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February 15, 2007


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Interim Final EBSA Regs on Distributions from Terminated (Including Abandoned) Pension Plans for Missing Beneficiaries (PDF)
10 pages. The regulatory safe harbor for making a distribution from a terminated pension plan (including an abandoned plan) on behalf of a missing, designated beneficiary is amended to require the rollover of that individual's benefit into an IRA on his or her behalf, rather than being transferred to an account that is not an IRA. Conforming changes are made to the notice required to be sent to the last known address of the beneficiary. (Employee Benefits Security Administration, U.S. Department of Labor)

Text of Proposed Amendment to PTE on Distributions from Terminated (Including Abandoned) Pension Plans (PDF)
The proposed amendment to class prohibited transaction exemption 2006-06 clarifies that its exemption for payment of services to a 'qualified termination administrator' in connection with termination of an abandoned plan is available when the QTA causes the plan to roll over into an IRA the benefit of any missing, designated nonspouse beneficiary. (Employee Benefits Security Administration, U.S. Department of Labor)

Do Traders Win? Trading Behavior and 401(k) Portfolio Performance (PDF)
12 pages. Excerpt: "Overall, 401(k) traders and nontraders appear to earn the same risk-adjusted returns. Among traders, low-turnover strategies such as rebalancing are beneficial, while high-turnover trading is costly. Participants who hold only balanced or life-cycle funds, who we refer to as passive rebalancers, earn the highest risk-adjusted returns." (The Vanguard Group, Inc.)

Massachusetts Governor Proposes that State Take Over Underperforming Local Funds
Excerpt: "Governor Deval Patrick is proposing a tough new mandate for the state's cities and towns: If your pension system isn't performing, we're taking the money and investing it ourselves." (The Boston Globe)

Question: May a Hardship Distribution Be Taken from Safe Harbor Contributions, QNECs, or QMACs?
Excerpt: "No. Generally, hardship distributions may be made only from elective deferrals. However, there are some exceptions." (McKay Hochman Co., Inc.)

Overview: DOL FAB 2007-1 on Investment Advice
Excerpt: "PPA permits employees, agents, or registered representatives of fiduciary advisers to qualify as fiduciary advisers if they satisfy the requirements of applicable insurance, banking, and securities laws relating to the provision of the advice." (McKay Hochman Co., Inc.)

Overview: Department of Labor Guidance on Selecting and Monitoring Investment Advisor (PDF)
Excerpt: "Much has been written of late regarding the importance of an appointing fiduciary understanding fully the fee arrangement with a service provider, to ensure that it is reasonable. FAB 2007-1 serves as a reminder that while an examination of fees is a key component of the selection and monitoring of a service provider, it is not the sole criteria." (Winston & Strawn LLP)

GASB Moves to Improve Pension Disclosures (PDF)
3 pages. Excerpt: "The current proposal is limited to disclosures. However, the GASB has begun a separate, more comprehensive research project to review the effectiveness of its pension accounting and reporting standards." (Governmental Accounting Standards Board)

American Benefits Council Amicus Brief in Xerox Corp. Retirement v. Miller, et al. (PDF)
25 pages. Excerpt: "The ninth circuit's decision is contrary to black letter law and rests on a misreading of an unrelated regulation." (American Benefits Council)

Overview: DOL's Interim Final Rule on Cross-Trading Policies and Procedures for ERISA Accounts
Excerpt: "The recently enacted Pension Protection Act established a helpful new prohibited transaction exemption for cross-trading of securities held by ERISA-covered accounts. Among other things, the exemption requires cross-trading investment managers to adopt written cross-trading policy and procedure statements." (Paul, Hastings, Janofsky & Walker LLP)

Administration Again Proposes Pension Simplification in FY 2008 Budget
Excerpt: "The Bush Administration's fiscal year 2008 budget, released on February 5, 2007, again includes proposals to simplify the retirement plan and IRA rules in an effort to expand personal savings. The proposals are similar to those included in the past several budget requests." (Wolters Kluwer Law & Business)

