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May 21, 2008

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

Today's sponsor is SunGard

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Banner ad for SunGard

SunGard's Relius Government Forms 5500 Web Client

Did you know the DOL is requiring electronic filing for 5500s? Now is the time to encourage your clients to use the Internet to gather and verify data. SunGard's Relius Government Forms 5500 Web Client can help.

Learn more.

800-326-7235, ext. 1100.

[Guidance Overview] Maximum Retirement Benefit and Contribution Limits for 2000-2008
Excerpt: "As published by the Internal Revenue Service." (; free registration required)

Merrill Lynch Sees Uptick in Roth 401(k)s
Excerpt: "The Merrill Lynch Retirement Group reports that, among the 1,700 plans on its proprietary record keeping system, 12% had added a Roth option as of March 31, 2008." (Employee Benefit News; free registration required)

ERISA Plan Audits Scoring a Failing Grade
Excerpt: "As part of its stated goal of providing benefits security, ERISA requires that an independent qualified public accountant (IQPA) perform an annual plan audit and that the accountant's report be included as part of the plan's annual report filed with the Department of Labor. Recent assessments have suggested deficiencies in the accomplishment of that objective." (Health Plan Law blog by Attorney Roy F. Harmon III)

S&P 500 Firms Push Funding of Defined Benefit Pension Plans
Excerpt: "Several elements contributed to the overfunded pension position of the S&P 500 companies in 2007. Plan sponsors invested heavily in international markets, especially emerging markets, and gains abroad helped offset a subpar year in the U.S. markets." (Workforce Management; free registration required)

401(k) Fee Disclosure a Priority to Legislators and Regulators
Excerpt: "Chairman George Miller (D-California) of the House Education and Labor Committee has been actively pushing the 401(k) Fair Disclosure for Retirement Security Act since he introduced the bill in July 2007 . . . . His committee recently passed a revised version of the bill -- with lawmakers voting along party lines -- which is cleared for action on the House floor." (Watson Wyatt Worldwide)

Global Retirement Update, May 2008 (PDF)
Excerpt: "Hewitt's monthly reports summarize retirement and financial management legislative developments and trends from around the world." (Hewitt Associates)

DOL Argues Duty To Disclose Transcends Statutory Reporting & Disclosure Requirements
Excerpt: "The Division of Plan Benefits Security of the Office of the Solicitor has posted the amicus brief filed in Hecker v. Deere. While much of the brief is devoted to retirement plan issues, the discussion of disclosure obligations in Section II is of interest in the employee welfare benefit plan context." (Health Plan Law blog by Attorney Roy F. Harmon III)

Are Pension Funds Fueling High Oil?
Excerpt: "A Senate hearing weighs charges that speculation by big investors and sovereign wealth funds is behind the rise in commodities and energy prices." (BusinessWeek)

Hudson's Bay Wins Reversal of Pension Surplus Award to Workers
Excerpt: "Hudson's Bay Co., Can.ada's largest retailer, doesn't have to share a C$94 million ($95 million) pension-plan surplus with former employees, an Ontario appeal court ruled today, reversing a lower court decision." (Bloomberg)

Proposed Louisiana Retirement Plan for Risky Jobs Gets Hearing
Excerpt: "A measure to create a comprehensive retirement plan for various gun-toting, law-enforcing state employees will be heard today in a House committee. The plan, called the Hazardous Duty Services Plan, would include several groups that have retirement plans within the state employees' retirement system, including wildlife agents, wardens, correctional officers, probation and parole officers, and alcohol and tobacco agents." (Advocate Capitol)

Solo 401(k) Compliance Can Get Lost in Translation
Excerpt: "[A Solo 401(k) plan] must meet certain ERISA and Internal Revenue Code requirements. And one of those requirements is the obligation to file Form 5500-EZ if plan assets exceed $250,000. And here's where there could be bad news. But sometimes that requirement gets lost in translation, and a self-employed or small business owner whose plan exceeds that threshold doesn't file the return. It may be because he or she missed the filing after being exempt for several years before the $250,000 threshold was crossed. Or it may be that the financial services firms at which these plans were established did not inform the self-employed or business owner of the filing obligation." (The Retirement Plan Blog)

Actuaries Scrutinized on Pensions
Excerpt: "By firing its actuarial consultant last week, the New York State Legislature shone a light on one of the public sector's deepest secrets: All across the country, states and local governments are promising benefits to public workers on the basis of numbers that make little economic sense." (The New York Times; free registration required)

Sponsors Should Carefully Eye Target-Date Equity Allocation
Excerpt: "Defined contribution participants nearing retirement may be shocked at the asset allocation to equities in their target-date funds, Watson Wyatt said in a new research paper. In a news release, Watson Wyatt said some target-date funds may retain more risk by allocating more to equities than might be optimal. For example, some funds for employees expecting to retire in 2010 still have almost 70% of assets in equities, according to recent Morningstar Direct research." (; free registration required)

[Opinion] Washington Update, May 13, 2008
Excerpt: "The Pension Protection Act (PPA) may have been enacted in 2006, but its implications still reverberate in 2008 as federal agencies continue to provide guidance on PPA changes. Ann Combs, the head of Vanguard Institutional Strategic Consulting and former U.S. Assistant Secretary of Labor, offers some observations on recent directives from the Internal Revenue Service (IRS) and Department of Labor (DOL) and the outlook for future developments." (Ann Combs via The Vanguard Group, Inc.)

[Opinion] The State of Public Pensions
Excerpt: "There's more to the pension funding story than what was conveyed in the May 11 front-page article 'Growing Deficits Threaten Pensions.' Studies conducted this year for the Center for State and Local Government Excellence by the Center for Retirement Research at Boston College, have found that . . . ." (The Washington Post; free registration required)

[Opinion] Determining the Adequacy of Investment Performance of Target-Maturity Funds
Excerpt: "On the whole, I believe the movement from participant choice to target-maturity funds -- a movement that is right now at the 'inching forward' stage -- is good. However, there is a problem these funds present to which, at present, there is no really good solution. How do you tell, between 2040 Fund A and 2040 Fund B, which is the better?" (; free registration required)

[Opinion] The ERISA Church Plan Exception: Why the Lown Test is Improperly Narrow
Excerpt: "Part I of this Comment generally discusses the ERISA church plan exception, and how it has been interpreted by the Department of Labor. Part II discusses the judicial interpretation of the exception, and demonstrates how courts are not giving full effect to the statutory language." (Alliance Defense Fund)

[Opinion] Take This 401(k) and Shove It - West Virginia Teachers Got to Vote to Return to Generous State Pensions
Excerpt: "It turns out that for a very large segment of West Virginia teachers, the 401(k)-type plan hasn't panned out too well. According to a study done by West Virginia's Consolidated Public Retirement Board, the average account balance is just $33,944 and only a handful of teachers age 60 or older have amassed more than $100,000 in their accounts - a fraction of what the pension plan would've paid." (

Sponsored by: Investment Company Institute

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June 3rd ICI Conference on DC Plans in the PPA Era

Register today for the Investment Company Institute's June 3rd conference on legal and business issues for 401(k) plans, 403(b) plans, and IRAs. Speakers include senior representatives from the Departments of Labor and Treasury and the mutual fund industry. Topics include:
  • DOL's 401(k) plan fee disclosure agenda and fee-related developments
  • PPA implementation update
  • Participant notices and statements
  • The future of 403(b) plans

(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] IRS Provides Tax Relief for Certain Recipients of Stimulus Payments
Excerpt: "Individuals who elected to have their federal tax refunds credited to their individual retirement arrangement (IRA), health savings account (HSA), Archer MSA, Coverdell education savings account (ESA) ,or qualified tuition program account (QTP or section 529 program) via direct deposit are eligible to withdraw those amounts on a tax and penalty-free basis." (

Bringing Coherence to Sovereignty and Jurisdictional Issues in Global Employee Benefits Law
Excerpt: "One of the most neglected areas of employee benefits law in the United States today is the extraterritorial application of ERISA to U.S. employees in other countries. Additionally, the courts and legislature have not spent the necessary time to discuss ERISA coverage issues for foreign employees, both legal and illegal and both working for foreign government and non-government employers, in the United States. These are increasingly crucial areas of U.S. employee benefits law as the globalization of the world's workplaces continues apace. After surveying the tangled web of ERISA law in this context, the article proposes two statutory fixes and one new path for courts to take in applying employment benefits law in the immigration milieu." (Social Science Research Network)

