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February 27, 2008

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

Today's sponsor is SunGard

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[Official Guidance] DOL to Hold Hearing on Proposed Fee Disclosure Regs Under ERISA Sec 408(b)(2)
Excerpt: "The hearing will be held on March 20, 2008, and March 21 (if necessary), beginning at 9 a.m., EST. . . . In the notice of proposed regulation, the Department invited all interested persons to submit written comments on or before February 11, 2008. To date, the Department has received approximately 90 written comments on the proposal, many of which were from major industry groups and plan fiduciaries. All written comments are available to the public, without charge, online at . . . ." (Employee Benefits Security Administration, U.S. Department of Labor)

[Guidance Overview] Supreme Court Holds that 401(k) Participants May Sue for Breach of Fiduciary Duty to Recover Losses in Individual Accounts
Excerpt: "Although LaRue leaves the reach of §502(a)(3) for another day, it clarifies that participants can bring claims for losses caused to individual accounts and need not make a demand for plan-wide relief. And while LaRue highlights that subsection (a)(2) only encompasses 'appropriate claims for 'lost profits,'' it leaves to the lower courts to determine the type of 'lost profits' claims that may be recovered." (Winston & Strawn LLP)

[Guidance Overview] Supreme Court Agrees to Hear Case on ERISA's Anti-Alienation Provision (PDF)
2 pages. Excerpt: "The U.S. Supreme Court has agreed to review the question of whether a qualified domestic relations order (QDRO) is the only valid way under ERISA that a former spouse can waive his or her right to receive a death benefit from an employee pension benefit plan. Kennedy v. DuPont Plan Administrator (07-636)" (Sutherland Asbill & Brennan LLP)

[Guidance Overview] Supreme Court Addresses the Remedies Available for Fiduciary Breach Under ERISA
Excerpt: "ERISA permits six civil actions, three of which are involved here: Claims for benefits under Section 502(a)(1)(B); Claims for restoration of losses to the plan caused by fiduciary breach under Section 502(a)(2); and Equitable remedies for all other breaches of the plan or ERISA itself under Section 502(a)(3)." (Little Mendelson P.C.)

[Guidance Overview] Supreme Court OKs ERISA Breach of Fiduciary Duty Claims Related to Individual 401(k) Participant Accounts (PDF)
2 pages. Excerpt: "Last week, the Supreme Court ruled unanimously that an individual participant in a 401(k) defined contribution plan can maintain a breach of fiduciary duty claim under ERISA, even though the alleged breach affected only the value of his own individual account. LaRue v. DeWolff, Boberg & Assocs., Inc., No. 06-856, 2008 WL 440748 (Feb. 20, 2008)." (Groom Law Group)

[Guidance Overview] How Is the 60 Days for IRA Rollovers Calculated?
Excerpt: "The 60-day period begins the day after the IRA owner receives the assets. An IRA owner is responsible for determining his/her receipt date. Whether he/she can exercise control of the distributed assets is a major factor is making this determination." (Wolters Kluwer Financial Services)

[Guidance Overview] Recent Supreme Court Case Should Prompt Review of Fiduciary Practices
Excerpt: "The LaRue decision should prompt plan sponsors and other fiduciaries of individual participant-directed account plans (including Internal Revenue Code Section 401(k) plans and Internal Revenue Code Section 403(b) plans) that are governed by ERISA to take steps to minimize exposure to such lawsuits and potential liability." (Bond, Schoeneck & King, PLLC)

[Guidance Overview] Updating Popular Plan Designs for 2008 Contribution Limits
Excerpt: "How does the 'triple stacked match' safe harbor 401(k) plan design compare with a cross-tested safe harbor 401(k) plan design using the current contribution limits in terms of employer cost for employees? They compare quite favorably depending on the circumstances, but a great deal depends on the facts of a specific case." (SunGard Corbel LLC)

[Guidance Overview] Supreme Court Permits Employees to Sue Retirement Plan Fiduciaries for Losses to Individual Account Balances
Excerpt: "In a decision on February 20, 2008, the Supreme Court effectively removed a major defense that had, until now, been routinely used to overcome claims by retirement plan participants seeking to recover for losses to their individual account balances allegedly caused by the actions or inactions of plan fiduciaries. In doing so, however, the Supreme Court may have created some new questions and more uncertainties." (Buchanan Ingersoll & Rooney PC)

[Guidance Overview] Benefits Groups Call for Certain Changes in EBSA's Proposed Regs on 401(k) Plan Fee Disclosure
Excerpt: "Among the specific changes to the proposed regulations requested by the benefits groups are the following: The final regulations should not apply to welfare plans. 'We recommend that 2550.408b-2(c)(1) be limited to pension plans,' the groups state." (Wolters Kluwer Financial Services)

Changes Proposed for Pension Regulations
Excerpt: "Clearing their desks at the end of the year, federal agencies in December proposed three new regulations that may impact pension plans. The proposals deal with cash balance pension structures, fee disclosures and calculating assets and liabilities. The regulators will review public comments on the proposals this spring." (Employee Benefit News; free registration required)

Current Influences on the Timing of Retirement among Older Workers
Excerpt: "This paper investigates the influences on retirement behavior among older workers who were surveyed by the Health and Retirement Study (1992-2004). It is found that increases in all categories of wealth (pension, housing equity and other financial wealth) raise the probability of retiring, while good earnings prospects induce continued employment." (Pension Research Council; registration required to download fulltext of paper)

Best Practices for Preventing 401(k) Plan Lawsuits
Excerpt: "Fiduciary liability insurance may be purchased to protect against legal judgments, with the limits and exclusions available in the market, but obviously, it is better for plan sponsors to avoid being drawn into lawsuits in the first place than to rely on insurance coverage." (Employee Benefit News; free registration required)

Selected State Pension and Retirement Legislation Enacted in 2007 (PDF)
58 pages. Excerpt: "The report consists of selected legislation enacted in the 50 states, the District of Columbia, and the Commonwealth of Puerto Rico in 2007 legislative sessions. It also includes about five items of interest that were not enacted in the course of 2007 but which will be carried over, at least for study, into 2008 legislative sessions." (National Conference on Public Employee Retirement Systems)

Kentucky House Panel Clears Beshear Pension Plan
Excerpt: "Gov. Steve Beshear's proposal to overhaul the state pension system and keep it financially stable cleared its first legislative hurdle Tuesday. The House State Government Committee approved the measure, with some added tweaks that would make portions of it apply to state lawmakers. The measure heads to the full House for consideration and could come to a vote by week's end, said Rep. Mike Cherry, the bill's sponsor." (AP via Lexington Herald-Leader)

State of Florida Officials Use Loophole to Double-Dip on Salary, Pension
Excerpt: "Thousands of state workers, including lawmakers, judges and top managers, are receiving retirement benefits in addition to full-time paychecks because of a loophole in state law. The cost of paying pensions to people who have returned to the state payroll was around $300 million last year, according to the Florida Retirement System." (South Florida Sun-Sentinel)

403(b) Sponsors Want Help in Complying with New Regs
Excerpt: "A new study from the Spectrem Group found 77% of 403(b) plan sponsors say it is very or somewhat important to get outside advice about what actions they must take to comply with new Pension Protection Act (PPA) and 403(b) regulations." (; free registration required)

[Opinion] PBGC Seeks to Avoid Losses, Not Make Money
Excerpt: "Your '' column 'Pension Guarantor's Bad Bet' (Money & Investing, Feb. 21) misunderstands the goals of the U.S. Pension Benefit Guaranty Corp. and unreasonably criticizes its new investment policy. The agency's investment goal is to meet all obligations without requiring a government bailout. Thus, risk for the agency is the probability of failing to meet its obligation from available resources." (The Wall Street Journal)

Sponsored by: ASPPA

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The ERISA Outline Book

Stay current with The ERISA Outline Book, 2008 Edition, by Sal Tripodi, J.D., LL.M. only from ASPPA. Available in both print or on CD, this one of a kind resource has become the must have for anyone working in the pension industry today. Fully updated with the latest guidance on a variety of PPA 2006 items, the 2008 Edition also includes automatic enrollment guidance including QACAs, final regulations on QDIA's, guidance on benefit restrictions and much more. Stay current and order your copy today.

(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] DOL Addresses Fiduciary Responsibility to Collect Delinquent Plan Contributions (PDF)
2 pages. Excerpt: "In Field Assistance Bulletin 2008-01 (February 1, 2008), the DOL articulated for its Office of Enforcement a theory of fiduciary responsibility under ERISA for collection of delinquent contributions to retirement and welfare plans." (Sutherland Asbill & Brennan LLP)

[Guidance Overview] Right to Performance-Based Compensation on Termination of Employment Results in Loss of Deduction Under Section 162(m)
Excerpt: "This is a significant departure from the IRS' prior private letter rulings on Section 162(m). Section 162(m) generally disallows any tax deduction for compensation paid to certain key executives of public companies to the extent the compensation exceeds $1 million for the taxable year." (Troutman Sanders LLP)

[Guidance Overview] IRS Ruling Requires Review of Public Company Incentive Compensation Plans and Executive Employment Agreements
Excerpt: "Section 162(m) of the Internal Revenue Code denies a tax deduction to public companies for compensation in excess of $1 million paid to certain officers, unless the compensation meets specific performance-based standards and procedures. In a reversal of position, the IRS has issued a ruling that will require all public companies to review their incentive compensation plans and executive employment agreements to maintain qualification under Section 162(m)." (Nixon Peabody LLP)

[Guidance Overview] Corporations May Need to Make Changes for 162(m) Rulings
Excerpt: "A corporation that wishes to preserve the deductibility of the compensation it pays to senior executives may need to consider changes to it plans and agreements. Among the plans and agreements that corporations should review with counsel are the following: Annual cash incentive plans, Long-term cash incentive plans, Equity incentive plans, Employment agreements, Change in control and severance agreements, Equity award agreements, particularly those for performance shares, restricted stock with performance vesting criteria and restricted stock units, and Other performance awards." (Michael S. Melbinger via Winston & Strawn LLP)

Newly Posted Events
(Post Yours!)

Benchmarking Benefit Trends
in Georgia on March 20, 2008
presented by WEB (Worldwide Employee Benefit Network) Atlanta Chapter

Drafting Challenges (Part 1) - 409A Compliance - Webcast
Nationwide on February 28, 2008
presented by West LegalEdcenter

Form 5500 Update - Webcast
Nationwide on March 27, 2008
presented by National Institute of Pension Administrators

Fundamentals of Employee Benefits Law (Part 1) - Webcast
Nationwide on February 28, 2008
presented by West LegalEdcenter

GLBT Corporate Benefits - What Employers and Employees Should Know - Webcast
Nationwide on March 19, 2008
presented by West LegalEdcenter

LaRue v. DeWolff: The High Court Rules on 401 (k) Plan Participants' Right to Sue - Webcast
Nationwide on March 11, 2008
presented by West LegalEdcenter

The Future of Women's Retirement Security - Webcast
Nationwide on February 28, 2008
presented by Women's Institute for a Secure Retirement (WISER)

U.S. Labor Department Hearing On Service Provider Compensation And Plan Fee Disclosure
in District of Columbia on March 20, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

What Employers Should Know About USERRA: Before, During and After An Employee's Military Leave - Webcast
Nationwide on April 1, 2008
presented by West LegalEdcenter

Newly Posted Press Releases
(Post Yours!)

State Health Care Reform Efforts Examined
U.S. House Small Business Committee

Segal Survey of Dental Plans Reveals Ways to Bite Down on Costs
The Segal Company

Benefit Insights, Inc. Launches New Service for TPA Firms to Securely Send and Receive Employee Data via the Internet
Benefit Insights, Inc.

CitiStreet Posts Another Year of Growth; Participants Now at 12 Million

401(k) Advice Pioneer Restructuring To Better Serve Participants and Other Advice Providers
The Scarborough Group, Inc.

AXA Equitable Helps Americans Prepare for a Long Retirement
AXA Financial, Inc

Roth 401(k) Analyzer Version 3.0 Released by ERISA Expertise
ERISA Expertise LLC

401k Toolbox & Guardian are First to Market with QDIA Managed Account Fiduciary Warranty

New White Paper Examines the Hallmarks, Advantages of a Strategic EAP over Gatekeeper Benefit Models
Corporate Counseling Associates

Americans Report Their Saving Habits and Progress
America Saves

Poll: Florida Educators Worry They Haven't Saved Enough To Retire
Independent Benefits Council

Partners' Center for Connected Health and EMC Corporation Launch New Web-Based Remote Monitoring Program to Help Employees Fight Hypertension
Center for Connected Health

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Plan Administrator
for Blue Ridge ESOP Associates
in VA

Trust Manager
for Polycomp Administrative Services, Inc.
in CA

Plan Administration Specialist
for Law firm with ERISA practice which provides plan administration services.
in CA

401k Consultant (Defined Benefits/Defined Contribution) at BB&T
for BB&T
in VA

Director of Compensation and Benefits
for PinPoint Solutions
in WI

Conversion Department Manager
for First Mercantile Trust Company/SunTrust Bank
in TN

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