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April 2, 2007

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Advanced Actuarial Conference Boston, MA, June 5-6, 2007

Designed by practicing pension actuaries specifically to address their unique and specialized needs, this conference covers a wide variety of current and timely issues. Workshops and general sessions will be dedicated to topics including PPA, Future DB Policy Initiatives, Yield Curve, RP 2000 Mortality Tables and Hybrid Plans. Join your fellow pension actuary colleagues at this one of a kind event.

Senate OK's Bill to Provide Roth 457 Plans to State and Local Government Workers
Excerpt: "A provision that would create Roth 457 plans was approved as part of an Emergency Supplemental bill late yesterday. The provision would level the playing field for state and local government workers by permitting 457(b) plans to offer the designated Roth accounts already permitted in 401(k) and 403(b) plans." (ICMA-RC)

California Seeks to Ban Investment in Iran
Excerpt: "[A] bill in the California Legislature. . . . would force two of the nation's largest pension funds -- devoted to the state's public employees and its teachers, with combined holdings of nearly $400 billion -- to remove their money from any foreign company doing business in Iran. American companies are already barred from such dealings." (The New York Times; free registration required)

Under PPA, Companies Play Key Role in Keeping Employee Retirement Savings on Track
Excerpt: "Passage of the Pension Protection Act (PPA) last August gave plan sponsors strong incentives to build a range of automatic enrollment, escalation, and rebalancing features into their 401(k) plans, along with a default selection of investments. [T]he PPA in effect restores some of the paternalistic employer management characteristics of the defined-benefit era." (

Profit Sharing/401(k) Council of America Announces 401(k) Communications Campaign
Excerpt: "The Profit Sharing/401(k) Council of America (PSCA) is using its National 401(k) Day materials to launch a year-round campaign designed to promote awareness of 401(k) plans." (; free registration required)

Calculation Method for Early Retirement Benefits not Required in SPD
Excerpt: "The 2nd U.S. Circuit Court of Appeals has ruled that the Employee Retirement Income Security Act (ERISA) does not require a Summary Plan Description (SPD) to include details of the method of actuarial reduction of benefits for participants who retire early." (; free registration required)

Faegre Asks for Age Discrimination and Interest Rate Whipsaw Relief for Variable Annuity DB Plans
Excerpt: "On March 28, 2007, Faegre & Benson submitted a letter requesting Treasury to provide parity of treatment for variable annuity plans that are the functional equivalent of cash balance plans. It is important that Treasury act quickly because the adverse positions would apply retroactively -- in the case of the age discrimination position, from June 29, 2005, and in the case of the minimum lump sum position, from August 18, 2006." (Faegre & Benson LLP)

SEC Advice Exemption Rebuffed
Excerpt: "A federal appeals court has rebuffed a Securities and Exchange Commission exemption, ruling that the agency exceeded its authority in granting a disclosure exemption on investment advice." (; free registration required)

Ohio's Public Pension Plans Criticized for 'Double-Dipping' and More
Excerpt: "[State Rep.] Schneider is working on a bill that would eliminate the retirement annuity for those who retire and are rehired under any of the state's public pension systems. The retire/rehire option has grown in popularity since 1991 when state law changed and required the annuity." (Dayton Daily News)

Overview: DOL Rule on Subsequently-Issued DROs
Excerpt: "The Department of Labor (DOL) issued a final interim rule on March 7 detailing the circumstances in which plan administrators must treat as qualified a domestic relations order (DRO) that issues after or revises a prior DRO. The rule implements a requirement that Congress put on the DOL in the Pension Protection Act of 2006. The rule is effective April 6, but interested persons have until May 7 to submit comments for DOL's consideration in developing a final rule." (Thompson Publishing Group, Inc.)

Overview: DOL Interim Final Rule Relating to the Time and Order of Domestic Relations Orders
Excerpt: "Over the years, although plan sponsors and plan administrators have become more practiced in processing QDROs, some questions have persisted, often involving issues of timing." (Trucker Huss)

Tribune Company Sale Could Be Big Test for Workers As Owners
Excerpt: "With the Tribune Company on the verge of deciding its future, perhaps no interested party remains more in the dark than its 20,000 employees, who could end up as majority shareholders under complicated financial arrangements proposed in competing plans." (The New York Times; free registration required)

Overview: DOL Reg to Clarify Sponsors' Fiduciary Duties
Excerpt: "A planned clarification by the Department of Labor to its regulation that involves qualified default investment alternatives (QDIAs) will make life a bit easier for plan sponsors and offer opportunities to plan providers, observers say." (Ignites via MJM Financial, LLC)

Statement of Plan Funding if Business Improved no ERISA Violation
Excerpt: "The 8th U.S. Circuit Court of Appeals has found that an employer that amended its retirement plan to provide no contributions did not breach its fiduciary duties by telling participants it may resume contributions if business improved." (; free registration required)

Massachusetts Transportation Finance Commission Report Highlights Costs of Early Retirements
Excerpt: "'Most pension plans allow an employee to retire at an earlier age, but with a reduced benefit. However, MBTA employees may retire and immediately collect full benefits after 23 years of service, regardless of their age. The result is that the MBTA may be carrying retirees, with full pensions, for three or four decades . . . .'" (The Eagle Tribune)

Public Workers' Pensions Growing, While Private Sector Losing
Excerpt: "Taxpayers question why government workers make out so much better in their retirement years, even retiring as young as 48. And because most government pensions are based on a worker's best three earning years, workers can inflate their pension checks for decades by stepping up for overtime in those three years." (Cleveland Plain Dealer)

Overview: Guidance on Deduction of Contributions to Defined Benefit Plans (PDF)
Pages 4-5 of 6 pages. Excerpt: "The PPA provides that the maximum amount that an employer may deduct for contributions is 150 percent of current liability in the case of a single employer defined benefit plan or 140 percent of current liability in the case of a multiemployer defined benefit plan." (Trucker Huss)

Opinion: Save More Now to Avoid a Big Retirement Surprise
Excerpt: "Fortunately, you don't need to go to graduate school in economics to acquire the tools needed to avoid a shock. A new study by Dartmouth economist Jonathan Skinner provides a fascinating guide to the best retirement strategies." (Bloomberg News)

Financial Planning Association Has Federal Court Victory Over SEC's Merrill Lynch Rule
Excerpt: "A federal appeals court has ruled in favor of the Financial Planning Association in its suit to overturn the SEC exemption from fiduciary responsibility for broker/dealer reps known as the 'Merrill Lynch rule.' In a statement following the ruling, the FPA characterized the decision as a victory for consumers and urged the SEC not to take the case to the next level -- the U.S. Supreme Court." (Investment Advisor)

Cash Balance Plans Regain Their Footing
Excerpt: "The recent favorable developments for cash balance plans come as employers continue to review their benefit strategies and adjust their retirement programs to better manage costs and risks, and meet evolving talent needs." (Towers Perrin)

Can Poor People Be Taught to Save?
Excerpt: "About nine million households have effectively no financial assets -- nothing to fall back on for emergencies or retirement. And it was with them in mind that [Stephen Brobeck, executive director of the Consumer Federation of America, embarked on a social experiment to change people's savings habits." (The New York Times; free registration required)

Utilization of Tax Incentives for Retirement Saving, Update to 2003 (PDF)
39 pages. Excerpt: "This paper presents figures for 2003, and it analyzes the implications of certain provisions in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) that increased the limits on contributions to tax-favored retirement plans." (Congressional Budget Office)

Links to Items on Executive Comp, Benefits in General

New Approach Emerges for Valuing Stock Options
Excerpt: "For years, critics of the Black-Scholes model and other formula-based methods for valuing stock options have argued that these theoretical approaches overstate the value of employee awards, leading companies to record too much cost in their financial statements. But that may be changing." (Towers Perrin)

Boomers Are Aging -- and Companies Must Rethink Jobs
Excerpt: "The oldest boomers will qualify for Social Security's early retirement benefits in less than a year, but a large part of corporate America isn't prepared for the tens of millions of employees who will quit their jobs or scale back their hours over the next decade." (The Dallas Morning News; free registration required)

First Circuit Address Structural Conflicts of Interest in ERISA Denial of Benefits Claims
Excerpt: "Of course, ERISA is full of vexing areas of law, preemption and the scope of civil enforcement under Section 502(a)(3) to name just two. But right up there at the top of the list is the appropriate standard of review when a court reviews a plan administrator's decision to deny an individual's claim for benefits under the plan AND the plan is operating under a structural conflict of interest." (Workplace Prof Blog)

Bill to Mandate Shareholder Advisory Vote on Executive Compensation Gathers Momentum (PDF)
1 page. Excerpt: "On March 28 the House Financial Services Committee approved the 'Shareholder Vote on Executive Compensation Act' (H.R. 1257) by a narrow vote of 37-29, largely along party lines. The bill is expected to go to the full House after Congress returns from Easter recess in April. Congressman Barney Frank (D-MA), the proponent of the bill, expects full House approval." (Frederic W. Cook & Co., Inc.)

409A Deferred Compensation Regulations Likely to Be Issued Soon, Officials Say
Excerpt: "Issuance of the regulations is 'pretty close,' according to Dan Hogans and Bill Schmidt of the IRS, who predicted the regulations would have a January 1, 2008 effective date." (Wolters Kluwer Law & Business)

Work -- The End of the Line as Detroit Workers Know It
Excerpt: "'The question is, Are we seeing a final end to what we have called blue-collar aristocracy?' asks Sheldon H. Danziger, a public policy researcher at the University of Michigan in Ann Arbor. 'Big Steel is gone, coal is gone, shipbuilding is gone -- all the big industrial unions are gone or going, except the auto workers. These are the people who had the strongest ability to fight, and now they seem to be giving up the struggle.'" (The New York Times; free registration required)

Listing of IRS Published Guidance for January-March 2007
The target page links to guidance published by the Service relating to retirement plans: Treasury Regulations; Revenue Rulings; Revenue Procedures; Notices; and, Announcements. (Internal Revenue Service)

Changing Benefit Practices Challenge Companies
Excerpt: "According to a major new Towers Perrin study, there's a lot of misunderstanding -- and concern -- on both sides. Neither employers nor employees believe that current benefit programs are fully meeting their needs." (Towers Perrin)

Newly Posted Events
(Post Yours!)

Benefits Buffet -- All You Can Learn For $195*
in California on May 2, 2007
presented by Western Pension & Benefits Conference - Los Angeles Chapter

Newly Posted Press Releases
(Post Yours!)

Making Every Day 401(k) Day
Pension Benefit Guaranty Corporation (PBGC)

U.S. Labor Department Obtains Court Order Requiring Harris N.A. To Pay $274,600 For Unpaid Health Claims
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Retirement Sales Consultant/Sales Executive
for BenefitStreet, Inc.
in NY

for Westchester NY Consulting Firm
in NY

Defined Benefit Conversions Project Leader
for New York Life Retirement Plans Services
in MA

Marketing Associate, 401 (k) Products
for Citigroup - Smith Barney
in NY

Retirement Plan Consultant
for Alan Nahoum Incorporated
in NY

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

Retirement Sales Executive
for Benefitstreet, Inc.
in IL, MA

In-House ERISA Attorney
for Walgren & Associates
in TX

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