Retirement Plans

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

Sort by date
Sort by closest match

April 29, 2008

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

Today's sponsor is DATAIR Employee Benefit Systems, Inc.

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

5500 / PBGC / 1099-R / 5300 / FAS 158 Software from DATAIR

DATAIR Pension Reporter System. Easy to use and economical for electronic and paper filing with instant access to forms and instructions. Live, expert support included. Choose from 4 modules:
  • Annual Reporting Series: EFAST 5500-series, PBGC Premium-series, SAR, and 5500 electronic filing;
  • 1099-R Series: 1099-R and related forms, 945/945-A, and 1099 electronic filing;
  • Qualification & Termination: 5300/5310-series and PBGC 500/600-series forms.
  • FAS 132/158: Audit Letter, Worksheets, Schedules
Contact or call 1-888-DATAIR-4 (1-888-324-2474)

[Official Guidance] EBSA Field Assistance Bulletin 2008-03: Guidance Regarding Qualified Default Investment Alternatives
22 Q&As. Excerpt: "Since publication of the QDIA regulation, a number of issues have been raised concerning the scope and meaning of various provisions of the QDIA regulation. This Bulletin is intended to supplement the QDIA regulation by providing guidance, in a question and answer format, on a number of the most frequently asked questions." (Employee Benefits Security Administration, U.S. Department of Labor)

[Official Guidance] Text of Amendments to Final EBSA Regs on QDIAs (Default Investment Alternatives Under Participant Directed Individual Account Plans) (PDF)
8 pages; to be published in the April 29, 2008 Federal Register. Excerpt: "The Department published in the Federal Register of October 24, 2007 . . . a final regulation providing relief from certain fiduciary responsibilities for fiduciaries of participant directed individual account plans who, in the absence of directions from a participant, invest the participant's account in a qualified default investment alternative . . . . The Department has determined that two paragraphs in the final regulation, and one statement in the Supplementary Information, require correction. Accordingly, this document corrects the final regulation by revising these paragraphs." (Employee Benefits Security Administration, U.S. Department of Labor)

[Official Guidance] 'Fact Sheet' from EBSA on Rules for Qualified Default Investment Alternatives
Excerpt: "The final regulation provides the following conditions that must be satisfied in order to obtain safe harbor relief from fiduciary liability for investment outcomes: . . ." (Employee Benefits Security Administration, U.S. Department of Labor)

[Guidance Overview] Final 403(b) Regulations Make 2008 a Key Planning Year
Excerpt: "This article focuses on a number of significant changes and trends reflected in the final §403(b) regulations and related guidance that impact plan design and implementation decisions that should be made in 2008." (Groom Law Group)

[Guidance Overview] A Brief Look at Investment Advice Within Your Defined Contribution Plan (PDF)
2 pages. Excerpt: "Plan sponsors now have the ability to provide participants in their defined contribution plans an advisory service which will assist participants in the selection of investments within the plan. In addition, these services can provide Managed Accounts which will create diversified investment portfolios and rebalance them over the course of the participant's life. Furthermore, the uncertainty of liability on the part of plans sponsors for the advice of this service appears to have been settled in a manner that should put plan sponsors' fears to rest." (National Association of Government Defined Contribution Administrators)

[Guidance Overview] 403(b) Plans Frequently Asked Questions
Excerpt: "Are distributions from 403(b) allowed after termination of employment as early as age 55 without additional penalty? Taxable, but no early withdrawal penalty? Yes. IRC Section 72(t) allows a distribution after termination of employment after age 55 without being subject to the 10% early withdrawal penalty. For this purpose, severance from employment may occur anytime during the calendar year in which the participant attains age 55." (National Association of Government Defined Contribution Administrators)

Plan to Open Up CalPERS Reflects Worry About Inadequate Saving for Retirement
Excerpt: "The California plan, with direct deposit and the lower costs that likely will go with using CalPERS resources, takes a stab at making it easier to invest. But will workers take a bite? Probably not, said Mark Iwry, a senior fellow with the Brookings Institution and an expert on retirement savings. He helped craft the California plan and similar proposals in Connecticut and Washington state. 'If we got half, even a third, even a million of the 6 million Californians (without a retirement plan) to do this, it would be a breakthrough,' Iwry said. 'But will everyone sign up? No.'" (The Sacramento Bee)

Why You Shouldn't Retire Early
Excerpt: "Retiring early will also limit your Social Security check and pension benefits. You can visit this calculator at the Social Security website to estimate your benefit -- and how it changes depending on when you retire. Delaying your retirement a few years might make a material difference in the money you have available for all of those daydreams." (The Motley Fool)

Bank of America Research Reveals the Affluent Are Ready for Retirement
Excerpt: "Many affluent Americans are addressing economic uncertainty by modifying expenses in the short term, and maintaining retirement investing for the long term, according to new research from Bank of America." (Investment Advisor)

The Teamsters Central States, Southeast and Southwest Areas Pension Fund, Rosemont, in 'Critical Status'
Excerpt: "Central States officials informed the Treasury Department that the plan 'has funding or liquidity problems, or both,' Thomas C. Nyhan, the fund's executive director, said in a notice to participants. The Internal Revenue Service, which is under Treasury, administers plan funding rules. Under a 'rehabilitation plan,' the fund plans to eliminate early retirement benefits, disability benefits and other so-called adjustable benefits for participants who work for employers in the multiemployer fund that have not agreed to a recent 8% annual increase in contributions, Mr. Nyhan said in the notice. The law allows for such changes of a pension plan in critical status, he added." (Pensions & Investments)

Los Angeles Pension-Payment Delay Plan Called Accounting Gimmick
Excerpt: "Delaying that payment would cost taxpayers more than $15 million in penalties, according to a document issued Friday by the city's top budget analyst. By 2013 -- which could be Villaraigosa's eighth and final year as mayor, should he win a second term -- the rearranged payment schedule would have cost the city $85 million, a sum larger than the payment being delayed this year." (Los Angeles Times)

Savvy Spending Safeguards Savings
Excerpt: "With recession fears mounting, more Americans are cutting back on spending in order to save money. Spending wisely or not spending as much ranks second as a savings strategy, only behind interest-bearing accounts, in a new poll from the American Institute of Certified Public Accountants." (Employee Benefit Adviser; free registration required)

Pitfalls of Working Past Retirement Age
Excerpt: "[W]orkers with defined-benefit pensions and those who already have tapped Social Security benefits might not realize is that there are significant financial disincentives that make working into retirement age a tricky proposition." (The Wall Street Journal)

Sponsors and Service Providers Urge Modification of Proposed Fee Disclosure Regs
Excerpt: "Proposed regulations on retirement plan fee disclosures should be modified and clarified before being finalized and the effective date delayed, according to hearing testimony by representatives of associations of plan sponsors, retirement plan professionals and service providers. The hearing was held on March 31, 2008 at the Labor Department in Washington, D.C." (Wolters Kluwer)

Federal Thrift Savings Plan Places Limit on Participant Interfund Transfers
Excerpt: "A rule posted in the Federal Register for April 24 says the plan's interfund transfer regulations have been amended to limit the number of interfund transfer requests to two per calendar month. Additional interfund transfers can be made only into the Government Securities Investment (G) Fund until the first day of the next calendar month, the rule says." (; free registration required)

401(k) Plans Are Being Retooled to Function Like a Pension Plan
Excerpt: "[F]inancial services firms are offering a wide and growing array of innovative new investment options for use within 401(k) plans. In doing so, they promise to give the 401(k) plan new life as both a retirement savings vehicle and a retirement income generator. Prudential's solution takes the form of a suite of five 'Prudential IncomeFlex Funds' that it debuted in December 2006. Targeted to investors 50 and older, the funds are designed to function both as a savings vehicle while the participant is working and an income vehicle once they stop working." (The Wall Street Journal)

COLA Calculation Making a Big Difference to Ft. Worth, Texas, Pension System
Excerpt: "The shortfall in the Fort Worth, Texas, municipal pension system dropped from $410 million in 2007 to $237.5 million at the beginning of 2008 -- a decrease of 42%. According to the Fort Worth Star-Telegram a report issued by an actuarial firm showed that the shortfall decreased in large part because the City Council changed the way cost-of-living adjustments are calculated. The cost-of-living change was cited as the reason for more than half the reduction in the shortfall." (; free registration required)

Most Employers Opt for Retirement Planning Initiatives, According to Survey
Excerpt: "Three-quarters of employers in a recent survey said they offer retirement or financial planning to their employees or savings plan participants. A news release from the International Foundation of Employee Benefit Plans said its survey was designed to find out about the types and formats of financial education as well as their availability and eligibility requirements." (; free registration required)

Plan Sponsors Are Increasing Attention to Investment Decisions, According to Survey
Excerpt: "A recent survey by Grant Thornton International Ltd. has found a heightened focus by plan sponsors on investment decision making and monitoring. In a press release, Grant Thornton said plan sponsors have determined an Investment Policy Statement (IPS) is critical to decision making by retirement plan investment committees. Eighty-two percent of sponsors surveyed said they have an IPS in place." (; free registration required)

Women Have Retirement Funding Fears
Excerpt: "A new survey finds that 32% of women and/or their partners are counting on a company pension for retirement income, particularly Baby Boomer women (42%). A news release said the survey of more than 3,000 women sponsored by Meredith Corporation and NBC Universal also found 52% of women and/or their partners are counting on personal savings/investments for their retirement. Three quarters of respondents said they are concerned about their ability save enough for retirement, while 77% said they are concerned about the future of Social Security." (; free registration required)

More Companies Offer Roth 401(k)s, But Complexity Remains a Concern
Excerpt: "Roughly 22% of corporations now offer a Roth 401(k) option to their workers, up from 12% last year, according to a survey from accounting firm Grant Thornton, which, along with Plan Sponsor Advisors and law firm Drinker Biddle, polled chief financial officers and human resources executives at nearly 200 companies." (Financial Week; free registration required)

Principal IRA Rollover Suit Could Blaze New Territory
Excerpt: "A lawsuit by former 401(k) participants against the Principal Financial Group appears poised to make new law. The lawsuit is over allegations that the company duped participants into IRA rollovers into Principal's proprietary mutual funds." (planadviser)

Sponsored by: BLAZE SSI Corp.

(Click on company name or banner to learn more.)
Banner ad for BLAZE SSI Corp.

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 IRC401(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

Why Riskier Companies Grant More Employee Stock Options
Excerpt: "This paper documents that riskier firms grant more options to non-executive employees using a large panel of US firms from 1992 to 2005. These results are not explained by factors on the industry level. A simple model in which a risk-neutral firm and an employee with cumulative prospect theory preferences bargain over the employee's pay package can provide an explanation for this otherwise puzzling behavior." (Social Science Research Network)

Worker Misclassification - Creating Employee Benefit Problems
Excerpt: "In addition to the problems of having insurance coverage defeated based upon 'employee' definitions, inadvertently promising benefits to those you did not intend, and jeopardizing the qualified status of your retirement plans, there is a another significant issue - ERISA preemption may not be available as a defense to claims brought by independent contractors." (Health Plan Law blog by Attorney Roy F. Harmon III)

Multicultural Marketing of Employee Benefits (PDF)
12 pages. Excerpt: "This article examines how cultural studies that explore the way different demographic groups tend to approach issues of health, wealth, and career have important implications for the design, development, and delivery of HR products and services." (Hewitt Associates)

[Opinion] Pay Gap Fuels Worker Anger
Excerpt: "The gap between top executive and employee compensation has never been greater. That's triggering lower morale and productivity on some corporate staffs, and making it more difficult to attract and keep talent, even in a slowing economy." (The Wall Street Journal)

Newly Posted Events
(Post Yours!)

2009 Health and Welfare Planning: What Should Employers Be Doing Now?
Nationwide on May 14, 2008
presented by Kilpatrick Stockton LLP

Health on the Hill Audio Report
Nationwide on April 30, 2008
presented by Kaiser Family Foundation

Loans to Participants and Beneficiaries
Nationwide on July 9, 2008
presented by Qualified Pension Consulting, Inc.

QOSA: The QJSA Alternative
Nationwide on July 23, 2008
presented by Qualified Pension Consulting, Inc.

The Final 415 Regs: Not Just for Defined Benefit Plans
Nationwide on June 4, 2008
presented by Qualified Pension Consulting, Inc.

Newly Posted Press Releases
(Post Yours!)

U.S. Department of Labor Issues Guidance and Technical Corrections to Default Investment Alternatives Regulation
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

EBRI Resources on Covering the Uninsured
Employee Benefit Research Institute (EBRI)

The ESOP Association Applauds Introduction of Resolution Supporting Employee Ownership through ESOPs by Congressmen Maurice Hinchey and Dana Rohrabacher
ESOP Association

John Hancock Retirement Plan Services Launches New 'Forum Coach' Training Program for TPAs
John Hancock Retirement Plan Services

Fiduciary360's Enhanced Analytical And Reporting Software Lets Users Create Highly Customized Due Diligence Reports
Fiduciary360 (fi360)

Benefit Funding Services Group, LLC Is Certified For Fiduciary Excellence
Centre for Fiduciary Excellence (CEFEX)

American Pensions Inc. Is Certified For Fiduciary And Recordkeeping Excellence
Centre for Fiduciary Excellence (CEFEX)

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 )

Retirement Plan Administrator
for Limestone Pension Associates, LLC
in DE

Processing Specialist
for Citi
in ME

Retirement Plan Administrator
for Lebenson Actuarial Services
in NV

Defined Contribution --401(k) Administrator
for Third Party Defined Contribution Administrator
in OH

Employee Benefits Paralegal
for Armington Recruiting LLC
in PA

Sales Consultant
for Diversified Investment Advisors
in CA

Plan Administrator/Trust Accountant
for Thomas F. Barrett, Inc.
in DC, MD, VA

401(k) Administrator
for Sunwest Pensions
in AZ

Team Support Specialist
for Virchow, Krause & Company, LLP
in MN

Retirement Plan Consultant
for Virchow, Krause & Company, LLP
in WI

Compliance Specialist -Year End Services
for Ascensus
in MN, PA

401(k) Client Service Associate
for Ascensus
in MN, PA

DC / 401(k) Administrator
for TPA Company in Oklahoma City Metro Area
in OK

Defined Contribution Team Manager/401K Plan Administrator
for National Life Group
in VT

Retirement Plan Specialist (Part-Time)
for Diversified Investment Advisors
in FL

Retirement Plan Specialist (Part-Time)
for Diversified Investment Advisors
in IN

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: