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March 3, 2008

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

Today's sponsor is

(Click on company name or banner to learn more.)
Banner ad for now has TWO NEW 403(b) plan documents! now offers a full-scope 403(b) plan document with an ERISA/non-ERISA option that allows sponsors (including churches, non-profits, or public schools) to provide matching, non-elective contributions and elective deferrals; and a limited-scope 403(b) plan document (non-elective contributions, non-ERISA only). Both documents are updated with the final regulations, include context-sensitive help buttons, forms and amendments, streamlined data import and export and online error correction. Contact or call 800.596.0714 for additional information.

[Guidance Overview] Listing of IRS Published Guidance for January - February 2008
The target page links to guidance published by the Service relating to retirement plans: Treasury Regulations; Revenue Rulings; Revenue Procedures; Notices; and, Announcements. (Internal Revenue Service)

EBSA to Hold Hearing on Service Provider Compensation and Plan Fee Disclosure
Excerpt: "The Department of Labor's Employee Benefits Security Administration (EBSA) will hold a public hearing March 20-21, to hear testimony about its regulatory proposal on the disclosure of service provider compensation and conflicts of interest information to employers. The hearing will take place at the department in Room S-4215 A-C, 200 Constitution Avenue, NW in Washington, DC." (International Foundation of Employee Benefit Plans)

The More the Better? Characteristics and Efficiency of 401(k) Investment Menus
Excerpt: "Few previous studies have explored whether defined contribution retirement saving plans offer sufficiently diversified investment menus, though it is likely that these menus significantly shape workers' accumulations of retirement wealth. This paper assesses the efficiency and performance of 401(k) investment options offered by a large group of US employers. We show that the majority of plans is efficient compared to market benchmark indexes." (Pension Research Council; registration required to download fulltext of paper)

How the Income Tax Treatment of Saving and Social Security Benefits May Affect Boomers' retirement Incomes (PDF)
42 pages. Excerpt: "Results show that changes in the income thresholds for taxing Social Security benefits have the largest impact on middle-income boomers, while changes in contribution limits for retirement saving plans and tax rates on capital gains and dividends have the largest impact on the highest income boomers." (Center for Retirement Research at Boston College)

Insurance Providers Charged in 412(i) Scheme
Excerpt: "A new lawsuit has accused a group of insurance companies, consultants, and lawyers of conspiring to sell illegal tax shelters to employers for 412(i) plans by misrepresenting the potential risks of the pension funding arrangements. The suit, filed by the Dallas law firm of Diamond McCarthy in the U.S. District Court for the Northern District of Texas, lists 17 plaintiffs and eight insurance company and consultant defendants." (; free registration required)

Double-Dipping in Florida - the Outrage Doesn't Add Up
Excerpt: "The numbers look alarming, but there's a big logical flaw in any possible solution. Take Supreme Court Justice Harry Lee Anstead, for instance. The Times reported that he got $426,852 in deferred compensation when he 'retired,' draws a pension of $7,596 a month, and earns $161,083 as a member of Florida's highest court. Do you have any idea how much the taxpayers could save if he wasn't doing all of that? Well, rounded off to the nearest dollar, nothing." (Tallahassee Democrat)

Advisers May Get OK on IRA Advice
Excerpt: "Guidelines that would allow investment advisers to give direct advice regarding individual retirement plans will soon be released, a Department of Labor official said . . . ." (Investment News; free registration required)

Enron Shareholder Settlement Plan in Judge's Hands
Excerpt: "The proposed allocation plan outlines procedures to distribute the settlement proceeds to about 1.5 million individuals and entities, such as pension funds. Those eligible to receive their share must have bought Enron stock during the span of the fraud alleged in the litigation led by the University of California. That window is Sept. 9, 1997, through Enron's bankrup.tcy filing on Dec. 2, 2001." (Houston Chronicle)

Georgia's First Black Police Officers May Take Pension Battle to Court
Excerpt: "Until 1976, black officers were blocked from joining a state-supported supplemental police retirement fund. Today, white officers who entered the fund before that year are taking home hundreds of dollars more every month in retirement benefits than their black counterparts. The now-retired black officers have been lobbying hard to change that, but eight years after they began an effort to amend the state constitution and give them credit for those lost years is stalled in the Legislature." (

Implications of the LaRue Decision for ESOPs
NCEO Executive Director Corey Rosen discusses the implications for employee stock ownership plans (ESOPs) of the U.S. Supreme Court's decision in LaRue v. DeWolff, Boberg & Associates (No 06-856), which concerns a 401(k) participant. (National Center for Employee Ownership)

Solvay Pension Class Action Lawsuit Web Page
Excerpt: "[The Solvay Pension Class Action Lawsuit web page] provides information and court documents relating to the Solvay class action lawsuit about a cash balance pension conversion: Jensen, et al. v. Solvay Chemicals, Inc., et al., C.A. 06-273 (D.Wyo.)." (Stephen R. Bruce)

Chinese Government Approves Pilot Employee Contribution Pension Schemes
Excerpt: "China's State Council, the country's Cabinet, on Friday approved a plan to launch the country's first publicly run employee contribution pension schemes in five provinces and municipalities. The pilot program, targeted at workers in state institutions, is to be launched in Shanxi, Shanghai, Zhejiang, Guangdong and Chongqing." (Xinhua News Agency)

[Opinion] Choice Architecture, 401(k) Plans and the Argument for Restricting Choice
Comments on a Boston Globe article which is referred to as a 'nice survey of the theory behind the idea of just how much choice should be granted to employees in that context, and how structuring the choices available to them may affect the outcome for their retirements." (Stephen Rosenberg of The McCormack Firm, LLC)

[Opinion] IRS Applies Wash Sale Rules to IRAs, and Maybe to Other Directed Accounts
Excerpt: "Ideally, Section 1091 wash-sale rules should only apply to replacement purchases by IRAs, and should not extend to the other types of directed plans. Conservative taxpayers, however, will take the approach that purchase by any directed account, in whatever form, will trigger the wash sale rule of Section 1091." (

[Opinion] DOL Amicus Curiae Brief in the Case of Grabek v. Northrup Grumman Corp. (PDF)
39 pages. Brief for the Secretary of Labor as amicus curiae supporting plaintiffs-appellants, February 5, 2008. (U.S. Department of Labor)

[Opinion] A Potentially Dangerous 'Safe Harbor'
Excerpt: "Participant contributions to small employee benefit plans will not be considered 'plan assets' before being placed in the plan if they are deposited within seven business days, under a new proposal from the Department of Labor published in today's Federal Register." (Baker & Daniels LLP)

[Opinion] Department of Labor Proposes Safe Harbor Rule for Deposit of Employee 401(k) Contributions
Excerpt: "We had been waiting for this for some time: a safe harbor rule for the time by which retirement plan sponsors must deposit employee 401(k) contributions. On February 28, 2008, the Department of Labor (DOL) announced that employee contributions to a 'small' retirement plan (one with less that 100 participants) will be deemed to be made in compliance with the law if those amounts are deposited with the plan within 7 business days of receipt or withholding." (The Retirement Plan Blog)

Sponsored by: University Conference Services

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Banner ad for University Conference Services

A New Era in Plan Management

The landscape and lexicon for managing your retirement plan have changed dramatically. The Mid-Sized Retirement & Pension Plan Management Conference, May 6-9, 2008, in Boston brings you up-to-date on the issues and places you out in front of new opportunities to enable your participants to reach their retirement goals.

(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 Ruling on Performance-Based Pay - Permissible Payment Events (PDF)
3 pages. Excerpt: "In recent years, the IRS has begun to increasingly audit public companies on Section 162(m) issues and to take conservative positions on debatable issues under Section 162(m). Many companies' published compensation policies indicate that section 162(m) deductibility is required for the company's programs generally (although some state to the contrary). Moreover, pending legislation would substantially tighten the rules under Section 162(m). Thus, public companies should consider limiting their exposure on this and other grey areas under Section 162(m)." (Groom Law Group)

The Corporate Response to Deployment and Reintegration - Highlighting Best Practices (PDF)
8 pages. Excerpt: "The Disability Management Employer Coalition (DMEC) convened its 2007 Workplace Warrior Think Tank to discuss the scope of challenges and opportunities around returning employees and to identify employer-based resources and strategies. As Think Tank participants discussed, to successfully reintegrate employees, companies must understand the range and magnitude of the challenges and identify resources (both government and their own) that are available." (Disability Management Employer Coalition)

Tapping Into Home Equity Can Be Pitfall for the Elderly
Excerpt: "[H]undreds of people who have sought reverse mortgages . . . have complained about high-pressure or unethical sales tactics they say steered them toward loans with very high fees. Some say they were tricked into putting proceeds of their loans into unprofitable investments, while sales agents pocketed rich commissions." (The New York Times; free registration required)

Newly Posted Events
(Post Yours!)

Health & Welfare Plan Management for Mid-Sized Employers
in Massachusetts on April 27, 2008
presented by University Conference Services

Health & Welfare Plan Management for Mid-Sized Employers
in Illinois on June 8, 2008
presented by University Conference Services

Mid-Sized Retirement & Pension Plan Management Conference
in California on March 11, 2008
presented by University Conference Services

Mid-Sized Retirement & Pension Plan Management Conference
in Massachusetts on May 6, 2008
presented by University Conference Services

National Business Coalition on Health 13th Annual Conference
in District of Columbia on November 9, 2008
presented by National Business Coalition on Health

What to Know before Signing an Executive Employment Agreement: 60 Minute Video Enabling You to Get Executive Smart on the Key Terms and Areas of Negotiation
Nationwide on March 5, 2008
presented by Research and Markets

Newly Posted Press Releases
(Post Yours!)

Directors, Institutional Shareholders At Odds Over Whether Executive Pay Model Is Improving
Watson Wyatt

Funds Paying Over 50 Percent More in Fees than Five Years Ago, Watson Wyatt Research Shows
Watson Wyatt

Hewitt Survey Reveals New Employer Trends in Retirement
Hewitt Associates LLC

Statement of PBGC Director Charles E.F. Millard on Continuation of Defined Benefit Pensions at Solutia Inc.
Pension Benefit Guaranty Corporation (PBGC)

Long Island Man Pleads Guilty To Failing To File Employee Benefit Return
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Department of Labor Proposes Safe Harbor Rule for Employee Contributions to Small Pension and Welfare Plans
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Call to Arms: Employers Urged to Use Employee Assistance Programs to Help Veterans Shift from War Zone to Workplace
The Hartford

Unum Reduces Rates on Multi-Life Individual Disability Policies

What Do We Know About the Universe of State and Local Plans?; Center for Excellence Publishes New Issue Brief
Center for State and Local Government Excellence

Kronos Optimal Health Company Screenings Reveal Majority of Employees are Overweight
Kronos Optimal Health Company

Nine Years of Excellence -- Merrill Lynch Unparalleled in Client Statements
Dalbar, Inc.

COSE Supports Business Growth, Opposes Mandatory Paid Sick Leave Act
Council of Smaller Enterprises' (COSE)

New CEA Employee Benefit Helps Environment, Encourages Home Ownership and Reduces Commuting Time
Consumer Electronics Association (CEA)

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in TX

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for Retirement Alliance, Inc.
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