Retirement Plans
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January 22, 2007

Sponsored by: ASPPA • Working for America's Retirement™

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Banner ad for ASPPA • Working for America's Retirement™

Don’t Miss The Los Angeles Benefits Conference!

Join your colleagues January 25-26, 2007 at the Hilton Los Angeles/Universal City for the perfect opportunity to discuss employee benefits issues with top IRS and DOL government agency representatives. Co-Sponsored by the IRS, ASPPA, NIPA and WP&BC, this conference offers a specialized agenda highlighting the latest on pension issues. Don’t let this opportunity pass you by. Register NOW!

Supreme Court Takes ERISA Fiduciary Case
Excerpt: "The Supreme Court has accepted cert in Beck v. PACE International Union, to decide the issue of whether a pension plan sponsor's decision to terminate a plan by purchasing an annuity, rather than to merge the pension plan with another, is a plan sponsor decision not subject to ERISA's fiduciary obligations." (Workplace Prof Blog)

Ask Your Boss for 401(k) Advice
Excerpt: "[M]otivated by recent changes in the federal pension law, more employers are concluding that offering sound investment advice gives workers a critical perk. And the investment companies that handle retirement accounts are stepping up with customized advice for workers who want it." (Daily News, L.P.)

Overview: Notice 2007-7 Provides Grab-Bag of Guidance on PPA Changes to Plan Distribution Rules
Excerpt: "[IRS Notice 2007-7] provides guidance on the new interest rate assumptions for applying the IRC § 415(b) limit to lump sum distributions, new hardship distribution rules, the accelerated vesting requirements for employer nonelective contributions, and the expanded notice and consent period for distributions." (Deloitte)

401(k) Plan Fees: The Next Wave of Litigation?
Excerpt: "A series of lawsuits recently were filed against at least ten large companies and their third-party administrators, charging that the plan fiduciaries breached their duties under ERISA by subjecting plan participants to excess fees and expenses, consequently reducing the value of their investments." (White & Case LLP)

Overview: ADP/ACP Testing Changes
Excerpt: "The final 401(k) and 401(m) regulations are effective for the 2006 plan year, which means the first ADP/ACP testing period using the final regs has arrived. [The target page] is an encore presentation of an article from our Prototype Plan News Newsletter of February/March 2006." (McKay Hochman Co., Inc.)

Canadian Business Group Calls for Public Plan Accountability
Excerpt: "Arguing that retirement benefits and wages are increasingly more generous for Canadian public sector employees than private sector employees, the Canadian Federation of Independent Business (CFIB) issued a report calling for public plan controls and accountability." (; free registration required)

Text of PBGC Reg Making Amendment Conforming to Elimination of Annual Notice for Underfunded Plans
Excerpt: "Section 4011 of ERISA requires certain underfunded plans to notify participants of plan funding status and the limits on the PBGC's guarantee. The Pension Protection Act of 2006 repealed section 4011 for plan years beginning after 2006 and replaced the disclosure requirement under that section with a disclosure requirement under Title I of ERISA. This rule amends PBGC's regulation on Disclosure to Participants to reflect that statutory change." (Pension Benefit Guaranty Corporation)

U.S. Supreme Court Turns Away Survivor Designation Case
Excerpt: "The U.S. Supreme Court has turned down a request to hear a case in which an appellate court decided a retiree could not change his surviving spouse designation even after the spouse he initially designated signed a waiver of benefits in their divorce settlement." (; free registration required)

Working Paper: Crowd-Out, Adverse Selection and Information in Annuity Markets (PDF)
42 pages. Excerpt: "[A]nnuitization is rare in most countries. This project examines workers' choices during the payout stage in Chile, the only country that has had mandatory personal accounts long enough to have had substantial experience with payouts." (Michigan Retirement Research Center)

Overview: IRS Guidance on Retirement Plan Distributions under the PPA (PDF)
2 pages. (Milliman)

Overview of Distribution Guidance in Notice 2007-7
Excerpt: "In Notice 2007-7, the IRS issued guidance in the form of questions and answers with respect to certain distribution provisions of the Pension Protection Act (PPA)." (McKay Hochman Co., Inc.)

Opinion: More Profit for 401(k) Asset Managers and Service-Providers Means More Fiduciary Liability
Excerpt: "Excluding actively managed investment opportunities represents a substantial opportunity to rationalize plan structure, minimize expenses and hidden costs and reduce sponsor risk and liability. According to William Sharpe 'properly measured, the average actively managed dollar must under-perform the average passively managed dollar, net of costs'. This logic is irrefutable and provides a sound fiduciary basis for indexing." (Anonymous Blogger)

Do Public Plans Provide the Model for Retirement Offerings?
Excerpt: "While defined benefit plans have been getting a bad rap lately, a panel of industry leaders at PLANSPONSOR's DB Summit last month said DB plans contain elements that are too valuable to discard, and offered an idea for what the best retirement offering should look like." (; free registration required)

Bill in Delaware Would Lower Number of Years It Takes for State Workers to Retire with Full Pension
Excerpt: "Allowing state workers to retire at 25 years with a full pension would cost the state millions of dollars annually in pension fund contributions and health insurance costs . . . ." (Delaware State News via

International Update, December 2006
Excerpt: "This monthly publication covers recent developments in foreign public and private pensions." (U.S. Social Security Administration Office of Policy)

PPA Guidance: Plan Sponsors Should Speak Up & Offer Practical Solutions for Enforcing Provisions
Excerpt: "Speak up now was the message of a panel of industry experts at PLANSPONSOR's 2006 DB Summit last month in Washington, D.C. While the 900+ pages of the PPA legislation offers a framework for improving retirement benefit offerings from US employers, the details necessary for enacting the provisions of the PPA will create an enormous amount of regulations . . . ." (; free registration required)

The Top 36 Pension Plans Reviewed Using a System to Evaluate the Financial Health of Plans
Excerpt: "The information for each plan comes from the most recent annual report – Form 5500 – filed with the Department of Labor. These forms are free and available to the public on You should download a copy of your plan's Form 5500 and familiarize yourself with it – it contains critical information and indicators of your plan's financial health." (Know Your Pension)

Plan May Pursue Insurance Broker for Acquiring Inadequate ERISA Bond
Excerpt: "EBIA Comment: We don't see ERISA bonding cases very often. And even though this one is mostly about whether the plan could pursue its state law claims against its insurance broker, we thought this would be a good opportunity to remind our readers about the broad scope of ERISA's bonding requirement." (Employee Benefits Institute of America Inc.)

Overview: Controlled Group Coverage Testing
Excerpt: "The lines of business ownership have become increasingly more complicated in the modern business climate. This may have a significant impact on the ability of employers to maintain separate retirement plans due to the requirements of the nondiscrimination regulations. The purpose of this article is to describe how coverage testing is performed when an employer is a member of a controlled group." (McKay Hochman Co., Inc.)

United Kingdom Pension Bill Would Raise Retirement Age, Streamline Pension Rules (PDF)
3 pages. Excerpt: "The Bill would raise the state pension age – in three stages – from 65 to 68 by 2046. In addition, the Basic State Pension would be linked to earnings, leading to more generous pension benefits. The Government said that as a result of the Bill, the state pension would be worth twice as much in 2050 as it would have been without reform." (Watson Wyatt Worldwide)

Sponsored by: Investment Company Institute

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February 7: The Latest Word from Washington on Retirement Plan Issues ...

Get up-to-the-minute insights from Labor Department and IRS officials on the Pension Protection Act of 2006, the most comprehensive revision of pension law since ERISA in 1974, at the Investment Company Institute’s Pension Protection Act Developments Conference in Washington, DC on February 7. The conference also features an address by Vanguard Group Chairman and CEO John Brennan.

ICI is the national association of U.S. mutual funds, which manage more than half of 401(k) assets.

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Links to Items on Executive Comp, Benefits in General

Employers Show Focus on Aging Workforce
Excerpt: "Employers are steadily developing strategies to broaden their understanding of an aging workforce, including conducting studies of their labor pool, finds a recent survey by the Center on Aging and Work, a Massachusetts-based research group." (BenefitNews Connect)

Commentary: Boomers' Work Plans Good News for Economy
Excerpt: "New research suggests that aging boomers plan to work longer than people born just a dozen years earlier. If they do, the economy will pump out more goods and services and mitigate the economic pressures created by an aging population." (Albany (N.Y.) Times Union via Urban Institute)

Appellate Court Reinstates Deferred Compensation Plan Case
Excerpt: "The 6th U.S. Circuit Court of Appeals has reinstated a case brought by a deferred compensation plan participant who claimed her former employer violated the Employee Retirement Income Security Act (ERISA) by failing to pay her the benefits she accrued under the plan after she terminated her employment." (; free registration required)

Overview: Tax Code Section 162(m) Limitation on Deductions for Entertainment Use of Business Aircraft
Excerpt: "Taxpayers that currently sponsor plans that provide for awards of performance-based compensation intended to comply with IRC § 162(m) may be able to make changes to the plans to provide benefits in cash or in-kind (e.g., entertainment use of corporate aircraft). Depending on the terms of the plan, it may be necessary to amend the plan to provide for in-kind payments." (Deloitte)

Overview: SEC Revision of Executive Compensation Rules
Excerpt: "The new revisions were adopted as interim final rules so they could be in effect for the 2007 proxy season." (Buchanan Ingersoll & Rooney PC)

Opinion: Executive Compensation -- Worth Every Last Million
Excerpt: "Executive compensation today isn't the sinful overindulgence of greedy executives that it's made out to be. There may be some abuse among the 7,500 publicly traded corporations in the country, but most of the CEOs who receive those huge pay packages not only earn them but also, yes, deserve them." (The Washington Post; free registration required)

Executive Remuneration Update: SEC Revision of Rules for Disclosing Equity Compensation
Excerpt: "This update provides an overview of the revisions and possible implications for company disclosure." (Mercer Human Resource Consulting LLC and Mercer Investment Consulting, Inc.; free registration required)

Comparing and Customizing SAS 70 Reports
Excerpt: "As a benefits manager, I receive SAS 70 reports from a number of service providers, but no two reports are alike. Why is this, and what should I really be looking for in these reports?" (Employee Benefit News)

Book Review: The Great Risk Shift: The Assault on American Jobs, Families, Health Care, & Retirement
Excerpt: "[T]o Jacob Hacker, author . . ., the effort to dismantle the Social Security system on which so many Americans depend is one piece of a larger campaign that, in the name of personal responsibility, is exposing Americans to the sorts of financial and health risks that can potentially wreck their lives." (California Literary Review)

Opinion: Fragile Hopes for Bipartisan Rescue of Social Security
Excerpt: "President Bush is renewing his call for a bipartisan effort on Social Security, but few other issues so clearly highlight the limits of bipartisanship these days, the mistrust and ideological division just barely below the surface." (The New York Times; free registration required)

Newly Posted Events
(Post Yours!)

2007 Voluntary Fiduciary Correction Program Update
in South Carolina on March 22, 2007
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Uncommon Solutions to Common Plan Problems
in Ohio on February 6, 2007
presented by ASPPA Benefits Council of Cleveland

Newly Posted Press Releases
(Post Yours!)

Accredited 401k Training for Retirement Professionals to be Offered February 8-9 through Robert Morris University, Pittsburgh
Financial Service Standards, LLC.

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Health/Welfare Consultant - Benefits Evaluation Team
for Hufnell, Inc Executive Recruiters - Benefits Outsourcing, Benefits and HR
in PA

Benefits Analyst / Underwriter
for Northwestern Benefit Corporation of Georgia
in GA

Lead Benefits Analyst
for Countrywide Financial
in CA

Internal Service Representative
for Northwestern Benefit Corporation of Georgia
in GA

Consulting Actuary, Health Practice
for First Niagara Benefits Consulting
in NY

Retirement Plan Administrator
for Capital City Bank Group, Inc.
in FL

Pension Administrator
for Matthews, Gold, Kennedy & Snow, Inc.
in AZ

Programmer / Analyst
for First Niagara Financial Group (Subsidiary Burke Group)
in NY

Program/Project Manager-Implementation
for Fidelity Investments
in NC

Defined Contribution/401(K) Plan Administrator
for Pension Actuarial Consulting Firm in Northport, L.I., NY
in NY

Defined Contribution Plan Administrator
for TravisWolff
in TX

Account Manager
for Northwestern Benefit Corporation of Georgia
in GA

Supervisor, Operational Compliance and Calculations
for University of California, Office of the President
in CA

Broker Dealer Chief Compliance Officer/ Executive Benefits Attorney
for Retirement Capital Group
in CA

Senior Relationship Manager – Retirement Plans
for T. Rowe Price
in MD

Client Manager
for Benetemps
in MA

Data Implementation Administrator
for Vanguard
in PA

Benefits Analyst
for Vanguard
in PA

Client Relationship Administrator
for Vanguard
in PA

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