January 5, 2007 Sponsored by: ASPPA • Working for America's Retirement™ (Click on company name or banner to learn more.)
Managed Accounts vs. Lifestyle or Lifecycle Funds Excerpt: "[T]he critical factor to success using Lifestyle or Lifecycle funds is the participants understanding of them. Meeting that challenge require excellent communication and education programs, and most importantly, a workforce that wants to be educated on these issues." (National Association of Government Defined Contribution Administrators, Inc.) Five Big Lessons from Recent Market History Excerpt: "Mistakes can and are made in all kinds of environments, and the market's behavior over the last 16 full years encompasses the extremes, stretching from two severe bear markets with a long bull market in between. This all-encompassing financial market history can provide a number of valuable asset allocation lessons." (AAII Journal, The American Association of Individual Investors) Commentary: Where are All the Managed 401(k) Services? Excerpt: "Many plan sponsors . . . are asking themselves, 'Why should we have our employees wade though the complexities of disclosures and untested computer models, when we can use an unbiased 3rd party?' Of course, the other side of the argument is that fund providers have intimate knowledge of their own funds and can provide a high level of advice. They also have the advantage of trading efficiencies on their own platform, which could ultimately lower the cost for plan participants." (Actium's Managed 401(k) / 403(b) Blog) Tax-Exempt Sector Has Less DC Plan Savings Excerpt: "Employees in tax-exempt sectors have 23% less saved in their workplace savings plans than corporate workers, a study released [January 4] by Boston-based mutual fund giant Fidelity Investments shows." (Investment News; free registration required) A New Law Makes It Easier for Advisors to Leverage Themselves Excerpt: "[T]he Pension Protection Act defines as 'fiduciary advisors' individuals who may offer personally tailored professional investment advice to help employees manage their 401(k) plans, individual retirement accounts and other retirement vehicles -- if they meet disclosure, qualification and self-dealing safeguards." (Financial Advisor) Viewpoint: Helping Participants Get On Target with Investment Management Excerpt: "On-site education and individual counseling are the most effective methods of assisting participants with investment management. We should use the technology and investment options/services spawned from the past decade to help professionals improve efficiency when educating and counseling participants, rather than expecting participants to subscribe to DIY investing." (National Association of Government Defined Contribution Administrators, Inc.) Opinion: Can DC Plans Alone Shoulder the Retirement Savings Burden? Not Without Change Excerpt: "The notion that defined contribution (DC) plans need to be 'DB-ized' has reached cliché status. What do we all mean by this? Basically, if DC plans are now to do all the work that defined benefit (DB) plans used to do, they will have to take on certain DB characteristics." (PLANSPONSOR.com; free registration required) Reviewing Annuities: More Points to Consider Excerpt: "The focus here is on economics, and in particular unpleasant economic surprises in the form of surrender-type charges and restrictions on moving money around." (403(b)-457 Plans Blog; posted by Thomas L. Geer) Reexamining Moench -- When Must a Fiduciary Sell Employer Stock? (PDF) 21 pages. Excerpt: "ERISA 'stock drop' cases are becoming common and frequently follow the almost inevitable securities class action that is filed whenever a publicly held corporation's stock declines due to a negative development and the attendant publicity. According to one published report, up to fifty ERISA stock drop cases may have been filed in the last two years alone." (Snell & Wilmer LLP) Commentary on the Paper Clip Theory of Pension Governance Excerpt: "When fiduciaries do not have a vested interest in adhering to best practices, will they be tempted instead to follow the path of least resistance? What motivates an individual to be a good steward of other people's money? Is it an increasing awareness of personal and professional liability that moves people to act or a concern that doing the right thing counts most?" (Pension Risk Matters) Commentary: Pension Contagion -- Should We Worry? Excerpt: "Broadly defined, the spread of bad financial news, like a transmitted disease, moves quickly, has the potential to wreak havoc and is hard to contain once unleashed. This is why policy-makers worry about anything that can accelerate diminished investor confidence and panic market participants into selling off positions they would otherwise choose to hold." (Pension Risk Matters) The End of Retirement as We Know It Excerpt: "[S]ince you've clicked on this article, you can't be too tired of reading about all of the impending retirement woes out there, so let me sum up the program's main points and then explain how you can be an extraordinary American by actually being able to retire." (Robert Brokamp via The Motley Fool) Retirement May Be Far Off, But Check Current Savings Now Excerpt: "Retirees today start with five to six times their average lifetime income on average, according to Mauricio Soto [of] the Center for Retirement Research at Boston College. 'Most people today are fine, but Social Security replacement rates are going down and people are retiring earlier,' he said. As that happens, and with pensions and retiree health care disappearing, five times income isn't going to be enough, he said. 'I'd say you're looking at needing between 7 and 10 times income.'" (Chicago Tribune; free registration required) Pan-European Pension Framework Adopted, Taken Step Further by Belgium Excerpt: "In an effort to attract multinational companies, Belgium implemented a new law Jan. 1, 2007, that takes the pan-European framework for pension funds a step further, providing tax benefits and other enticements for locating in Belgium. The law passed the Belgian parliament on Oct. 27, 2006." (Watson Wyatt Worldwide) Links to Items on Executive Comp, Benefits in General Commentary: Goodbye 109th Congress, Hello 110th Excerpt: "House Democrats . . . plan to hold five-day-a-week legislative sessions (Monday through Friday), rather than the more recent three-day sessions (Tuesday through Thursday). One of the first things they intend to pass is 'pay-go' rules that will require any legislative change that costs money to be accompanied by changes that reduce spending or raise taxes to pay for it." (Dallas Salisbury via Human Resource Executive Online; free registration required) New York Clarifies Stock Option Allocation Rules Excerpt: "The State of New York Department of Taxation and Finance has amended New York State Personal Income Tax Regulations to clarify rules for allocation of income from stock options, stock appreciation rights, and restricted stock for non-residents and part-year residents." (PLANSPONSOR.com; free registration required) Newly Posted Events Retirement as a Time to Reinvent, Rewire and Renew: Educating Employees about Total Retirement Planning Nationwide on January 17, 2007 presented by International Foundation for Retirement Education (InFRE) Newly Posted Press Releases AARP Calls for 2007 'Best Employers for Workers Over 50' Applications AARP Oregon Employers and Leaders Commit to National Initiative for Improving Quality and Value in Health Care U.S. Department of Health & Human Services Award-Winning Guide on Caregiving Available Free LifeCare, Inc. Newly Posted or Renewed Job Openings Pension Administration for R.J.L. Pension Services, Inc. in FL Defined Benefit Client Account Manager for New York Life Investment Management - Retirement Plans Services in MA Retirement Plan Implementation/Sales Support for Benefit Consultants Group in NJ DC/401(k) Administrator for PENFlex Services, Inc. in IL 401(k) Plan Administrator for Qualified Plans, LLC in GA Client Service Manager for Princeton Retirement Group, a subsidiary of Merrill Lynch in NC Retirement Plans Administrator for Security Benefit in KS Benefits Compliance Manager for Aerojet - Sacramento in CA Administrator - 401(k) for Continental Benefits Group, Inc. in NJ OmniPlus Business Analyst for DC Specialists, Inc in ANY STATE MEP/PEO Client Relationship Manager - Los Angeles, CA for Transamerica Retirement Services in CA Client Relations Manager- TPA for Benefit Consultants Group in NJ Account Executive-Retirement Services for Principal Financial Group in MD 401(k) Plan Administrator/Retirement Plan Consultant for TriStar Pension, Ltd. in OK Retirement Service Consultant for Stanton Group in MN Director/VP Client Services for Fidelity Investments in NH 401(k)/Defined Contribution Administrators for Graham Group Pension Services, Inc in NY Defined Contribution Conversions Project Leader - Small Plans for New York Life Investment Management - Retirement Plans Services in MA Nonqualified Plans Consulting Administrator for Vanguard in PA Compliance Administrator - Fund Accounting for Vanguard in PA Actuarial/Defined Benefit Professional for The Pension Service in CT, MA, ME Health and Welfare Project/Client Manager for TRI-AD in CA Retirement Specialist for Dreyfus Corporation in ANY STATE Vice President Product Development, Retirement Services for MassMutual in MA Employee Benefits Administrator for Aerojet - Sacramento in CA Benefit Administrator for RSM McGladrey in IL Actuarial Assistant for Retirement System Group Inc. in NY Pension Administrator for Retirement System Group Inc. in NY Sr. Benefits Administrator for Aerojet - Sacramento in CA Principal Analyst (Two-Year Contract Position) for University of California in CA Handy Links:
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