Firm Aims to Rank Retirement Adviser Credentials
Excerpt: "The alphabet soup that accompanies the name of most retirement plan advisers may shorten once the Financial Services Standards company completes its survey of the industry's offerings. FSS, which of course sponsors its own designation -- the professional plan consultant, is in the process of surveying the adviser community to detail the universe of designations, including the target audience, cost, prerequisites and focus of the eleven leading designations." (The Adviser)

Hewitt Federal Legislation Quick Guide Updated as of February 13, 2007, for Retirement Plans (PDF)
2 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding retirement plans. (Hewitt Associates)

The Equity You Live in: The Home as a Retirement Savings and Income Option (PDF)
32 pages. Excerpt: "To answer some of the salient questions now in the air, this report will discuss the sheer scale and changing role of home equity in America; the relative long-term returns -- and risks -- of investing in real estate (compared to stocks, bonds and cash); and the emotional and behavioral factors that can make it hard to draw down home equity." (Fidelity Research Institute)

Overview: Vesting Schedules -- 2007 Style
Excerpt: "Note: Though not required, if a plan wished to make a plan amendment to reflect that only post plan year 2006 employer contributions will be vested on a top heavy schedule or better, the plan may do so by making a board resolution and completing an amendment page." (McKay Hochman Co., Inc.)

The Role of Real Estate In Funding Retirement: Retiree and Pre-Retiree Opinions (PDF)
6 pages. Excerpt: "Presented in this brief are the survey's key findings, specifically on: how retirees and pre-retirees have used or plan to use home equity to finance their retirement; the incentives and barriers to using home equity to fund retirement; how decisions are made; which methods are used most often to leverage home equity; and the usage of and familiarity with reverse mortgages." (Fidelity Research Institute)


Links to Items on Executive Comp, Benefits in General

Rev. Rul. 2007-12: Liability of Accrual Basis Employer for Payroll Taxes on Deferred Compensation (PDF)
6 pages. Excerpt: "If the all events test and recurring item exception of § 461 are otherwise met, an accrual basis taxpayer may treat its payroll tax liability as incurred in Year 1, regardless of whether the compensation to which the liability relates is deferred compensation that is deductible under § 404 in Year 2." (Internal Revenue Service)

Overview: IRS's Section 409A Compliance Program for Discounted Stock Options (PDF)
5 pages. Excerpt: "The Program also provides certain reporting relief for employers, but it does not affect either the employer's obligation to report on Form W-2 the employee's compensation income from exercising the stock right or the employee's obligation to report and pay income tax on that compensation income." (Sutherland Asbill & Brennan LLP)

Overview: Compliance Resolution Program for 2006 Exercise of Backdated & Discounted Options & SARs (PDF)
3 pages. Excerpt: "The Internal Revenue Service issued Announcement 2007-18, which implements a compliance resolution program for employers whose employees exercised stock options or stock appreciation rights during 2006 that did not comply with the requirements of Section 409A of the Internal Revenue Code of 1986." (Pillsbury Winthrop Shaw Pittman LLP)

Overview: IRS February 28, 2007, Deadline for Employee Relief on Discounted Employee Options
Excerpt: "Any company that may have granted discounted options that were exercised in 2006 should carefully (and promptly) consider the new IRS program." (Orrick, Herrington & Sutcliffe LLP)

Overview: IRS Announcement 2007-18
Excerpt: "On February 8, the Internal Revenue Service (IRS) released Announcement 2007-18 that permits employers to pay the additional taxes incurred by certain covered individuals arising under Internal Revenue Code Section 409A due to the exercise of certain discounted stock options or stock appreciation rights (stock rights) in 2006." (J.P. Morgan Retirement Plan Services, LLC)

Hewitt Global Report -- Fourth Quarter 2006 Themes (PDF)
7 pages. Excerpt: "Antidiscrimination issues were a common theme in legislation passed or proposed during the third quarter of 2006. As governments try to cope with labor shortages exacerbated by aging populations, legislation abolishing the mandatory retirement age is becoming more common." (Hewitt Associates)

Court Denies Dismissal Motions in Shareholder Derivative Actions on Timing of Stock Option Grants
Excerpt: "On February 6, 2007, Chancellor Chandler of Delaware's Court of Chancery issued two important decisions relating to the purported manipulation of stock option grant dates. In both cases the court denied the defendants' motions to dismiss in large part. Given the prominence of Delaware's Court of Chancery in corporate matters, these decisions deserve careful analysis, and may provide useful lessons and insights in future stock option litigation." (Paul, Hastings, Janofsky & Walker LLP)

Hewitt Federal Legislation Quick Guide for February 13, 2007, on Human Resources & Employment Law (PDF)
6 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates)

2007 Top Five Total Rewards Priorities Survey (PDF)
9 pages. Excerpt: "Health care costs are still a pressing priority, but talent shortages represent a greater challenge. As we move forward in the 21st century, demographics and globalization trends outweigh other issues." (Deloitte Consulting LLP and the International Society of Certified Employee Benefit Specialists)


Newly Posted Events

401(k) Plans
in Washington on March 27, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

401(k) Plans
in Oregon on April 10, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

Advanced Valuation: Special Topics
Nationwide on March 8, 2007
presented by National Center for Employee Ownership

Cafeteria Plans
in Washington on March 28, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

Cafeteria Plans
in Oregon on April 11, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

COBRA Compliance for Group Health Plans
in Washington on March 30, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

COBRA Compliance for Group Health Plans
in Oregon on April 13, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

ERISA Compliance for Health & Welfare Plans
in Washington on March 29, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

ERISA Compliance for Health & Welfare Plans
in Oregon on April 12, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

HIPAA Portability, Privacy & Security
in Washington on March 30, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

HIPAA Portability, Privacy & Security
in Oregon on April 13, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

HSAs, HRAs, and Consumer-Driven Health Care
in Washington on March 29, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)

HSAs, HRAs, and Consumer-Driven Health Care
in Oregon on April 12, 2007
presented by Employee Benefits Institute of America Inc. (EBIA)


Newly Posted Press Releases

Meaningful Hiring, Orientation Programs Key to Long-Term Success, Watson Wyatt Finds
Watson Wyatt

Schwab's New '15-Minute IRA' Makes It Easier Than Ever to Open and Fund an Individual Retirement Account
Charles Schwab & Co., Inc.

U.S. Labor Department Announces New Rule for Distributions to Missing Non-spouse Beneficiaries
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Funding Status of U.S. Pension Plans Improved in January, According to Mellon Financial
Mellon Financial Corporation

Council Commends Mental Health Parity Bill Passed by Senate HELP Committee
American Benefits Council

Treasury, IRS Issue Guidance Helping Employees Transition To HSAs
U.S. Treasury Department and Internal Revenue Service

NCQA to Require Quality Measurement, Improvement of All Health Plans
NCQA

Travel Guard Comes to the Aid of Stranded Winter Travelers
AIG Travel Guard

Connecture Targets Small Health Plans
Connecture, Inc.


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Benefit Software Customer Support
for DATAIR Employee Benefit Systems, Inc.
in IL

Defined Contribution Software Customer Support
for DATAIR Employee Benefit Systems, Inc.
in IL

401(k) Account Manager
for Great-West Retirement Services
in WI

Plan Administrator
for LPC
in CA

Retirement Plan Administrator
for PEN-CAL Administrators, Inc.
in CA

Plan Administrator
for The Newport Group
in NC

Regional Service Coordinator
for Standard Insurance Company
in TX

Communications Consultant, Retirement Services
for Fidelity Investments
in MA, NH

Business Development Associate
for World's Premier Provider of Account Administration Services
in CA

Compliance Analyst
for The Newport Group
in FL

Actuary
for Acuff & Associates, Inc.
in TN

Defined Contribution Client Management Specialist
for Prudential Retirement
in IA, PA




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