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December 29, 2006


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The Inside Edition: Has the 'Boomer-Era' of Fiduciary Liability Begun to Boom? Overview of a Lawsuit
Excerpt: "The heart of the claim comes down to this: (A) plan fees are excessive and significantly and improperly reduce the returns of participants, and in turn, harm participants' retirement security; and (B) the defendants failed to fully and accurately disclose crucial information to participants." (the McHenry Group)

Human Resources Should Know the Rules for Shutting a 401(k) Plan Down
Excerpt: "No matter what the reason for shutting down a 401(k) plan, HR must address numerous -- sometimes complicated -- issues to make sure the plan is shuttered correctly." (Society for Human Resource Management)

Up for Review: The 401(k) Industry
Excerpt: "Americans' 401(K) retirement plans are starting to face scrutiny -- of a kind that previously helped to reshape the mutual-fund business and many practices on Wall Street." (The Wall Street Journal via Pittsburgh Post-Gazette)

Breached-Fiduciary Complaints Threaten Outlook for 401(k) Plans
Excerpt: "A series of breached-fiduciary complaints filed against several high-profile Fortune 500 companies could shake the foundation on which 401(k) plans operate if a favorable ruling or cash settlement is scored by the plaintiffs." (Employee Benefit News)

Overview: Lawsuits Allege that Participants Were Charged Excessive Fees for 401(k) Investments
Excerpt: "The suits shine a light on the controversial issue of revenue-sharing, and assert among other things that participants needed to get more information about these deals. Some dispute that contention. 'Does the average participant care?' asks Ted Scallet, a principal at Groom Law Group in Washington." (PLANSPONSOR.com; free registration required)

California Commissions Public Pension Obligations Review
Excerpt: "California Gov. Arnold Schwarzenegger . . . created a commission on Thursday to study how to meet future pension obligations. The 12-member commission -- six to be appointed by the Republican governor, six by Democratic legislative leaders -- will have one year to study the problem, determine the extent of unfunded liabilities and devise a plan." (Reuters via The Washington Post; free registration required)

Estimates for Public Pension Funds to Tighten
Excerpt: "The states of New York, New Hampshire, Tennessee and about a dozen other governments may no longer be able to say their pension funds are fully funded no matter how the markets perform. Accounting rule makers have proposed an amendment that would force these governments to provide a more realistic estimate of how much they owe retirees over time." (The New York Times; free registration required)

ASPPA Provides Online IRS/DOL Question Submission Form for Use at Conferences
Excerpt: "Use this form if you are an ASPPA member (or ASPPA Conference attendee) to submit question(s) to the ASPPA Government Affairs Committee; the questions will be presented to government representatives during our Q&A sessions at the various conferences throughout the year. . . . Generally, you will not get individual responses to your questions (but that may happen occasionally). We expect that the questions will be addressed at our various conferences." (ASPPA)

New Strategies for Lifetime Income and on Increasing Retirement Income
Excerpt: "[Analysts at Fidelity Research Institute, a new center focusing on public policy and investment theories] caution that strategic decisions on income don't stop once an individual leaves the workforce, and retired workers must be knowledgeable about when and in what order to access personal savings, Social Security and other retirement income accounts." (Employee Benefit News)

San Diego City Lawyer Challenges Pension Ruling
Excerpt: "San Diego City Attorney Michael Aguirre has asked a California judge to rethink his order severely constricting Aguirre's ability to recover improperly granted pension benefits from city workers." (PLANSPONSOR.com; free registration required)

Opinion: City of San Diego Employees' Other Pension
Excerpt: "In 1982, the city was able to get out of paying into social security because it had the regular defined benefit city pension plan already in place. Almost every city and county has chosen that route, opting out of social security. But there was no need for the city to start up the second SPSP pension program." (voiceofsandiego.org)

ESOP Companies Expand Globally (PDF)
4 pages. Excerpt: "As globalization and the related investment opportunities continue, ESOP Companies will continue to expand and operate outside the United States in an effort to become stronger and more profitable, and thus able to compete in the global marketplace. The tax advantages of an ESOP used in conjunction with the S election represent a strategic tool that some ESOP Companies may be able to take advantage of with respect to these types of investment opportunities." (Morgan, Lewis & Bockius LLP)

2006 Was Another Rough Year for Plan Sponsors, But 2007 Could Be Better
PLANSPONSOR looks at the main benefit issues by answering the following questions: What we said last year; Where we are; and, What's ahead. (PLANSPONSOR.com; free registration required)

The Process and Criteria for Selecting Investment Advisers Under ERISA
Excerpt: "Is the adviser qualified? Fiduciaries should consider whether the adviser has the appropriate investment credentials, experience, and expertise. For example, fiduciaries should evaluate the adviser's: Experience with other ERISA plans; Education, experience, and industry credentials; Registration with appropriate regulatory authorities; Reputation; References; Past performance with investments of the type contemplated." (PLANSPONSOR.com; free registration required)

Number of Ohio Educators Collecting Bigger Paychecks and Pensions at Same Time Has Increased
Excerpt: "Dennis Leone, retirement system board member, said that while it may be a win-win situation for a school district and the retiring employee, the pension system is paying the bill. It lost $2 million last year providing health insurance to retired rehirees, he said." (The Columbus Dispatch)

Towers Perrin U.S. Legislative Tracking Charts -- Retirement -- Updated December 27, 2006 (PDF)
13 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

Overview: IRS/PBGC/EBSA Propose Changes to Form 5500 to Conform to PPA
Excerpt: "The Agencies would like to move quickly to incorporate changes by an internal deadline of February 2007, which is required to meet the goal to revise the Form 5500 for the 2008 plan year, as well as implement an electronic filing and processing system." (Wolters Kluwer Law & Business)

Text of Annual Appeal for Financial Support by the Pension Rights Center
The Pension Rights Center is a section 501(c)(3) tax-exempt organization. Its programs include preparing proposals for expansion of pension coverage. Donations can be made by credit card (think tax deduction for 2006). (Pension Rights Center)


Links to Items on Executive Comp, Benefits in General

Text of SEC Interim Final Rules on Executive Compensation Disclosure (PDF)
14 pages. Excerpt: "The amendments to Item 402 of Regulations SK and SB revise Summary Compensation Table and Director Compensation Table disclosure with respect to stock awards and option awards to provide disclosure of the compensation cost of awards over the requisite service period . . . . The revised disclosure replaces disclosure in the Summary Compensation Table and Director Compensation Table of the aggregate grant date fair value of awards computed in accordance with FAS 123R." (Securities and Exchange Commission)

Same-Sex Benefits Ban Gets Alaska Governor's Veto
Excerpt: "Gov. Sarah Palin vetoed a bill Thursday that sought to block the state from giving public employee benefits such as health insurance to same-sex couples." (Anchorage Daily News)

Overview: SEC Amends Rules on Proxy Disclosure of Equity Awards Effective for 2007 Proxy Season (PDF)
3 pages. Excerpt: "The new rules require inclusion in the salary or bonus column of the SCT of any amount that an NEO elects to forego in exchange for an award of stock, options or non-equity incentive plan compensation." (Frederic W. Cook & Co., Inc.)

Pay Packages Allow Executives to Jump Ship With Less Risk
Excerpt: "[G]olden hello payments are intended to make the executive 'whole' -- in essence to treat the executive as if his career were one smooth ascent with no costly interruptions. And these multimillion-dollar payments and perks are used to draw in not only chief executives, but virtually every member of the executive suite." (The New York Times; free registration required)

Towers Perrin U.S. Legislative Tracking Charts Human Resources -- Updated December 27, 2006 (PDF)
11 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

Hewitt Global Report: Asia-Pacific Monthly Legislative Updates
Excerpt: "[These] monthly updates summarize recent legislative activity in the Asia-Pacific region, by country, for the following issues: labor environment, cost of employment, employment terms and conditions, retirement and social security, health care system, taxation of compensation and benefits, and issues for expatriate employees." (Hewitt Associates)

Hewitt Global Report: Latin America Monthly Legislative Updates
Excerpt: "[Hewitt's] monthly updates summarize recent legislative activity throughout Latin America, by country, for the following issues: labor environment, cost of employment, employment terms and conditions, retirement and social security, health care system, taxation of compensation and benefits, and issues for expatriate employees." (Hewitt Associates)


Newly Posted Events
(Post Yours!)

Journey deep into the world of IRAs
in South Carolina on January 16, 2007
presented by Wolters Kluwer Financial Services

Journey deep into the world of IRAs
in New Hampshire on January 16, 2007
presented by Wolters Kluwer Financial Services

Journey deep into the world of IRAs
in North Carolina on January 17, 2007
presented by Wolters Kluwer Financial Services

Journey deep into the world of IRAs
in New Hampshire on January 17, 2007
presented by Wolters Kluwer Financial Services

Journey deep into the world of IRAs
in Virginia on January 18, 2007
presented by Wolters Kluwer Financial Services

Journey deep into the world of IRAs
in Massachusetts on January 18, 2007
presented by Wolters Kluwer Financial Services

Managing the Health of Your Workforce
in Ohio on January 17, 2007
presented by WEB (Worldwide Employee Benefits Network) Cleveland Chapter


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Pension Administrator
for Pension Dynamics Corporation
in CA

Retirement Plan Administrator
for Berry, Dunn, McNeil & Parker
in ME

Account Manager (Insurance/TPA)
for Zenith Administrators
in NV

Benefits Administrator
for Phillips - Van Heusen Corp.
in NJ




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