Retirement Plans
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December 18, 2006

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Text of GASB Proposal for Disclosure Requirements for Governmental Pension Plans (PDF)
53 pages. Excerpt: "This proposed Statement would more closely align the financial reporting requirements for pensions with those for other postemployment benefits (OPEB) and, in doing so, would enhance information disclosed in notes to financial statements or presented as required supplementary information (RSI) by pension plans and by employers that provide pension benefits." (Governmental Accounting Standards Board)

GASB Unveils Proposal on Disclosure Requirements for Public Employee Plans
Excerpt: "The Governmental Accounting Standards Board (GASB) has issued a proposal that could impose additional pension funding pressures on state and local governments." (; free registration required)

From EBSA: The Pension Protection Act of 2006 -- The Law, Regulations, Other Guidance, and Background
EBSA has updated its pension reform site to include more resources on the Pension Protection Act of 2006. (U.S. Employee Benefits Security Administration)

Brokers with Overly Rosy Sales Pitches Lure Unwary 401(k) Holders
Excerpt: "'The retirement security of American workers is at risk from unscrupulous salesmen pitching 'pie in the sky' investment programs to those about to retire from a lifetime's work,' said Joseph P. Borg, president of the North American Securities Administrators Assn. 'Securities regulators around the country are hearing from increasing numbers of investors.'" (Los Angeles Times; free registration required)

Opinion: Think Your 401(k) Is Insured Against Theft? Think Again.
Excerpt: "Thefts from 401(k) accounts occur mostly at companies with fewer than 100 employees, where almost a fifth of the 51 million Americans who have 401(k) plans work. There's no requirement for auditing these small plans every year to make sure the money that's supposed to be set aside is actually there. Looting often goes undetected for years." (USA TODAY)

Overview: Pension Protection Act of 2006 -- Changes for Defined Contribution Plans (PDF)
3 pages. Excerpt: "This Client Alert briefly describes the PPA changes applicable to defined contribution plans that plan sponsors should consider now for implementation in 2007." (Powell Goldstein LLP)

Overview: Diversification Requirements for DC Plans Holding Publicly Traded Employer Securities
Excerpt: "Individuals who are entitled to receive a diversification notice: For elective deferrals & employee contributions (after tax & rollovers), the requirements apply to: 1. any participant, 2. any alternate payee who has an account under the plan, and 3. any beneficiary of a deceased participant." (McKay Hochman Co., Inc.)

Opinion: 401(k)-Type Plans Are Too Expensive and Middleman Deals Are Buried in the Fine Print
Excerpt: "I would suggest that even more than 38 million are in the dark as to how their retirement plans are enriching brokers, agents, managers and administrators. An accepted practice called revenue-sharing takes a slice of your mutual-fund expenses and passes it along to third parties, such as record keepers." (Bloomberg News)

Overview: 2007 Safe Harbor 401(k) Notice
Excerpt: "The IRS has . . . made it clear that the notice update would be required for the 2007 plan year and it has resisted easing the requirements for future years." (McKay Hochman Co., Inc.)

Editorial: Roadblock to Tax Reform in New Jersey
Excerpt: "Gov. Jon Corzine has pulled the rug out from under Democratic leaders in the Legislature on property tax reform. Just as the leaders were about to ask their colleagues to cut pension benefits for future public workers, as a way of subsidizing property tax relief, they were told by Mr. Corzine that the issue would instead be handled through collective bargaining." (The New York Times; free registration required)

Overview: PPA Defined Benefit and Defined Contribution Deduction Limits
Excerpt: "The PPA modification of the 25% combined DB/DC limit potentially allows for an increased deduction by employers." (McKay Hochman Co., Inc.)

Longevity Risk Seen As Big Issue for United Kingdom Pensions
Excerpt: "Longevity risk -- the chance that a pension fund may run short of money because people live longer -- is probably the biggest challenge facing Britain's corporate pensions next year, Peter Redhead, managing director at Pension Capital Strategies, told Reuters." (Reuters via Business Insurance)

Employee Ownership Update for December 15, 2006
NCEO Executive Director Corey Rosen discusses a European Commission report endorsing employee ownership in new member and candidate states, endorsing the U.S. ESOP model; AMT relief for incentive stock option holders in the 2006 tax bill; Google's arrangement for creating marketable employee stock options; and the WorldBlu List of Most Democratic Workplaces 2007 call for applicants. (National Center for Employee Ownership)

A Wish List Letter to Santa from a Pension Fiduciary
Excerpt: "Dear Santa: I've been a good pension fiduciary this year so I hope you remember me in a few days. It's been a tough year, with 2007 definitely looking grim." (Pension Risk Matters)

Update on Form 8905, Certification of Intent to Adopt a Pre-approved Plan
Excerpt: "Informally, the IRS has indicated that those who validly adopted a pre-approved plan by the end of their individual EGTRRA RAP need not execute Form 8905. This is supposed to be confirmed in an update of Revenue Procedure 2005-66 that is to be issued shortly." (McKay Hochman Co., Inc.)

Frequently Asked Questions on the Pension Protection Act of 2006
The target page contains questions received by McKay Hochman and their answers regarding Pension Protection Act changes that will be effective soon. (McKay Hochman Co., Inc.)

Opinion: A Requiem for Pensions
Excerpt: "[Jane Bryant Quinn speaks] up for the value of corporate pension plans, which are slowly slipping away. The country hardly seems to care." (

Working Paper: Regret, Pride, and the Disposition Effect on Stocks
Excerpt: "[The authors] develop a dynamic portfolio choice model which incorporates anticipated regret and pride in individual's preferences and show that those preferences can cause investors to sell winning stocks and hold on to losing stocks; that is, anticipating regret and pride can help explain the disposition effect." (Pension Research Council; registration required to download full-text of paper)

Do-It-Yourself Retirement: Allowing Employees to Direct the Investment of their Retirement Savings
Excerpt: "The existing evidence raises questions about whether the individuals are well-suited to handle investment of their retirement savings when confronted with too many choices or too little understanding of markets." (Journal of Labor and Employment Law via Social Science Research Network)

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Links to Items on Executive Comp, Benefits in General

A Push to Fix Sarbanes-Oxley
Excerpt: "The Sarbanes-Oxley law was approved in 2002 as lawmakers grew concerned that they might be swept out of office by millions of middle- and lower-income investors who owned their share of the marketplace through mutual funds, IRA's, 401 (k)'s, and 529 college-savings programs. [This Thursday, ]a judge will consider a case that challenges the validity of the Public Company Accounting Oversight Board, a new agency created by the Sarbanes-Oxley law to oversee auditors." (The New York Times; free registration required)

New Jersey Lawmakers Pass Civil Unions Bill
Excerpt: "The Garden State is set to become the third state in the nation to offer civil unions, with New Jersey Governor Jon Corzine promising to sign legislation approved Thursday by the state legislature." (; free registration required)

'Lucky' Stock Options Not Limited to Executives: Study Finds Board Members Profit, Too
Excerpt: "Chief executives weren't the only ones enjoying near-guaranteed profits from stock options in the past decade. Outside directors at hundreds of American companies also received option grants that are likely to have been manipulated, a new study found." (The Washington Post; free registration required)

Newly Posted Events
(Post Yours!)

Holiday Gifts for Health Plan Sponsors: Final HIPAA Non-Discrimination Regulations, Wellness Plans and New HSA Opportunities
Nationwide on January 9, 2007
presented by ABA Joint Committee on Employee Benefits

Pension Protection Act and the Changing Landscape of Retirement
in Missouri on February 1, 2007
presented by A.G. Edwards

Retirement as a Time to Reinvent, Rewire and Renew: Educating Employees about Total Retirement Planning
Nationwide on December 20, 2006
presented by International Foundation for Retirement Education (InFRE)

Newly Posted Press Releases
(Post Yours!)

Chicago Federal Court Shuts Down Health Care Reimbursement Tax Fraud Scheme
U.S. Department of Justice

Resolve To Save and Invest in 2007: Alliance For Investor Education Highlights 11 Best Resources For Consumers
Alliance for Investor Education

Newly Posted or Renewed Job Openings
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401(k) Client Relationship Manager
for The Douglas Group
in NJ, NY, PA, TX

Assistant Service Delivery
for Philip Morris USA
in VA

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