Retirement Plans

To BenefitsLink home page Fill your job openings fast on!
Search Earlier Newsletters:

Sort by date
Sort by closest match

April 28, 2008

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

Today's sponsor is

(Click on company name or banner to learn more.)
Banner ad for now has TWO NEW 403(b) plan documents! now offers a full-scope 403(b) plan document with an ERISA/non-ERISA option that allows sponsors (including churches, non-profits, or public schools) to provide matching, non-elective contributions and elective deferrals; and a limited-scope 403(b) plan document (non-elective contributions, non-ERISA only).
Both documents are updated with the final regulations, include context-sensitive help buttons, forms and amendments, streamlined data import and export and online error correction.
Contact or call 800.596.0714 for additional information.

[Guidance Overview] No Fiduciary Liability for Employer or HR Representative Who Gave Participant Inaccurate Benefit Information
Excerpt: "EBIA Comment: This case puts a new spin on the DOL regulations regarding fiduciary responsibility. While other courts appear to have taken the position that delegating responsibility for benefit estimates is generally a fiduciary act that may be subject to fiduciary liability . . ., this court concluded that providing estimates is not a fiduciary function, so there could be no fiduciary liability for improper delegation of that responsibility." (Employee Benefits Institute of America)

[Guidance Overview] Proposed Model Cutback Notice for Workers in Multiemployer Plans
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration has proposed a model notice [PDF] that will be sent to workers in multiemployer plans whose pensions may be reduced because their pension plan is severely underfunded." (Pension Rights Center)

[Guidance Overview] Fourth Circuit Rejects Validity of Assignments Taken in Claims Settlement
Excerpt: "In this recent opinion, the Fourth Circuit considered the issue of derivative standing in the context of an ERISA claim for benefits action. . . . The Fourth Circuit affirmed the district court, holding that the assignments presumably taken by the original PEO defendant (Sikora) in a claims for benefit case through settlement were insufficient to create ERISA standing in a subsequent claim by the PEO against third parties (Fidelity Group) allegedly responsible for the defalcation in benefit funding." (Health Plan Law blog by Attorney Roy F. Harmon III)

Bill Would Require Employee Representatives on Trust Boards for Pension Plans
Excerpt: "Rep. Peter Visclosky (D-IN) has proposed politicizing the administration of pension plans by requiring joint boards of trustees with elected employee representatives. The Employees' Pension Security Act of 2008 (H.R. 5754) would also establish new requirements for plan terminations and require companies that have terminated plans to pay for the amounts not covered by the Pension Benefit Guaranty Corporation." (HR Policy Association)

Reforms in Chile Could Give Employers New Retirement Tools
Excerpt: "The government recently approved a number of changes to retirement programs that could broaden coverage for workers. Among them is a provision that will allow employers to offer voluntary savings vehicles (ahorro provisional voluntario or APV) on a group basis, with tax advantages for employees. As a result, this new vehicle could offer employers a significant attraction and retention tool." (Watson Wyatt Worldwide)

401(k) Loans = Retirement Insecurity
Excerpt: "Conclusion. The option of borrowing against a 401(k) is attractive; however, potential borrowers should be wary. Even in extreme situations, it is best for workers to seek other sources of capital before tapping their 401(k) accounts. Otherwise, borrowers are leaving much of their potential earnings on the table. A small loan now can equal a huge loss in future retirement security." (National Center for Policy Analysis)

The U.S. Retirement Market, Third Quarter 2007 (PDF)
22 pages. Excerpt: "Americans' retirement assets rose to a record $17.8 trillion as of Sept. 30, 2007, according to a quarterly statistical series launched last year by the Investment Company Institute, the national association of U.S. mutual funds and other investment companies." (Investment Company Institute)

South Carolina Working Retirees Await Pension Ruling As Court to Decide Issue of Paying Into State Fund
Excerpt: "[There are] approximately 15,000 employees in the state retirement system who have retired and come back to work. Those working retirees still are waiting for a court to decide whether they must keep paying 6.5 percent of their salary into the retirement system." (

Defined Contribution Plan Consultants Adjust Business Offering to Address New Trends
Excerpt: "Newly released findings of a survey by PIMCO shows the DC plan consulting business is changing to adjust to new plan trends by, among other things, offering custom target-date funds and adding inflation-protection investment vehicles to fund offerings." (; free registration required)

The 4% Rule - At What Price?
Excerpt: "The 4% rule is the advice most often given to retirees for managing spending and investing. This rule and its variants finance a constant, non-volatile spending plan using a risky, volatile investment strategy. As a result, retirees accumulate unspent surpluses when markets outperform and face spending shortfalls when markets underperform. The previous work on this subject has focused on the probability of short falls and optimal portfolio mixes. We will focus on the rule's inefficiencies -- the price paid for funding its unspent surpluses and the overpayments made to purchase its spending policy." (Social Science Research Network)

