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December 27, 2006

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The International Foundation of Employee Benefit Plans is a comprehensive resource for those working with benefit plans. Members enjoy personalized secondary research services, informative publications and online information, as well as discounted educational programs, books and distance learning options. Known as the cosponsor of the CEBS designation, the International Foundation also offers numerous ways to keep current with benefit issues, so you are prepared to answer your participants' questions.

Defined Benefit Plan Sponsors, Brace Yourselves for a Jolt to the Corporate Balance Sheet
Excerpt: "One big thing it will cover: how to recognize pension funds on income statements. 'Phase two is going to look at the whole array of calculations that are required on financial statements for pension funds,' . . . . 'It will move past the balance sheet, looking at the P&L and the annual expense recognized for the plan.'" (; free registration required)

Textile Firms Are Sued Over 401(k) Plan
Excerpt: "The Labor Department has filed suit against executives of two defunct textile firms, including one in Santa Monica, demanding the return of more than $100,000 in employee contributions to the firms' 401(k) plan." (Los Angeles Times; free registration required)

Corporate New Year's Resolution: Better 401(k) Options
Excerpt: "One of the tools that has the potential to do a great deal of good is the managed 401(k) account, where a professional manages the employee's 401(k)/403(b) account on their behalf." (Actium's Managed 401(k) / 403(b) Blog; Posted by jsinatra)

It Can Be Hard to Figure Out If You're Being Fleeced on Your 401(k) Fees
Excerpt: "VERY FEW YEAR-END financial actions are as satisfying as cutting your 401(k) expenses. Trimming costs can boost your total return and put more money into your plan. Yet the gnarly matter of discovering how much your retirement program is really costing you is a trying process. Like the Dr. Seuss character the Grinch, the middlemen who are profiting from your retirement funds are largely unseen." (Bloomberg News via Asbury Park Press)

Law Firm Probes Corning Inc. Pension Plan
Excerpt: "Keller Rohrback, a Seattle law firm, says it is investigating whether Corning Inc. has violated federal pension regulations. The investigation, the firm says on its Web site (, 'focuses on concerns that the (Corning Inc. pension) plan fails to comply with accrual rules for defined benefit plans as set forth in ERISA.'" (Star-Gazette)

Editorial: Public Pension Mess Looms
Excerpt: "We hope you were following the Associated Press series on state employee pensions that ran for five days in The Sentinel last week, because taxpayers are going to be hit with the implications it made plain for every level of government." (The Sentinel)

Working Paper: Life-Cycle Asset Allocation with Annuity Markets: Is Longevity Insurance a Good Deal? (PDF)
Excerpt: "[The authors] derive the optimal portfolio choice over the life-cycle for households facing labor income, capital market, and mortality risk. In addition to stocks and bonds, households also have access to incomplete annuity markets offering a hedge against mortality risk. [The authors] show that a considerable fraction of wealth should be annuitized to skim the return enhancing mortality credit." (Michigan Retirement Research Center)

Overview: Feds Ask for Advice on Phased Retirement
Excerpt: "IRS officials are asking for the comments in IRS Notice 2007-8, 'In-Service Benefits Permitted to be Provided at Age 62 by a Pension Plan,' a discussion of IRS efforts to implement Section 905 of the Pension Protection Act." (National Underwriter Life & Health; free registration or paid subscription required)

Boomers Need to Do Homework on Retirement
Excerpt: "What challenges are in store for boomers? And how are they planning for retirement?" (

Working Paper: Financial Literacy and Retirement Preparedness re: Financial Education Programs (PDF)
Excerpt: "The experience of other countries, including a saving campaign in Japan as well as the Swedish pension privatization program, offers insights into possible roles for financial literacy and saving programs." (Michigan Retirement Research Center)

FTSE 100 Companies' Pension Deficits Nearly Halve in 2006, According to Survey in UK
Excerpt: "The aggregate pension deficit of the UK's top 100 companies nearly halved in 2006 due to rising stock markets, and are likely to fall further as employers pay extra cash to save on the risk levies charged by the Pension Protection Fund, according to Watson Wyatt." (

Links to Items on Executive Comp, Benefits in General

Overview: IRS's Semiannual Regulatory Agenda, Including Pension and Benefit Projects
Excerpt: "Subject areas in which the IRS will be drafting proposed regulations include: Definition of 'highly compensated employee;' Deductibility of employer contributions for deferred compensation; The performance of actuarial services under ERISA; Code Sec. 401(a)(4) nondiscrimination requirements; Cafeteria plans; and, Withholding and reporting obligations under Code Sec. 1441 regarding tender offers." (Wolters Kluwer Law & Business)

Overview: DOL Offers Good-Faith Compliance Guidelines for Individual Benefit Statements
Excerpt: "EBIA Comment: The FAB provides timely guidance in response to various compliance issues raised by the benefits community concerning the new benefit statement requirements under ERISA Section 105." (Employee Benefits Institute of America Inc.)

S.E.C. Changes Reporting Rule on Top Executives' Pay
Excerpt: "The Securities and Exchange Commission, in a move announced late on the last business day before Christmas, reversed a decision it had made in July and adopted a rule that would allow many companies to report significantly lower total compensation for top executives." (The New York Times; free registration required)

Court Upholds Exclusion of Independent Contractors Contained in Plan Documents
Excerpt: "EBIA Comment: As this court points out, ERISA permits employers to exclude certain groups or classifications of employees from plan eligibility, provided the classification is neither discriminatory nor based on age or service: '[A]n employer could even exclude all persons whose names begin with the letter 'H,' as long as this was not deemed to be discriminatory in application.'" (Employee Benefits Institute of America Inc.)

Finance and Human Resources: How Business Gets Done
Excerpt: "Sprint Nextel's Chief Financial Officer, Paul Saleh and Sandy Price, senior vice president of human resources, explain how finance and HR can work together on employee benefits." (Employee Benefit News)

A Fun Look at the Dream Life of Benefits Directors
Excerpt: "[W]hether your mind is haunted by ghosts of plan years past (plan experience, SARs and 5500s), present (maintenance, compliance and relationship management) or future (budgeting, redesign and open enrollment), don't be mad at your subconscious - it just shares your concern about getting ahead." (Employee Benefits News)

Online Auctions: Benefit Buying in Cyberspace
Excerpt: "Massachusetts-based HighRoads provides employers with software to create an online bidding environment for employee benefits plans. The technology is seen by some as a cost-saving measure, on both the employer and carrier sides, to the paper-intense request-for-proposals process." (Employee Benefit News)

Ford Auto Workers Weigh Buyout Options
Excerpt: "For hourly workers at Ford, making a decision on the buyout offers required a combination of economic calculations and soul searching. Some 38,000 Ford workers -- roughly half of Ford's U.S. hourly work force -- said they would take one of Ford's eight buyout packages." (AP via The New York Times; free registration required)

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401(k) Senior Plan Administrator
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