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February 28, 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] Urgent: Most IRS Enrolled Actuaries Must Mail Renewal Form On or Before March 1
The IRS notes at the target page that enrolled actuaries will not be sent an email or letter about renewal of the enrollment of enrolled actuaries. Form 5434-A (Rev. January 2008) is to be used by all individuals enrolled before January 1, 2008 who wish to have their renewal effective as of April 1, 2008; a $250 fee and reporting of continuing education hours is required. The instructions to the form say it must be 'received' by the IRS by March 1, 2008, but the target web page merely states, 'If your renewal is postmarked on or before March 1, 2008, you may begin using the '08-' prefix on April 1, 2008, even if you have not received notification of renewal by the Joint Board." (Internal Revenue Service)

[Guidance Overview] Fiduciaries Exposed to New Liability Under ERISA As Supreme Court Rules on Individual Accounts (PDF)
4 pages. Excerpt: "This alert provides a brief summary of the LaRue case, as well as outlines the problems it may create for plan sponsors and fiduciaries and posits several actions that they may wish to take to help address those problems." (Womble Carlyle Sandridge & Rice, PLLC)

[Guidance Overview] Handling by Retirement Plans of Post-Severance Payments: Action Needed (PDF)
3 pages. Excerpt: "The Treasury Department issued revised final regulations under § 415, which new rules are effective for plan years beginning on and after January 1, 2008. (For non-calendar plan years, the regulations are effective for years beginning on or after July 1, 2007.) . . . . For 401(k), 457(b) and 403(b) plans that allow employees to direct some of their pay into plans, the new rule means that amounts paid after employment terminates may not be deferred and contributed, even if it is W-2 pay, unless an exception applies (see below)." (The ERISA Law Group, P.A.)

[Official Guidance] Disaster Relief Announcement 08-02 Relating to PBGC Deadlines in Response to Severe Storms and Flooding in Indiana
Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to the severe storms and flooding that occurred on January 7, 2008, in Indiana." (Pension Benefit Guaranty Corporation)

[Official Guidance] Disaster Relief Announcement 08-03 Relating to PBGC Deadlines in Response to Severe Storms, Tornadoes and Flooding in Tennessee
Excerpt: " Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to the severe storms, tornadoes and flooding that occurred on February 5, 2008, in Tennessee." (Pension Benefit Guaranty Corporation)

[Official Guidance] Disaster Relief Announcement 08-04 Relating to PBGC Deadlines in Response to Severe Storms, Tornadoes and Flooding in Arkansas
Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to the severe storms, tornadoes and flooding that occurred on February 5, 2008, in Arkansas." (Pension Benefit Guaranty Corporation)

[Official Guidance] Disaster Relief Announcement 08-05 Relating to PBGC Deadlines in Response to Severe Storms, Tornadoes and Flooding in Kentucky
Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to the severe storms, tornadoes and flooding that occurred on February 5, 2008, in Kentucky." (Pension Benefit Guaranty Corporation)

Healthy Companies' Moves to Halt Pension Benefit Sign Retirement Costs Now Fall on Employees
Excerpt: "While it was no surprise when GM, an ailing enterprise that lost $8.6 billion in 2005, decided to freeze its pensions, the new wave of freezes among healthy companies like IBM, Verizon and Lockheed-Martin has retirement experts predicting the era of the pension soon will be over for up to three-quarters of roughly 21 million workers enrolled in such plans." (

9th Annual Transamerica Retirement Survey - Workforce Survey Results (PDF)
83 pages. Excerpt: "Harris Interactive was commissioned to conduct the 9th Annual Retirement Survey for Transamerica Center for Retirement Studies. . . . This report represents the findings for workers. Separate survey reports will be issued for employers of for-profit corporations as well as full-time workers of non-profit organizations." (Transamerica Center for Retirement Studies)

9th Annual Transamerica Retirement Survey - Results from Employers (PDF)
160 pages. Excerpt: "Since 1998 Transamerica has conducted a national phone survey of U.S. business employers and employees regarding their attitudes toward retirement. The overall goals for the study are to illuminate emerging trends, promote awareness, and help educate the public. Harris Interactive was commissioned to conduct the 9th Annual Retirement Survey for Transamerica Center for Retirement Studies. Where appropriate, questions were tracked and some new questions were added to investigate new topics of interest. This report represents the findings for employers. A document for employees is issued as a separate report." (Transamerica Center for Retirement Studies)

