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May 19, 2008

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

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[Guidance Overview] Contribution Shortfall Under Municipal Pension Plan Was Not Covered by Insurance
Excerpt: "In a suit for declaratory judgment, an insurance company contended that it had no duty to defend its insured, a municipality, against a suit by firefighters claiming that the municipality had, for decades, shortchanged its pension fund." (Cypen & Cypen)

[Guidance Overview] The Intricate Web of Plan Amendments Explained
Excerpt: "The three main categories of plan amendments that employers need to be aware of are generally described as follows: . . . ." (White & Case LLP)

[Guidance Overview] Department of Labor Issues QDIA Guidance
Excerpt: "Despite a fulsome notice-and-comment period in which much of the regulatory community participated, many interpretative and practical questions about the regulation have persisted. Although the Department appears to have touched on several of the most common issues, this newest guidance did not put to rest all of the interpretative questions related, and may have even created new ones." (Baker & Daniels LLP)

Analysis of Social Security Trustees' Report (PDF)
8 pages. Excerpt: "The findings in the 2008 Social Security trustee's report demonstrate the need for timely and effective action to make Social Security solvent and sustainable, says an Academy issue brief." (American Academy of Actuaries)

Obama Warns Seniors on Social Security Reform Proposals
Excerpt: "Hours before being greeted by the biggest crowd of his campaign, Democrat Barack Obama quietly told a small group of seniors Sunday that Republican John McCain would threaten the Social Security they depend on because he supports privatizing the program." (New York Times)

New York State Assembly Halts Bills With Analysis by Union-Paid Actuary
Excerpt: "The State Assembly will halt action on all legislation that relied on the financial analyses of an actuary who was being paid by labor unions, and the bills will undergo new reviews, the Assembly speaker . . . said on Friday. . . . To critics of the Legislature, [the actuary's] role in analyzing the pension legislation underscored what they perceived as the lawmakers' overly cozy relationship with labor." (New York Times)

In New Hampshire, Retirement Reform Hurdles Remain
Excerpt: "The House version would require new police and firefighters to work 25 years, instead of the existing 20, and retire at 50, instead of 45, to be eligible for full benefits. The Senate version makes no such changes." (Union Leader)

Obama's Remarks on Retirement Security
Excerpt: "Here's my plan. Right now, the Social Security payroll tax only applies to the first $102,000 a worker makes. I think the best way forward is to adjust the cap on the payroll tax so that people like me pay a little bit more and people in need are protected. " (RealClearPolitics)

Safe Ways to Spend Your Nest Egg
Excerpt: "But I think another reason those of us lucky enough to have accumulated retirement savings are reluctant to draw it down is fear of not doing it right. The looming concern for many who have only retirement savings and Social Security is outliving the savings. The prospect of a reduced standard of living toward the end of our lives is a real concern . . . ." (Washington Post; free registration required)

Characteristics and Efficiency of 401(k) Investment Menus
Excerpt: "This paper assesses the efficiency and performance of 401(k) investment options offered by a large group of US employers. We show that the majority of plans is efficient compared to market benchmark indexes. Three performance measures underscore the fact that these plans tend to offer a sensible investment menu . . . ." (University of Michigan Retirement Research Center)

U.S. House Committee Aims to Improve Thrift Savings Program
Excerpt: "Chairman Waxman, Subcommittee Chairman Danny Davis, and Ranking Member Tom Davis requested comments from the Chairman of the Federal Retirement Thrift Investment Board on legislation the Committee is considering to strengthen the federal Thrift Savings Program." (U.S. House of Representatives, Committee on Oversight and Government Reform)

Lawsuit Claims Fraud in West Virginia Teacher 403(b) Plan
Excerpt: "The lawsuit targets an investment option known as a VALIC annuity that was offered to enrollees in the Teachers' Defined Contribution plan. The plan allows members to manage investments to generate future retirement benefits. Enrollees claim they were duped into selecting the VALIC annuity." (

