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March 18, 2008

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

Today's sponsor is ASC & The ASC Institute

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Let ASCi be your 403(b) tax-sheltered annuity plan document solution!

The IRS now requires that every employer with a 403(b) tax-sheltered annuity plan must have a written plan document in place by December 31, 2008. Whether you maintain thousands or just a few 403(b) plans, the ASCi Document Generation and Management (DGEM) system can help you manage these plans efficiently and easily.
Click here to learn more about how DGEM can help you meet the IRS requirements.

[Official Guidance] Proposed IRS Regs: Multiemployer Pension Plan Funding Guidance Under Code Sec. 432 (PDF)
10 pages. Excerpt: "These proposed regulations affect sponsors and administrators of, and participants in multiemployer plans that are in either endangered or critical status. These regulations are necessary to implement the new rules set forth in section 432 that are effective for plan years beginning after 2007. The proposed regulations reflect changes made by the Pension Protection Act of 2006. . . . Section 432 generally provides for a determination by the enrolled actuary for a multiemployer plan as to whether the plan is in endangered status or in critical status for a plan year." (Internal Revenue Service)

[Guidance Overview] 'Distributing' 403(b) Annuities - New 403(b) Regulations Raise More Questions Than Answers
Excerpt: "The IRS's decision to permit the termination of 403(b) plans, and the distribution of its assets, raises a new issue which vendors, plans and plan participants have never had to deal with in the past: can you distribute an annuity upon 403(b) plan termination, how do you do it, and how is such a distribution treated?" (Baker & Daniels LLP)

[Guidance Overview] Hewitt Global Retirement Report, March 2008 (PDF)
2 pages. Excerpt: "Our Global Retirement Update summarizes recent legislative developments and trends related to retirement and financial management and highlights recently passed and pending legislation that may require employers to take action to comply with new rules or review existing plans." (Hewitt Associates)

[Guidance Overview] IRS Approves Continued Reliance on Alternative Disability Mortality Tables
Excerpt: "Reliance on the mortality tables set forth in Rev. Rul. 96-7 . . . for individuals entitled to defined benefit plan benefits due to disability, may continue until the IRS issues revised disability mortality tables, as required by the Pension Protection Act of 2006 (PPA; P.L. 109-280), according to a newly-issued IRS Notice." (Wolters Kluwer)

[Guidance Overview] The DOL's Proposed 408(b)(2) Regulation: Impact on Broker-Dealers and Registered Representatives (PDF)
7 pages. Excerpt: "Here, we discuss the impact on broker-dealers and their registered representatives and their relationship with plans. (However, we do not discuss the application of the proposed regulation to investment advice or services to participants, e.g., serving as a fiduciary adviser under the Pension Protection Act.)." (Reish Luftman Reicher & Cohen)

[Guidance Overview] Surviving Spouse Plan Requirements Cannot be Changed by Oral Representation
Excerpt: "The 5th U.S. Circuit Court of Appeals affirmed a lower court ruling that a pension plan administrator was correct in denying surviving spouse benefits to a widow not legally married to the deceased participant at the time of his retirement." (; free registration required)

[Guidance Overview] IRS May Have Ended Form 5307 Roulette with Announcement 2008-23
Excerpt: "The IRS . . . announced some important changes to when Form 5300 should be filed instead of Form 5307 by a plan using a prototype or volume submitter plan document, and which Cumulative List will be used to review a prototype or volume submitter plan document filed using Form 5300." (Pension Protection Act Blog)

[Guidance Overview] Proposed Regs Regarding Determination of Multiemployer Plan Status Under New Funding Rules
Excerpt: "The IRS has issued proposed regulations under Code Sec. 432 regarding the determination of whether a multiemployer plan is in endangered status or critical status for purposes of the new funding rules enacted by the Pension Protection Act of 2006 (PPA '06) (P.L. 109-280). The IRS must receive comments and hearing requests by June 16, 2008." (CCH Incorporated)

