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April 17, 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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[Guidance Overview] 403(b) Plan Sponsors Subject to New Reporting and Audit Requirements
Excerpt: "If an employer fails to have a timely written plan (i.e., a document which contains basic provisions relating to eligibility, benefits, distribution availability and other limitations, and information relating to the annuity contracts or custodial agreements used by the 403(b) plan), any annuity contract or custodial agreement purchased by the employer will not qualify as a 403(b) plan, and contributions will be fully taxable." (McDermott Will & Emery)

[Guidance Overview] Target-Date Funds: Four Key Considerations Plan Sponsors Should Know
Excerpt: "In this 20-minute video, Vanguard principals John Ameriks, Ph.D., and Steve Utkus discuss four key considerations for sponsors as they determine the most desirable options for their participants. Watch the presentation or read a transcript." (The Vanguard Group, Inc.)

[Guidance Overview] DOL Correspondence on Late Deposit of Elective Deferrals
Excerpt: "Recently, the Department of Labor (DOL) has been automatically generating letters to plan sponsors who answer line 4a (Schedule H or I) with a 'yes.' Line 4a asks if the plan sponsor failed to transmit elective deferrals to the plan within the time period described in the plan asset regulations. Apparently, the DOL generates the letter even though the plan sponsor has included an attachment (or a footnote) in which it indicates that the late deposit has been corrected." (SunGard Corbel LLC)

[Guidance Overview] Terminated Employees Can Be Toxic to the Health of Your Plan
Excerpt: "The [LaRue] ruling demonstrates once more why plan advisors should act quickly to move terminated employees off of their plans. Ted Benna, known as the 'father of the 401(k),' and a frequent advisor to Congress and regulatory authorities, has long warned about the fiduciary requirement to provide sufficient information to make informed investment decisions." (401kExchange, Inc.)

Fair Disclosure for Retirement Security Act, H.R. 3185, Amendment in the Nature of a Substitute (PDF)
33 pages. (Rep. George Miller via American Benefits Council)

New Social Security System Now in Place in Panama
Excerpt: "A new social security system, with components of both traditional defined benefit (DB) pensions and defined contribution (DC) retirement accounts, began operating on January 1, 2008. Employers and employees are paying higher contributions to fund the new system." (Watson Wyatt Worldwide)

Hardship Withdrawals and the Mortgage Crisis
2 pages. Excerpt: "Hardship withdrawals from Vanguard® defined contribution plans rose in 2006 and 2007, although the absolute level of withdrawals is still quite low. The increase may be correlated with either the emerging home mortgage crisis or broader economic stress among financially vulnerable plan participants." (The Vanguard Group, Inc.)

Proposed Best Practices for Hedge Funds Released
Excerpt: "Two private-sector committees established by the President's Working Group (PWG) have released separate yet complementary sets of best practices for hedge fund investors and asset managers. The PWG tasked the committees, comprised of well-respected asset managers and investors, with collaborating on industry issues and developing a set of best practices for their respective groups of stakeholders. The PWG includes the heads of the U.S. Treasury Department, the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission." (International Foundation of Employee Benefit Plans)

The Miracle of Funding by State and Local Pension Plans (PDF)
12 pages. Excerpt: "This brief examines three aspects of the funding of state and local pension plans -- the regulatory environment under which they operate, their costs and funding requirements, and their current funding status." (Center for State and Local Government Excellence)

IRS Announces Hearing on Proposed Regs Relating to Automatic Contribution Arrangements
Excerpt: "The IRS will hold a public hearing on its proposed regulations relating to automatic contribution arrangements under 401(k) plans . . . . The public hearing will be held on Monday, May 19, 2008, at 10 a.m., in the auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC." (Wolters Kluwer)

San Diego City Council Criticized for Increasing Its Pay 24% - Which Also Bumps Up Pensions
Excerpt: "When the San Diego City Council voted to boost its pay 24 percent Monday, it did so for life. The raise triggers a similar increase in annual council pensions, to $26,176 from $21,108, for officials who serve two four-year terms and start collecting their retirement at age 55." (The San Diego Union-Tribune)