[Opinion] Effective 401(k) Fee Reform Needs Plain And Simple Disclosures
Excerpt: "Congress can change the rules on 401(k) fee disclosure, but until consumers start reading more information and employers know how to supply it, the effort is akin to putting a bow on a pig and saying it's the Easter Bunny. It's not going to deliver the goods." (MarketWatch)

[Opinion] The Questions Candidates Should Answer About Social Security Reform (PDF)
Excerpt: "This guide has been written by the American Academy of Actuaries' Social Insurance Committee for the general public, including journalists, policymakers, and citizens to use as they evaluate candidates' proposals during the 2008 election cycle. The Academy is a nonpartisan, non-profit organization of actuarial professionals. While the Social Insurance Committee does not specifically endorse or oppose any of the reforms discussed in this guide, the committee strongly believes that Congress and the administration must take action to reform Social Security, and that action is needed sooner rather than later." (American Academy of Actuaries)

[Opinion] Many Sides to New York State Pension Debate Over Lawyers' Participation in Plans
Excerpt: "Lawyers are finally defending themselves as to whether they deserve pension credits in the coveted state retirement system. It's about time." (Marv Cermak on

[Opinion] Wrongdoing Involving Securities Brokerages, Pension Consultants
Excerpt: "Why, if total 401k plan costs are disclosed already (which they aren't), is the mutual fund industry so opposed to disclosing revenue sharing? What could investors learn from the disclosure of revenue sharing that is of such concern to the mutual industry? Anything? The answer is a lot and the regulators and legislators in Washington who are allowing the industry to shape the debate are missing the point. Here's the real story: . . . ." (

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DOL Speaks: The 2008 Employee Benefits Conference

Do you represent plan sponsors, participants or possible both in today’s retirement marketplace? If so, join colleagues and employees from the Department of Labor at this unique event designed to facilitate the open discussion of employee benefit issues facing our industry today. With its focus on current topics such as QDIA’s, Investment Advice and Participant Disclosure, you do not want to miss your opportunity to be a part of this once a year collaborative event. Get additional information or register now.

(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

[Opinion] U.S. House of Representative Committee Again Approves Restrictions on Offshore Nonqualified Deferred Compensation
Excerpt: "This week, the House Ways and Means Committee approved legislation extending corporate tax breaks for one year and paying for them by, among other things, imposing limits on offshore nonqualified deferred compensation. Although the provisions are aimed at hedge funds in low tax countries, the Energy and Tax Incentives Act of 2008 (H.R. 6049) would arguably treat stock appreciation rights, restricted stock units and other performance-based compensation as nonqualified deferred compensation under section 409A of the tax code" (HR Policy Association)

[Opinion] NCCMP Comments to DOL Proposed Regulation on Form T-1 (PDF)
33 pages. Excerpt: "[The] latest effort to establish a Form T-1, in large part, fails to take into account the predominant role of ERISA in establishing rigorous reporting and disclosure requirements on all employee benefit plans. More troubling still, the [Notice of Proposed Rulemaking, or 'NPRM'] exhibits little understanding of the body of employee benefits law that has developed since 1974 that has drastically altered the regulatory framework governing employee benefit plans. Finally, nowhere in the NPRM will one find any analysis that would indicate a nexus between the financial affairs of ERISA plans and circumvention or evasion of reporting requirements under the LMRDA." (National Coordinating Committee for Multiemployer Plans)

[Opinion] Updated American Benefits Council Talking Points on the Offshore Nonqualified Deferred Compensation Provision (PDF)
Excerpt: "This provision should be rejected for the following reasons . . . It is extremely broad and would apply to non-abusive compensation practices. . . . It targets equity compensation. . . .It targets performance-based compensation. . . . It would create great uncertainty and would be virtually impossible to administer. . . . It is retroactive." (American Benefits Council)

[Guidance Overview] California Supreme Court Rules to Allow Same-Sex Marriage: Decision Could Lead to Constitutional Issues
Excerpt: "By elevating se.xual orientation to a constitutionally protected classification like race or religion, the ruling raises the potential for state constitutional challenges to various government programs and policies and to certain private actions." (Ballard Spahr Andrews & Ingersoll, LLP)

[Guidance Overview] DOL Seeks More Union Disclosure
Excerpt: "The proposed financial regulations would require unions to itemize benefits and indirect reimbursements, as well as increase the filing requirements of smaller unions. Some confidentiality provisions would also be affected. " (Human Resource Executive Online)

ERISA Preemption Means California G.ay Marriage Ruling Not a Slam-Dunk for Benefits
Excerpt: "[B]ecause the federal government doesn't recognize g.ay marriage and California already has a strong domestic partnership law, the new ruling's nuts-and-bolts impact on g.ay couples' personal finances is expected to be limited, analysts said. For example, Social Security survivor benefits and Cobra, the continuation of employer health insurance after a job loss or divorce, still apply exclusively to the traditionally married." (Marketwatch)

Delay G.ay Marriage, California Court Urged
Excerpt: "The marriage amendment will be on the ballot regardless, he said. If it passes, the words of the voter-approved Proposition 22 -- 'Only the marriage between a man and a woman is valid or recognized in California' -- will be added to the state constitution, even though the high court yesterday declared those same words unconstitutional." (

Older Staffers Get Uneasy Embrace
Excerpt: "Surveys by Boston College's Center for Retirement Research found that employers expect about a quarter of employees currently in their 50s will want to work two to four years longer than past workers. Then employers were asked if they would accommodate half those who wanted to work later. 'On a scale of 1 (unlikely) to 10 (likely), the median response was a lukewarm 6,' the researchers say." (The Wall Street Journal)

International Survey of Actuarial Issues and Practices
Excerpt: "The role of the health actuary is different from one country to another. This survey, prepared by Milliman in partnership with the International Actuarial Association Health Section, examines the many actuarial practices and work issues around the world, identifying the many similarities and differences." (Milliman)

Calif. G.ay Marriage Ruling Sparks New Debate
Excerpt: "The California Supreme Court reignited a political wildfire with its ruling legalizing same-sex marriage in the most populous state in the union, but the issue already has burned out in more than half the states." (

Newly Posted Press Releases
(Post Yours!)

Parish National Bank Selects Gilsbar, Inc. for 360° Benefit Plan Management®
Gilsbar, Inc.

Wachovia Names New President of Retirement And Investment Products Group
Wachovia Corporation

New NAG Toolbox for MATLAB® Gives Actuaries and Benefits Consultants Access to 1,300+ Computational Routines
Numerical Algorithms Group

WiredBenefits Launches Ordinance Compliant San Francisco Health Care Benefit
WiredBenefits, Inc.

Genworth Study Shows QDIAs with Guaranteed Income Increase Lifetime Financial Security
Genworth Financial, Inc.

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Defined Contribution Plan Administrator
for Alliance Benefit Group of Michigan, Inc.
in MI

409A Plan Administrator / 409A Senior Plan Administrator
for Pen-Cal Administrators
in CA

Branch Manager (Insurance/TPA/Employee Benefits)
for Zenith Administrators
in CA

Defined Contribution Plan Administrator
for Pension Planning Consultants, Inc.
in NM

Defined Contribution Administrator
for Pension Funds of Arizona
in AZ

DC Implementation Analyst
for Milliman
in TX

Senior Benefits Consultant / Team Leader
for High performance, technical and client-focused environment
in NC

Vice President, Client Communications
for HR & Benefits Consulting Firm
in NY

Project Manager - Retirement Practice
for Cammack LaRhette Consulting
in NY

Client Relations Representative
for The Online 401k (Decimal, Inc)
in CA

Assistant Director
for 1199SEIU Benefit & Pension Funds
in NY

Health and Welfare Professionals
for Towers Perrin
in DC, NJ, NY, PA

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

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