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March 20, 2008

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

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[Official Guidance] Text of Proposed IRS Regs: Requirements for Certain Pension Plan Amendments Significantly Reducing the Rate of Future Benefit Accrual (PDF)
26 pages. Excerpt: "Section 4980F sets forth the requirements for providing notice to certain affected persons when a plan significantly reduces future benefit accruals. A notice required under section 4980F of the Code or the parallel rules in section 204(h) of [ERISA] is referred to as a 'section 204(h) notice.' These proposed regulations would set forth timing rules for providing a section 204(h) notice for a plan amendment that is permitted to be effective before the applicable amendment date. In addition, the regulations provide guidance relating to changes made in section 4980F by the Pension Protection Act of 2006 . . . ." (Internal Revenue Service)

[Guidance Overview] Rollovers to Nonspouse Beneficiaries Are Back With Passage of H.R. 3361 - For 2009 not 2008
Excerpt: "For rollovers to nonspouse beneficiaries, the passage of H.R. 3361 has significant impact because of the IRS' position on rollovers to nonspouse beneficiaries." (Pension Protection Act Blog)

[Guidance Overview] IRS Proposes Regulations for Financially Challenged Multiemployer Defined Benefit Plans
Excerpt: "On March 14, 2008, the Internal Revenue Service (IRS) released proposed regulations, Treasury Regulation sections 1.432(a)-1 and 1.432(b)-1,1 which cover the basic requirements for certifying that a multiemployer defined benefit pension plan is in either endangered or critical status. Once adopted in final form, the regulations are proposed to be effective as of the start of the 2008 plan year, which would be a retroactive effective date for most plans." (The Segal Group, Inc.)

With Pension Bill Approved, Unions Promote Switch to West Virginia Teachers Retirement System
Excerpt: "Legislators approved a compromise plan during Sunday's special session to allow teachers and school personnel stuck with severely under-funded pensions in their Teachers Defined Contribution plan to switch to the older Teachers Retirement System. [Links to text and audio are on the target page.]" (West Virginia Public Broadcasting)

ETFs Evolve -- For Better or Worse?
Excerpt: "While most experts think ETFs were a good innovation -- built like index-style mutual funds but traded like stocks -- some worry that the increasingly specialized ETFs introduced in recent years stray from the faith, encouraging too much risk-taking." (Wharton School of the University of Pennsylvania)

Disclosing 401(k) Plan Fees Does Not Mean They Are Understood
Excerpt: "While many employers say fee disclosure in the 401(k) market has improved, they remain uneasy about what they don't know about their defined contribution plans. Outwardly, employers are comfortable with transparency levels, but many plan sponsors feel they just don't understand plan fees, says a new Chatham Partners study." (Employee Benefit Advisor; free registration required)

Introduction to the 2008 State and Local Government Defined Contribution Plan Survey
Excerpt: "As the Survey Task Force Chair for the National Association of Government Defined Contribution Administrators (NAGDCA), it is my pleasure to present the 2008 State and Local Government Defined Contribution Plan Survey. Responses were received from a total of eighty-six 457 plans, sixteen 401(k) plans, sixteen 401(a) plans, and one 403(b) plan for a total of 119 survey respondents. [Links to summary documents are on the target page.]" (National Association of Government Defined Contribution Administrators)

Education Level and Marital Status Affect 401(k) Investments, Wyatt Study Finds
Excerpt: "Although the average U.S. household invests about 55 percent of its 401(k) or other defined contribution plan assets in common stocks, many Americans are investing all or nothing in equities, due to a host of factors, including education level and marital status, according to a new analysis of government data by Watson Wyatt Worldwide." (Wolters Kluwer)

Total Individual Account Retirement Plan Assets, by Demographics, 2004 (PDF)
Pages 1-9 of 12 pages. Excerpt: "This analysis uses the most recent data (2004) from the Survey of Consumer Finances (SCF), a triennial survey of family finances by the Federal Reserve Board, as well historical SCF data, to examine the demographic factors associated with the ownership of individual account retirement plan assets." (Employee Benefit Research Institute)

SPARK Institute Wants Extension on 403(b) Regs Compliance
Excerpt: "The SPARK Institute has filed a 13-page comment letter with the Internal Revenue Service (IRS) about the new 403(b) retirement savings plan regulations, asking for an extension of the effective date for compliance and guidance on the treatment of contracts and information sharing agreements (ISAs)." (; free registration required)

Alaskan Public Employees Show Support for Restoration of Pension Plan
Excerpt: "Public employees, teachers and their union representatives showed up in force this week to tell a Senate committee that the state should never have traded in its pension plan for a 401(k)-style defined contribution plan. The Senate State Affairs Committee held two days of hearings before moving out a bill Wednesday that would reinstate the defined benefits retirement plan for newly hired employees." (AP via Fairbanks Daily News-Miner)

Expert Reveals New Jersey State Pension Bill Up $167M This Year
Excerpt: "The financial bad news continued to mount for state and local taxpayers today, as an expert revealed the bill for government worker pensions is scheduled to jump by $167 million this year. The report, the latest in a string of analyses to show that New Jersey's public pension funds are dramatically underfunded, elicited an epithet from one exasperated board member. 'That's an actuarial term,' Ned Thomson, a member of the Public Employees Retirement System trustees board said, after cursing at the report's conclusions." (

P&I's Eddy Awards Show Plan Sponsors Find Creative Ways to Get the Word Out to Employees
Excerpt: "Some of the most creative -- yet challenging -- education campaigns entered into this year's Eddy Awards from Pensions & Investments were in the special projects and conversion categories. For example, Wade Trim Group Inc. Taylor, Mich., garnered an award for its personalized retirement plan checkup special project. Timothy McKindles, vice president of people services at Wade Trim said the 401(k) plan wanted education that spoke directly to the specific employee." (Pensions & Investments)

[Opinion] Can Faster Economic Growth Bail Out Our Retirement Programs?
Excerpt: "Government analysts portray a bleak fiscal future as the retirement of baby boomers and soaring health costs push up expenditures on Social Security, Medicare and Medicaid much faster than projected tax revenues. Some argue that the analysts' economic growth projections are too pessimistic. This analysis argues that official growth projections are quite reasonable, but even if they are too pessimistic, faster growth will accelerate Social Security costs because of the program's structure and health costs are also likely to grow more rapidly. Faster growth will, however, ease the pain associated with necessary reforms." (Urban Institute)

[Opinion] A Bear Market for 401(k) Plans
Excerpt: "Pity . . . the rank-and-file employees of Bear Stearns, who collectively own about a third of the company's stock. They've just witnessed the loss of their life savings. Dreams of homeownership, college for their kids, and early retirement have all flown out the window." (Rich Duprey via The Motley Fool)

[Opinion] Bear Stearns and Employee Ownership
Excerpt: "[The target page offers a look at] the available facts about just what kinds of employee ownership plans exist there. For the broad employee population, there was an employee stock ownership plan (ESOP) that held about $285 million in Bear Stearns stock in 2007. The plan was funded by the company. This was not, however, the sole, or even main, retirement plan at the company. In addition, there was a profit sharing plan funded by the company that had about $300 million in diversified investments and a 401(k) plan with $720 in diversified investments. So from a retirement plan standpoint, Bear Stearns is not at all like Enron and some other companies several years ago where employees were heavily or primarily invested in company stock, generally in their 401(k) plans, and were left with limited or no retirement assets after their companies melted down. The ESOP accounted for about 3% of total Bear Stearns Stock." (The National Center for Employee Ownership)

[Opinion] Data-Rich Research Report Looks at Experience of 12 States with Defined-Contribution Retirement Plans
Excerpt: "The report is clearly the best work yet on this topic, and it provides some useful information for policymakers and plan administrators alike." (Congressional Quarterly Inc.)

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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

[Official Guidance] The IRS Employer's Supplemental Tax Guide for Use in 2008 - Publication 15-A (PDF)
60 pages. Excerpt: "This publication supplements Publication 15 (Circular E), Employer's Tax Guide. It contains specialized and detailed employment tax information supplementing the basic information provided in Publication 15 (Circular E)." (Internal Revenue Service)

[Guidance Overview] Accounting Proposal Would Require More Postretirement Benefit Disclosure
Excerpt: "A Financial Accounting Standards Board (FASB) proposal made public on March 18, 2008, would significantly increase the amount and types of disclosures employers are required to file regarding postretirement benefits, such as pensions and retiree medical plans. These changes are proposed to take effect for fiscal years ending after December 15, 2008." (Watson Wyatt Worldwide)

United Healthcare Options Backdating Suit Gets Class Action Status
Excerpt: "A federal judge in Minneapolis has granted class-action status to a lawsuit against UnitedHealth Group Inc. over stock options backdating." (; free registration required)

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Newly Posted Press Releases
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Companies Not Fully Tapping Potential of Onsite Health Centers
Watson Wyatt

Departing CEOs Not Receiving Increased Termination Payments At Most Companies, Watson Wyatt Survey Finds
Watson Wyatt

EBRI Report on Individual Account Assets
Employee Benefit Research Institute (EBRI)

The SPARK Institute Comments On IRS 403(b) Plan Rules, Requests Deadline Extension, Guidance On Contracts
SPARK Institute

FASB Issues Proposed FASB Staff Position (FSP) No. 132(R)-a, Employers' Disclosures about Postretirement Benefit Plan Assets
Financial Accounting Standards Board (FASB)

Financial Services Execs Drowning in Underwater Stock Options
Steven Hall & Partners

Many Americans May Run Out of Money in Retirement; Spending Outlook May Need to be Reduced

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Internal Service Representative
for Northwestern Benefit Corporation of Georgia
in GA

Defined Contribution Software Customer Support
for DATAIR Employee Benefit Systems, Inc.
in IL

Defined Contribution Analysts
for Milliman, Inc.
in NY

401(k) Recordkeeper
for Guidant Financial Group, Inc.
in WI

Pension Analyst I
for SunGard Relius
in FL

Senior Relius Administration Analyst
for SunGard Relius
in FL

Manager of Customer Service
for Northwestern Benefit Corporation of Georgia
in GA

Pension Administrator
for R-Tech Consultants, Inc.
in CA

Benefits Specialist
for CVS Caremark
in RI

Benefits Manager
in DC, MD, VA

Actuary I
for Stanley, Hunt, Dupree and Rhine
in SC

Assistant Manager Pension Operations
for Zenith Administrators
in IL

Director of Investment Research Team-50052593
for MassMutual Financial Group
in MA

Assistant Director, Business Compliance
for Hartford Life, The Hartford
in CT

Defined Benefits Sr Analyst
for Affiliated Computer Services
in NJ

Sr Analyst - Benefits
for L'Oreal USA
in NJ

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