Retirement Plans

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May 6, 2008

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

Today's sponsor is ASC & The ASC Institute

(Click on company name or banner to learn more.)
Banner ad for ASC & The ASC Institute

Let ASCi be your 403(b) tax-sheltered annuity plan document solution!

The IRS now requires that every employer with a 403(b) tax-sheltered annuity plan must have a written plan document in place by December 31, 2008. Whether you maintain thousands or just a few 403(b) plans, the ASCi Document Generation and Management (DGEM) system can help you manage these plans efficiently and easily.
Click here to learn more about how DGEM can help you meet the IRS requirements.

[Guidance Overview] Former Participants Have Standing to Pursue Equitable, But Not Legal Remedies With Respect to IRA Rollovers (PDF)
2 pages. Excerpt: "Plaintiffs are former participants in 401(k) plans, who allege that in rolling over their plan accounts to IRAs, defendants violated ERISA. On April, 21 2008, a federal judge in Iowa ruled that former participants in a 401(k) plan lacked standing to pursue legal remedies under ERISA, despite the Supreme Court's recent ruling in LaRue v. DeWolff, Boberg & Assoc., Inc., 128 S. Ct. 1020 (2008), but held that standing was proper to pursue equitable relief under ERISA. Young v. Principal Financial Group, Inc., S.D. Iowa., No. 4:07-cv-386." (Sutherland Asbill & Brennan LLP)

[Guidance Overview] DOL Corrects and Supplements Final Regulations on QDIAs
Excerpt: "EBIA Comment: The technical corrections to the final regulations and the FAB clarify many issues that the regulations raised. The FAB's references to future guidance, though, remind us that these rules may evolve further as plan sponsors and the DOL acquire more experience with their operation. That evolution, and the close connection between the DOL's QDIA rules and the IRS's rules on automatic contribution arrangements, will require plan sponsors to continue monitoring developments in this area in order to maximize the available fiduciary relief." (Employee Benefits Institute of America)

[Guidance Overview] DOL Clarifies QDIA Notice Requirements
Excerpt: "FAB 2008-3 addresses other issues as well, but leaves many other questions unresolved. It is not clear at this time whether we can expect additional guidance from the Department on QDIAs, or if this FAB is as much as we will get. In either case, plan sponsors would be well advised, IMO, to carefully review the FAB to be sure they are complying with the QDIA regulations." (Baker & Daniels)

Is Your Plan Investment Menu Boxed In?
Excerpt: "If an investment committee for a participant-directed 403(b) is doing its job, the investment policy statement (IPS) serves as a road map for selecting and monitoring investments offered to plan participants." (; free registration required)

Being There, as an Advisor, for the Five Phases of Retirement
Excerpt: "Retirement is a moving target that defies a singular definition because it will be different for each client. However, planning for this event occurs continuously throughout the client's financial life-cycle and usually has five phases. It's your job as an advisor to make sure that you are there -- and active -- during all of these phases." (Advisor Today)

Why Does Funding Status Vary Among State and Local Plans? (PDF)
12 pages. Excerpt: "Some factors expected to affect the funding status of state and local pension plans include funding discipline, governance, general plan characteristics, and the overall fiscal health of the government. Indeed, variables in each of these categories are found to have significant impacts on plans' funding ratios. Identifying the factors that affect the ratio of assets to liabilities is only the first step in understanding the funding process. The key issue is whether the sponsor has a funding plan and is sticking to it. A future brief will explore the factors that affect the sponsor's decision to make annual required pension contributions." (Center for Retirement Research at Boston College)

Australia's Superannuation Changes to Go Into Effect
Excerpt: "As of July 1, 2008, all employers must provide superannuation support of at least 9 percent per employee's 'notional earnings base.' In addition, all superannuation funds must provide a minimum level of death insurance to members who have joined it by default. Although employers have been preparing to meet these requirements for some time, many are taking another look at their plans now that the deadline is drawing near." (Watson Wyatt Worldwide)

Report of the Working Group on Participant Benefit Statements
Excerpt: "The 2007 ERISA Advisory Council formed a Working Group on Participant Benefit Statements [to study] legislative requirements and to make recommendations to the DOL regarding the required content, form and timing of the benefit statements. Testimony to the Working Group was provided on July 12, 2007, and September 18, 2007 by 13 speakers, representing plan sponsors (both single employer and multi-employer), third party administrators, investment advisors, organizations representing participants and beneficiaries, and actuaries and other service providers." (U.S. Employee Benefits Security Administration)

Report of the Working Group on Fiduciary Responsibilities and Revenue Sharing Practices
Excerpt: "The 2007 ERISA Advisory Council formed the Working Group on Fiduciary Responsibilities and Revenue Sharing Practices . . . to study numerous issues as to fiduciary responsibilities arising from the enactment of the Pension Protection Act ('PPA'), as well as to address issues relative to the practice of revenue sharing which has become a common practice used to offset plan expenses with respect to defined contribution 401(k) plans. The desired result of the Working Group was to discover and present matters that would enhance the ability of fiduciaries to fulfill their responsibilities under ERISA, to develop criteria in the area of disclosure to participants and otherwise to satisfy the objectives of ERISA." (U.S. Employee Benefits Security Administration)

Report of the Working Group on Financial Literacy of Plan Participants and the Role of the Employer
Excerpt: "The 2007 ERISA Advisory Council formed a Working Group on Financial Literacy of Plan Participants (hereinafter referred to as the 'Working Group') to study numerous issues in increasing the financial decision-making skills of plan participants. The desired result of the Working Group was to discover and present matters that would enhance the ability of plan participants to manage assets throughout their financial life cycle." (U.S. Employee Benefits Security Administration)

The 403(b) Market
Excerpt: "[The] chart illustrates the distribution of investments in the 403(b) market as of December 31st of each year. The numbers represent billions of dollars invested." (Spectrem Group via bWise Guys, LLC)

Implementation of 'ad hoc COLA' Aids in Shortfall Reduction for Fort Worth Pension Fund
Excerpt: "The long-troubled Fort Worth city employees' pension fund isn't so troubled anymore. A new report by the Gabriel Roeder Smith & Co. actuarial firm shows that the fund's long-term funding shortfall has decreased from $410.7 million to $237.5 million -- a pleasing 42.7 percent drop. As of Jan. 1, it is estimated that the shortfall will be eliminated in slightly less than 14 years. The fund no longer is projected to have a perpetual shortfall, as was the case in recent years." (

Sprint Sued for Fiduciary Breach over Company Stock
Excerpt: "A participant in the Sprint Retirement Savings Plan of Sprint Nextel Corporation has sued the company and other plan fiduciaries for continuing to offer company stock as a plan investment." (; free registration required)

Unpaid Contributions Constitutes ERISA Theft
Excerpt: "The 4th U.S. Circuit Court of Appeals has affirmed the conviction of two retirement plan administrators for Employee Retirement Income Security Act (ERISA) theft due to unpaid plan contributions." (; free registration required)

Proposed Regs Require Full Disclosure of 401(k) Fees
Excerpt: "If adopted, the regulations should allow plan sponsors to better determine whether fees paid to service providers are reasonable. Plans sponsors will be able to compare fees among competing providers. Today, it's difficult for most plan sponsors to understand the amount and manner in which fees are paid. There is a sense by Labor officials and others that fees can be excessive. Part of this is due to the fact fees are often not fully disclosed, and the lack of knowledge breeds suspicion." (Charlotte Business Journal via; free registration required)

May 5 Was 'Retirement Plan Selection Day' for W.Va. School Employees
Excerpt: "Members of the state's Teachers' Defined Contribution Retirement System have been receiving information booklets and personal retirement reports to estimate retirement benefits under the plan, as well as information on the State Teachers Retirement System. This information has been provided to members so they can make an informed choice on continuing with the Teachers' Defined Contribution (TDC) or requesting a transfer to the Teacher's Retirement System." (The Herald-Dispatch)

Newly Posted Events
(Post Yours!)

Default Investments in 401(k) Plans: Lessons Learned
Nationwide on June 2, 2008
presented by ABA Joint Committee on Employee Benefits

Getting It Right: Know Your Fiduciary Responsibilities -- Free Compliance Assistance Seminar
in Colorado on June 10, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Newly Posted Press Releases
(Post Yours!)

U.S. Labor Department Team Receives First Annual Citizen Service Award
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Secretary Paulson Names Leadership for President’s Advisory Council on Financial Literacy
U.S. Department of Treasury

NBCH’s Community Coalitions Health Institute Receives CDC Grant
National Business Coalition on Health

Gilreath to Lead ING Employee Benefits Business
ING Group

Integrated Benefits Institute Releases Research on True Cost of Absence for Employers
Integrated Benefits Institute

More Women Than Men Lack Confidence in Preparing for Retirement
Wachovia Corporation

Mercer Urges Changes to FASB Disclosure Proposal for Retirement Plan Assets

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DC Plan Administrator
for Campbell Albrecht
in CA

Legal / Compliance Specialist
for Beneco, Inc.
in AZ

ERISA Associate
for Archer, Byington, Glennon & Levine, LLP
in NY

Retirement Plan Administrator
for Fred S. Shapiro & Associates, Inc.
in MD

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

Retirement Plan Analyst
for BeneTrends, Inc.
in PA

Benefits Specialist
for Saks Fifth Avenue
in NY

Attorney - Health & Benefits
for Mercer
in IA, IL, MI, MN, MO

Director of Benefits
for AAA Mid-Atlantic
in DE

Mutual Fund Analyst
for Kravitz, Davis, Sansone
in CA

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