Hewitt Dispute Is Settled on Enron Payments
Excerpt: "Former Enron employees finally can get the remainder of lawsuit settlement payments that had been delayed because of a dispute, the Department of Labor announced Thursday. The Enron Creditors Recovery Corp. - as what's left of Enron is called now - and Illinois-based human resources company Hewitt Associates, which botched a first wave of payments in 2006, together will restore $11.2 million to the settlement fund." (Houston Chronicle)

When Should Married Men Claim Social Security Benefits? (PDF)
8 pages. Excerpt: "If married men delayed claiming Social Security benefits, retirement income security would significantly improve. This brief focuses on the potential gains from delayed claiming and the factors that may influence claiming behavior. It then considers possible policy responses." (Center for Retirement Research at Boston College)

An Ohio County School Board Reconsiders Retire/Rehire Plan
Excerpt: "While a new policy for rehiring retirees was hammered out months ago by the county school board, the debate might not be over. . . . Superintendent Vicki Giovangnoli said that the issue of retire/rehire is expected to be discussed in an executive session, which may be followed by a vote on the policy. . . . The source of debate is whether a public employee should be rehired after retiring, therefore earning a salary plus a pension on the taxpayers' dime." (Tribune Chronicle)

Momentum Building to Reduce 401(k) Fees
Excerpt: "Most 401(k) plans charge investment-management fees as a percentage of total assets a participant has in the plan. Participants with large balances, therefore, pay a larger share of overall costs. Some companies are thinking about migrating to flat fees for all participants, particularly for the administrative costs of running the plan . . . . " (Chicago Tribune)

Study Finds Denver Public Schools' Pension Flaws
Excerpt: "The pension offered by Denver Public Schools is antiquated and not designed to attract top-quality teachers, a study released [yesterday] says." (The Denver Post)

A Large Number of Accounts Hinders Oversight of Your Financial Situation
Excerpt: "This year, investors are expected to move more than $300 billion out of 401(k)'s into I.R.A.'s, according to Cerulli Associates, a research firm specializing in the financial services industry. As people become more serious about managing all their accounts, said Carolyn M. Clancy, executive vice president for personal investment at Fidelity, they want to know that their beneficiaries will be taken care of and that they will have lower fees, lower or no loads on mutual funds and access to investment guidance -- all in one place." (The New York Times; free registration required)

Thrift Savings Plan Trading Crackdown Is Working
Excerpt: "Efforts to discourage 'market timers' in the Thrift Savings Plan are showing progress. Only 549 people last month defied a new policy limiting trades in the TSP, a 401(k)-type program used by government employees, the plan's executive director said yesterday." (The Washington Post; free registration required)

Employer-Provided DC Plans: Should Employers Worry About the 'Governance Gap'?
Excerpt: "As contract-based arrangements become the main vehicle that employers use to provide their employees with retirement income, it is important for employers to consider their duties, responsibilities and risks concerning such arrangements. As a first step, in considering these issues, employers must understand both the risks they may be assuming by establishing a governance structure and the risks they may be exposed to by failing to do so." (Mercer LLC)

EBRI Resources on Company Stock in 401(k) Plans (PDF)
Excerpt: "The nonpartisan Employee Benefit Research Institute (EBRI) has done extensive analysis on company stock in 401(k) plans. The primary source of data on holdings in company stock is the EBRI/ICI Defined Contribution Participant Database. The most recent annual publication from this database is for end-of-year 2006 and is available online at" (Employee Benefit Research Institute)

[Opinion] Employers Owe Employees 401(k) Contributions
Excerpt: "The proposed 401(k) Security Act recommends that most employers contribute at least 9% of pay to their employees' 401(k) accounts, as Australian employers must. . . . . Companies that can afford to compensate executives with eye-popping paychecks and pensions should be able to cough up $17,600 or so toward the nest egg of a typical highly productive rank-and-file employee, compared to the typical contribution of $5,866." (Jane White and Rick Meigs via Employee Benefit News; free registration required)

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] Court Allows Fired Smoker to Proceed with Privacy and ERISA Claims
Excerpt: "The Scotts Company maintains a policy against employing smokers. In Rodrigues v. The Scotts Company, the plaintiff claimed that his employer wrongfully terminated him when a urine test confirmed that he smoked. After his termination, Rodrigues brought four claims in the U.S. District Court for the District of Massachusetts: (1) violation of the Massachusetts privacy statute; (2) unlawful interference with his rights in violation of the Massachusetts Civil Rights Act (MCRA); (3) wrongful termination; and (4) violation of Section 510 of the federal Employee Retirement Income Security Act (ERISA) by terminating him in order to interfere with his right to benefits under the employer's ERISA plans." (Seyfarth Shaw LLP)

[Guidance Overview] Section 409A and Non-U.S. Retirement Arrangements - What You Should Know
Excerpt: "Are any US taxpayers participating in any of your company's non-US retirement plans? If so, you should know about Section 409A of the US Internal Revenue Code. Section 409A deals with the inclusion in gross income of deferred compensation under nonqualified deferred compensation (NQDC) plans. Failure to comply can result in harsh tax consequences for US tax-paying employees and possibly for their employers. The definition of NQDC plans is broad and includes most non-US retirement arrangements as well as other types of plans, such as nonqualified salary-deferral arrangements and severance plans." (Mercer LLC)

Stimulus Check Schedule, Calculator Unveiled
Excerpt: "The Internal Revenue Service (IRS) announced today that it will begin sending more than 130 million economic stimulus payments starting May 2, and that those stimulus payments will be sent out in the order of the last two digits of the Social Security number used on individual tax returns." (; free registration required)

[Opinion] The Debate, Mostly Misguided, About Social Security's Financial Status
Excerpt: "I'll spare you the history lesson about why no one worried much about how to invest the huge -- albeit temporary -- surpluses that Social Security began to rack up in the 1980s, when Social Security taxes were raised and future benefits trimmed as a result of the famous Greenspan Commission report. It would be nice to have $2.3 trillion in useful assets in an equivalent of a sovereign wealth fund, but we can't turn back time." (Allan Sloan via The Washington Post; free registration required)

Newly Posted Events
(Post Yours!)

IRC Section 436 Benefit Restrictions: Focus On Certifications, Timing Issues and Transition Rules
Nationwide on February 1, 2008
presented by College of Pension Actuaries

Live IRA Beginner and Advanced Seminar Tour
Nationwide on May 6, 2008
presented by Wolters Kluwer Financial Services

Newly Posted Press Releases
(Post Yours!)

Proposed Rule On Multiemployer Plan Withdrawal Liability
Pension Benefit Guaranty Corporation (PBGC)

2007 Willis Wellness Survey Report - Complimentary Copy

Northeast Hospitals and Healthcare Organizations Are Saving as Much as 10% Annually on Rx Drug Costs
Cammack LaRhette Consulting

Gender Gap Widens on Retirement Outlook
COUNTRY Financial

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Pension Administrator
for Jordan & Andrews
in CA

Pension Administrator
for The Senex Group
in CA

Defined Contribution Plan Administrator
for Alliance Benefit Group of Michigan, Inc.
in MI

Manager - 401(k)/Defined Contribution Valuation Processing Department
for National Retirement Services, Inc.
in NC

401(k) Daily Valuation Administrator
for Moran, G. Russell Knobel and Associates, Inc.
in WA

Pension Consultant
for Mercer Advisors
in CA

for Tarrytown Consulting Firm
in NY

Retirement Services Manager
for Fiserv Investment Support Services
in CO

Pension Plan Administrator
for Pension Plan Services, Inc.
in MI

Plan Document / Plan Termination Specialist
for Summit Benefit & Actuarial Services, Inc.

National Accounts Retirement Services District Manager
for ADP- Retirement Services
in FL, GA

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