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April 21, 2008

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

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Learn everything you need to know about EGTRRA restatements -- FREE

Join us for a webinar on April 23rd at 1:00 pm CDT. will review converting your plans from GUST to EGTRRA, new plan features as well as the differences between Prototype and Volume Submitter plans. You'll also have an opportunity to ask questions relating to the EGTRRA restatements before getting started.

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[Guidance Overview] Questions on IRC 403(b) Tax-Sheltered Annuity Plans - Answers from Bob Architect
Excerpt: "Bob Architect, Senior Tax Law Specialist and the resident expert on 403(b) plans, receives many questions while presenting the latest 403(b) information to organizations. See the most frequently asked questions and Bob's answers [at the target page]." (Internal Revenue Service)

[Guidance Overview] DOL Guidance on Fiduciary Responsibility for the Collection of Delinquent Plan Contributions (PDF)
Pages 5-6 of 8 pages. Excerpt: "In light of FAB 2008-01, it is unlikely that plan trustees or investment managers will agree to be assigned or allocated the responsibility of monitoring and collecting plan contributions under a trust agreement. Therefore, plan sponsors and other named fiduciaries of ERISA-covered plans should be aware that they may be held liable for plan losses arising from the failure to collect delinquent contributions." (White & Case LLP)

[Guidance Overview] CRS Report for Congress: Survivor Benefits for Families of Civilian Federal Employees and Retirees (PDF)
6 pages. Excerpt: "Federal employees with permanent appointments are eligible for retirement and disability benefits under either the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS). . . . Both FERS and CSRS provide survivor benefits for spouses and dependent children of employees and retirees. . . . The federal government pays compensation to dependent survivors of federal civilian employees who are killed while performing their duties; however, a survivor eligible for both an annuity under CSRS or FERS and for survivor compensation cannot receive both." (Congressional Research Service, U.S. Library of Congress)

Retirement Planning - Pick Allocation of Stocks and Bonds That You Can Live with for a Long Time and Stick with It
Excerpt: "That is the implication of 'Hitting or Missing the Retirement Target: Comparing Contribution and Asset Allocation Schemes of Simulated Portfolios,' by Harold J. Schleef, an economics professor at Lewis & Clark College, and Robert M. Eisinger, an associate professor of political science at that institution. It was published last year in the Financial Services Review, an academic journal." (The New York Times; free registration required)

Making Your Money Last as Long as You Live
Excerpt: "Even for people who have built up a decent nest egg, deciding how to use it is one of the demands of early retirement. The good life may be within reach, but the financial logistics still require careful attention." (The New York Times; free registration required)

Kansas County's Teachers' Early Retirement Benefits May Change
Excerpt: "Currently, a school district employee becomes eligible for the five-year early retirement benefit after working in the district 15 years. They must also have 20 years or more of credit under the Kansas Public Employees Retirement System and be at least 57 but not yet at retirement age under the Social Security Act. For two years, a subcommittee of teachers, administrators and board members has studied the early retirement system. Its reform is a topic in the current teacher contract negotiations." (The Lawrence Journal-World)

Programs for Retaining Older Workers Are Slowly Emerging
Excerpt: "At Pacific Gas & Electric in San Francisco, 42 percent of its workers -- and 50 percent of managers -- are eligible to retire. The company has been interviewing these people about their jobs and posting the information on an intranet database. It is pairing would-be supervisors with older ones. It may soon film experienced workers as they do their jobs, and post the films on the intranet. 'And we're taking a fresh look at our pension calculator to see if we can make it financially worthwhile for older workers to ratchet down hours rather than just leave,' said Van Ton-Quinlivan, director for work-force strategy and diversity." (The New York Times; free registration required)

You Can Panic in a Recession, or You Can Strategize
Excerpt: "WE all know the drill: invest for the long term, especially when planning for retirement. Don't panic. Even if the stock market is tumbling and the country is plunging into a recession, stick to your basic strategy. Easy to say but not so easy to follow. And many experts acknowledge that you don't have to follow your plan 100 percent. In certain circumstances, investors may be better off with stabler alternatives. This could also be a good time to take early retirement, cash in some holdings for the tax plays or find deals in -- yes -- real estate. Financial decisions depend mostly on your age and tolerance for risk . . . ." (The New York Times; free registration required)

Roadmap to Reading Your Retirement Plan Fees
Excerpt: "Retirement plan expenses can whittle away at the money in your long-term savings accounts. But how do you tell what your 401(k) fees really are? It's not easy, even for an investment professional . . . ." (The Washington Post; free registration required)

Court Affirms no Fiduciary Breach in Miscalculated Benefit Estimates
Excerpt: "The 1st U.S. Circuit Court of Appeals has affirmed a district court's determination that miscalculations of pension benefits by a human resources employee and a plan's online payment calculator did not constitute a fiduciary breach under the Employee Retirement Income Security Act . . . ." (; free registration required)

Researchers Say Post-Retirement Spending Drop a Myth
Excerpt: "A newly released research study casts doubt on the traditional notion that calculations of a person's retirement nest egg should take into account a post-retirement spending dropoff." (; free registration required)

Plan Participants Want Help, But Won't Pay, Study Finds
Excerpt: "Close to half of plan participants still turn to friends and family for advice about their retirement plan assets, according to a new report. The analysis, by Spectrem Group, a Chicago-based research and consulting firm, showed that plan participants are interested in advice, but don't want to pay for it." (Investment News; free registration required)

Book Review of 'Pension Dumping: The Reasons, the Wreckage, the Stakes for Wall Street'
Excerpt: "[The author] Ms. Hawthorne has turned her attention to an important issue that in today's economy isn't going [away] anytime soon, pension plan terminations. In her new book, . . . Ms. Hawthorne takes an in-depth look on what happens when financially troubled companies terminate their defined benefit pension plans through bankrup.tcy." (Retirement Plan Blog)

Milliman 2008 Pension Funding Study (PDF)
4 pages. Excerpt: "The funded status of the pension plans improved significantly during 2007, exceeding 105%, as increases in discount rates decreased liabilities for the first time in the eight-year history of the Milliman Pension Funding Study. Actual investment returns exceeded expectations, further improving funded status." (Milliman)

Pension Plan Funding Topped 100% in 2007 but Was Short of 1990s Levels
Excerpt: "Aided by solid investment results and rising interest rates, large U.S. employers' pension plans in 2007 were, on average, overfunded for the first time since 2001. . . . On average, defined-benefit plans offered by 100 large U.S. public companies were 105.6 percent funded in 2007, up from 98.8 percent in 2006, according to a survey released Wednesday by Milliman Inc." (Workforce Management; free registration required)

Four Lawyers from One Law Firm Wrongly Included in N.Y. Pension System
Excerpt: "Four attorneys working for a prominent education law firm in Albany, N.Y., have been disqualified from the state pension system by New York's comptroller, Thomas DiNapoli, because they were not employees but independent contractors. The four Girvin & Ferlazzo attorneys additionally were shown in records as having worked 1,157 days last year for an Albany area Board of Cooperative Educational Services, when in fact they actually worked 196 days, reports the Times Union." (American Bar Association)

Boeing to Ask Unions to Drop Pension Plans for New Hires
Excerpt: "Boeing spokesman Tim Healy said in an interview Friday that the company will propose to offer new union hires 401(K)-style plans, and not the more traditional pension plans. The change is 'about attracting a new generation of employees that may not have the same appreciation for the value of the traditional pension,' Healy said. 'The new generation may not be willing or have a desire to stay at the same company for 30 years,' and would instead favor a more portable retirement plan." (Seattle Post-Intelligencer)

New York's Attorney General Expands Investigation of State Pension Scandal
Excerpt: "New York's attorney general said Friday that his investigation into the improper awarding of state pension credits had recently uncovered two related schemes: the granting of credits to lawyers who did no work to earn them, and the initiation of the practice in some cases by officials at Boards of Cooperative Educational Services, or BOCES, to gain greater state aid." (NewsDay)

Former Employee Sues Stinker Stations Over Retirement Plan Being Discontinued
Excerpt: "A former worker for Stinker Stations has sued the Boise company, alleging it is trying to withhold retirement benefits that he and other workers earned. Edward Brasley, 48, a former tanker truck driver who worked for the gasoline retailer for almost 19 years, alleges that the chain illegally tried to eliminate a deferred compensation retirement plan put in place by Stinker's former owners." (

Companies Take Steps to Shield Pension Funds
Excerpt: "[S]ome 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 via The Akron Beacon Journal)

San Diego's Aguirre Appeals Ruling on Pension Lawsuit
Excerpt: "The San Diego City Attorney's Office Friday filed an appeal of last year's Superior Court ruling that threw out the city's lawsuit over two increases of pension benefits. 'We return to court because justice has not been done, and quitting would mean a billion-dollar burden on San Diego taxpayers,' City Attorney Michael Aguirre said in a statement." (Bay City Television, Inc.)

New Jersey State Senator Proposes Dropping Pensions for Obscure Boards
Excerpt: "A state senator is asking the attorney general to do something about people building taxpayer-funded retirement benefits by serving on obscure state consumer affairs boards that meet as infrequently as once per month." (AP via NewsDay)

Medical Subsidy Hikes May Threaten New Hampshire Pension System's Tax Exemption
Excerpt: "A veteran lawmaker and key player in the New Hampshire Retirement System debate says the Internal Revenue Service may end the tax-exempt status of the New Hampshire Retirement System if the current structure allowing annual medical subsidy increases continues." (New Hampshire Union Leader)

[Opinion] House Committee Would Require Greater 401(k) Disclosure
Excerpt: "The bill that survived the Committee markup was an amended version of Chairman Miller's original 401(k) Fair Disclosure for Retirement Security Act (H.R. 3185), and would, among other things, require disclosures from plan service providers to plan administrators and from administrators to participants. The Committee action is the latest move in a ongoing trend among regulators and lawmakers to focus on 401(k) plan fees and disclosure." (Baker & Daniels)

[Opinion] An Emerging Legal Difficulty -- for ERISA Class Action Suits
Excerpt: "[A] very well-thought-of federal judge, on the Seventh Circuit -- judge Frank Easterbrook -- has authored, and now published, an opinion that tends to cast doubt on of the viability of most ERISA suits of the kind now being brought against Schering. Now, to be fair, what Judge Frank Easterbrook recently wrote . . . was, strictly speaking, obiter dicta (that is, not essential to his disposing of the case before him -- think of it more of an editorial comment, if you will), and yet, because he is so-well-regarded, it may be the way 'the path of the law' will ultimately evolve." (Shearlings Got Plowed)

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

[Guidance Overview] The Final Deadline for 409A Compliance Is December 31, 2008
Excerpt: "The good news is that we now know a lot more about the details of 409A. Therefore, final compliance will be a bit easier as we are able to follow an established pattern and start from model language we have developed. And we have added one new step to the checklist, thanks to the IRS' creation of a self-correction program for 409A errors." (Winston & Strawn LLP)

[Guidance Overview] Flurry of Cases Could Make Employers Decide to Select 'Top Hat' Plans for Further Review (PDF)
Pages 1-4 of 8 pages. Excerpt: "In light of the fact that employers may be required to establish affirmatively that their unfunded deferred compensation arrangements satisfy ERISA's requirements for the top hat exemption, employers may wish to review this recent spate of cases to determine if they continue to have adequate comfort that their plans intended to be limited to a 'select group of management or highly compensated employees' are in fact so limited." (White & Case LLP)

Excerpt from 'The Big Squeeze: Tough Times for the American Worker'
Excerpt: "One of the least examined but most important trends taking place in the United States today is the broad decline in the status and treatment of American workers -- white-collar and blue-collar workers, middle-class and low-end workers -- that began nearly three decades ago, gradually gathered momentum, and hit with full force soon after the turn of this century. A profound shift has left a broad swath of the American workforce on a lower plane than in decades past, with health coverage, pension benefits, job security, workloads, stress levels, and often wages growing worse for millions of workers." (The New York Times; free registration required)

Newly Posted Press Releases
(Post Yours!)

Updated Primer on How Private Health Coverage Works
Kaiser Family Foundation

Principal Updates Fiduciary Plan Sponsor Fiduciary Handbook
Principal Financial Group

Mercer Launches a New Online Retirement Savings Educational Program -- "Count on Your Retirement"

Callan Associates and Natixis Global Associates Create UMA Program
Callan Associates and Natixis Global Associates

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Pension Administrator
for The Nolan Company
in KS

TPA Sales Channel Manager - Retirement Services
for MassMutual Financial Group
in CA

Relationship Manager II
for AST Capital Trust Company
in AZ

Retirement Plan Specialist (Plan Administrator)
for First National Bank of Omaha
in NE

Trust Administrator II or III
for Associated Pension Consultants
in CA

CRTFL - Senior Operations Manager
for Citi
in FL

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