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March 25, 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] Text of Model Notice of Critical Status for Multiemployer Plans (PDF)
7 pages. Excerpt: "[T]he Pension Protection Act of 2006 . . . amended [ERISA] by adding section 305, and . . . the Internal Revenue Code . . . by adding section 432, to provide additional rules for multiemployer defined benefit pension plans in endangered status or critical status. . . . Use of the model notice is not mandatory. However, the plan sponsor of a plan in critical status who uses the model notice to notify participants and others of the status of the plan is considered to have satisfied its content obligations under section 305(b)(3)(D) of ERISA and section 432(b)(3)(D) of the Code." (Employee Benefits Security Administration, U.S. Department of Labor)

[Guidance Overview] IRS Clarifies 162(m) Ruling Position -- Finance Departments Breathe Sigh of Relief
Excerpt: "Companies will need to reexamine all their performance plans to determine whether to amend those that pay out awards at termination or retirement. Although section 162(m) requires shareholders to approve the material terms of a performance-based compensation plan, eliminating provisions in future grants that would trigger payment at termination or retirement is not likely to require a shareholder vote on the plan terms. [The table on the target page] should help companies determine whether a performance plan will meet the performance-based-compensation exception. The table applies to all cash- and stock-based plans with an annual or multiyear performance goal." (Watson Wyatt Worldwide)

[Guidance Overview] Final IRS Regulations Make Major Changes in the 403(b) World (PDF)
20 pages. Excerpt: "For many years, IRS guidance on Internal Revenue Code section 403(b) plans has been a hodgepodge of regulations, exam guidelines, revenue rulings, and notices dating back to the 1960s. Several years ago, the IRS began to tackle the process of updating and consolidating most of this guidance into one unified set of regulations reflecting current law -- issued in proposed form in November 2004 -- and including guidance under the controlled group rules of section 414(c)." (American Bar Association via Groom Law Group)

Pension Plans Take Chance on Mortgages
Excerpt: "The subprime mortgage crisis has yielded at least one benefit for states: Mortgage-related investments have become so cheap that they are luring some pension funds to buy. Retirement systems in South Carolina and Pennsylvania are nibbling at the securities, betting that they have been beaten down so much that the ones with good credit ratings could yield strong returns later." (AP via Google)

SPARK Asks IRS for 403(b) Prototype Plan Program
Excerpt: "The SPARK Institute has submitted a formal request to the IRS for a 'Pre-Approved 403(b) Prototype Plan Program,' according to SPARK Institute general counsel Larry Goldbrum. In a SPARK Institute press release, Goldbrum said the Institute outlined in its letter nine areas for consideration in developing a prototype document to meet its stated goals. According to Goldbrum, some of the key considerations include pre-approval of documents covering governmental 403(b) plans and church 403(b)(9) plans." (; free registration required)

PBGC Waives Reporting of Missed Contributions for Certain Employers
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) has issued Technical Update 08-2, which waives reporting under the PBGC's reportable events regulation of missed quarterly contributions for plan years beginning in 2008 for certain small employers." (; free registration required)

When You're Invested Too Much in Your Company's Stock
Excerpt: "The Bear debacle is a reminder of the perils of being too invested in your company's stock. Following news of the original deal, financial guru Suze Orman touted diversifying your portfolio on NBC's Today show and said Bear employees' biggest mistake was owning too much of their employer's stock. 'You are not to have 100 percent of all your money in your employer's stock, within your 401(k) plan,' Orman said. 'Didn't we learn from WorldCom?'" (U.S. News & World Report)

Fees Not Top 401(k) Concern, Say Plan Sponsors
Excerpt: "The report . . . found that plan sponsors are more concerned about their adviser's support and knowledge than fees when it comes to deciding whether to stay with an adviser." (Financial Week; free registration required)

[Opinion] Should We Rue LaRue?
Excerpt: "My initial reaction to the decision recalls a quote from 'The Godfather,' when Marlon Brando, presiding over a meeting of the five families to establish a peace, asks 'How did things ever get this far?' How could we, more than 30 years after ERISA, still be debating whether a participant in a defined contribution plan has a cause of action against a fiduciary whose breach reduced the value of the employee's account? But now, thanks to LaRue, the issue is settled. Or is it? Justice Roberts wrote separately. His opinion says that LaRue's true claim was a claim for benefits under Section 502(a)(1)(B) of ERISA and that 'it is at least arguable that a claim of this nature properly lies only under § 502(a)(1)(B). . . . If LaRue may bring his claim under § 502(a)(1)(B), it is not clear that he may do so under § 502(a)(2) as well.'" (Pension & Benefits Blog)

