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December 14, 2006

Sponsored by: 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.

Text of PBGC Final Regs on Mortality Assumptions for Missing Participants, Mass Withdrawals (PDF)
The new rules are effective February 27, 2007, without further notice, unless PBGC receives significant adverse comment by January 16, 2007. PBGC explains that the rules for certain valuations involving missing participants' benefits depend in part on the single-employer mortality assumptions updated in 2005, requiring changes to the rules for missing participant valuations. A minor conforming amendment also is made to the rules for mass withdrawals. (Pension Benefit Guaranty Corporation)

Text of PBGC Proposed Regs on Mortality Assumptions for Missing Participants, Mass Withdrawals (PDF)
The 'proposed' regs are the same as the 'direct final' regs issued on the same date, which will become effective February 27, 2007 unless 'significant adverse comment' is received; PBGC uses this notice of proposed regs to formally ask for public comment by January 16, 2007. (Pension Benefit Guaranty Corporation)

Fidelity Finds Advisors Eager for Retirement Business but Uncertain of Their Responsibilities
Excerpt: "Nearly 90% of advisors polled in a recent survey said they planned to give investment advice to retirement plan participants, yet only one-third of them said they understood the fiduciary responsibilities involved." (

The Managed 401(k): Two Conflicting Reports Uncover Important Issue
Excerpt: "Two seemingly conflicting reports related to 401(k) account holders may uncover a need for a more personal approach to the managed 401(k). The first report is from AllianceBernstein . . . . A second study [was] conducted by Eaton Vance Corp . . . ." (Actium's Managed 401(k) / 403(b) Blog; Posted by jsinatra)

New Pension Accounting Rules: Defusing the Retirement Time Bomb
Excerpt: "Accounting for pension plans requires the measurement of pension cost and then the allocation of such cost to appropriate time periods. The determination of pension cost is a complicated task because it is calculated by netting five factors: Service cost; Interest on the projected benefit obligation; Expected return on plan assets; Amortization of prior service cost; and Effects of gains and losses." (The CPA Journal)

Longer Lives Boost Hawaii State Employee Pension Fund Liabilities
Excerpt: "According to a consultant to the state's employee pension fund, the system's liabilities have increased by one (b) billion dollars in the last year because retirees are living longer." (AP via

Employers Globally Consider Pensions a Risk
Excerpt: "Over half of companies around the world surveyed by Mercer Human Resource Consulting said their pension plans represent at least a moderate financial risk to their organization." (; free registration required)

Overview: PBGC Issues Guidance on Premium Penalty Waivers: Practitioners Beware! (PDF)
5 pages. Excerpt: "With PBGC premiums on the increase and the issuance of a relatively strict PBGC policy on waiver of premium penalties, the importance of timely paying the correct premium cannot be overstated." (The Bureau of National Affairs, Inc. via Keightley & Ashner LLP)

Opinion: Coming Soon: Easy to Read Disclosures? Probably Not.
Excerpt: "What many plan sponsors are beginning to take into account is advice and managed 401(k) / 403(b) providers that have a singular focus on advice / managed accounts (they don't offer other financial services). By avoiding any possibility of conflicts of interest it removes the requirement for confusing disclosures. Many plan sponsors believe the 401(k) operation is already confusing enough, and adding another level of forms and disclosures may not be the best approach." (Actium's Managed 401(k) / 403(b) Blog; Posted by jsinatra)

Overview: Protection for Early Retirement Benefits -- New Rule Will Preserve Reemployment Rights
Excerpt: "Under a final regulation issued by the Treasury Department, a change in pension plan rules limiting reemployment rights of certain early retirees will not affect pension benefits earned before the rule change." (Pension Rights Center)

Hewitt Federal Legislation Quick Guide Updated as of December 12, 2006, for Retirement Plans (PDF)
1 page. 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: Social Security Reform -- Let's Not Forget About the Middle Class
Excerpt: "The May 2006 CPA Journal's theme of Social Security reform was timely and relevant. It addressed the Social Security insolvency problem, noted the issue of the fund's being insolvent earlier than most government economists had forecast, and discussed possible solutions. However, the articles were somewhat unbalanced. They were skewed toward high-net-worth individuals and ignored the lower and middle classes." (Eric Rothenburg via The CPA Journal)

The Future of Pension Plans (PDF)
4 pages. Excerpt: "[The Pension Protection Act of 2006] legislation clarifies the treatment of cash balance plans and accelerates full funding of defined benefit plans. What impact will this have on defined benefit plans?" (Aon Consulting)

Small Business Owners not Providing Retirement Benefits, According to Survey
Excerpt: "The 2006 ShareBuilder Small Business Annual Retirement Trend (SBART) Survey found that 63% of respondents do not offer retirement benefits to their employees." (; free registration required)

White Paper on United Kingdom Proposals for a New National System of Low-Cost Personal Accounts
Excerpt: "Combined with mandatory matching employer contributions, tax relief and automatic enrolment, the new personal accounts will radically improve access to affordable, low-cost pension saving for many on moderate to low incomes who do not currently save in a private pension." (Department for Work and Pensions)

Currency Risk in Canadian Pension Plans Debate: To Hedge or Not to Hedge (PDF)
4 pages. Excerpt: "This article discusses the issues surrounding currency risk in Canadian pension plans, and looks at ways of developing a currency policy that addresses and manages these risks. With the increasing opportunities available in global markets, this issue will take center stage in pension committees. Given the recent strength of the Canadian dollar, investors must understand the potential effects of currency movements and the elements to be considered in a currency policy." (International Foundation of Employee Benefit Plans)

United Kingdom Employer Pension Contributions Will Fall in New System, Report Shows
Excerpt: "The Labour government's controversial saving scheme has left pensions experts worried that millions of workers will see the value of their pensions collapse, according to the Daily Mail." (Insurance Business Review Online)

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Links to Items on Executive Comp, Benefits in General

Overview: Guidance Issued on 2005 and 2006 Reporting and Withholding Rules Under 409A
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 in box 12 of Form W-2 using Code Y. Likewise, a payor is not required to include such amounts in box 15a of Form 1099-MISC." (Wolters Kluwer Law & Business)

Total Compensation Tool Helps Recruit Essential Talent (PDF)
2 pages. Excerpt: "Read how you can demonstrate your total compensation and benefits to recruits with a flexible, on-line tool and differentiate yourself from the competition." (Aon Consulting)

Overview: New Jersey Court Affirms the Rights of Same-Sex Couples
Excerpt: "In Lewis v. Harris, decided October 25, 2006, the New Jersey Supreme Court ruled that same-sex couples in New Jersey are entitled to the same rights and benefits enjoyed by heterose.xual couples under state marriage laws." (Watson Wyatt Worldwide)

Year-End Employee Benefits and Executive Compensation Checklist
Excerpt: "Employers sponsoring retirement plans and deferred compensation arrangements should be mindful of certain actions that must take place by December 31 of this year, as well as new requirements and opportunities effective at the beginning of the 2007 plan year." (Littler Mendelson P.C.)

When Both Spouses Work, Who Should Retire First?
Excerpt: "Sometimes, a look at your family's monthly budget is all it will take to decide who can retire. If you earn significantly more than your spouse, for instance, you may have to keep working just because it's your income building the household savings." (

Hewitt Federal Legislation Quick Guide for December 12, 2006, on Human Resources & Employment Law (PDF)
1 page. 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)

Opinion: The High Cost of Low Wages
Excerpt: "Consider Costco and Wal-Mart's Sam's Club, which compete fiercely on low-price merchandise. Among warehouse retailers, Costco -- with 338 stores and 67,600 full-time employees in the United States -- is number one, accounting for about 50% of the market. Sam's Club -- with 551 stores and 110,200 employees in the United States -- is number two, with about 40% of the market." (Harvard Business School Publishing Corporation)

Forced Retirement Another Factor in Financial Goals
Excerpt: "In addition to savings and investment considerations in planning for retirement, a new survey suggests Americans should factor in forced retirement when setting their financial goals. According to a press release from Sun Life Financial, its survey found 22% of retirees are forced into retirement before they had planned, on average approximately eight years earlier than expected." (; free registration required)

Newly Posted Press Releases
(Post Yours!)

Prudential Responds to 'Retirement Revolution' with Innovative, Patent-Pending Guaranteed-Income Product
Prudential Financial, Inc.

Newly Posted or Renewed Job Openings
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Plan Consultant
for Diversified Investment Advisors
in NY

Defined Contribution 401(k) Plan Administrator
for Pension & Financial Services, Inc.
in PA

Defined Contribution Analyst II
for Standard Insurance Company
in OR

Internal Wholesaler
for ING, Financial Services
in CA, TN

Marketing Consultant
for ING, Financial Services
in TN

Underwriter (Health and Welfare Plans)
for Trion
in PA

Benefits Administrator
for Allied Waste
in AZ

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