9th Annual Transamerica Retirement Survey (PDF)
30 pages. Excerpt: "For the past eights years, the Transamerica Center for Retirement Studies has conducted a national survey of U.S. business employers and workers regarding their attitudes toward retirement. The research emphasizes employer-sponsored retirement plans, issues faced by small- to mid-sized companies and their employees, and the implications of legislative and regulatory changes." (Transamerica Center for Retirement Studies)

130 Teachers Eligible to Apply for Early Retirement Plan in Local Arizona District
Excerpt: "The local Public Agency Retirement Services (PARS) early retirement plan is in addition to what the teachers would get from the state retirement program. District school officials pointed out that the plan is not a bonus program, but a way to compensate teachers for what they would lose by retiring early. They also pointed out that the goal of offering early retirement is not to save the district money but to prevent laying-off younger teachers." (The Lompoc Record)

California City Moves Closer to Bankrup.tcy Filing; Pension Costs a Factor
Excerpt: "If approved, Vallejo would become the biggest city and second-largest local government in the state after Orange County to file for bankrup.tcy. Municipalities throughout California are grappling with billions of dollars in labor and pension cost increases incurred during the late 1990s." (Bloomberg News)

Turkey to End `Nightmarish' Pensions for 48-Year-Olds
Excerpt: "The government lowered the retirement age in the 1990s, hoping that it would cut unemployment by leading older people to leave the workforce and open up jobs for young ones. ``Setting the retirement age so low has been the main factor upsetting the actuarial balance of the social security system,'' according to a May 2007 government planning document." (Bloomberg News)

Department of Labor Sues Exeter, New Hampshire Roofing Company for 401(k) Violations
Excerpt: "In response to a Department of Labor suit, A.J. DesJardins Roofing Company Inc., of Exeter, has agreed to restore almost $33,000 to its employees 401(k) retirement plan." (

Should You Sue Your Employer Over Fees and Choices Offered in Its 401(k) Plan?
Excerpt: "The Northrop Grumman management, board of directors, and 401(k) investment committee have been named as defendants in a lawsuit filed on behalf of current and former employees. The plaintiffs are alleging that Northrop's 401(k) plan charged excessive fees and offered inappropriate investment choices." (The Motley Fool via Yahoo! News)

Financial Adviser Sees Great Opportunities for Fiduciaries in the Small-Plan Market
Excerpt: "While target marketing usually means targeting a specific audience, sometimes a product target also can bring success. One adviser who has prospered with this approach is Steven Kaye, president of American Economic Planning Group in Watchung, N.J., who targets 401(k) plans." (Investment News; free registration required)

'Harris Trust' Aspects of New Group Annuity Products Make a Comeback
Excerpt: "In response to [a court] decision, the issuance of 95-60, the passage of 401(c) and the DOL's promulgating the regs attempting to define an arcane creature called 'transition policies,' much of the insurance industry amended its group annuity contracts to qualify as guaranteed benefits policies." (Baker & Daniels LLP)

Should Fiduciaries Invest Like Warren Buffet?
Excerpt: "'If investing is your game, diversification doesn't make sense. It's crazy to put money into your 20th choice rather than your 1st choice. If you have a harem of 40 women, you never really get to know any of them well. Charlie (Munger)and I operated mostly with 5 positions. If I were running 50, 100, 200 million, I would have 80% in 5 positions, with 25% for the largest.'" (Fiduciary Investor)

Florida Associations Unveil Model 403(b) Plan
Excerpt: "A coalition of Florida's K-12 education associations announced the development of a 403(b) Model Plan for Florida educators in a February 25 nationwide teleconference." (; free registration required)

GAO Issues Report on Hedge Funds which Looks at Pension Investment in Hedge Funds
Excerpt: "The Government Accountability Office (GAO) has issued a report, Hedge Funds: Regulators and Market Participants are Taking Steps to Strengthen Market Discipline, but Continued Attention is Needed. The number of hedge funds has grown, and they have attracted investments from institutional investors such as pension plans." (International Foundation of Employee Benefit Plans)

PBGC Announces New Investment Policy in What Practitioner Calls a 'Dramatic' Shift
See title above in list of Items of Interest. Excerpt: "Notable is the allocation to private equity, a sector that has chosen to terminate defined benefit plans and pass liabilities to PBGC in the past when they have taken companies private, Dallas Salisbury said. ''This will lead PBGC to be invested more like a pension fund and less like an insurance company,'' he said." (BNA's Pension & Benefits Daily; reprinted with permission by Keightley & Ashner LLP)

Industry Outlook for Registered Investment Advisers: Opportunities in the Minefield (PDF)
Excerpt: "As sponsors increasingly acknowledge their fiduciary role, retirement plans specialists are gaining momentum in the mid-market, but many are at capacity. This is a major opportunity for specialists capable of differentiating their practice because RIAs will replace most of the traditional broker sold products in the mid-large plan market. . . . Service is central to success, but it is not a substitute for technical expertise. The retirement plans learning curve is steep and the landscape is populated with a fiduciary minefield." (The Center for Due Diligence)

[Opinion] The LaRue Decision - ERISA Liability and Insurance Issues
Excerpt: "It may well be that the LaRue decision will lead to a wave of new employee driven litigation. However, employees considering a lawsuit like LaRue's should consider several things about the Supreme Court's opinion." (Kevin M. LaCroix via The D&O Diary)

[Opinion] Stocks That Pay You to Retire: High Dividend-Paying Selections
Excerpt: "The notion that you can no longer count on a corporation to fund your retirement is really only half true. The recent rash of pension freezes and obliterations offers investors an opportunity to change how they look at -- and plan for -- retirement. Well-researched investments in high-yielding, well-positioned corporations can have you happily unemployed ahead of schedule." (The Motley Fool)

[Opinion] Text of American Bankers Association Comments to DOL on Proposed Class Exemption Involving Fee Disclosures (PDF)
9 pages. Excerpt: "The proposal references multiple terms that either have not been defined under ERISA, or require additional clarification. The terms 'agent', 'compensation or fees', and 'service provider' appear throughout the Department's proposal. . . . [T]he inclusion of extraneous and unnecessary information concerning service provider payments to third parties could distract plan sponsors from their ultimate goal of determining the reasonableness of fees they pay to service providers." (American Bankers Association)

Sponsored by: Cassidy Retirement Group

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Helping Companies Manage Their Retirement Plan Risks

At Cassidy Retirement Group, our core business is strategic retirement plan consulting for all types of qualified and non-qualified benefit plans. Our services include defined benefit and defined contribution plans, investment consulting, and mergers and acquisitions. Our clients come to trust and to value our independent advice. For more information, please visit our website.

(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] IRS Confirms New Position on Performance-Based Compensation, But Applies it Prospectively (PDF)
2 pages. Excerpt: "The IRS, apparently recognizing the accounting and other implications of its earlier position, has stated that it will not apply the new ruling to disallow a deduction for compensation that otherwise satisfies the rules for performance-based compensation, provided that either (i) the performance period for such compensation begins on or before January 1, 2009, or (ii) the compensation is paid pursuant to an employment agreement that was in effect (without regard to future renewals or extensions, including automatic renewals or extensions) on February 21, 2008." (Drinker Biddle & Reath LLP)

[Guidance Overview] Attorneys Up in Arms About IRS Ruling That Nixes Corporate Deductions for Executive Compensation
Excerpt: "[A private letter] ruling was met with a firestorm of criticism, even outrage, by the pillars of our nation's legal community -- in excess of 90 law firms lodged protests with the I.R.S. in which they concluded that the agency's position was unwise and, as a matter of law, incorrect. These protests fell on deaf ears: The I.R.S. has now 'upped the ante.' It has 'upgraded' the position it adopted in the letter to 'published ruling' status. Thus, with the issuance of Revenue Rule 2008-13, the I.R.S. has unequivocally signaled its intentions with respect to this issue." (

This Employee Benefit Helps Environment, Encourages Home Ownership and Reduces Commuting Time
Excerpt: "The Consumer Electronics Association (CEA ®) today announced an innovative new employee benefit designed to encourage home ownership, reduce commuting time and help the environment. The association will provide a $25,000 forgivable three- year loan to assist with the down payment of a home closer to its Arlington headquarters. While some local governments entice employees to live in their jurisdiction, CEA is to its knowledge the first non-governmental entity to make this type and level of benefit available." (Business Wire via Human Resource Executive Online)

Newly Posted Events
(Post Yours!)

403(b) Learning Series Webinar
Nationwide on March 12, 2008
presented by Reish Luftman Reicher & Cohen

Form 5500 Update with Janice Wegesin
Nationwide on March 4, 2008
presented by

HR in a Multi-generational workforce
in Maryland on March 6, 2008
presented by Worldwide Employee Benefits Network -- Baltimore chapter

Newly Posted Press Releases
(Post Yours!)

President’s Council on Financial Literacy Supports Treasury Launch of New Curriculum
U.S. Department of Treasury

Retirement Practice White Papers Announced by Venture (k) Corp.
Venture (k) Corp.

Caruthers Benefit Systems, Inc. Is Open For Business
Caruthers Benefit Systems, Inc.

MJM401k and Fortress Complete Merger

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