Some Experts Wonder Whether Pension Pooling Ruling Breaks New Ground
Excerpt: "Despite the praise that . . . officials were heaping on the DOL's advisory opinion, one ERISA attorney said the opinion letter plows no new ground -- and instead simply summarizes DOL regulations that have been on the books for several decades. 'This letter is a perfectly straightforward application of rules written in 1981 to the types of transactions that occurred in 1981,' said A. Richard 'Brick' Susko, an ERISA attorney with Cleary Gottlieb Steen & Hamilton LLP, New York. 'There is nothing new in this opinion, and that is the news,' Mr. Susko added." (Pensions & Investments)

A Stalwart of Retirement Planning: The IRA
Excerpt: "Financial experts say that one often-overlooked resource is the humble Individual Retirement Account, or I.R.A., which has been a part of the personal finance landscape for so long that many of us take it for granted. . . . The rules for some I.R.A. contributions are so complex that many Americans may not realize they are eligible to make them . . . ." (The New York Times; free registration required)

[Opinion] American Society of Pension Professionals & Actuaries' Comments on EPCRS Provisions That Apply to Retroactive Plan Amendments (PDF)
Excerpt: "On April 25, 2008, ASPPA submitted a comment letter to the IRS and Treasury discussing current methods available to plan sponsors through EPCRS to retroactively correct certain document errors, and providing additional examples to assist plan sponsor and practitioners." (American Society of Pension Professionals & Actuaries)

[Opinion] Tide May Be Turning Against Practice of Divesting Pension Funds from Terrorist States
Excerpt: "These well-intended political initiatives are a festering sore for pension funds. They force public trustees to violate their duty of loyalty and put political interests ahead of the sole interest of their beneficiaries. At minimum, divestment laws impose administrative headaches and financial losses on pension plans -- losses that are not reimbursed by legislatures. At worst, they seriously impair investment returns and impose costs on future generations who will be forced to pick up the tab for investment underperformance." (

[Opinion] How We Got Into This Pension Mess
Excerpt: "I am here to recommend to you the book 'Pension Dumping.' It is a very good summary of how we got into the mess we in today with respect to Defined Benefit [DB] pension plans. Now, much of the rest of this review will quibble with some aspects of the book, but that does not change my view that for those interested in the topic, and aren't experts now, they will learn a lot from the book. The author, Fran Hawthorne, has crammed a lot of useful information into 210 pages." (Seeking Alpha)

[Opinion] 401(k) Fees and Participant Education
Excerpt: "The issue that seems to loom largest in the minds of those paying attention is the requirement that all service providers break down their charges into four specific categories: administrative fees, investment management fees, transaction fees, and other fees." (; free registration required)

[Opinion] 'Bad Boy' Clauses Aren't Passe After All - But Sometimes It Takes a Judge to Do the Right Thing
Excerpt: "ERISA's prohibition against bad boy clauses generally precluded a court being able to order the retirement plan to pay out a participant's benefits to a third party as restitution, even for a crime committed against the employer. But what if a crime was committed against the plan? Under these circumstances the Department of Labor or a Federal court could order the Plan Administrator to offset the plan's losses against the participant's account." (The Retirement Plan Blog)

[Opinion] Who Needs Retirement Savings When You Can Bail Out Lenders?
Excerpt: "Rep. John Shadegg, R-Ariz., has a fascinating plan (HR5776, the 'Homeowner Empowerment Act') which he claims will help homeowners facing foreclosure. Fascinating not because it might help homeowners (of course not), but for what it says about Shadegg's priorities. Under the proposal, homeowners could use IRAs or pensions to pay mortgages." (East Valley Tribune)

Sponsored by: DATAIR Employee Benefit Systems, Inc.

(Click on company name or banner to learn more.)
Banner ad for DATAIR Employee Benefit Systems, Inc.

DC/401(k) Administration Software from DATAIR

DATAIR’s Defined Contribution System for Valuations, Discrimination Testing, and Proposals. Handles New Comparability Plans, Sole Proprietorships, 401(k) and 403(b) plans. Live, expert support.

DATAIR’s DC/401(k) System includes

  • Download links to many allocated account fund providers
  • Automated loan processing
  • Flexible data import/export
  • Interface with DATAIR’s 5500/1099R system.
Contact or call 1-888-328-2474 (1-888-DATAIR-4)

(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

Federal Banking Official Sees End of Pensions Within Years
Excerpt: "Speaking at the Association of BellTel Retirees annual meeting . . ., Thomas J. Mackell, Jr., chairman of the board of directors for the Federal Reserve Bank of Richmond, Va., warned that pension plans once taken for granted are evaporating and will disappear, along with affordable access to health insurance -- leaving tens of millions of retirees vulnerable, destitute, hungry, sick and willing to take matters into their own hands." (Worcester Telegram & Gazette Corp.)

When the Company Share Price Is a Factor in Compensation
Excerpt: "[47] percent of private sector employees in the United States have had at least part of their compensation tied to their company's profitability or stock price. That's right. If you include stock options, deferred stock, profit sharing or cash bonuses pegged to a company's performance, nearly half of the 114 million employees of private-sector companies had some stock or profit-related pay at the end of 2006." (The New York Times; free registration required)

High Court Hears Benefits Conflict-of-Interest Case
Excerpt: "The Supreme Court will decide whether a benefit plan administrator that both determines and pays benefits operates under a conflict of interest that must be considered by courts reviewing benefits cases." (Workforce Management; free registration required)

Telecommuting: Ten Legal Considerations
Excerpt: "Before permitting employees to telecommute, employers should consider the ten legal issues outlined [in the target page]. Employers are also well-advised to develop a written telecommuter agreement advising telecommuting employees of their responsibilities and requiring them to commit to certain performance band behavioral expectations." (Troutman Sanders LLP)

Biotech Executives Learn About Value-Based Benefits and Employee Health and Workforce Productivity
Excerpt: "Attendees at BayBio2008 learned about value-based benefits, one of today's fastest growing trends in the health care and biotech industries. At the core of a value-based approach is the concept that benefits should be viewed as a corporate investment rather than as an expense. Organizations with this mindset are in a better position to offer programs that enhance employee health and productivity, which ultimately positively impact company success." (Business Wire via NewsEdge via Human Resource Executive Online)

Three Small to Midsize Businesses Show That Size Doesn't Matter in the Growing Trend to Embrace Work-Life Flexibility
Excerpt: "Flexibility is the way business gets done,' says Karen Kerrigan, President and CEO of Women Entrepreneurs, Inc. and moderator of recent panel about flexible work options sponsored by the Department of Labor. The panel featured three small to midsize businesses (SMBs) in a variety of industries across the United States. Each panelist shared their own unique take on finding an appropriate work-life balance - proving that for even the smallest of businesses, a flexible workplace is possible without stretching companies to their limits of patience and resources." (Employee Benefit News; free registration required)

GASB Revamps 2008 Technical Plan
Excerpt: "The Governmental Accounting Standards Board (GASB) has added three projects to its current agenda -- including a review of existing postemployment benefits standards." (; free registration required)

IRS Updates 2007-2008 Priority Guidance Plan
Excerpt: "The updated 2007-2008 Priority Guidance Plan lists regulations and other guidance still under development. It also adds new items and indicates which items have already been published. Here are some of the significant projects affecting 401(k) plans and health plans that are listed as outstanding in the updated Priority Guidance Plan . . . ." (Employee Benefits Institute of America)

Newly Posted Events
(Post Yours!)

2008 NCCMP Annual Conference
in Florida on September 20, 2008
presented by National Coordinating Committee for Multiemployer Plans

Form 5500 for Health and Welfare Plans: A Guided Tour for Employers, Form 5500 Preparers, and Advisors
Nationwide on May 15, 2008
presented by Employee Benefits Institute of America (EBIA)/Thomson Tax & Accounting

HIPAA and Other Health Benefits Laws Compliance Assistance Seminar
Nationwide on May 14, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Prescription for Change: The Employer’s Role in Healing the Health Care System Webcast
Nationwide on May 8, 2008
presented by International Foundation of Employee Benefit Plans

Wellness Programs in the Workplace: What’s Allowed, What Isn’t, and What Designs Work Best?
Nationwide on April 17, 2008
presented by Employee Benefits Institute of America (EBIA)/Thomson Tax & Accounting

Newly Posted Press Releases
(Post Yours!)

70% of Responding Organizations Provide Retirement or Financial Planning Education to Employees
International Foundation of Employee Benefit Plans

Benefit Informatics Selected by Diversified Group Brokerage to Expand Client Data Analysis, Reporting and Communications
Benefit Informatics

Barbara Johnson assumes role of Managing Director at Atéssa Benefits, Inc.
Atéssa Benefits, Inc.

We're one of the top 350 employment sites on the web!Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs | RSS feed for jobs RSS Feed )

DC/DB Project Support Analyst
for New York Life Retirement Plan Services
in MA

Retirement Plans Service Center Supervisor
for New York Life Retirement Plan Services
in MA

Wachovia Retirement Services Relationship Manager I
for Wachovia
in PA

Senior Plan Consultant
for July Business Services
in TX

Implementation Services Manager
for Citi
in FL

PSC Manager
for Citi
in ME

Retirement Services Education & Enrollment Specialist
for Prudential Financial
in CT

Marketing Representative
for Retirement Benefit Solutions, LLC
in VA

Pension Administrator
for Retirement Benefit Solutions, LLC
in VA

Handy Links:

Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too!

Sign-up form is at (free).

This newsletter is sent to you each workday except federal holidays.

This email has been published by:, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

David Rhett Baker, J.D., Editor

Copyright 2008, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.

Anyone can receive these emails; just have them sign up at this web page:

Other useful links: