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January 8, 2008

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

Today's sponsor is ASC & The ASC Institute

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ASC helps retirement plan professionals increase efficiency and profitability through its software systems, documents and education. Software includes DC 401(k) administration & valuation, Defined Benefit, Compliance Testing, DV Direct daily valuation, AIM case management and more. With ASCi plan documents you can quickly and easily create customized prototype/volume submitter plan documents, efficiently maintain historical plan information, create complete amendment packages for all your clients at one time and more. Click to learn more or email

(a) New Guidance Documents

(None today.)

(b) News

House and Senate Pass Stand-Alone Tax Technical Corrections Bill
Excerpt: "The bill contains technical corrections to the Tax Relief and Health Care Act of 2006 (P.L. 109432), Title XII of the Pension Protection Act of 2006 (Provisions Relating to Exempt Organizations) (P.L. 109-280), the Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222), the Energy Policy Act of 2005 (P.L. 109-58), the American Jobs Creation Act of 2004 (P.L. 108-357) and other tax legislation. The technical corrections bill contains a handful of provisions affecting pensions and benefits, including amendments relating to IRA distributions made for charitable purposes, application of the special elective deferral limit under Code Sec. 402(g)(7) to designated Roth contributions, and application of FICA taxation to designated Roth contributions." (Wolters Kluwer Financial Services)

(c) Summaries of Guidance; Filed Comments

Overview: IRS Issues Proposed Regulations on Diversification Requirements for Publicly Traded Employer Securities
Excerpt: "EBIA Comment: The new proposed regulations are required reading for any employer that maintains a defined contribution plan subject to the diversification requirements. No doubt many such employers will choose to rely upon the proposed regulations, instead of Notice 2006-107, until final regulations become effective, since the proposed regulations are more flexible than the notice in many respects." (Employee Benefits Institute of America)

Overview: The Department of Labor Weighs In on Proxy Proposals
Excerpt: "Some executive compensation professionals may have overlooked recent guidance on proxy resolutions because it came out of the U.S. Department of Labor (DOL) instead of the SEC. Advisory Opinion 2007-07A, issued to the U.S. Chamber of Commerce on December 21, 2007, but first made available on January 2, 2008, responds to concerns about the use of pension plan assets by plan fiduciaries to further public policy debates and political activities through proxy resolutions that have no connection to enhancing the value of the plan's investment in the company." (Michael S. Melbinger via Winston & Strawn LLP)

Plan Fiduciaries not Required to Announce Own Stock Sale to Participants
Excerpt: "The 7th U.S. Circuit Court of Appeals affirmed a lower court's decision that plan fiduciaries were not obligated to tell Thrift Plan participants that they had decided to sell their own holdings in company stock, both within the plan and otherwise." (; free registration required)

Summary Prospectus on Table for Mutual Funds
Excerpt: "The SEC has proposed rule changes that would require mutual funds to provide investors with a summary prospectus. The short document would appear at the front of each prospectus and provide, in plain English, information such as a fund's investment objectives and strategies, risks and costs, tax consequences and compensation for financial intermediaries." (Investment News; free registration required)

(d) Trends, Surveys, Research

New Retirement Income Funds Remove Much of the Decision-Making Associated with Retirement Investment and Distribution Planning
Excerpt: "Some observers believe structured retirement payout funds such as these represent a new generation of products that stand in direct competition to annuities. 'I think we are definitely going to see a lot more of these kinds of retirement income solutions coming down the pike,' says Francois Gadenne, chairman of the Retirement Income Industry Association (RIIA). Fidelity Insight editor Eric Kobren calls the funds a good choice for people 'who want to keep things as simple as possible during their retirement years.'" (Financial Advisor)

Quick Tips: Limiting Liability in Retirement Plans
Excerpt: "The potential of [the LaRue] case, combined with a greater scrutiny of fees and expenses as well as increased transparency that will soon be required of defined-contribution retirement plans like 401(k)s, makes the onus of properly managing employees' retirement savings all the more important. Here are a few ways to do so and limit your liability in the process . . . ." (

(e) Policy, Opinion, Advocacy

California's Governments Need to Start Permanent Funds to Tackle $118 Billion Liability
Excerpt: "Former Assemblyman Keith Richman, who has formed a foundation to help address the state's pension and benefits problems, said the commission failed to even consider strong reform measures - such as revising pension formulas or raising the ages of retirement for public-safety officers. Under current limits, public-safety officers can now retire at age 50 with pensions higher than their salaries. The panel also did not consider whether to switch state employees to a defined-contribution plan, similar to a 401(k), rather than the traditional defined-benefit pension plan." (Los Angeles Newspaper Group)

Opinion: Pensions, Profits and the 'Mortgage Crisis' -- Or, a Hard Lesson Against Privatizing Social Security
Excerpt: "Long before most of America knew anything about 'subprime loans', many of the nation's pension plans were in trouble. They were often under-funded and teetering on the brink of insolvency. And, should they fail, by its own admission, the federal agency tasked with bailing them out doesn't have enough funds rescue them. Now we come to a situation, which adds even great possibilities for pension plan failure: a major crisis on Wall Street, due to the institutional sale of mortgage based secured investment products. These instruments were sold to banks and institutional investors around the world and have now lost much of their value." (San Francisco Bay Area Independent Media Center)

Pension Wealth and Income: 1992, 1998, and 2004 (PDF)
12 pages. Excerpt: "What is the impact of the shift from defined benefit to defined contribution plans on the pension wealth of households approaching retirement? Using data from the Health and Retirement Study, this brief documents this shift and compares employer-sponsored pension wealth across households with heads age 51-56 in 1992, 1998, and 2004. The results show that, for the average household, both pension wealth and replacement rates -- the ratio of annual benefits to pre-retirement earnings -- fell between 1992 and 2004." (Center for Retirement Research at Boston College)

Editorial: A Pension Perk That, by Rights, Should Be Banned for Elected Officials
Excerpt: "When they eventually retire, Council President Anna C. Verna and Councilmen Frank DiCicco and Frank Rizzo will take home six-figure lump-sum payouts in addition to their monthly pension checks. That's the same sweet deal that sent former Mayor John F. Street home with a payment of $451,626, on top of his annual pension of $115,700. The generous lump-sum payouts are legal under the city's Deferred Retirement Option Program (DROP). But they were meant to retain veteran city workers with needed expertise, not elected officials. Yet when Council enacted the program in 1999 under then-Mayor Edward G. Rendell they made sure to deal themselves in." (

Sponsored by: University Conference Services

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Is Your Plan Management Textbook Outdated?

Comprehensive legislative changes, increased regulatory scrutiny, mounting litigation and unprepared participants have created whole new chapters on plan management. With all of these changes, you need to update your textbook today. The Mid-Sized Retirement & Pension Plan Management Conference, January 27-30, 2008, at the Hilton in the Walt Disney World®, Orlando, Florida is your chance to study with the best. Keynote speaker Ann Combs, former Assistant Secretary of Labor and head of the Employee Benefits Security Administration, headlines an outstanding lineup of speakers in 40+sessions. Make plans now to attend and move to the head of the plan management class.

Presented by the University of North Carolina's Kenan-Flager Business School in conjunction with leading retirement plan providers and advisors

(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

2008 Reporting & Disclosure Calendar for Single-Employer Benefit Plans
Excerpt: "Sibson Consulting's 2008 Reporting & Disclosure Calendar for Benefit Plans summarizes compliance requirements for qualified, single employer benefit plans. To see a brief description of each requirement and information about such details as the plan(s) affected, filing requirements and due dates, click on any item listed [in the target page]." (Sibson Consulting)

2008 Reporting & Disclosure Calendar for Multiemployer Plans
Excerpt: "The Segal Company's 2008 Reporting & Disclosure Calendar for Multiemployer Plans summarizes compliance requirements for multiemployer plans. To see a brief description of each requirement and information about such details as the plan(s) affected, filing requirements and due dates, click on any item listed [in the target page]." (The Segal Group, Inc.)

Overview: SEC Issues Extension for Using Simplified Method to Calculate Employee Stock Option Expense (PDF)
1 page. Excerpt: "SAB 107 allows for the use of the simplified method until December 31, 2007, at which time it was expected companies would have adequate historical information available to them to calculate a reliable expected option term. The SEC understands that this historical data may not yet be readily available and on December 21, 2007, the SEC issued SAB 110 which extends the timeframe eligible companies will have to use the simplified method on an interim basis. Once detailed information on exercise terms becomes readily available, the SEC will suspend use of the method and will require companies to estimate the expected term of an option using historical data." (Frederic R. Cook)

Funding Pensions and Retiree Health Care for California Public Employees (PDF)
332 pages. Excerpt: "[The mission of the Commission was to] send a report to the Governor and Legislature that: Identifies the full amount of post-employment health care and dental benefits for which California governments are liable and which remain unfunded. Evaluates and compares various approaches for addressing governments' unfunded retirement health care and pension obligations. Proposes a plan to address governments' unfunded retirement health care and pension obligations." (Public Employee Post-Employment Benefits Commission)

In Australia, Terminally Ill Employees Allowed to Access Retirement Benefits Tax Free
Excerpt: "A number of regulatory changes made in late 2007 are prompting trustees to take another look at their retirement plans, including a new rule that allows terminally ill employees to receive lump sum payments from their superannuation accounts tax free." (Watson Wyatt Worldwide)

'Say on Pay' Effort Stalls in Congress
Excerpt: "The House-passed bill that would let shareholders weigh in on executive compensation packages continues to sit in the Senate Banking Committee. HR 1257 would require public companies to include a non-binding advisory shareholder vote in annual proxies so shareholders can express approval or disapproval for executive pay plans. Its Senate companion, S 1181, was introduced the day the House bill passed last April." (Investment News; free registration required)

Overview: Tax Exempt Organizations Should Begin Assessing Redesigned Form 990
Excerpt: "The final Form 990 requires exempt organizations to report information in a number of areas not addressed by the current form. It also requires greater detail than the current form in certain areas." (Faegre & Benson LLP)

Law Review Article: Has Congress Stopped Executives from Raiding the Bank? A Critical Analysis of I.R.C. §409A
Excerpt: "This paper focuses on how §409A began largely as a reaction to the sizeable distributions to Enron executives from their nonqualified deferred compensation accounts shortly before Enron's collapse. The paper discusses how §409A represents a major shift in nonqualified deferred compensation planning but does little to remedy the exact problem at Enron that gave rise to §409A." (Social Science Research Network)

In Australia, Terminally Ill Employees Allowed to Access Retirement Benefits Tax Free - linked by
Excerpt: "A number of regulatory changes made in late 2007 are prompting trustees to take another look at their retirement plans, including a new rule that allows terminally ill employees to receive lump sum payments from their superannuation accounts tax free." (authored by Watson Wyatt Worldwide)

Newly Posted Events
(Post Yours!)

An Industry In Transition
in Arizona on October 13, 2008
presented by Center for Due Diligence

Effective and Legal Management of Independent Contractors
Nationwide on January 23, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group

Facing The Challenges Of The Aging Workforce: An Ongoing Review - Webcast
Nationwide on January 9, 2008
presented by Ernst & Young, LLP

Protect Your Organization from Caregiver Discrimination Claims
Nationwide on January 29, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group

Troubleshooting Plan Loan Programs
Nationwide on January 30, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group

Wellness Programs-What Works, What Doesn't, and What Are Your Responsibilities
Nationwide on January 24, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group

Newly Posted Press Releases
(Post Yours!)

Sandell Grant Program in Retirement Research Deadline Reminder
Center for Retirement Research at Boston College

Veteran Fidelity Executive Joins CAPTRUST Financial Advisors
CAPTRUST Financial Advisors

Bi-Partisan Benefits Commission Announces Comprehensive Plan To Address Pension and Retiree Health Care Obligations
California Public Employee Post-Employment Benefits Commission

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Omni Experience Needed
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Plan Review and Enrollment/Communications Specialist
for Pension Specialists, Inc.
in CA

CRTNJ - Account Manager- Mid
for CitiStreet
in NJ

CRTNJ - Account Manager- Mid
for CitiStreet
in NJ

Plan Administrator
for The Newport Group
in FL

Client Account Manager - Group DI/LTC/ Life Benefits
for Winged Keel Group
in NY

Defined Contribution Consultant/Manager
for American Economic Planning Group, Inc.
in NJ

Pension Administration
for R.J.L. Pension Services, Inc.
in FL

Fund Administrator - Benefits
for Taft-Hartley Funds - Massachusetts
in MA

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