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January 17, 2008

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

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[Official Guidance] New FAQs from IRS Elaborate on 'Cycle-Changing Events' for Determination Letter Program
Other new questions appear under the 'Miscellaneous' heading (questions 10 through 12). BenefitsLink thanks attorney Tom Farnam of St. Louis and Alexandria VA for the link! (Internal Revenue Service)

[Official Guidance] IRS 'Employee Plan News' Announcing Revised Forms for M&P Applications, Reminder re Cycle B Submission Deadline (PDF)
Excerpt: "This special edition announces that Forms 4461-A, 5329, and 5558 have been revised and are available. Form 5330 is currently being revised. In addition, this special edition reminds you that the Cycle B submission period for determination applications ends January 31, 2008 and Cycle C begins February 1, 2008. Proposed cash balance regulations and section 430 proposed regulations were issued on December 28, 2007." (Internal Revenue Service)

[Guidance Overview] Overview: IRS Proposed Rules on Measurement of Plan Assets and Liabilities Under PPA
Excerpt: "CCH Note: The IRS notes that this guidance is the third in a series of proposed rules following the May 29, 2007 release of proposed regulations relating to the mortality tables used to determine liabilities (see CCH Pension Plan Guide 20,261Y) and the August 31, 2007 release of proposed regulations relating to benefit restrictions for underfunded single-employer plans . . . ." (Wolters Kluwer Financial Services)

House Panel Studies Bill to Save Public Employee Benefits
Excerpt: "The bill, sponsored by Reps. Howard Berman, D-Van Nuys, and Howard P. 'Buck' McKeon, R-Santa Clarita, has about 336 supporters - three-quarters of the U.S. House. It aims to make sure public employees in California and 14 other states are not penalized in retirement. 'The people who need this bill made their Social Security payments for as long as they were required to. But they don't receive full benefits in return. Why? Because they also worked as public servants,' Berman said after the hearing in the House Ways and Means Committee." (Los Angeles Newspaper Group)

Australian Employers Analyzing Superannuation Plans in Light of Upcoming Changes
Excerpt: "With legislative changes scheduled to take effect on July 1, 2008, Australian employers have just a few months to review their retirement arrangements to ensure the level of superannuation they provide continues to meet the mandatory Superannuation Guarantee (SG) minimum." (Watson Wyatt Worldwide)

Investment Policy on PBGC's Agenda; Practitioners Call for More Aggressive Mix
3 pages; on the target page, click on the link having the title shown above. Excerpt: "The Pension Benefit Guaranty Corporation has contracted with an outside investment adviser to review the agency's assets and liabilities in light of the best investment practices and asset allocations of similar institutions, John H. Hanley, director of PBGC's Legislative and Regulatory Department, said in discussing issues the agency will be dealing with in 2008." (From BNA's Pension & Benefits Daily; reprinted with permission by Keightley & Ashner LLP)

Addition of Roth Option to the Federal Employee Thrift Savings Plan Considered
Excerpt: "While TSP officials are not currently seeking authorization to offer a Roth option, plans to look into the costs and benefits of such a move are in the works. Once the TSP hires a new product development director (a position left vacant when Gregory Long moved to become executive director last March), he or she will take on the task of determining whether the Roth option is right for the TSP, said Thomas Trabucco, the plan's legislative director." (National Journal Group Inc.)

Lawmakers and Witnesses Debate Fairness of Government Pension Provisions
Excerpt: "Witnesses and members of Congress debated issues of fairness at a . . . hearing on the impact of the Government Pension Offset and Windfall Elimination Provision on vulnerable workers, including federal employees. 'These rules were intended to help treat workers across employment sectors equitably,' said Rep. Michael McNulty, D-N.Y., chairman of the Ways and Means Subcommittee on Social Security. 'But many of the approximately 1 million individuals whose benefits are affected by these provisions believe the GPO and WEP are unfair.'" (National Journal Group Inc.)

GM Settles Class Action 401(k) Suit
Excerpt: "General Motors Corp. avoided further litigation . . . when it agreed to settle for $37.5 million a class-action lawsuit filed by 401(k) plan participants who suffered huge losses after GM shares fell sharply." (Business Insurance)

Chilean Congress Backs Pensions for All
Excerpt: "Chile's congress backed a pension reform bill Wednesday to ensure the country's landmark social security program for the first time covers every citizen." (AP via The Washington Post; free registration required)

Database and Analysis of Pension Litigation Decisions
Excerpt: "With over 1,500 cases and more than 100 classification codes, this research tool provides invaluable information about a variety of ERISA and public pension litigation cases. Plan sponsors, general counsel, transaction attorneys, litigators, regulators, compliance officers and advisors enjoy numerous benefits, including unlimited access to the Subscribers-Only website." (Pension Governance, LLC and The Michel-Shaked Group)

Charging an Early Withdrawal Penalty on an IRA Certificate of Deposit?
Excerpt: "A financial organization can indeed charge a penalty for early distribution from an IRA investment that has not reached maturity, unless it has previously disclosed that it will waive the penalty in certain circumstances, such as reaching a specific age [i.e. 70 or older] or if an IRA owner has died." (Wolters Kluwer Financial Services)

Study Shows Variable Annuity Works Well in Retirement Portfolio
Excerpt: "Investors who add a variable annuity with a lifetime guaranteed minimum withdrawal benefit (GMWB) to a stock and bond retirement portfolio can enjoy pumped up income with less risk, a new study finds. That was the finding of a study by Ibbotson Associates which examined the risk of a declining income and a potential income shortfall, according to a news release." (; free registration required)

Retirement Annuity and Employment-Based Pension Income, Among Individuals Age 50 and Over: 2006 (PDF)
Pages 2-7 of 12 pages. Excerpt: "Demographics affect pension income: The most recent data from the March 2007 Current Population Survey confirm earlier findings that gender, marital status, age, education, and other demographic variables have a significant impact on the likelihood of a worker receiving a retirement annuity and/or employment-based pension income in retirement." (Employee Benefit Research Institute)

Will Aging Boomers Lose Social Security Benefits?
Excerpt: "Will boomers see their benefits diminished during their long retirements? It's impossible to say for sure. Aware of their political muscle, Congress will likely try to shield those in or near retirement from cutbacks in Social Security benefits. But a rough consensus among experts is that a projected long-term explosion of health care costs could force sweeping changes in both Medicare and private health insurance." (USA TODAY)

Links to Items on Executive Comp, Benefits in General

The Compensation of Senior Executives at Listed Companies: A Manual for Investors
Excerpt: "As a supplement to The Corporate Governance of Listed Companies: A Manual for Investors, this manual builds awareness of how executives are paid and describes the governance structures that help set compensation plans within companies." (CFA Institute)

[Guidance Overview] 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)

Older Workers Turning to Government for Second Careers
Excerpt: "Older workers are also looking beyond federal departments and agencies to state and local governments, where retirements will create many vacancies in social services and health care." (The Dallas Morning News; free registration required)

Finances of Employee Benefits, 1950 - 2006 (PDF)
Pages 7- of 12 pages. Excerpt: "Financing of the U.S. employee benefit system is a joint effort by employers and employees. Both employers and employees make payments to voluntary employee benefit programs that provide health insurance coverage, retirement benefits, and other benefits. In addition, employers and employees make payments to mandatory government social insurance programs--most notably Social Security and Medicare--which provide retirement income and health care coverage, respectively, for elderly and disabled workers and their dependents." (Employee Benefit Research Institute)

Newly Posted Events
(Post Yours!)

Background Checks: Getting The Facts On Job Candidates - Legally
Nationwide on January 22, 2008
presented by

Cafeteria Plan Compliance: Handling Status Change Rules - Including HSA Considerations
Nationwide on January 31, 2008
presented by

Newly Posted Press Releases
(Post Yours!)

House Committee on Small Business to Explore Factors Behind the Limited Health Care Options Available to Entrepreneurs
U.S. House Small Business Committee

Prudential Can Help Americans Create a Retirement Income Program and Guarantee It for Life
Prudential Financial, Inc.

CPI Qualified Plan Consultants, Inc. Announces Creation of CPI Common Remitter Services Division
CPI Qualified Plan Consultants, Inc.

AXA Launches Corporate Retirement Distribution Channel
AXA Financial, Inc

Wolters Kluwer Financial Services Launches Online HSA Enrollment and Management Solution
Wolters Kluwer Financial Services

GM Settles Class Action 401(k) Suit
Business Insurance Magazine

Social(k) 401k Platform Sees 186% Growth

The Online 401k Offers an Automatic Enrollment Feature to Small Businesses
The Online 401(k)

Ibbotson Study Finds Living Benefits Can Help Increase Retirement Income While Reducing Income Risk
Ibbotson Associates

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Retirement Compliance Testing Administrator
for Vanguard
in PA

Implementation Project Lead
for Vanguard
in PA

Assistant General Counsel
for Administaff
in TX

401(k)/Defined Contribution Valuation Processor
for National Retirement Services, Inc.
in CA, NC

Pension Administrator
for Jordan & Andrews
in CA

Documents Supervisor
for Associated Pension Consultants
in CA

Employee Benefits Administrator
for The Coffee Bean & Tea Leaf
in CA

Associate Account Manager, Retirement
for Cammack LaRhette Consulting
in MA

401(k) Plan Administrator
for Qualified Plans, LLC
in GA

401(k) Plan Administrator
for Southern Pension Services
in FL

Retirement Plan Administrator
for Envoy Financial
in CO

Sr. Implementation Consultant - Institutional Services Group
for AIG Retirement (Formerly AIG VALIC)
in TX

Sr. Implementation Analyst - Contracts & Agreements Specialist
for AIG Retirement (Formerly AIG VALIC)
in TX

In House ERISA/Employee Benefits Counsel
for National Financial Partners
in NY

Relationship Manager
for Swerdlin and Company
in GA

Cafeteria Plan Specialist
for Swerdlin and Company
in GA

Senior Retirement Plan Consultant
for Employee Benefit Resources, LLP
in MT

Assistant Account Administrator
for McCready and Keene, Inc.
in IN

Participant Services Representative I
for Standard Insurance Company
in TX

Retirement Services District Manager
for ADP
in CA, CO, CT, DC, FL, NY, WA

Account Manager II - Standard Retirement Services
for Standard Retirement Services
in OR

Account Manager II - Standard Retirement Svcs.
for Standard Retirement Services
in PA

Defined Contribution Analyst I
for Standard Retirement Services
in OH

Defined Contribution Analyst I
for Standard Retirement Services
in PA

New Business Account Manager - Standard Retirement Svcs.
for Standard Retirement Services
in PA

Team leader I -Standard Retirement Services
for Standard Retirement Services
in OR

Retirement Plan Administrator
for North Central Trust Company
in MN, WI

Product Manager
for Administaff
in TX

Group Benefits Senior Account Manager
for Wachovia
in FL

Qualified Plan Administrator
for Bentley Employee Benefits Group, LLC
in RI

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