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April 18, 2008

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

Today's sponsor is International Foundation of Employee Benefit Plans

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Be Smart by Association with the International Foundation

Smart is not a permanent state of being. What’s your maintenance plan? Take advantage of the education and information available through the International Foundation of Employee Benefit Plans, a nonprofit educational association, and find out why over 35,000 industry professionals like Larry Beebe rely on the Foundation to stay informed and educated. Make sure you have the most comprehensive information on health, pension and compensation issues. Be smart by association.

[Guidance Overview] Beneficiaries Naming Beneficiaries - Examples and a New Form, the IRA Successor Beneficiary Form
Excerpt: "May an individual retirement account (IRA) beneficiary name a beneficiary -- a successor to receive any remaining assets upon the beneficiary's death? What are the benefits of doing so?" (Wolters Kluwer)

House 401(k) Fee Disclosure May Not Get Beyond Floor Vote
Excerpt: "Under a bill approved along party lines by the House Education and Labor Committee on April 16, retirement plans would have to provide greater transparency on the fees that they charge participants." (Workforce Management; free registration required)

Avoiding the Retirement Scramble of Distinct Phases and Life–Altering Changes During Retirement
Excerpt: "This article presents highlights from a Roundtable Discussion showcasing recent SOA research that was held at the 2008 Annual Conference of the National Academy of Social Insurance (NASI). . . . A number of research projects have explored changes during retirement and provide insights about the causes, dynamics and impact of those changes." (Society of Actuaries)

Text of Rep. Andrews Amendment to H.R. 3185, Fair Disclosure for Retirement Security Act (PDF)
2 pages. (American Benefits Council)

Florida Lawmakers Target Double- and Triple-Dipping
Excerpt: "A bill that would eliminate triple-dipping and place new restrictions on public employees who try to double-dip won approval Wednesday from the House Council on Governmental Efficiency and Accountability. Acting just a week after a Senate committee killed another effort to limit double- and triple-dipping, the House bill would close several loopholes that have allowed thousands of public employees to 'retire' and return to work at the same job, collecting both a salary and a pension." (St. Petersburg Times)

Boeing Labor Negotiator Wants Pension Plan Change for New Hires
Excerpt: "Boeing's top labor negotiator, Doug Kight, has an uphill battle ahead as the company undertakes difficult contract talks with both major unions this year. And one of his proposals -- for enrolling new hires in a 401(k)-style retirement plan instead of the existing Boeing pension plan -- won't make things any easier." (The Seattle Times)

Maine Senate Votes to Restore Cut State Employee Benefits
Excerpt: "According to the Brunswick Times Record, the move will reduce the early retirement penalty for some teachers and state employees from 6% to 3%, allowing those with at least 25 years of experience to retire before the age of 62 and receive more of their pension. Legislators only restored the benefit to those employed when the original benefit was in place, and did not change the existing benefit for those hired after the 1993 cut." (; free registration required)

Miller 401(k) Fee Bill Cruises through House Committee
Excerpt: "The version of a 401(k) fee disclosure bill passed by a U.S. House committee Wednesday includes a controversial provision mandating that plan sponsors include an index fund in their investment lineup." (; free registration required)

Large 401(k) Sponsors Want Expert Advisers, According to Survey
Excerpt: "A new Spectrem Group survey of large 401(k) plan sponsors found that the sponsors are looking for advisers with expertise in a particular service and will bring on more than one if they need to. The Spectrem report . . . said that might mean a sponsor might hire an investment consultant (including one familiar with a particular asset class) as well as a separate adviser with administrative expertise." (; free registration required)

Alleged ERISA Violations Added to Suit Against Merck
Excerpt: "A complaint filed against Merck & Co. (MRK) in a New Jersey court was modified to include an alleged violation of the Employee Retirement Income Security Act, according to the law firm Schatz Nobel Izard PC. . . . The complaint claims the Whitehouse Station, N.J., pharma.ceutical product and service company failed to disclose material information regarding the effects of its Vytorin anti-cholesterol drug." (

Kentucky General Assembly's Pension Inaction Will Cost Millions
Excerpt: "The General Assembly's failure to pass a public pension reform bill this session will cost taxpayers hundreds of millions of dollars -- on top of the $26.6 billion shortfall that already exists in the retirement systems, officials say." (The Courier-Journal)

Rhode Island State Senator Proposing Rules to Govern Pension Plans of State's 39 Cities and Towns
Excerpt: "State Senator Stephen Alves (D-West Warwick), who chairs the Senate Finance Committee, is proposing rules to govern pension plans of the state's 39 cities and towns. . . . Nevertheless, Alves a member of the Senate leadership, said his proposals to regulate the pension plans of municipalities would be similar to the reforms enacted in 2005 to the pension plans of state workers and teachers, who are also included in the state pension plan." (Beacon Communications)

Mutual Funds and ERISA in Braden vs. Wal-Mart
Excerpt: "A class action lawsuit filed in late March alleges that Wal-Mart, the giant discount retailer, violated mutual fund ERISA statutes and cost its 401(k) employee plan holders and investors $60 million in unnecessary expenditures by purchasing expensive mutual funds, when cheaper alternatives were available." (Online Legal Marketing Ltd.)

How to Help Employees Save for Retirement
Excerpt: "A retirement plan is less expensive than health care coverage and can engender a lot of good will among employees. 'The responsibility for seeing that the American public retires with some sense of security is on the shoulders of small businesses,' . . . ." (

[Opinion] Does Employer Stock Even Belong in Retirement Plans?
Excerpt: "Should there even be employer securities in a 401(k) plan or other retirement vehicle? That's the million dollar question (or more like the hundred million dollar question) that cases like those arising out of the Bear Stearns collapse raise. Moreover, it goes right to the underlying tension between ERISA and the securities laws that plays out in the concept of fiduciary duty: namely, the extent to which it is appropriate for a fiduciary to continue to allow employer stock holdings in a retirement vehicle when the company is simultaneously facing market pressure on its stock price and an obligation to comply with the securities laws in dealing with the marketplace as a whole." (Stephen Rosenberg of The McCormack Firm, LLC)

Sponsored by: ASPPA

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The ERISA Outline Book

Stay current with The ERISA Outline Book, 2008 Edition, by Sal Tripodi, J.D., LL.M. only from ASPPA. Available in both print or on CD, this one of a kind resource has become the must have for anyone working in the pension industry today. Fully updated with the latest guidance on a variety of PPA 2006 items, the 2008 Edition also includes automatic enrollment guidance including QACAs, final regulations on QDIA's, guidance on benefit restrictions and much more. Stay current and order your copy today.

(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] Self-Correction Program Helps Employers Avoid 409A Penalties
Excerpt: "Under the IRS correction program, certain failures corrected in the same tax year as they occurred will result in no income inclusion or additional taxes under Code Sec. 409A." (Wolters Kluwer)

The Workplace as Clubhouse
Excerpt: "Fat paychecks, pensions and health insurance are not enough to recruit and keep employees these days. Companies are again finding that adding a bit of social context to work is crucial to keeping employees happy and productive. That is where employee clubs come in. Workplace specialists say clubs are a way to build camaraderie and help people get to know fellow employees away from work. Companies benefit, too. Clubs help create loyal employees, reduce turnover and improve morale while costing very little." (The New York Times; free registration required)

Growing Disparities in Life Expectancy (PDF)
6 pages. Excerpt: "Increasing longevity, by itself, has clear implications for Social Security and Medicare expenditures. As beneficiaries live longer, they will receive benefits for a longer period, putting additional pressure on the programs' finances." (U.S. Congressional Budget Office)

Newly Posted Events
(Post Yours!)

22nd Annual Multiemployer Benefit Plans Seminar
in Minnesota on May 29, 2008
presented by Felhaber Larson Fenlon & Vogt

Effective Management of Workers' Compensation Claims
Nationwide on May 20, 2008
presented by Lorman Education Services

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Employee Benefits Service Department Supervisor
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Compensation & Benefits Manager
for Vera Bradley
in IN

Pension Coordinator
for White & Case LLP
in NY

Plan Administrator
for San Luis Pension Consultants, Inc.
in CA

Internal 403(b) Sales Representative
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