Retirement Plans
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December 20, 2006

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From Federal Register: Final Regs on Prohibited Allocation by ESOP of Securities in an S Corporation (PDF)
12 pages; December 20, 2006 effective date; also, generally applicable with respect to plan years beginning on or after January 1, 2006. The temporary regulations published in December of 2004 are retained for plan years beginning before January 1, 2006. (Internal Revenue Service)

Final Regulations Issued Concerning Prohibited ESOP Allocations
Excerpt: "The Internal Revenue Service (IRS) and Treasury Department have issued final regulations that provide guidance concerning prohibited allocations and disqualified person requirements under section 409(p) of the Internal Revenue Code for employee stock ownership plans (ESOPs) holding stock of Subchapter S corporations." (; free registration required)

401(k) Plan Sponsor Sues Principal over 401(k) Fund Revenue Sharing
Excerpt: "The sponsor of a 401(k) plan for employees at an Illinois racetrack is suing Principal Financial group for fiduciary breach over revenue sharing arrangements with mutual funds whose offerings are in Principal's 401(k) product." (; free registration required)

Pension Funds' Health Improved in '05
Excerpt: "The health of traditional pension plans at Standard & Poor's 500 companies improved in 2006, according to a Credit Suisse report [on December 18, 2006]." (AP via

Law Firm Investigating Cash Balance Plan Conversions
Excerpt: "Keller Rohrback L.L.P. is also currently investigating several companies regarding their conversions from a defined benefit pension plan to a cash balance formula." (Keller Rohrback)

File Maintenance Guidelines: IRA Reports and Amendments
Excerpt: "For each [IRA type], an IRA custodian/trustee is responsible for sending a variety of reports to an IRA owner and to the IRS each year. In addition, an IRA custodian/trustee must send amended disclosure statements and/or model agreements that inform an IRA owner of any changes to the IRA." (Wolters Kluwer Financial Services)

The President to Sign New Law for Postal Reform
Excerpt: "One big change shifts responsibility for some retirement benefits from the post office to the treasury. Many postal workers previously served in the military. Unlike other federal agencies, the post office was required to pay for retirement benefits earned during both military and postal careers of those workers." (The Washington Post; free registration required)

Video Preview of Multi-Part Special Report on Soaring Retirement Costs for Public Employees
Excerpt: "The Desert Sun has spent a year investigating the increasing cost of retirement for public workers and the impact it has on cities, schools and public services. California public employees have the best retirement deals in the country, but the pressure to pay for these packages has led to understaffed police and fire departments. . . . . The series [ran] Saturday through Tuesday in The Desert Sun." (The Desert Sun)

Retirement Plans in 2006: A Year of Profound Change (PDF)
3 pages. Excerpt: "This Alert outlines the major changes for retirement plans in 2006 and highlights the actions plan sponsors should consider both before year-end and in the years to come." (Aon Consulting)

Overview: Agencies Issue Proposed Changes to Form 5500 Annual Report As Required by the PPA
Excerpt: "The proposed changes supplement proposed revisions to the 5500 form that were published by the agencies prior to the enactment of the PPA." (Wolters Kluwer Law & Business)

Downside Risk Portfolio Optimization Analysis (PDF)
19 pages. Excerpt: "Designing an optimal portfolio for an individual investor, total retirement plan, or plan participant has undergone dramatic changes over the last few decades. Not yet an exact science, portfolio construction has moved past the 'art' phase of its development. Another term for portfolio construction is 'asset allocation.'" (Unified Trust Company, NA)

Overview: Guidance on Diversification Rights with Respect to Publicly Traded Employer Securities (PDF)
2 pages. Excerpt: "For many plans that provide for permissive rather than required investments in employer securities, and have uniform restrictions and conditions and have routinely advised participants of the importance of diversification, these new divestiture requirements will have limited applicability although the notice requirements will be applicable." (Winston & Strawn LLP)

United Kingdom Retirement Scheme Members Need Investment Education
Excerpt: "A recent survey by Mercer Investment Consulting found UK defined contribution scheme members have limited knowledge of investments and need more education to help them make investment choices." (; free registration required)

Links to Items on Executive Comp, Benefits in General

Court Upholds Ruling in ERISA Conversion of Assets Case
Excerpt: "The 7th US Circuit Court of Appeals has upheld a conviction for conversion of plan assets under the Employee Retirement Income Security Act (ERISA) for an employer who never forwarded employee payroll deductions for health insurance and 401(k) contributions, while paying himself and making other purchases." (; free registration required)

Overview: Internal Revenue Service Additional Transitional Relief Under Code Section 409A (PDF)
2 pages. Excerpt: "The IRS also clarified that the notice did not limit the scope of any transitional relief otherwise available under Code Section 409A. The notice, while not unexpected, is obviously a relief to sponsors of nonqualified deferred compensation plans." (Winston & Strawn LLP)

Newly Posted Events
(Post Yours!)

Health Risk Appraisal and Action Planning Teleweb
Nationwide on January 11, 2007
presented by International Foundation of Employee Benefit Plans

Newly Posted Press Releases
(Post Yours!)

More Businesses Aware of Pandemic Flu Threat; Despite Progress, Not All Have Adequately Planned, Finds a Deloitte, ERIC Survey

AARP Encourages Use of New 'Split Refund' Tax Filing Option to Save and Invest

Workplace Options Poll Shows U.S. Employees Prioritize Health During the Holidays
Workplace Options

BenefitsCheckUp® Helps Brighten Seniors' Holidays
National Council on Aging (NCOA)

Commuter Check Benefit Solutions Now Available In NYC
Accor Services North America

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Contribution Plan Administrator
for Pension Specialists, Inc.
in AZ

Daily Val Recordkeeper
for Ingham Group
in SC

401 (k) Administrator
for B & B Benefits
in CA

401(k) Plan Administrator
for Hessel & Associates, LLC
in IL

Defined Contrib Analyst I
for Standard Insurance Company
in OR

Pension Administrator (Consultant I)
for Qualified Benefits, a BenefitStreet company
in CA

Plan Administrator / Account Manager - 401(k)
for Oak Brook-based Employee Benefits Consulting Firm
in IL

Corporate Attorney, ERISA
for Paychex
in NY

Product Manager, Retirement Services
for Paychex
in NY

Client Relationship Mgr
for P.R. & Associates
in NE

General Clerk / Receptionist
for Laborers' National Pension Funds
in DC

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