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January 30, 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.

(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 or call 1-888-328-2474.

[Guidance Overview] Required Minimum Distribution Made in Stock Rather Than Cash
Excerpt: "IRA custodians/trustees report distributions on IRS Form 1099-R. The IRS Instructions for Forms 1099-R and 5498 tell payers to show the FMV of the property on the date of distribution. In this case, the custodian/trustee would distribute 40 shares, resulting in a distribution amount of $2,000 reported on Form 1099-R." (Wolters Kluwer Financial Services)

[Guidance Overview] IRS Proposed Rules for Measuring Defined Benefit Plan Assets and Liabilities (PDF)
2 pages. (Milliman)

[Guidance Overview] DOL Action on Disclosure of Compensation
Excerpt: "The U.S. Department of Labor ('DOL') recently took two actions that will significantly expand the types of information that must be disclosed by persons who provide services to ERISA-covered employee benefit plans. This Alert describes the DOL actions and offers some preliminary thoughts on the practical implications." (Kirkpatrick & Lockhart Preston Gates Ellis LLP)

[Guidance Overview] Sixth Circuit Finds Fourth Circuit's Interpretation of Fiduciary Liability 'Unconvincing'
Excerpt: "The Sixth Circuit specifically rejected the Fourth Circuit's interpretation of ERISA Section 502(a)(2), furthering the depth of disagreement among the Circuit Courts of Appeal on the issue." (Health Plan Law blog by Attorney Roy F. Harmon III)

[Guidance Overview] New Guidance Regarding Automatic Enrollment and Default Investments in Defined Contribution Plans
Excerpt: "Sponsors of 401(k) plans that currently provide for automatic enrollment should review their procedures to ensure that they are compliant with the rules set forth in the proposed IRS regulations. Other 401(k) plan sponsors may wish to consider adding an automatic enrollment feature to encourage increased participation and/or ease nondiscrimination testing concerns. Finally, plan fiduciaries who invest the accounts of a participant who fails to make an affirmative investment election in a default option should strongly consider compliance with the final QDIA regulations (plan sponsors utilizing an automatic contribution arrangement generally are required to follow the QDIA rules)." (Bond, Schoeneck & King, PLLC)

[Guidance Overview] Plan Funds Rollover Chart, Updated January 2008 (PDF)
1 page. Excerpt: "This is a chart of what the Internal Revenue Service regards as permissible when rolling funds over from one type of retirement account to another." (

[Guidance Overview] PBGC Updates Premium Rules for DRA and PPA Changes
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) has issued final regulations to implement certain changes to the flat- and variable-rate premiums made by the Deficit Reduction Act (DRA) of 2005 (P.L. 109-171) and the Pension Protection Act (PPA) of 2006 (P.L. 109-280), and to add provisions for the new termination premium established by the DRA and modified by the PPA. 72 FR 71222 (December 17, 2007). The final regulations closely follow proposed rules the PBGC released early in 2007." (Deloitte via

[Guidance Overview] IRS to Postpone Effective Date of PPA Funding Regulations Until 2009 But Will Permit Interim Reliance
Excerpt: "In a news release, IRS indicated that the proposed effective date of PPA regulations issued in 2007 on Mortality Tables for Determining Present Value and on Benefit Restrictions for Underfunded Pension Plans will be postponed until plan years beginning on or after January 1, 2009. However, consistent with other PPA guidance, plan sponsors will be permitted to rely on the proposed regulations for 2008." (Deloitte via

[Guidance Overview] Appellate Court Splits with Sister Court on 401(k) Breach Remedies
Excerpt: "As the U.S. Supreme Court ponders whether a 401(k) participant can pursue a fiduciary breach suit on behalf of himself rather than on behalf of the plan, a federal appellate court has ruled that two doctors can move forward with such a breach suit as individuals." (; free registration required)

[Guidance Overview] Another Court Determines Cash Balance Plan not Age Discriminatory
Excerpt: "Yet another legal victory has been won for cash balance plans as the U.S. District Court for the District of Connecticut has ruled a cash balance plan's interest accrual and conversion formulas are not age discriminatory." (; free registration required)

Podcast - Chris Williams of Ernst & Young Discusses Tax Implications Under the PPA
Excerpt: "Hear Managing Editor Leah Carlson Shepherd talk with Chris Williams, tax partner of Ernst & Young's financial services practice about computer software that employers can now use under the 2006 Pension Protection Act." (Employee Benefit News; free registration required)

Employer-Sponsored Pensions: A Primer
Excerpt: "This primer describes pensions, workers with coverage, and related policy issues." (Urban Institute)

What Pension Plan Sponsor Wouldn't Kill to Lay Off Longevity Risk by Investing in a New Breed of Index Products
Excerpt: "'Two's a coincidence,' the old adage goes; 'three's a trend.' So when Goldman Sachs Group Inc. recently introduced a longevity and mortality index, it seemed to be the start of a movement. Goldman joined JPMorgan Chase & Co. and Credit Suisse First Boston in a drive to create a tradeable market for a new breed of derivatives that would hedge the risks associated with lengthening lifespans." (Treasury & Risk)

Investment Policy to Save You from Yourself
Excerpt: "Investment policies come in two parts. First, an asset allocation. You decide what percentage of your money you will keep in stocks and how much in bonds. A simple example would be 60 percent stocks, 40 percent bonds. Within those broad categories, you create subsets -- a certain percentage allocation to large and small U.S. stocks, international stocks, emerging markets, Treasuries, high-yield bonds and so on." (Jane Bryant Quinn via Bloomberg News)

California Legislators Introduce Bills to Implement Pension Commission Recommendations
Excerpt: "Senator Patricia Wiggins (D - Santa Rosa) and Assembly member Ed Hernandez (D - West Covina), the respective chairs of the Senate and Assembly Committees with jurisdiction over public employment and public pension issues, . . . unveiled legislation that will implement all recommendations of the Public Employee Post-Employment Benefits Commission that required legislative action." (California Chronicle)

Brother, Can You Spare $6 Billion?
Excerpt: "It's been a bad month at the office for the folks who manage the state's public pension fund. By close of business Tuesday, after the subprime meltdown and resulting credit crunch had set off another tsunami of selling in world financial markets, the value of the Oregon Public Employees Retirement Fund had shrunk by nearly $6 billion since the beginning of the year." (The Oregonian; free registration required)

Employee Ownership Update for January 29, 2008
NCEO Executive Director Corey Rosen discusses a court decision allowing General Mills to take a deduction where it made a redemptive dividend to pay ESOP distributions; a fascinating account of employee ownership at Proctor & Gamble early in the 20th century; and the Certified Equity Professional Institute's extension of its risks and controls project to restricted stock awards and restricted stock units. (National Center for Employee Ownership)

Sponsored by: ASPPA

(Click on company name or banner to learn more.)
Banner ad for ASPPA


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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(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

[Guidance Overview] The Principal 10 Best Practices Guide
Excerpt: "A Guide to Best Practices in Employee Benefits from The Principal 10 Best Companies for Employee Financial Security[.] This invaluable guide outlines the experiences of 10 outstanding small and medium-sized companies recognized in 2007 for excellence in employee benefits. The Principal 10 Best Companies for Employee Financial Security were selected by a blue ribbon panel of judges, renowned for their expertise in employee benefits." (Principal Financial Services)

[Guidance Overview] EBSA's Semiannual Regulatory Agenda
Excerpt: "The Employee Benefits Security Administration (EBSA) has released its semiannual regulatory agenda, which outlines regulations that have been selected for review or development during the next year, as well as any regulations that have been finalized during the last six months." (Wolters Kluwer Financial Services)

[Guidance Overview] IRS Sending Taxpayer Delinquency Investigation Notices About Failures to File 5500 or 5500-EZ in 2004 and Later Years
Excerpt: "This IRS initiative currently targets only employers that have failed to file a required Form 5500 series return rather than late or incomplete Form 5500s. The IRS has reinstated the program to allow it to obtain missing returns and to allow non-filers to become compliant." (McDermott Will & Emery)

[Guidance Overview] Executive Compensation 2008 Planning Tips (PDF)
5 pages. The newsletter includes information on: ISO and Stock Purchase Plan Tax Returns; Registration Exemption for Stock Options; Rule 144 Restricted Stock Holding Periods; and, 409A compliance. (Seyfarth Shaw LLP)

[Guidance Overview] New IRS Correction Program for Deferred Compensation Violations
Excerpt: "The initial correction program announced by the IRS last month is a welcome development, but it provides very limited relief. This limited relief highlights the importance of employers taking steps soon to prevent, and to address, violations of the Deferred Compensation Requirements." (Bond, Schoeneck & King, PLLC)

California Health Care Reform Bill Rejected - Gov. Vows to Continue Effort
Excerpt: "A California Senate panel voted 10-1 late Monday, January 28, to reject comprehensive health care reform crafted by Republican Gov. Arnold Schwarzenegger and Democratic Assembly Speaker Fabian Nez." (Workforce Management; free registration required)

2008 EITC Toolkit
Excerpt: "The 2007 Employer Guide: Educate Your Employees About Benefits They've Earned, with information for tax year 2007, will provide you with information on multiple federal programs, [with] links to each of the programs: Earned Income Tax Credit (EITC), Child Tax Credit (CTC), State Children's Health Insurance (SCHIP), Food Stamps and The Low Income Home Energy Assistance Program (LIHEAP)." (Corporate Voices for Working Families)

GAO Testimony on Long-Term Fiscal Outlook - Action Is Needed to Avoid the Possibility the Possibility of a Serious Economic Disruption in the Future (PDF)
21 pages. Excerpt: "During the past 3 years, the Comptroller General has traveled to 25 states as part of the Fiscal Wake-Up Tour. Members of this diverse group of policy experts agree that finding solutions to the nation's long-term fiscal challenge will require bipartisan cooperation, a willingness to discuss all options, and the courage to make tough choices." (U.S. Government Accountability Office)

Newly Posted Events
(Post Yours!)

EEOC and Consideration of Age in Providing Retirement Benefits - Webcast
Nationwide on February 14, 2008
presented by West LegalEdcenter

Executive Deferred Compensation for Tax Exempt Entities: Is There Anything Left That Still Works? - Webcast
Nationwide on February 14, 2008
presented by Retirement Capital Group

Health Plans Update: HIPAA, Cafeteria Plans & Other Welfare Plan Issues - Webcast
Nationwide on January 31, 2008
presented by West LegalEdcenter

Independent Contractor: Is Your Worker Really Independent? - Webcast
Nationwide on January 31, 2008
presented by West LegalEdcenter

Online Total Reward: The Challenge of Going Global Workshop
in Pennsylvania on May 22, 2008
presented by Buck Consultants, an ACS Company

Using Technology and Partnerships to Communicate Total Rewards Workshop
in Pennsylvania on May 21, 2008
presented by Buck Consultants, an ACS Company

What DB Plan Administrators Need to Know About PPA - Webcast
Nationwide on February 5, 2008
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Newly Posted Press Releases
(Post Yours!)

New Best Practices Guide on Employee Benefits
Principal Financial Group

Corporate Voices for Working Families Releases Employer Guide Providing Companies With the Tools to Help Employees Take Advantage of Tax Credits and Other Federal Benefits
Corporate Voices for Working Families

National Business Coalition on Health Convenes Multi-Stakeholder Leadership Group to Address Value Based Purchasing Trends
National Business Coalition on Health

Small Business Owners' Concern: Not Enough Money for Retirement
Wells Fargo

Minnesotans' Health Stuck in Idle From Inactivity, Unhealthy Eating
Blue Cross and Blue Shield of Minnesota

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Assistant Vice President & Counsel-50037228
for MassMutual Financial Group
in MA

Data Conversion Specialist
for Vanguard

Defined Contribution Analyst III
for Standard Insurance Company
in TX

New Business Data Specialist
for Standard Insurance Company
in PA

Defined Contribution Analyst
for Standard Insurance Company
in OR

Account Mgr I - SRS
for Standard Insurance Company
in WA

Retirement Plan Consultant/Administrator
for Third Party Administrators, Inc.
in NH

Operations Officer
for CitiStreet
in MA

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