[Opinion] A 401(k) Debit Card Is Dumb
Excerpt: "To improve retirement savings, we should be making it harder for workers to get their hands on 401(k) money -- not easier. Certainly not as easy as going to the ATM machine. But that's exactly what the 401(k) debit card by Reserve Solutions does." (The Baltimore Sun)

Sponsored by: DATAIR Employee Benefit Systems, 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

Annual Social Security and Medicare Reports to Be Released Today
Excerpt: "Treasury Secretary Henry Paulson will be joined by members of the Social Security and Medicare boards of trustees for a news conference to discuss the release of the annual Social Security and Medicare trustees' reports at 2 p.m. EDT Tuesday, March 25." (Modern Healthcare; free registration required)

Budy and Bales on Naming a Defendant in an ERISA Action
Excerpt: "This article argues that courts should permit suit against any entity that played a role in denying the claim. This approach (1) is consistent with the plain language of ERISA, (2) is consistent with the legislative intent behind ERISA which was to protect employees from underfunded plans and from erroneous benefit denials, (3) is consistent with Supreme Court precedent permitting fiduciaries to be sued under ERISA, and (4) creates an incentive for entities making benefits determinations to make those determinations correctly." (Workplace Prof Blog)

Findings of 14th Annual Deloitte/ISCEBS Top 5 Rewards Priorities Survey Findings (PDF)
9 pages. Excerpt: "More than two-thirds of survey respondents (68 percent) plan to undertake a redesign of other rewards programs within the next year. The most commonly identified programs slated for an overhaul were learning and development programs (51 percent), followed by paid time off (44 percent), flexible work arrangements (39 percent), and mentoring programs (28 percent)." (International Society of Certified Employee Benefit Specialists)

Help Increases for Partners of Relocated Workers
Excerpt: "Relocating for a job is always a challenge. But human-resource executives say that it has become increasingly difficult through the years, and that spouse issues are among the biggest hurdles, especially for dual-career couples." (The Wall Street Journal)

Social Security Trustees to Give Annual Update
Excerpt: "The trustees of Social Security and Medicare are certain to kick off a fierce round of debate when they release their annual assessment of the fiscal health of the government's two biggest benefit programs. . . . The new report is expected to make only small changes in the estimates made last year for when both trust funds will be depleted." (The Washington Post; free registration required)

Newly Posted Events
(Post Yours!)

Integrating Wellness Into Employee Benefit and HR Programs
in Virginia on April 16, 2008
presented by Capital Chapter ISCEBS

PenServ Annual Conference
in South Carolina on August 4, 2008
presented by PenServ, Inc.

Take the Mystery out of the RFP Process
in District of Columbia on March 27, 2008
presented by Capital Chapter ISCEBS

Newly Posted Press Releases
(Post Yours!)

Talent Shortage Emerges as No. 1 Employer Concern: Deloitte/ISCEBS

Council Applauds End of AARP v. EEOC Legal Battle
American Benefits Council

First Health Plans Receive Bridges to Excellence Endorsement and Certification
Bridges to Excellence (BTE)

Bridges to Excellence Launches Medical Home Program
Bridges to Excellence (BTE)

Blue Cross and Blue Shield of Texas Announces Wellness Tools and Resources
Blue Cross and Blue Shield of Texas

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Retirement Sales Wholesaler - Inside Sales
for ExpertPlan, Inc.
in NJ

Employee Benefits Attorney
for Hershner Hunter, LLP
in OR

Defined Benefits Professional
for Vanguard
in PA

Retirement Plan Consultant
for Charles Schwab
in OH, TX

Benefits Service Manager-DB
for Hewitt Associates
in IL

Field Service and Underwriting Manager
for Standard Insurance Company
in CA

Compliance Coordinator
for AtÚssa Benefits, Inc.
in CA

Application Support Specialist
for Princeton Retirement Group, a Merrill Lynch Co.
in GA

401(k) Compliance Reporting & Testing Analyst
for Boston Financial Data Services
in MA

Benefit Consultant
for Unified Trust Company, N.A.
in KY

Home Based Participant Services Rep
for Citi
in MI

Defined Contribution Analyst
for Medium size Third Party Administrator
in OH

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