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January 15, 2008

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

Today's sponsor is ASPPA

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Join over 1,400 colleagues at the retirement industry's longest running conference dedicated solely to retirement plan sales and investment professionals , The ASPPA 401(k) SUMMIT. Attend advisor centered workshops, general sessions with internationally known speakers, secure insurance and other CE credits, network with your peers and more in Orlando, Florida, February 10-12, 2008. Don't miss your opportunity to join the best of the best.
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(a) New Guidance Documents

Final Reg: PBGC Interest Rates for Use with Terminating Single-Employer Plans with February 2008 Valuation Dates (PDF)
2 pages. Excerpt: "Three sets of interest assumptions are prescribed: (1) A set for the valuation of benefits for allocation purposes under section 4044 (found in Appendix B to Part 4044), (2) a set for the PBGC to use to determine whether a benefit is payable as a lump sum and to determine lump-sum amounts to be paid by the PBGC (found in Appendix B to Part 4022), and (3) a set for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using the PBGC's historical methodology (found in Appendix C to Part 4022)." (Pension Benefit Guaranty Corporation)

Table: Present Value of PBGC Maximum Guarantee
Excerpt: "The 2008 table was developed using the 417(e) segment rates for August 2007 (5.02%, 5.18% and 5.28% respectively) and the 417(e) applicable mortality table for 2008 provided in IRS Revenue Ruling 2007-67." (Pension Benefit Guaranty Corporation)

(b) News

Rail Car Maker Ordered to Rehire Workers So They Can Get Pension Benefits
Excerpt: "A Chicago-based rail car manufacturer has asked a federal judge in Pennsylvania to delay implementing his order that the company reinstate more than 100 workers laid off last year so they can receive pension benefits set forth under a union contract." (; free registration required)

(c) Summaries of Guidance; Filed Comments

Overview: IRS Proposes Regulations on Cash Balance and Other Hybrid Retirement Plans (PDF)
10 pages. Excerpt: "The IRS has issued proposed regulations on cash balance and other hybrid defined benefit pension plans. The benefits community has long awaited the release of these regulations, which provide guidance on some of the most important provisions in the Pension Protection Act of 2006 affecting defined benefit plans." (Hewitt Associates)

Overview of Two Regulatory Initiatives, the Final Form 5500 Regulations and the Proposed Section 408(b)(2) Regulations
Excerpt: "While the centerpiece of these regulations is greater 'fee transparency,' their implementation will result in substantial administrative burdens and costs. They will require that: service providers develop and disclose lots of fee information (much of which has been previously unreported); plan sponsors turn 'tattle tale' on providers who fail to disclose required information; and service contracts be reviewed and, in many cases, be amended to conform to these new requirements." (; free registration required)

Lawyer Did Not Commit Wrongdoing on Benefits Dispute
Excerpt: "Even though a divorce decree reflected a bad address for a life insurance plan participant's ex-wife, the document still represented a qualified domestic relations order (QDRO), a federal appellate court ruled." (; free registration required)

Seventh Circuit Affirms Trial Judgment for Defendants in Indianapolis Power & Light 401(k) Stock-Drop Case (PDF)
5 pages. Excerpt: "On January 2, 2008, the Court of Appeals for the Seventh Circuit upheld a defense judgment in a 401(k) employer stock case following a bench trial on breach of fiduciary claims. Nelson v. Hodowal, ___ F.3d ____, 2008 WL 90057 (7th Cir. Jan. 2, 2008). The Seventh Circuit's decision is undoubtedly significant as only the second appellate decision following a trial on the merits of fiduciary breach claims arising out of the decline of employer stock in a defined contribution plan." (Alston & Bird LLP)

Overview: Cumulative List -- IRS Notice 2007-94
Excerpt: "The 2007 Cumulative List of regulatory changes is basically for Cycle C plans. Cycle C plans are individually designed plans whose EIN ends in 8 or 3 and whose filing timeframe is February 1, 2008 to January 31, 2009. This is the first cumulative list after the updated Rev Proc 2007-44 (that updated Rev Proc 2005-66). Once again the IRS has listed as 'new', items that appear for the first time." (McKay Hochman Co., Inc.)

Overview: Spouse Beneficiary Rules
Excerpt: "Under the original and final required minimum distribution regulations, the surviving spouse has always had special opportunities. The surviving spouse of a deceased participant may roll the funds into his or her own IRA or to a qualified plan, if the qualified plan accepts rollovers." (McKay Hochman Co., Inc.)

Overview: 415 Final Regulations Plan Amendment
Excerpt: "The §415 changes will have to be done by separate amendment even if executed simultaneously with the EGTRRA restatement. In fact, depending on timing, the §415 amendment may need to be attached to both the employer's GUST and EGTRRA documents." (McKay Hochman Co., Inc.)

(d) Trends, Surveys, Research

Does Your Retirement Plan Offer Investing Advice? Take It.
Excerpt: "The evidence is in. Do-it-yourselfers need serious help in managing their 401(k)s. Left alone, you don't achieve anywhere close to the market returns available." (Newsweek)

Liability-Driven Investing: Adding Investment Return, Lowering Risk (PDF)
3 pages. (Financial Executives International via Sibson Consulting)

Boomers' Eagerness to Retire Could Cost Them
Excerpt: "Can they afford to retire? How far will their Social Security checks go? The reality is this: Many of those who retire early will accept reduced benefits -- and in doing so will risk falling short of their financial needs." (USA TODAY)

(e) Policy, Opinion, Advocacy

Opinion: What the Public Really Wants: Retirement and Social Security (PDF)
8 pages. Excerpt: "The economy has not delivered strong wage growth or adequate savings opportunities in recent years for average Americans, resulting in widespread economic anxiety and insecurity. Not surprisingly, then, one particular area of anxiety is retirement. In this new brief from Ruy Teixeira's What the Public Really Wants...series, polling data consistently show that not having enough money for retirement is at the top of Americans' economic concerns." (The Century Foundation)

Social Security and Pension Trends: Five Country Case Studies (PDF)
Excerpt: "Together these five case studies serve to provide potential guidance to policymakers in other countries as they seek to address the challenges presented by demographic change including aging populations, increasing longevity, declining birth rates and other economic and social trends that impact the financing, solvency and sustainability of Social Security systems." (Buffin Partners Inc. via Ryan ALM)

GAO Delays 401(k) Report Until May
Excerpt: "House Education and Labor Committee Chairman George Miller (D-Calif.) requested GAO do a series of reports on 401(k) fees and practices and has been the most active legislator calling for fees legislation. The upcoming report will be called 'Plan Sponsor Practices and their Oversight by the Department of Labor,' according to GAO officials." (ICMA-RC)

Opinion: Federal Thrift Savings Plan Addresses Frequent Trades by Plan Participants -- Here We Go Again
Excerpt: "[I]t's been interesting to watch the debate over market-timing once again raise its ugly head -- this time among the participants of the federal government's own Thrift Savings Plan, or TSP. Apparently, there are a couple of thousand participants (out of a universe of 3.8 million in the TSP) who are trading 'frequently' -- and the TSP is taking steps to rein them in." (; free registration required)

Sponsored by: Swerdlin & Company

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Banner ad for Swerdlin & Company

Attention Pension Actuaries: Are you prepared for the new DB laws?

  • Are you prepared for the new defined benefit laws effective on January 1, 2008?
  • Does this mean new software?
  • Modifications to current software?

Don't let these new laws add to your workload and stress level.
Let Swerdlin & Company help you!

(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

Changing Trends in the Labor Force: A Survey (PDF)
16 pages. Excerpt: "In this paper, the authors review the evidence of changing labor force participation rates, estimate the trends in labor force participation over the past 50 years, and find that aggregate participation has stabilized after a period of persistent increases. Moreover, they examine the disparate labor force participation experiences of different demographic groups. Finally, they survey some of the studies that have provided explanations for these differences." (Federal Reserve Bank of St. Louis)

Benefit Program Claim Audits Can Help Employers Save Money and Enhance Performance (PDF)
3 pages. Excerpt: "For starters, an audit can fulfill your plan sponsor fiduciary responsibilities -- by evaluating whether your benefit programs are administered accurately and according to contractual agreements. Of course, the best audit outcome confirms that vendor performance levels are at or above industry standards. But this level of quality continues to be the exception rather than the rule. More often than not, our audits reveal costly errors and a host of other performance issues. The good news? By uncovering these issues and identifying how to resolve them, an audit can help you save money, enhance performance and even deliver a better employee experience." (Towers Perrin)

Newly Posted Events
(Post Yours!)

403(b) Regulations - Webcast
Nationwide on January 22, 2008
presented by InterCall

EGTRRA Pre-approved Plan Workshops
Nationwide on March 18, 2008
presented by SunGard Relius

ERISA Fee Transparency: New DOL Rules for Service Provider Disclosures
Nationwide on February 6, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group

Free Benefits Webinar
Nationwide on January 24, 2008
presented by Ogletree Deakins

HIPAA Security Audits: Are You Prepared?
Nationwide on February 7, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group

Managing Long-Term Leaves of Absence
in Massachusetts on February 13, 2008
presented by WEB Worldwide Employee Benefits Network MA Chapter

Plan Design Workshop
Nationwide on March 18, 2008
presented by SunGard Relius

Newly Posted Press Releases
(Post Yours!)

Watson Wyatt Data Services' Newest Report Covers Latest Trends in Compensation Policies & Practices for the Insurance Industry
Watson Wyatt

CFDD Launches New Website For Retirement Advisors
Center for Due Diligence

Pension Governance, LLC and The Michel-Shaked Group Launch Pension Litigation Database as Lawsuits Surge
Pension Governance, LLC

Enwisen Continues Momentum -- Finishes Record Year with 80 New Customers

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Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm
in NJ

OmniPlus Consultants
for Chesapeake Benefit Partners

Implementation Project Lead
for Vanguard
in PA

Account Manager
for Pension Specialists, Inc
in CA

Group Benefits Insurance Senior Account Manager
for Wachovia
in GA

Managing Consultant, Institutional Relationships, Hospital
in IL

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

Retirement Compliance Testing Administrator
for Vanguard
in PA

Retirement Plan Administrator-loans and distributions
for Full Service Employee Benefits Firm In The Phila Area
in PA

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