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October 9, 2007

Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy.


Today's sponsor is DATAIR Employee Benefit Systems, Inc.

(Click on company name or banner to learn more.)
Banner ad for DATAIR Employee Benefit Systems, Inc.

Software for 401(k), Pension and Flex Administration

Pick and choose the software modules you need: DC/401(k) Proposals & Administration - DB Proposals & Administration - Retirement Plan Documents (Prototype and Volume Submitters) - Government Forms (5500s, 1099-Rs, 5300s) - Cafeteria Plan Administration & Documents - Participant Termination Calculations - FAS 132 Reporting

Contact sales@datair.com or call 1-888-328-2474.



Note: No Newsletter Was Published Yesterday (Columbus Day, federal holiday)
You should have been informed on Friday that no newsletter would be published on Monday. I apologize for the confusion! --Editor

(a) New Guidance Documents

(None today.)

(b) News

Nationwide Fiduciary Breach Suit Survives a New Challenge
Excerpt: "A federal judge in Connecticut has cleared the way for the trustees of five 401(k) plans to pursue their claims that Nationwide Financial Services was a fiduciary because it could change the plans' investment lineups." (PLANSPONSOR.com; free registration required)

Missouri Judge OKs Defined Contribution Pension Plan for Local Firefighters
Excerpt: "The Mehlville, Missouri Fire Protection District (MFPD) board of trustees won a victory for fiscal responsibility when a judge ruled the district may switch employee retirement benefits from a defined benefit to a defined contribution plan." (Heartland Institute)

Steel Pensioners Told to Give Some Overpayments Back
Excerpt: "The problem was that even though PBGC decided the pensions would be reduced beginning in January 2003, it kept sending full checks for 11 months." (The Morning Call)

(c) Summaries of Guidance; Filed Comments

Overview: IRS Proposed Regulations on Funding Balances and Benefit Restrictions Under PPA (PDF)
11 pages. Excerpt: "The IRS has issued proposed regulations under the Pension Protection Act of 2006 (PPA) relating to the maintenance of funding balances and restrictions on benefit payments in single-employer defined benefit pension plans. Our August 31 NewsFlash noted some of the highlights of the regulations. This For Your Information explores the proposed regulations in greater depth." (Buck Consultants)

Update on Interim Amendments and EGTRRA Restatements
Excerpt: "The purpose of this article is to provide you with an update on (1) interim amendments that may be required in the near future, (2) the EGTRRA restatement process, and (3) the implementation of certain PPA provisions." (SunGard Corbel LLC)

Hewitt's Global Retirement Update, September 2007
Hewitt's monthly reports summarize retirement and financial management legislative developments and trends from around the world. (Hewitt Associates)

(d) Trends, Surveys, Research

Workers Still Filling 401(k)s with Company Stock
Excerpt: "On top of all the other troubles at Countrywide Financial Corp., the mortgage giant faces a lawsuit from an employee alleging that workers lost hundreds of millions of dollars in their 401(k) retirement plans by holding the company's stock." (Chicago Tribune)

Guaranteed or Tax-Free Retirement Income? That's the Choice with Two New 401(k) Investment Options
Excerpt: "Recently it has been dawning on the folks who design 401(k)s that the ultimate goal of the plans is to provide a living income in retirement. And that the best time to start planning for that eventuality is when you put the money in. The result is two new 401(k) investment options that may show up in your plan soon." (CNNMoney.com)

401(k)-Type Plans and Individual Retirement Accounts (PDF)
Pages 1-13 of 16 pages. Excerpt: "Defined contribution plan growth has topped out: The most current data show that the sharp increase in the number of defined contribution plans and participants, which had grown sharply through the 1990s, had leveled off by 2004. The number of DC plans hit almost 687,000 in 2000, and was down to less than 636,000 in 2004. The number of DC participants reached 52.9 million in 2002 and was down to 52.2 million in 2004. (There are several types of DC retirement plans, which include the 401(k).)" (Employee Benefit Research Institute)

Employer Generosity in Employer-Matched 401(k) Plans, 2002-03 (PDF)
9 pages. Excerpt: "In particular, the article focuses on a type of 401(k) plan referred to in NCS publications as a savings and thrift plan. Such a plan determines employers' contributions by applying a matching formula to the contributions made by each employee; employees are required to contribute to the plan in order to receive the employer match." (U.S. Bureau of Labor Statistics)

'Lifestyle Portfolios' Pay Off in 401(k)s
Excerpt: "A new study shows that 84.2% of 401(k) participants in John Hancock's funds would have had better results over the last 10 years if they had invested solely in pre-selected portfolios geared to their risk tolerance." (Investment News; free registration required)

Fleecing 403(b) Plan Participants -- Fiduciary Liabilities
Excerpt: "Many state fiduciary laws incorporate the 'sole interest' and 'exclusive purpose' duties of ERISA. These two duties together express the duty of loyalty - first appearing in eleventh century England - which underlies all trust fiduciary law. The paramount duty of fiduciaries of 403(b) plans where state-level fiduciary law applies to their conduct, then, is to operate such plans solely in the interest of members and beneficiaries for the exclusive purpose of providing them with benefits." (Morningstar)

New Institute to Study Pensions
Excerpt: "Indiana University-Purdue University Fort Wayne, in conjunction with several organizations, will form an IPFW Institute for Pension Plan Management, the university said in a statement . . . ." (The Journal Gazette)

Working Paper: Net Worth and Housing Equity in Retirement
Excerpt: "This chapter documents the trends in the life-cycle profiles of net worth and housing equity between 1983 and 2004." (Pension Research Council; registration required to download fulltext of paper)

Using Annuity Laddering for Retirement Income
Excerpt: "Retirees say they want a regular income check that will be there no matter what. In effect, they want the equivalent of a pension, a dependable source of income that is not subject to the vagaries of the market or other uncertainties. Yet when it comes time to use the savings to purchase a guaranteed lifetime income annuity, they balk. One study, in fact, showed that only 4% of defined contribution plan participants who had an option to annuitize upon leaving the plan chose to do so." (The National Underwriter Company; free registration or paid subscription required)

The Effect of Retirement Incentives on Retirement Behavior: Evidence from the Self-Employed in the United States and England (PDF)
45 pages. Excerpt: "In this paper, we examine how public and private pension and health insurance systems affect the retirement transitions. In many countries, public and private pension eligibility, as well as access to health insurance varies between self-employed and wage and salary workers, and these differences are likely to cause differential retirement patterns both within and across countries." (University of Michigan Retirement Research Center)

Note: Ways and Means Committee Calls for Comments on PPA Technical Corrections Bill
Excerpt: "House Ways and Means Committee Chair Rep. Charles B. Rangel (D-NY) has announced that the Committee is requesting comments from the public on H.R. 3361, a bill that would make certain technical corrections to the Pension Protection Act of 2006 (PPA)." (International Foundation of Employee Benefit Plans)

A Conversation with a Fiduciary: Part 2
In this conversation, an attorney follows up an exchange between a plan sponsor and a fiduciary. (Matthew Hutcheson via Morningstar)

Chart: State & Local Government Average Pension Benefit -- FY 2006, in Dollars
The chart ranks the states by the dollar amount of payouts and also shows the Employee Contributions per Total Receipts. (Empire Center for New York State Policy)

(e) Policy, Opinion, Advocacy

Opinion: Increase in Lawsuits Against Public Pension Plan Trustees?
Excerpt: "There's a clear trend upward in the number of cases involving pension fiduciaries. We're adding 250 to 300 cases each quarter. Most are private sector, but we are fast and furiously adding more public pension cases. I don't think public plan trustees truly appreciate what their liability exposure looks like." (Susan Mangiero via Governing,com)


Sponsored by: ASC & the ASC Institute

(Click on company name or banner to learn more.)
Banner ad for ASC & the ASC Institute

Failed a discrimination test?

ASC Systems will automatically show you how to best pass!

With ASC Software more of your plans will pass -- and for the ones that don't -- ASC's Budget Solving for 401(a)(4) discrimination testing will automatically crunch the numbers to find the best option for your clients. ASC automatically provides you multiple ADP/ACP corrective options - allowing you to provide creative and money saving solutions to your clients. When plan sponsors prefer not to return deferrals to the highly compensated group - ASC automatically provides other corrective options in an easy-to-read summarized format! ASC offers a full range of retirement plan automation products including DC/401(k) administration and valuation software, Defined Benefit software, Document Management and Generation (DGEM)System and much more. Learn more! Email: sales@asc-net.com


(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

Roth 457 Plans Get Fresh Boost in Senate Finance Committee
Excerpt: "The Senate Finance Committee has included a Roth 457 provision as a revenue-raiser in a transportation bill the Committee approved Sept. 21 on a 16 to 5 vote. Under the proposal, 457 plans could include qualified Roth contribution programs. As a revenue raising proposal the bill's chances for passage rise significantly." (ICMA-RC)

Backdating Employee Stock Options: Accounting and Legal Implications
Excerpt: "The authors discuss the accounting treatment of stock options under Accounting Principles Board (APB) Opinion 25, 'Accounting for Stock Issued to Employees,' and SFAS 123(R), Share-Based Payment. Next, the authors examine Sarbanes-Oxley Act (SOX)-related problems that arise from backdated stock options. The article concludes by presenting the potential financial implications of backdating for investors." (The New York State Society of CPAs)

Overview: IRS's Limited Extension of Section 409A Compliance Deadline (PDF)
Excerpt: "Until further guidance is issued, the cash-out rules in the final regulations - that allow installment or annuity payments to be cashed out if the present value falls below a predetermined amount - may be applied only at the original payment date, and need not be applied throughout the stream of payments." (Drinker Biddle & Reath LLP)


Newly Posted Events

401(k) Plans: Beyond the Basics
Nationwide on October 18, 2007
presented by SunGard Relius

401(k) Plans: Beyond the Basics
in Illinois on November 8, 2007
presented by SunGard Relius

ERISA Workshop
Nationwide on October 17, 2007
presented by SunGard Relius

ERISA Workshop
in Florida on October 30, 2007
presented by SunGard Relius

ERISA Workshop
in Texas on November 1, 2007
presented by SunGard Relius

Health Law Seminar - Free
in Minnesota on November 7, 2007
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

New Nondiscrimination Rules for Cafeteria Plans: A Wake-Up Call for Employers and Administrators
Nationwide on September 20, 2007
presented by Employee Benefits Institute of America (EBIA)/Thomson Tax & Accounting

New Proposed Cafeteria Plan Regs: IRS & Experts Analyze Changes - Webcast
Nationwide on October 11, 2007
presented by ALI-ABA (American Law Institute-American Bar Association)

The Prescription for Rx Plan Management Success
in Washington on October 12, 2007
presented by International Society of CEBS - Pacific NW Chapter


Newly Posted Press Releases

NBCH Launches Community Health Value Collaborative to Prevent Diabetes and Improve Care for Patients with Diabetes
National Business Coalition on Health

Study Demonstrates Value of John Hancock Lifestyle Portfolios for 401(k) Plan Participants
John Hancock Retirement Plan Services

Steelworker Retirees Set to Receive New Health Care Benefit
United Steelworkers

Nation's Disability Policy Makes it Hard to Save for Retirement
Goodwill Industries

Global Leadership Council Is Formed To Promote Fiduciary Excellence
Investment Fiduciary Leadership Council (IFLC)


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Retirement Plan Sales
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in ANY STATE

Defined Contribution / 401(k) Plan Administrator
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ERISA Tax Associate
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in CO

Client Services Project Leader
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Benefits Manager
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Labor Relations Sr. Manager
for 1199 Benefit and Pension Funds
in NY

401(k) Administrator
for West Pension Solutions, LLC
in MD

Sr. Employee Benefit Specialist-Retire Secure
for The Principal Financial Group
in CA

Producer
for FBD Consulting, Inc.
in KS

Research Director
for Milliman, Inc.
in DC

Benefits Specialist 5 - Req 07-1024051
for The Boeing Company
in WA

Outsourcing Team Manager
for Trion
in PA

Retirement Plan Sales Executive
for BenefitStreet, Inc.
in KS

Pension Attorney, Paralegal or Specialist
for J.P. Schlachter & Associates, Inc.
in OH

Compliance Testing Consultant
for Diversified Investment Advisors
in NY

Sr. Employee Benefit Specialist - Retire Secure
for The Principal Financial Group
in UT

Account Manager
for McGraw Wentworth
in MI

401K) External Wholesaler
for John Mulligan & Associates, Inc.
in CA, IL

Licensing and Commission Administrator
for Transamerica Retirement Services
in CA

Manager - Benefits
for 1199 Benefit & Pension Funds
in NY

Pension Calculation Sr. Manager
for 1199 Benefit & Pension Funds
in NY

Internal Wholesaler
for ING, US Financial Services
in TN

Participant Communication Consultant
for Standard Insurance Company
in OH

ERISA/Employee Benefits Associate
for Greensfelder, Hemker & Gale, P.C.
in MO

Assistant Director of Customer Service
for $5 Billion not-for-profit Church Pension Fund
in NY




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