Market Turmoil Has Taken a Toll on Big Pension Funds
Excerpt: "At the same time, though, some of America's biggest companies have begun taking steps to shield their pension funds from market volatility by moving out of stocks. Such a step has long been predicted by economists, but was shunned until now by the vast majority of pension investment managers." (The New York Times; free registration required)

The Best New Features of a Rich 401(k) Plan
Excerpt: "Over the past year or two, a combo of new government regulations and a chaotic stock market - not to mention the continued slashing of traditional pensions - has spurred many companies to revamp their 401(k) plans in ways that can pay off big-time." (Money Magazine via

PBGC Reminds Plans that Missing Pension Payments Require Form 200
Excerpt: "A PBGC news release said its Form 200 should be submitted if a required minimum contribution is missed and the plan has an unpaid balance of more than $1 million. The form must be filed within 10 days of the payment's due date." (; free registration required)

Number of Retirement Plans Offered to Attorneys Grows
Excerpt: "ALM's Altman Weil Publications' Retirement and Withdrawal Survey for Private Law Firms, 2008 Edition found firms offered more qualified retirement plans in 2008 to their employees than in previous surveys." (; free registration required)

For Big Companies, Pension Funds Shrinking - and Fast
Excerpt: "In a matter of just months, the largest of the large corporate pension plans have seen the vast majority of their 2007 gains wiped out, according to a new study from actuarial consulting firm Milliman." (Financial Week; free registration required)

PPA Increases Need to Educate Workers About 401(k) Assets in Company Stock
Excerpt: "Participants whose plans match in company stock will want investment information with which they can conclude that the company stock, as a 401(k) asset, is a good investment. Some employers are going further, though, saying, 'Maybe we will offer company stock as 401(k) investment option, but we will not match in company stock,'' says Leslie Smith, senior vice president of Aon's retirement practice. Under PPA, employees can direct company stock as a 401(k) match as they like." (Employee Benefit News; free registration required)

[Opinion] PSCA April 15 Letter Regarding HR 3185, the 401(k) Fair Disclosure for Retirement Security Act of 2008 (PDF)
1 page. Excerpt: "The requirement to offer an index fund is a concern for our members. While the majority of plan sponsors offer some type of index fund to workers, we don't agree that a government-directed investment option is appropriate or in the best interests of participants." (Profit Sharing / 401k Council of America)

[Opinion] Testimony of an Independent Pension Fiduciary for Hearing on Reasonable Contracts or Arrangements Under Section 408(b)(2) - Fee Disclosure (PDF)
7 pages. The hearing was held by the United States Department of Labor Employee Benefits Security Administration on March 31, 2008. (Fiduciary360, LP)

[Opinion] ERIC Urges Mind-Set Change in Treasury's Proposed Hybrid Retirement Plan Regulations
Excerpt: "RIC's comments address many specific concerns with the regulations, among them: The IRS's inappropriate use of the determination letter and audit programs to make major interpretations of the law governing hybrid plans; An extremely limited interpretation of the market rate of return requirement that would prohibit plan sponsors from offering generous interest crediting rates to participants; An overly broad definition of interest credits that could disallow many required and permissible credits for imputed service or for periods of disability and maternity leave; A inappropriate application of the special vesting rules to benefits determined under non-hybrid plan formulas resulting in faster vesting; and The exclusion limited applicability of the PPA's indexing rule that would disallow cash balance and pension equity plans from complying with the age discrimination test by meeting its requirements." (The ERISA Industry Committee)

[Opinion] American Benefits Council Letter to Rep. George Miller Regarding H.R. 3185 (PDF)
Excerpt: "On behalf of the American Benefits Council (the 'Council'), I am writing with respect to the scheduled mark-up of H.R. 3185, the '401(k) Fair Disclosure for Retirement Security Act of 2007'. Specifically, we would like to comment on the amendment in the nature of a substitute to H.R. 3185 that we understand you plan to offer." (American Benefits Council)

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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

[Guidance Overview] Hot HR Compliance Issues for Small Businesses in 2008
Excerpt: "The purpose of this article is to highlight a few issues before they become critical [such as Section 409A, flex plans, qualified retirement plans, and 401(k) contributions]." (Employee Benefit News; free registration required)

For Top Executives, Some Perks Come Tax-Free
Excerpt: "About one in five of the nation's large public companies paid part of their chief executive's tax bill, the Corporate Library found in a study of perks reported between February 2007 and February 2008. The findings are based on more detailed public disclosures aimed at transparency in executive benefits. The group's report, published as 'Tax Reimbursement: The Grossest Perk,' was based on a study of more than 3,000 companies." (The Atlanta Journal-Constitution)

Picking the Perks That Employees Value
Excerpt: "When it comes to employee benefits, the best plan for a small company may be to have no set plan. . . . Kahler Slater has also done something that many smaller companies haven't done: It has surveyed employees to get a sense of what the majority of them valued. Before the company began surveying employees, 'we had a clue' of what mattered to employees, 'but we didn't have a pattern,' that showed the perks employees valued most . . . . The surveys 'prioritized it in a very clear way.'" (The Wall Street Journal)

Newly Posted Events
(Post Yours!)

401(k) Plan Workshop
in Washington on May 13, 2008
presented by SunGard Relius

401(k) Plan Workshop
in Kansas on May 14, 2008
presented by SunGard Relius

401(k) Plan Workshop
in California on May 14, 2008
presented by SunGard Relius

401(k) Plan Workshop
in Colorado on May 16, 2008
presented by SunGard Relius

COBRA Compliance: Take the Bite Out Of Costly Violations
Nationwide on May 7, 2008
presented by

Designing Sales Compensation Plans That Motivate And Get Results
Nationwide on May 14, 2008
presented by

Form 5500 Workshop
in Kansas on May 13, 2008
presented by SunGard Relius

Form 5500 Workshop
in California on May 13, 2008
presented by SunGard Relius

Form 5500 Workshop
in Colorado on May 15, 2008
presented by SunGard Corbel

Fundamentals of 401(k) and Other Qualified Plans Workshop
Nationwide on June 4, 2008
presented by SunGard Relius

Hot Topics and Trends in Employee Benefits 2008 All Day Forum with Separate Tracks for Health/Welfare and Retirement/Pension Plans
in Virginia on May 20, 2008
presented by Capital Chapter ISCEBS

Newly Posted Press Releases
(Post Yours!)

Statement of U.S. Assistant Secretary of Labor Bradford P. Campbell on House Education and Labor Committee action on 401(k) Fee Disclosure
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

ERIC Urges Mind-Set Change in Treasury's Proposed Hybrid Retirement Plan Regulations
ERIC (ERISA Industry Committee)

The SPARK Institute Raises Concerns Over Revised "401(k) Fair Disclosure Retirement Security Act"
SPARK Institute

Milliman Study Confirms 2007 Corporate Defined Benefit Pension Gains Were Wiped Out in First Quarter of 2008
Milliman USA

The (k)larity Group to Offer Synapses' Comprehensive 401(k) Education Materials
Synapses Inc.

John Hancock's 'EZ Route' Post-Enrollment Education Program Wins 2008 Insight Award for Customer Advocacy in Financial Services
Insight Forums

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Director of Corporate Market Sales
for Great-West Financial Services

Regional Director
for The Newport Group
in CO, WA

Pension Analyst
for OperationsInc
in CT

Actuarial Analyst
for Diversified Investment Advisors, Inc.
in MA

Account Manager
for Retirement Services
in NY

Plan Analyst
for Pension Specialists, Inc.
in CA

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