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April 15, 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.
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[Official Guidance] Federal Register Version of Proposed IRS Regs on Determination of Minimum Required Pension Contributions for Single-Employer DB Plans (PDF)
From an IRS press release: 'The proposed regulations, together with three earlier sets of proposed regulations, enable plan sponsors to determine the contribution requirements that apply to their defined benefit plans under the new funding regime, including the application of the quarterly contribution requirements. Although the new funding rules are generally effective for plan years beginning on or after January 1, 2008, these regulations are proposed to be effective for plan years beginning on or after January 1, 2009. Plan sponsors, however, can rely on the proposed regulations for purposes of satisfying the minimum funding requirements for plan years beginning in 2008." (Internal Revenue Service)

[Guidance Overview] A Review of Current 401(k) Plan Fee Legislation and Regulation, as of April 3
Excerpt: "At least three bills related to 401(k) plan fees have been introduced in Congress, and the Department of Labor (DOL) is about halfway through its three-part regulatory initiative concerning fees. In this article, we review, generally, where these legislative and regulatory initiatives stand." (JPMorgan Chase & Co.)

[Guidance Overview] Calculating Lump Sums After PPA
Excerpt: "In our view, retaining the traditional approach to determining actuarial equivalence is perfectly defensible. To suggest that a result is wrong because it produces an answer 0.05% different from another approach is to impute a false level of precision to these calculations generally. All approaches require some kind of judgment about within-year mortality." (JPMorgan Chase & Co.)

[Guidance Overview] ERISA Section 404(c) Meets 'The Real World' (PDF)
21 pages. Excerpt: "The commonsense allure of holding participants responsible for their own investment decisions will continue to fuel the imaginations of the defense bar. Is ERISA Section 404(c) a silver bullet for all 401(k) plan investment loss claims? Of course, not. Will defendants ask courts to look at the totality of circumstances to determine if a participant was the primary cause of losses in his or her 401(k) account? You can count on it. Will ERISA Section 404(c) derail plaintiffs' ability to show plan-wide loss causation? We don't know yet." (Aspen Publishers, Inc. via Jones Day)

[Guidance Overview] Proposed Safe Harbor for Deposit of Small Plan Contributions and a Clarification for All Plans (PDF)
2 pages. Excerpt: "In the preamble, the DOL has requested comments, including whether the DOL should create a safe harbor for large plans. The DOL has requested information, including whether there is a need for a safe harbor for large plans, the size of the plans for which there is a perceived need, and the time periods in which large plan sponsors deposit contributions." (Holme Roberts & Owen LLP)

[Guidance Overview] New IRS Examination Initiative Focuses on Plans with Greatest Audit Potential
Excerpt: "The Employee Plans (EP) office of the IRS has announced a new examination initiative, the 'EP Risk Modeling Project,' in order to focus its efforts on pension plan filers with the greatest audit potential. The EP Risk Modeling Project will refine how returns are selected for audit, and will result in EP spending more time on returns that show areas of noncompliance." (Wolters Kluwer)

[Guidance Overview] Proposed Regulations on Minimum Required Contributions for Single Employer Defined Benefit Plans (PDF)
Excerpt: "On April 11, the IRS issued proposed regulations on minimum required contributions for single employer defined benefit plans under the funding rules of the Pension Protection Act of 2006 (PPA). Importantly, this long-awaited guidance contains rules on required quarterly contributions, leaving sponsors of calendar year plans only two business days to determine and deposit the first 2008 plan year required quarterly amount (if applicable) which is due April 15." (Buck Consultants)

[Guidance Overview] New Accounting Rules for Defined Benefit Pension Plans
Excerpt: "Prior to SFAS 158, companies could measure their pension assets and benefit obligations at times other than their fiscal year-end. Effective for fiscal years ending after December 15, 2008, companies must measure these items as of the date of their fiscal year-end balance sheet. Finally, SFAS 158 expands disclosure of the effects of the pension plan in other comprehensive income." (The New York State Society of CPAs)

International Update, April 2008, Recent Developments in Foreign Public and Private Pensions (PDF)
2 pages. Excerpt: "International Update is a monthly publication of the Social Security Administration's Office of Policy. It reports on the latest developments in public and private pensions worldwide." (U.S. Social Security Administration)

Retirement Security for Women: Progress to Date and Policies for Tomorrow (PDF)
24 pages. Excerpt: "In this paper, we describe the underlying reasons for the differences between men and women's retirement preparedness and the challenges for women from lower income families . . . . In Section III, we delineate a series of specific policies that could materially improve the economic status of women in retirement." (The Retirement Security Project)

Several States Considering Legislation to Open Pension Funds to Private Sector Workers
Excerpt: "California has joined a growing list of states interested in allowing private-sector employees to invest their retirement savings through a state pension plan." (Pensions & Investments)

Payback Sought in New York for Questioned Public Pension Credits
Excerpt: "The New York State comptroller is reviewing the case of a private attorney in Nassau County who received 21 years of retroactive pension credits - helping him earn a six-figure annual pension - even though he had been paid as an independent contractor all those years, a spokesman said yesterday." (The Baltimore Sun)

Mutual Fund ERISA Lawsuits in the News
Excerpt: "In some situations, financial companies offer their own mutual funds to employees. However, mutual funds are not generally recommended for plans that have a high value. Plans with more than $30 million have enough financial clout to deal with their own money manager and negotiate lower fees. Therefore, employees whose money is improperly put into mutual funds are likely paying far more in fees and charges than they should be." (Online Legal Marketing Ltd.)

Whitworth University Professors Set to Try Phased Retirement
Excerpt: "The administration is developing a phased retirement program for tenured faculty who have taught full time for a minimum of 15 years. The plan is a mutual agreement between the individual faculty member and the university, according to the draft of the phased retirement plan. The faculty member must initiate the process . . . ." (The Whitworthian)

Defunct Firm Forces 401(k) Distributions
Excerpt: "Former employees engaged in a lawsuit against their defunct former employer Wurld Media Inc. were surprised last month when they received lump-sum distributions of their 401(k) accounts. The Albany Times Union reports that the former employees received a letter with their checks saying the distribution was ordered by ex-CEO Gregory Kerber, the trustee of the retirement plan. The former employees are suing Wurld Media and successor company ROO Group Inc., claiming contributions to their 401(k) were withheld from their paychecks but never deposited to their accounts." (; free registration required)

Small Firms Slower to Address Defined Benefit Plan Accounting Changes
Excerpt: "New research from Greenwich Associates suggests that sponsors of small corporate pension plans are falling behind their larger counterparts when it comes to preparing for new mark-to-market accounting rules and changes in global investment markets." (; free registration required)

401(k) Mistakes and How to Avoid Them
Excerpt: "I frequently hear unfortunate stories about people who regularly invested in their IRAs or 401(k)s and, upon retirement, discovered that they didn't have enough saved for living expenses. Many mistakes are commonly made that could have been easily avoided. This is the issue we will address today: common mistakes people make with their 401(k) and how to avoid making these mistakes in the future." (Zacks Investment Research)

[Opinion] Testimony by Dallas Salisbury at Hearing on 'Financial Literacy and Education: The Effectiveness of Initiatives' (PDF)
5 pages. Excerpt: "There are programs and tools available today that would provide the basis for sound individual financial decision-making. But the reality is that even when they are made available most individuals do not take advantage of them. Getting individuals to do so requires a constant drumbeat of effort. As already noted, given the constant noise to borrow and spend, current savings initiatives are actually amazingly successful, as they are 'outspent' by thousands of dollars to one by those urging people to borrow and spend." (Employee Benefit Research Institute)

[Opinion] California Assembly's Refusal to Detail Pension Spike Is Outrageous
Excerpt: "When the news broke that leaders of the California Assembly had offered to spike the pensions of 222 staff members on the grounds that it would save money in the long run by inducing them to retire early, that seemed dubious enough. But the Assembly's decision this week to keep secret analysis that purportedly justified the cost-saving claim makes what previously looked dubious now look scandalous." (The San Diego Union-Tribune)

Sponsored by: BLAZE SSI Corp.

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GTS - the George Taylor System for combined DB /DC Plan Proposals

GTS is a fast, easy-to-use MS Excel-based interactive system designed by George Taylor. It creates plan proposals, including combined DB Cash Balance and DC New Comparability plan designs. GTS performs combined plan IRC 401(a) non-discrimination testing and prepares client-ready reports. A GTS subscription includes system updates for government regulations and HelpLine Support. GTS is available exclusively from BLAZE SSI Corp.

(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] CRS Report for Congress: Summary of the Employee Retirement Income Security Act (ERISA) (PDF)
76 pages; April 10, 2008. Excerpt: "The Employee Retirement Income Security Act of 1974 (ERISA) provides a comprehensive federal scheme for the regulation of employee pension and welfare benefit plans offered by employers. ERISA contains various provisions intended to protect the rights of plan participants and beneficiaries in employee benefit plans. These protections include requirements relating to reporting and disclosure, participation, vesting, and benefit accrual, as well as plan funding. ERISA also regulates the responsibilities of plan fiduciaries and other issues regarding plan administration. ERISA contains various standards that a plan must meet in order to receive favorable tax treatment, and also governs plan termination. This report provides background on the pension laws prior to ERISA, discusses various types of employee benefit plans governed by ERISA, provides an overview of ERISA's requirements, and includes a glossary of commonly used terms." (Congressional Research Service, U.S. Library of Congress)

AFL-CIO Blames Executive Pay for Credit Crisis
Excerpt: "The AFL-CIO said . . . that 'outrageous' pay packages for banking industry executives were partly to blame for the credit crisis, encouraging risky investment strategies that ended up hurting shareholders and consumers." (AP via The Washington Post; free registration required)

[Guidance Overview] Additional Guidance Regarding Minnesota Taxation of Deferred Compensation, Severance and Stock Option Income Paid to Nonresidents
Excerpt: "The Minnesota Department of Revenue is preparing guidance addressing withholding and reporting issues raised by the new law taxing some deferred compensation, severance and stock option income paid to nonresidents. The law now taxes income earned in Minnesota but received when the taxpayer is not a state resident. The new law requires employers to withhold tax from such payments beginning April 1, 2008." (Oppenheimer Wolff & Donnelly LLP)

Generation Y Causing Employment Policies Change
Excerpt: "Gen Y, it seems, expects a constant flow of promotions, flexible schedules, lots of leave and more money as if those benefits were its right, not something to be earned. But because Gen Y represents the workforce of the future, employers are changing their HR policies in response to its demands, according to a US survey of 2546 hiring managers at HR professionals conducted by CareerBuilder and Harris Interactive." (Human Resource Executive Online)

Arizona Proposal Would Expand Domestic Partner Benefits
Excerpt: "The Governor's Regulatory Review Council has voted to extend domestic partner benefits to employees of the state and university. Unmarried straight couples, not just g.ays and les.bians, would be covered." (Eastern Arizona Courier)

Newly Posted Events
(Post Yours!)

Are You Ready For EGTRRA Restatements?
Nationwide on May 1, 2008
presented by

Coping with Benefit Cutbacks: 204(h) Notice Requirements from Regulatory and Litigation Perspectives
Nationwide on May 13, 2008
presented by ABA Joint Committee on Employee Benefits

Newly Posted Press Releases
(Post Yours!)

Modest Number Of Uninsured Families Have Sufficient Assets To Cover Cost Sharing In HSA-Qualified Plans
Kaiser Family Foundation

The ESOP Association Announces Silver ESOP Award Winners
ESOP Association

Testimony of U.S. Treasurer Anna Escobedo Cabral before the House Committee on Financial Services
U.S. Department of Treasury

ASPPA and CIKR Support Uniform 401(k) Fee Disclosure Act
American Society of Pension Professionals & Actuaries (ASPPA)

Northern Trust Achieves a Milestone in Cross-Border Pooling With U.S. Department of Labor Opinion Regarding ERISA Plan Assets
Northern Trust

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Pension Administrator/TPA
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for MassMutual Financial Group
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for UFCW-Employers Benefit Plans of Northern California
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in CA

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in NY

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for Gallagher Retirement Services
in FL

Regional Sales Manager
for Milliman, Inc.
in NY

TPA Sales Support Consultant - Retirement Services
for MassMutual Financial Group
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for Wal-Mart Stores, Inc.
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