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May 15, 2007
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Text of ASPPA's Comments to IRS on Combined Plan Deduction Limits Under Notice 2007-28 (PDF)
4 pages; May 14, 2007. Excerpt: "The IRS should expeditiously reconsider its interpretation . . . which states that the combined plan deduction . . . will continue to apply to defined benefit contributions for 2006 and 2007 for employers who make any deductible contributions to defined contribution plans, regardless of the size of the defined contribution deduction. This interpretation is contrary to the plain language of PPA and Congressional intent . . . and represents poor public policy." (American Society of Pension Professionals and Actuaries)

UAW Says Chrysler Sale Includes Pension Contribution
Excerpt: "United Auto Workers President Ron Gettelfinger said DaimlerChrysler AG and Cerberus Capital Management LP agreed to make additional contributions to Chrysler's pension fund as part of the unit's sale." (Bloomberg News)

A Costly Glitch for Nonspouse 401(k) Heirs
Excerpt: "The IRS ruling lets employers choose whether to amend their 401(k) plans to make IRA transfers more widely available. While some companies, including IBM (IBM ), Eastman Kodak (EK ), and MetLife (MET ), have done so, many have yet to consider the matter." (BusinessWeek)

Working Paper Abstract: New Estimates of the Future Path of 401(k) Assets
Excerpt: "Over the past two and a half decades there has been a fundamental change in saving for retirement in the United States, with a rapid shift from employer-managed defined benefit pensions to defined contribution saving plans that are largely controlled by employees. To understand how this change will affect the well-being of future retirees, we project the future growth of assets in self-directed personal retirement plans." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve full-text)

Working Paper Abstract: Rise of 401(k) Plans, Lifetime Earnings, and Wealth at Retirement
Excerpt: "We consider in this paper the implications of rising 401(k) saving through the year 2040. In particular, we emphasize the growth of the sum of Social Security wealth and 401(k) assets for families in each decile of the Social Security wealth distribution." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve full-text)

Roth 401(k) Adoptions Growing in Vanguard Plans, Especially with Short-Tenured Employees
Excerpt: "In the Vanguard plans that adopted the Roth 401(k) option, 5% of plan participants elected to utilize the Roth 401(k). Based on tenure, 10% of participants with less than one year of service adopted a Roth 401(k); followed by 6% of those with one to three years of service; 3% of those with four to 25 years of service; and 2% of those with more than 25 years of service." (Wolters Kluwer Law & Business)

Opinion: Lower Fees and Better Disclosure on the Horizon?
Excerpt: "Coupled with greater scrutiny of plan fees by Congress, the U.S. Securities and Exchange Commission, and the U.S. Department of Labor, this new round of retirement plan litigation signals a pro-employee change in the defined contribution plan industry." (Gregory Y. Porter via 403(b)wise, LLC)

CIEBA Letter on Valuation Guidance for Financial Reporting (PDF)
5 pages. Excerpt: "A number of CIEBA members have identified financial reporting issues, especially with respect to the valuation of 'nontraditional' assets. The [points in the target page] represent specific issues related to valuations for financial reporting . . . ." (Committee on Investment of Employee Benefit Assets)

Houston Faces Challenge Over Funding Pension Fund
Excerpt: "Short of layoffs, the city won't meet its full obligation to the municipal pension fund in the next fiscal year, Mayor Bill White says, citing rising public safety and health care costs that are expected to strain resources." (The Houston Chronicle)

Opinion: The Final Frontier -- Investment Advice and Professionally Managed Accounts (PDF)
Excerpt: "This paper gives fiduciaries and their advisors guidance . . . by reinforcing the proposition that most participants need investment help. It will also make a case that 'target-date' funds, also known as lifecycle funds, should not be the primary, or preferred, default safe harbor. Lastly, this paper will provide reasons why every plan should provide participants with at least access to investment advice, and even seriously consider making it the default investment option." (Stephen J. Lansing of Bogdahn Consulting LLC, with Peter Gulia of Fiduciary Guidance Counsel)

International Update, April 2007 (PDF)
4 pages. Excerpt: "International Update is a monthly publication of the Social Security Administration's Office of Policy. It reports on the latest developments in public and private pensions worldwide." (U.S. Social Security Administration)

Problems and Solutions with Liability Indexes for Pension Plans (PDF)
12 pages. Excerpt: "This report will explore the problems and solutions with any liability index. To illustrate the dramatic differences and problems we created a proxy pension benefit payment schedule (future value) of $1 million per month for 30 years ... a $360 million future value cash flow schedule and an average duration of 11.191 years. We then priced this static cash flow using various discount rate methodologies." (Ryan ALM, Inc.)

WP Abstract: Changing Progressivity as Means of Risk Protection in Investment-Based Social Security
Excerpt: "This paper analyzes changes in the progressivity of the Social Security benefit formula as a means of lessening the risk inherent in investment-based Social Security reform." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve full-text)

Watson Wyatt Comments on Hybrid Plans and Future Guidance
Excerpt: "Early this year, the IRS released guidance on the Pension Protection Act (PPA) provisions concerning hybrid defined benefit plans and asked the public to comment on the proposed guidance along with several other issues concerning hybrid plans. Watson Wyatt's comments, which are summarized [on the target page], speak to a broad array of issues that affect hybrid plans." (Watson Wyatt Worldwide)

Poll Says Employers Think Workers Unprepared for Retirement
Excerpt: "Three in five organizations in a recent poll said most of their workers are not financially prepared for retirement, according to an Aon Consulting news release." (PLANSPONSOR.com; free registration required)


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(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

Chrysler Deal Carries a Test for the U.A.W.
Excerpt: "By unwinding a nine-year-old merger between Chrysler and Daimler-Benz of Germany, Cerberus is also taking on Chrysler's $18 billion obligation for health care and pensions for employees and retirees. Any efforts to sharply reduce those perks -- which Chrysler can afford but says represent a cost burden of $1,500 a vehicle -- will probably put it at odds with the U.A.W." (The New York Times; free registration required)

Overview: IRS Guidance to Assist Tax-Exempt Organizations in Completing Form 990 (PDF)
3 pages. Excerpt: "Although the IRS released the new Guidance in the form of a question-and-answer document just weeks before most tax-exempt organizations will file their Form 990s, it can help clarify questions relating to board structure, when to report compensation for directors and officers who have relationships with other organizations, when and how to report compensation for all 'disqualified persons,' and relationships between directors and other insiders." (Powell Goldstein LLP)

GAO Report Looks At Employers' Efforts to Control Benefit Costs
Excerpt: "The GAO Report provides a useful overview of employer-sponsored benefits, how health and retirement benefits have evolved, and the types of changes employers have been making to these benefits in order to manage costs." (Deloitte)

(ADV) Welcome to New Advertiser WinMill Software
Excerpt: "Has your benefit fund outgrown your computer systems? If so, you're not alone. Most benefit funds today are running on computer systems that are five or more years old, and are finding that their systems no longer effectively support their operations. With increased participation, reduced capitalization, ever-changing regulatory requirements and benefit plan changes, computer systems have simply not been able to keep up. Request a free 2-day evaluation of your computer systems!" (BenefitsLink.com)


Newly Posted Events

Basics of Health and Welfare Plans
in California on May 22, 2007
presented by No. Calif. Chapter of Certified Employee Benefits Specialists (ISCEBS)


Newly Posted Press Releases

Sierra Nevada Brewery Derives Value From Outsourcing Total Rewards Statements to Benefit Software Inc.
Benefit Software Inc.

The ESOP Association Honors Members for Excellence in 'Employee Ownership' Communications
ESOP Association

Employers Not Doing Enough to Meet Workforce Retirement and Recruitment Needs, Says Aon Consulting Survey
Aon Consulting

ASPPA and DOL Jointly Host Employee Benefits Conference
American Society of Pension Professionals & Actuaries (ASPPA)

Investor Alert From Cauley Bowman Carney & Williams, PLLC: Update on Proposed Acquisition of Bisys Group, Inc.
Cauley Bowman Carney & Williams


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Tax/Employee Benefits Attorney
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Senior ERISA Attorney
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Plan Document & Administrative Consultant
for Southern Pension Services
in FL

Client Relationship Consultant - Chicago / Itasca, IL
for Gallagher Retirement Services
in IL

Service Delivery Manager
for JPMorgan Retirement Plan Services
in CO, KS, MO

DB Conversions QA Analyst
for New York Life Retirement
in MA

Bilingual Strategic Communications Consultant
for New York Life Retirement
in MA

VP of Training and Development
for New York Life Retirement
in MA

Retirement Services Marketing and Communications Writer
for Administaff
in TX

Professional sales rep for HR and Benefits (401K/FSA)
for PAYCHEX INC.
in NY




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