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April 7, 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] Form 5307 (rev. March 2008), Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans (PDF)
9 pages. (Internal Revenue Service)

[Official Guidance] Instructions for Form 5307 (rev. March 2008), Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans (PDF)
6 pages. (Internal Revenue Service)

[Guidance Overview] Retirement and Survivor Annuities for Former Spouses of Federal Employees (PDF)
6 pages. Excerpt: "A former spouse of a federal employee may be entitled to a share of the employee's retirement annuity under the Civil Service Retirement System (CSRS) or the Federal Employees' Retirement System (FERS) if this has been authorized by a state court decree of divorce, annulment, or legal separation. An employee also may voluntarily elect a survivor annuity for a former spouse. A state court can award a former spouse a share of the employee's retirement annuity, a survivor annuity, or both. A court also can award a former spouse of a federal employee a portion of the employee's Thrift Savings Plan (TSP) account balance as part of a divorce settlement." (Congressional Research Service via

[Guidance Overview] PBGC Proposed Regulations on Multiemployer Plans' Employer Withdrawal Liability (PDF)
4 pages. Excerpt: "The proposed regulations, which primarily reflect statutory changes made by the Pension Protection Act of 2006 (PPA), address (1) the PPA's new 'fresh start' rule, (2) mandated adjustments to the withdrawal liability calculation for multiemployer plans that are in 'critical status,' (3) the PPA's limited exception that allows an employer to delay making withdrawal liability payments until a final decision is rendered by a court or arbitrator, and (4) the allocation of a plan's total unfunded vested benefits (UVBs) among employers in a mass withdrawal." (Seyfarth Shaw LLP)

[Guidance Overview] Notice 2008-30 - Guidance on PPA Changes to Distribution Rules for 2008
Excerpt: "Notice 2008-30 provides guidance on distribution-related provisions of the Pension Protection Act of 2006 (PPA) that are effective in 2008, including rollovers from eligible retirement plans to Roth IRAs, additional survivor annuity options, and interest rate assumptions for lump sum distributions. The notice also provides guidance regarding plan amendments for certain gap-period earnings." (McKay Hochman Co., Inc.)

[Guidance Overview] Towers Perrin U.S. Legislative Tracking Charts -- Retirement -- Updated April 4, 2008 (PDF)
10 pages. These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors. (Towers Perrin)

DOL Keeping an Eye on Rising Tide of 401(k) Fee Lawsuits
Excerpt: "By voicing its opinion on a case involving workers at Deere & Co., the Department of Labor has sent a message that courts need to carefully examine the claims of 401(k) participants in each of the individual suits currently pending." (Workforce Management; free registration required)

Time Diversification and Horizon-Based Asset Allocations (PDF)
12 pages. Excerpt: "Over the last few years the growing acceptance of life cycle investment products, such as target retirement mutual funds, has renewed interest in the topic [of time diversification]. The objective of this paper is not to prove or disprove time diversification, but to evaluate whether the concept must be valid for a horizon-based asset-allocation framework to be viable and appropriate. Our findings suggest that there is little evidence to support the notion that time moderates the perceived volatility inherent in risky assets." (The Vanguard Group, Inc.)

New Rules May Help Target-Date Funds
Excerpt: "Experts say the main impetus for the rising use of these funds will be new federal regulations that went into effect at the end of 2007, making it easier to automatically enroll employees in 401(k)'s. Target-date funds are among the investment options in which employers may automatically enroll workers, and once the funds are added to a 401(k) plan, they would be available to all the plan's participants." (The New York Times; free registration required)

Lawsuit Targets Pension Plan Change to Cash Balance Formula
Excerpt: "A federal judge has authorized a class-action lawsuit over alleged cuts in pension benefits brought against Solvay Chemicals Inc., one of southwest Wyoming's leading soda ash producers. An attorney for the plaintiffs said employees of Solvay have been invited to join the national class-action lawsuit aimed at fighting changes in the soda ash giant's pension benefits. U.S. District Judge Alan Johnson authorized the class action in the lawsuit filed against Solvay in a Feb. 8 order and ruled that the case could move forward under federal age discrimination laws." (

Johnson & Perkinson Announces Filing of Employee Retirement Class Action Complaint Against The Bear Stearns Companies Inc.
Excerpt: "The complaint, on behalf of participants and beneficiaries who obtained Company stock through an employee stock ownership plan between December 14, 2006 and the present, seeks redress under the Employee Retirement Income Security Act of 1974 ('ERISA'). The complaint alleges the failure of the plan fiduciaries to act solely in the interest of the participants and beneficiaries, and to exercise the required skill, care, prudence and diligence in administering the retirement plan, as is required by ERISA." (

Draft of Best Practices for 403(b) Plans Information Sharing - Minimum and Comprehensive Data Elements (PDF)
17 pages. Excerpt: "This document sets forth certain best practices with respect to the data elements for information sharing between 403(b) plan employers or employer representatives and vendors. The document also identifies a basic file convention layout. The document does not define best practices for: (1) the methods and frequency of data transmission, or (2) information sharing with respect to specific plan transactions or events (e.g., loans). Best practices with respect to such matters are currently being evaluated by The SPARK Institute." (The SPARK Institute)

Appellate Court Allows Baxter Intl. Stock Drop Suit to Move Forward
Excerpt: "401(k) participants in a stock-drop case against medical products manufacturer Baxter International Inc. have won an important legal skirmish as a federal appellate court upheld the plaintiffs' right to sue for individual damages in a fiduciary breach suit." (; free registration required)

Participant's Former Stepdaughter Should Get 401(k) Distribution, Says Federal Judge
Excerpt: "U.S. District Judge John R. Tunheim of the U.S. District Court for the District of Minnesota issued the ruling that rejected claims the participant's beneficiary designation should not be honored because the participant was incompetent at the time. Tunheim ruled that stepdaughter Tracy Marks did not exert improper influence over James Marier when he executed the beneficiary designation naming Marks in 2001 and 2002.' (; free registration required)

2008 Future of Asset Allocated Funds Conference Coverage
Excerpt: "On March 4 and 5, 2008, at the Fairmont Hotel in Newport Beach, California, the editors of PLANSPONSOR and PLANADVISER hosted a two-day conference for plan sponsors and advisers on the future of asset allocated funds in the 401(k)/defined contribution world. [Topics covered included: What do the Qualified Default Investment Alternatives (QDIAs) regulations mean for retirement plan sponsors, and what questions are still unanswered? The best way to benchmark asset allocation funds; The rationale behind the glide path of lifecycle funds; Managed accounts built from the options on a plan's existing investment menu; asset allocated solutions based exclusively on risk, rather than age or date; and, The underlying assumptions of asset allocation funds.]" (; free registration required)

Allentown, PA Pension Dispute Comes Down to One Word - Interpretation of 'Achieves' Crux of Fight Between City, Police
Excerpt: "The interpretation of a single word in a court document may resolve the debate over whether Allentown police officers can retire after working 11 years if they have prior military experience." (The Morning Call)

In Alaska, Pension Obligation Bonds Pass
Excerpt: "The Alaska Legislature has agreed to give the state another financial tool - albeit a somewhat risky one - to help pay down a massive debt in its retirement systems. On Thursday, the Senate unanimously approved a House bill authorizing the state to issue pension obligations bonds." (AP via

Mutual Fund ERISA Lawsuits: DOL Gets Involved
Excerpt: "In a quiet move that many people may not have noticed, the US Department of Labor recently weighed in on the 401(k) lawsuit filed against Deere & Co. The move could have wide-ranging implications for other companies and employees involved in mutual fund ERISA lawsuits." (Online Legal Marketing Ltd.)

[Opinion] South Carolina Legislators About to Sweeten Their Pension Perk
Excerpt: "[S.C. lawmakers provide pensions] for themselves out of our pockets. More particularly, . . . they are about to vote themselves an increase in those pensions without so much as a debate." (

[Opinion] Florida Teachers Due Retirement Reform
Excerpt: "All Florida school districts must change their tax-deferred retirement plans by Jan. 1. That requirement created a window of opportunity to solve a longstanding problem and ensure that teachers get a far better deal on retirement funds than they are currently getting." (The Tampa Tribune)

[Opinion] What Every Fiduciary Should Know About Their Brokers and Their Custodial Banks and Financial Contracts
Excerpt: "The recent volatility in the credit markets reminds fiduciaries yet again of the need to be proactive in protecting the assets of plan participants. This time around potential insolvency issues involve plan assets held by brokers, custodial banks, and financial contracts such as repos, swaps, securities lending, etc." (Retirement Plan Blog)

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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

Executive Pay Rises in Spite of Being in the Spotlight
Excerpt: "Wasn't 2008 supposed to be the year of shareholder victory on the executive compensation front? After all, tighter disclosure rules kicked in last year, and -- the theory went -- once companies had to shine a spotlight on their compensation practices, they were bound to make them better. Politicians, never loath to acknowledge the national mood -- particularly in an election year -- held several hearings about excessive pay." (The New York Times; free registration required)

Corporate Housing Taking Hold As Cost-Effective Means of Providing Temporary Accommodations to Relocated Employees
Excerpt: "Designed specifically for temporary stays, corporate housing consists of fully-furnished apartments, condos and occasionally even houses. Because they are fully furnished with linens, kitchenware and weekly maid service, transferees need only bring their personal effects. They are then able to live as they would at home, cooking their own meals, doing their own laundry, and entertaining guests, all while the corporation foots the bill." (Human Resource Executive Online)

Chart of State and Local Government Workers' Access to Quality-of-Life Benefits
Excerpt: "Long-term care insurance was offered to 26 percent of State and local government workers in September 2007. Such insurance was the quality-of-life benefit most commonly offered to employees of State and local governments." (U.S. Bureau of Labor Statistics)

BusinessWeek White Paper: The Impact of Commuting on Employees
31 pages. Excerpt: "Purpose of the survey: To explore the challenges and issues that respondents have pertaining to commuting and the role they feel employers should play, as well as the strategies companies are deploying to address these issues. Additionally, to examine the role of commuter benefits as they relate to commuting issues, including level of interest and usage." (BusinessWeek; long registration form required to receive copy)

[Opinion] In the Boardroom, Every Back Gets Scratched
Excerpt: "START with the obvious. Executive pay at the top levels in this country is stunning in its size and its rate of climb. According to the Congressional Research Service, average pay for chief executives stood at 179 times average worker pay in 2005, up from a multiple of 90 in 1994. Adjusted for inflation, average worker pay rose by a total of only 8 percent from 1995 to 2005; median pay for chief executives at the 350 largest companies rose 150 percent." (The New York Times; free registration required)

Newly Posted Events
(Post Yours!)

2008 Web/Telephone Seminar: Handling IRA Legal Issues
Nationwide on May 15, 2008
presented by Ascensus

2008 Web/Telephone Seminar: Introduction to 401(k)s
Nationwide on May 22, 2008
presented by Ascensus

2008 Web/Telephone Seminar: Introduction to QRPs
Nationwide on May 20, 2008
presented by Ascensus

2008 Web/Telephone Seminar: IRA Reporting
Nationwide on May 8, 2008
presented by Ascensus

2008 Web/Telephone Seminar: Roth IRA Distributions
Nationwide on May 13, 2008
presented by Ascensus

2008 Web/Telephone Seminar: Traditional IRA Distributions
Nationwide on May 6, 2008
presented by Ascensus

The Basics of Self Funded Plans
in California on May 7, 2008
presented by International Society of Certified Employee Benefit Specialists - Orange County Chapter

Newly Posted Press Releases
(Post Yours!)

McKay Hochman Announces §403(b) Plan Documents
McKay Hochman Co., Inc.

EBRI Award for Contributions to Economic Security
Employee Benefit Research Institute (EBRI)

PLANSPONSOR Announces Winners of Retirement Plan Adviser and Adviser Team of the Year

The SPARK Institute Releases Draft 403(b) Plans Information Sharing Agreement And Seeks Public Comment
SPARK Institute

Fiduciary Risk Management testifies at DOL Public Hearings on Fee Disclosure
Fiduciary Risk Management, LLC

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401(k) Administrator
for TSP Associates, Inc.
in CA

Retirement Education Specialist - Michigan 50060647
for MassMutual Financial Group
in MI

Trust Associate II
for Wachovia Corporation
in MN

Manager of Benefits
for Polk
in MI

Defined Contribution Client Account Manager
for New York Life Retirement Plan Services
in MA

Senior Retirement Plan Specialist
for Kansas City Retirement Plan Third Party Administrator
in KS, MO

Health & Welfare Claims Manager
for Trucking Employees of North Jersey
in NJ

Retirement Distribution Manager - Operations
for Charles Schwab
in AZ

Operations Specialist - Alternative Investment
for Charles Schwab
in AZ

Benefit Educators for 401(k) & Health Plans
for Total Benefit Communications, LLC, An Ascensus Company

Human Resources Analyst/Specialist (Benefits)
for AAA Mid-Atlantic
in DE

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