages. (PricewaterhouseCoopers LLP)

Overview: IRS Issues Reporting and Withholding Guidance under 409A (PDF)
3 pages. (PricewaterhouseCoopers LLP)

Financial Advisers Help Investors Plan for Retirement Amid Increased Health Care Costs
Excerpt: "Financial advisers are equipping themselves to help clients plan for their futures as increased health care costs and 'corporate cutbacks in retiree health benefits' prompt 'anxiety among investors about their retirement prospects,' the Wall Street Journal reports." (Kaiser Family Foundation)

Hewitt Federal Legislation Quick Guide for December 5, 2006, on Human Resources & Employment Law (PDF)
6 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates)

Taxation of Stock Options and Restricted Stock: The Basics and Beyond (PDF)
14 pages. Excerpt: "This article presents the basic tax rules that apply to stock options and restricted stock, but also goes beyond the basics to discuss certain more complex issues and planning considerations." (Grant Thornton LLP)

Newly Posted Events
(Post Yours!)

Drafting The Blueprint For Women's Retirement Security Symposium
in District of Columbia on December 7, 2006
presented by Women's Institute for a Secure Retirement (WISER)

NICSA East Coast Regional Meeting featuring Current Events in the Retirement Arena
in Massachusetts on January 24, 2007
presented by NICSA

Newly Posted Press Releases
(Post Yours!)

Consumer-Driven Health Plans Slow To Catch On, 2nd Annual Survey Finds
Employee Benefit Research Institute (EBRI)

Study Shows 401(k) Participants Feel Naïve About Investing: Participants Also Skeptical of Internet-Based Advice and Social Security
The Scarborough Group, Inc.

Spencer's COBRA Survey Finds More Eligible Employees Elect COBRA Coverage, Companies Paying Significantly Higher Claim Costs
Wolters Kluwer

Bridges to Excellence Helps Employers Achieve Bush Administration's 'Cornerstones' for Health Care Purchasing
Bridges to Excellence (BTE)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Supervisor, Technical Analysis System and Compliance Monitoring
in DC

DB Administrator
for Continental Benefits Group, Inc.
in NJ

for Westchester NY Consulting Firm
in NY

Defined Contribution Asst
for Standard Insurance Company
in OR

Handy Links:

NOTE TO AOL MEMBERS: PLEASE DO NOT REPORT THIS EMAIL AS SPAM. This email is not unsolicited. We do not send unsolicited email. This email is coming to you because you asked to receive it by entering your email address on our web page at

These emails are sent each workday except federal holidays.

This email has been published by:, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

David Rhett Baker, J.D., Editor

Copyright 2006, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.

Anyone can receive these emails; just have them sign up at this web page:

Other useful links: