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January 16, 2008

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.

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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 or call 1-888-328-2474.

(a) New Guidance Documents

(None today.)

(b) News

Save the Date: Financial Advice Free for One Day -- January 25, 2008
Excerpt: "During Jump-Start Days, their expertise is free. Call (888) 919-2345 or log on to www retirement/jumpstart to participate in an online discussion with an adviser." (Courier-Post)

Lawsuit in North Carolina to Stop Diverting State Pension Money
Excerpt: "[A] lawsuit before the state Court of Appeals could bar state officials from using contributions to the state pension fund to balance the budget -- and force officials to pay penalties for the last time the governor used it." (

(c) Summaries of Guidance; Filed Comments

Individual 401(k) Participant Argues Loss to His Defined Contribution Account Is Effectively a Loss to the Plan
Excerpt: "Individual 401(k) participants will finally have the right to sue plan administrators for fiduciary breaches if the plaintiff in a lawsuit currently pending before the Supreme Court of the United States prevails. In November, the Supreme Court heard arguments in LaRue v. DeWolff, Boberg & Associates Inc., in which James LaRue is suing his former employer, management-consulting firm DeWolff, Boberg & Associates, for allegedly not following his 401(k) investment instructions." (; free registration required)

Global Retirement Update, January 2008 (PDF)
3 pages. Excerpt: "Our Global Retirement Update summarizes recent legislative developments and trends related to retirement and financial management and highlights recently passed and pending legislation that may require employers to take action to comply with new rules or review existing plans." (Hewitt Associates)

One Last Look at Cycle B and Looking Ahead to Cycle C
Excerpt: "In a few weeks, on January 31st, Cycle B ends and Cycle C begins. Cycle C marks the middle of this great experiment called the EGTRRA remedial amendment cycle restatement period. Like all experiments, charts and tables come in handy. When the IRS issued Rev. Proc. 2007-44 last year, they also updated the Quality Assurance Bulletin (QAB) on the EGTRRA Staggered Remedial Amendment Period and Remedial Amendment Cycle for Individually Designed Plans, with charts and tables included within the QAB." (Pension Protection Act Blog)

Overview: PBGC's PPA Guidance
Excerpt: "[T]he Pension Benefit Guaranty Corporation (PBGC) has been issuing a steady stream of guidance on various provisions of the Pension Protection Act (PPA) in the form of 'technical updates.' Technical Updates 07-2 and 07-3 provide helpful guidance on the effect of certain PPA changes on the ERISA § 4010 annual reporting requirements, the ERISA § 4043 reportable event requirements, and the ERISA § 4041(b) standard termination rules. Also, Technical Update 07-4 designates the present value of the PBGC maximum guaranteed benefit that must be used when applying the partial limitation on lump-sum payments by certain underfunded plans." (Deloitte via

Supreme Court Examines Whether State's Retirement System Violates Age Discrimination Act
Excerpt: "Although this case involves a challenge to a single state's retirement system, the Supreme Court's decision could affect numerous other state and local government retirement plans. Several entities have filed amicus briefs in support of the state. If the 6th Circuit decision is upheld, it may force certain states to change the provisions of their statutes, and in some cases their state constitutions, to comply." (Deloitte via

'Plan-Related Employment' Results in Suspension of Pension Benefits
Excerpt: "According to the plan [Wisconsin Carpenters' Pension Fund], the fund may suspend a participant's retirement benefits if he continues or resumes work in a 'plan-related employment,' which is defined as, among other things, employment in an industry involving any business activities in which employees covered by the plan were employed at the time that payment of benefits commenced. A participant's work in plan-related employment will suspend benefits for any calendar month in which the suspendible participant worked 40 or more hours after having worked 400 hours in prior months in such calendar year in plan-related employment as an employee." (Cypen & Cypen)

(d) Trends, Surveys, Research

Recent Developments in Pension Plans in the Netherlands
Excerpt: "Pension systems in developed countries are often described as having three pillars: Social Security, employer-sponsored pensions and personal savings. In the Netherlands, the first two pillars are unusually comprehensive and widespread among workers. Nonetheless, employer-sponsored pensions have undergone significant changes recently, both in benefit structures and in regulatory oversight." (Watson Wyatt Worldwide)

Custom Liability Benchmarks: Measuring the Success of Your Defined Benefit Plan
Excerpt: "When it comes to gauging the effectiveness of their pension portfolios, many plan sponsors compare them with either a peer group or a total return benchmark. However, when used exclusively, these metrics can lead to an incomplete assessment of a plan's total risks in a liability-centric environment. Because of recent changes to the defined benefit (DB) regulatory and reporting environment, the liability side of the equation is taking on increased prominence." (The Vanguard Group)

U.S. Capital Market Update: Pension Funded Status Continued Upward in 2007 (PDF)
4 pages. Excerpt: "The monthly Capital Market Update is designed to support our clients in the ongoing financial management of their U.S. retirement plans. Towers Perrin has been tracking the asset/liability performance of a hypothetical benchmark pension plan since 1990. This report reviews how capital market performance affected pension plan financing, with a focus on linked asset/liability results. Specific plan results will vary based on such factors as liability characteristics, contribution policy, portfolio composition and management strategy." (Towers Perrin)

Employee Ownership Update for January 15, 2008
NCEO Executive Director Corey Rosen discusses new guidance on incentive stock option and employee stock purchase plan reporting; proposed French legislation to democratize stock options; developments in stock drop cases in ESOPs and 401(k) plans; the William McGuire case; and submissions for the Innovations Award. (National Center for Employee Ownership)

In Can.ada, Phased Retirement Programs Get a Lift from Government
Excerpt: "Can.ada's federal government is backing legislation that includes amendments to the federal income tax regulations that would give sponsors of defined benefit (DB) pension plans greater flexibility in designing phased retirement and other retention programs starting in 2008." (Towers Perrin)

European Commission Revises Portability Directive on Pension Rights
Excerpt: "The European Commission has drafted a revised directive to protect employees' pension rights accrued under employer-sponsored plans when they change jobs. The main difference from the original draft issued in 2005 is the omission of the requirement to give employees the right to transfer their pension benefits in full to their new employer's plan." (Towers Perrin)

Automatic Plans Capture Attention of Employers and Employees
Excerpt: "Automatic 401(k) plans continue to grow in the workplace, forcing some small- and midsize-employers to ask tough questions about the purpose of a defined contribution retirement plan. Some employers wonder how a company could say no to auto-enrollment if the goal of the plan is to prepare workers for retirement." (Employee Benefit Advisor; free registration required)

Just Put It on My 401(k) Debit Card
Excerpt: "A growing number of companies now offer employees the option of being issued a debit card that taps a 401(k) loan. The card, called ReservePlus, allows workers to withdraw funds from their 401(k)s. The immediate concern for consumers is that impulse spending desires could trump their long-term savings needs." ( via InsuranceNewsNet)

(e) Policy, Opinion, Advocacy

CPI Fails to Reflect Retirees' Inflation
Excerpt: "The Bureau of Labor Statistics publishes an inflation rate for those 62 and older, called the CPI-E. The annual inflation rate for the CPI-E was 4.16 percent in November. It's unusual that this rate is lower than the traditional inflation rate, says Patrick C. Jackman, an economist with the Bureau of Labor Statistics. The reason it happened is that the index for older consumers gives less weight to gas, and fuel prices have shot up, he says." (The Baltimore Sun)

Call for Papers: Incorporating Self-Adjusting Mechanisms into Retirement Systems
Excerpt: "To expand thinking on this subject, the Society of Actuaries Pension Section Council's Research Team is issuing this Call for Papers, inviting academic researchers, practitioners, plan sponsors, analysts and other interested parties to further the debate, develop proposals and/or identify solutions related to any aspect of self-adjusting mechanisms and their application to retirement systems. . . . Please submit an abstract or outline of your proposed paper by January 31, 2008 . . . ." (Society of Actuaries)

Call for Papers: Changing the Signals -- A Potentially Important Mechanism to Change Future Retirement Behavior
Excerpt: "This Call for Papers is being issued as part of the Society of Actuaries Pension Section Council's Retirement 20/20 project. It stems from discussions at the 2006 Retirement 20/20 conference where signals were discussed . . . . Please submit an abstract or outline of your proposed paper by January 31, 2008 . . . ." (Society of Actuaries)

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

Age Affects Benefits Satisfaction
Excerpt: "To help HR departments attract younger workers and retain older ones, The Segal Company conducted workplace research to better understand what motivates government employees. The study focuses on employees' attitudes and opinions about pay, benefits and job satisfaction. More than 1,900 public-sector employees participated in the survey." (Employee Benefit News; free registration required)

Recently Published Scholarship: Employee Benefits Law Symposium
A listing of the articles in The John Marshall Law Review, Volume 40, Spring 2007, Number 3. (Workplace Prof Blog)

Overview of Practical Considerations for Revised Rule 144 (PDF)
5 pages. Excerpt: "[S]ignificantly, . . . the revisions to Rule 144 shorten the holding period for restricted securities of reporting issuers (companies that are and have been subject to the reporting requirements of the Securities Exchange Act of 1934 for at least 90 days before the proposed Rule 144 sale) to six months for both affiliates and non-affiliates." (Pillsbury Winthrop Shaw Pittman LLP)

Older Baby Boomers Caught All the Breaks
Excerpt: "In a generation as sprawling as the baby boomers, you're bound to notice some big differences. And the main difference is probably this: The older boomers, exemplified by the 62-year-olds who will start retiring this year, occupy a demographic sweet spot that most younger boomers can't match." (USA TODAY)

Overview: Treasury/IRS Provide Limited Relief for Operational Failures Under Code Section 409A
Excerpt: "This article examines Notice 2007-100 which the Department of Treasury and the IRS published on December 24. Notice 2007-100 provides relief under particular circumstances for certain failures to comply with Internal Revenue Code Section 409A." (JPMorgan)

Employee HR Self-Service in Place Among Nearly All Large Companies
Excerpt: "According to Towers Perrin research on HR service delivery trends, it's fair to say that employee self-service (ESS) has become the primary means of HR service delivery for key benefit applications in most organizations. Specifically, by the end of 2008, 99% of respondents will deliver annual benefit enrollment via ESS. As recently as 2006, only 74% of organizations offered benefit enrollment via ESS." (Towers Perrin)

Newly Posted Events
(Post Yours!)

2008 - 2nd Wednesday Teleconference Series
Nationwide on February 13, 2008
presented by Employers Council on Flexible Compensation (ECFC)

A School for Fiduciaries
in Georgia on January 23, 2008
presented by Southern Employee Benefits Conference

Advanced Cafeteria Plans Conference 2008
in Massachusetts on July 16, 2008
presented by Employee Benefits Institute of America (EBIA)/Thomson Tax & Accounting

HIPAA and Other Health Benefits Laws Compliance Assistance Seminar - Free
in Texas on February 27, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Offering Health Care Through Individual Policy Arrangements (HRAs and Premium Reimbursement Accounts) - Webcast
Nationwide on February 13, 2008
presented by Employers Council on Flexible Compensation (ECFC)

Update on Domestic Partner HR and Benefits Issues - Webcast
Nationwide on January 17, 2008
presented by West LegalEdcenter

Newly Posted Press Releases
(Post Yours!)

International Foundation Announces 2008 Executive Committee
International Foundation of Employee Benefit Plans

AHRQ Releases Consumer Financial Incentives Guide for Employers and Other Health Care Purchasers
Agency for Healthcare Research and Quality

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Defined Benefit Conversions Data Analyst
for New York Life Retirement Plan Services
in MA

Trust Administrator - Employee Benefits
for Old Point Trust
in VA

Government Reporting Specialist
for New York Life Retirement Plan Services
in MA

Strategic Communications Consultant
for New York Life Retirement Plan Services
in CA

ERISA Consultant
for New York Life Retirement Plan Services
in CA

Relationship Manager
for New York Life Retirement Plan Services
in CA

401(k)/Defined Contribution Administrator
for Pencor, Inc.
in FL

Participant Communication Consultant
for Standard Insurance Company
in OH

Client Relationship Manager
for Transamerica Retirement Services
in MD

Human Resources Supervisor - Retirement
for Aecom
in CA

Retirement Services Education & Enrollment Specialist
for Prudential Financial
in MD

Defined Contribution Pension Plan Administrator
for Philadelphia Based Industry Leader In Plan Administration
in PA

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