BenefitsLink Retirement Plans Newsletter for March 9, 2007

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March 9, 2007

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Few Private Company CEOs Are Knowledgeable About the New 2006 Pension Reform Act
Excerpt: "Few CEOs of fast-growth private companies, 27 percent, are knowledgeable about the new 2006 Pension Reform Act guidelines that took effect on January 1, 2007; only four percent were rated very knowledgeable and 23 percent somewhat knowledgeable. Most CEOs, 61 percent, admitted they are not knowledgeable at all, while three percent were uncertain and nine percent did not report." (PricewaterhouseCoopers)

Most CEOs on the Fence about Automatic Enrollment
Excerpt: "Only 5% of firms intend to use the automatic enrollment feature sanctioned by the PPA to get employees to contribute to a 401(k) account, according to a recent survey of 'Trendsetter' firms by PricewaterhouseCoopers' Private Company Services." (PLANSPONSOR.com; free registration required)

Opinion: 401(k) Investors Need a 'Safe' Target-Date Retirement Fund Option
Excerpt: "Lawmakers in Washington this week met to discuss whether fees for 401(k) plans are too high or aren't transparent enough. The nation's 401(k) plan participants would have been better served had lawmakers discussed what the appropriate default investment options should be for those who will have their nest egg contributions automatically invested into a target-date or target-risk retirement fund." (MarketWatch)

PPA Compliance Alert for Sponsors of Defined Contribution Plans (PDF)
4 pages. Excerpt: "Among the many new requirements included in the Pension Protection Act of 2006 (the PPA) is the obligation of a plan sponsor to provide periodic pension benefit statements to participants and beneficiaries." (Morgan, Lewis & Bockius LLP)

Annuity Markets and Pension Reform (PDF)
6 pages. Excerpt: "There is a legitimate debate about when a retiree should annuitize. Retirees who can handle financial market risk might wait until they're relatively old or annuitize in stages. However, even with early annuitization, the return on the annuity if the retiree remains alive is higher than the return on long-term bonds, and keeps right on paying." (American Academy of Actuaries)

Maryland Leaders Want to Divest Pension Fund Holdings Tied to Sudan
Excerpt: "State Treasurer Nancy K. Kopp (D), Comptroller Peter Franchot (D) and several legislators joined Brown at a news conference to urge the passage of the 2007 Darfur Protection Act, which would add Maryland to a growing list of states that have begun divesting or restricting investments in Sudan." (The Washington Post; free registration required)

End Health Perks for Public Trustees, New York's Cuomo Says
Excerpt: "Attorney General Andrew M. Cuomo sent letters to about 100 public authorities on Thursday warning them that their trustees should not be receiving free health insurance because they are supposed to serve without compensation." (The New York Times; free registration required)

International Update, February 2007
Excerpt: "This monthly publication covers recent developments in foreign public and private pensions. [This issue provides information on the following countries: Netherlands; Portugal; Spain; Can.ada; Bahrain; and, Pakistan.]" (U.S. Social Security Administration)

Alternative Assets Gaining Market Share Globally
Excerpt: "Retirement funds in the 11 countries with the largest workplace retirement systems are increasing their investments in alternative assets as more and more companies and pension trustees focus on diversifying assets." (Watson Wyatt Worldwide)

Pension Reform Bill Sent to Congress in Chile
Excerpt: "President Michelle Bachelet launched an ambitious plan to create a new pension system to cover lower- and middle-class individuals in a bill presented to Congress on Dec. 15, 2006. The bill is the result of a long citizen input process and is intended to eventually cover all 1 million people who now lack social security pensions." (Watson Wyatt Worldwide)

Are Pensions Ready for Property Derivatives?
Excerpt: "For a pension fund unable to buy property and/or allocate monies to a real estate investment trust or real estate private equity fund, this new derivative may be a good workaround." (Pension Risk Matters)

Social Security in the Slow Lane - An Analysis of Benefits
Excerpt: "Social Security benefits are based on the amount you earn over the course of your career. In calculating benefit amounts, the Social Security Administration considers the 35 years in which you earned the most money, after your earnings are adjusted for inflation." (The Motley Fool)

Hedge Funds Escape Regulation: Should Investors Be Worried?
Excerpt: "In a late-February report, the group, chaired by Treasury Secretary Henry M. Paulson, urged vigilance but concluded that new regulations are not needed. The freewheeling world of hedge funds and their cousins, private equity and venture capital, have for now escaped the tightened oversight imposed on publicly traded companies after Enron and WorldCom." (Wharton School of the University of Pennsylvania)

Links to Items on Executive Comp, Benefits in General

Executive Compensation: Bad Boys (and Girls) Get Clawed Back (PDF)
15 pages. Excerpt: "Bad boy provisions were found in compensation plans and agreements long before the enactment of SOA. The 2000 stock plan design and administration survey issued by the National Association of Stock Plan Professionals (NASPP) indicated that 23.8 percent of the companies surveyed in 2000 had stock option plans containing noncompete forfeiture provisions. [The articles was originally published in Summer 2005.]" (Benefits Law Journal via Kirkpatrick & Lockhart Preston Gates Ellis LLP)

IRS Provides Audit Results for Executive Pay by 501(c)(3)s
Excerpt: "The IRS has just issued a report detailing results of its audits of a sampling of tax-exempt organizations with respect to executive compensation issues, including the excise tax on 'excess benefit transactions' under IRC Section 4958." (Mitchell Silberberg & Knupp LLP)

House Debates Executive Compensation Bill
Excerpt: "Requiring advisory shareholder votes on executive pay packages is necessary and would make U.S. markets stronger, Democrats and proponents of legislation that would mandate such a vote said . . . at a House Financial Services Committee hearing." (Investment News; free registration required)

Milliman's Monthly Benefit News and Developments, March 2007 (PDF)
2 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee Benefits. (Milliman)

Boston ERISA Law Blog: Equitable Relief Under ERISA in the First Circuit Post-Sereboff
Excerpt: "[I] will comment in particular on the court's discussion of the viability of claims for equitable relief in this circuit after Sereboff, particularly since the court points out that the First Circuit itself has not yet found reason to interpret and apply Sereboff, other than to cite the case for the proposition that 'what forms of relief are considered equitable is a matter in dispute.'" (Stephen Rosenberg via Boston ERISA Law Blog)

How Changes in Marriage, Divorce and Childbirth Are Redefining the Workplace
Excerpt: "According to a new study by Betsey Stevenson and Justin Wolfers, professors of business and public policy at Wharton, marriage and divorce rates in the United States are both at historic lows." (Wharton School of the University of Pennsylvania)

Newly Posted Events

Benefits Boot Camp 2007
in Georgia on April 24, 2007
presented by WEB (Worldwide Employee Benefit Network) Atlanta Chapter

Newly Posted Press Releases

Hearing Notice: "Challenges and Solutions to Health Insurance Coverage for Small Businesses"
U.S. House Small Business Committee

PSCA Commends Senators Smith and Bingaman for Introducing The Tribal Government Equality Act
Profit Sharing/401(k) Council of America (PSCA)

IBM Delivers Financial Education and Planning for All U.S. Employees
IBM

D.C. Court Rejects Effort to Overturn Pharmacy Benefit Manager Reform Law
National Community Pharmacists Association (NCPA)

Application of Current Stock Option Backdating Methodologies Can Be Misleading, According to New NERA Economic Consulting Paper
NERA Economic Consulting

Hearings On 401k Fees Didn't Go Far Enough
Cloud Neff Management LLC

Newly Posted or Renewed Job Openings

401(k) Plan Administrator
for Pollard & Associates, Inc.
in MD

Assistant Pension Administrator
for Pollard & Associates, Inc.
in MD

Actuarial Analyst
for Lynchval Systems Worldwide Inc.
in VA

Retirement Plan Administrator
for Goodman & Company
in VA

Tax Manager - Employee Benefits, Global Employment Services
for Deloitte & Touche, LLP
in FL, GA

Director of Fulfillment, Retirement Services
for MassMutual Financial Group
in MA

401(k) Retirement Plan Administrator
for Medical-Dental Consultants, Inc.
in RI

Handy Links:

View Today's Active Message Threads
Using the Web for Employee Benefits Research (hypertext article)
Employee Benefits Library

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