Mercer Issues Survey on Prevalence of Car Benefits
Excerpt: "Mercer's 2008 International Car Policies report is a valuable reference guide that can help companies define new strategies and optimize their car policies by highlighting differences in practices across key markets, identifying cost-saving measures and benchmarking an organization's car policy against others in the market. The new report provides information on allocation policies, cash alternatives to cars and associated tax regulations in 63 countries." (Mercer LLC)

2008 Top Five Total Rewards Priorities Survey (PDF)
9 pages. Excerpt: "Although no longer most employers' top worry, confronting the mounting cost of total rewards -- particularly health care benefits -- remains a high priority for survey respondents. In fact, 'the cost of providing health care benefits to active employees' was the second-highest concern on a list of 12 . . . ." (Deloitte Consulting LLP and the International Society of Certified Employee Benefit Specialists)

Court Upholds DOL Reporting Requirements on Employer Payments to Unions
Excerpt: "According to a Department of Labor (DOL) press release, on May 5, the U.S. District Court for the Northern District of Georgia dismissed a challenge to the DOL's authority to require reports from attorneys who make payments to unions or union officials. The Labor-Management Reporting and Disclosure Act (LMRDA) requires employers to file reports if, among other things, they provide money or other things of value to a union or a union officer or employee." (International Foundation of Employee Benefit Plans)

Vacations Continue to be Less of a Break from Work
Excerpt: "One-quarter of workers surveyed by said they stay in contact with work while on vacation." (; free registration required)

Unum Will Make 529 Plan Contribution for Employees' Children
Excerpt: "Employee benefit provider Unum has announced that it will now kick in $700 towards a 529 college fund for the children of its employees." (; free registration required)

Baby Boomers Retiring and Leaving Employers Short on Talent
Excerpt: "Talk about a brain drain: according to a new study of large corporations by Aon Consulting, the majority of employers feel that the wave of baby boomers now starting to retire will leave them with a substantial shortage of leadership talent in the very near future. Specifically, 60% of corporations polled by Aon said that they expect the performance of their businesses to be affected by the loss of baby-boomer talent -- up from only 16% of employers who reported the same concerns last year." (Financial Week; free registration required)

Newly Posted Events
(Post Yours!)

Are You Ready For EGTRRA Restatements?
Nationwide on May 28, 2008
presented by

Benchmarking: Secrets of High Performing Companies
in Texas on December 9, 2008
presented by WEB (Worldwide Employee Benefits Network) Dallas Chapter

Communicating and Managing Change
in Texas on May 27, 2008
presented by WEB (Worldwide Employee Benefits Network) Dallas Chapter

Fiduciary responsibility
in Texas on August 26, 2008
presented by WEB (Worldwide Employee Benefits Network) Dallas Chapter

Form 5500 Refresher Course
Nationwide on May 29, 2008
presented by

How to Retire by Age 80
in Texas on September 30, 2008
presented by WEB (Worldwide Employee Benefits Network) Dallas Chapter

Labor Law Update
in Texas on June 24, 2008
presented by WEB (Worldwide Employee Benefits Network) Dallas Chapter

Open up and say "Audit"
in Texas on July 29, 2008
presented by WEB (Worldwide Employee Benefits Network) Dallas Chapter

Understanding Your Responsibilities under ERISA Workshop
in Missouri on May 22, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Vendor management practices
in Texas on October 28, 2008
presented by WEB (Worldwide Employee Benefits Network) Dallas Chapter

WorldatWork course B3 - Health Care and Insurance Plans - Design and Management
in Texas on May 12, 2008
presented by WEB (Worldwide Employee Benefits Network) Dallas Chapter

WorldatWork course B3 - Health Care and Insurance Plans - Design and Management
in Texas on November 12, 2008
presented by WEB (Worldwide Employee Benefits Network) Dallas Chapter

Newly Posted Press Releases
(Post Yours!)

Prudential Financial Named One of the Best Adoption-Friendly Workplaces in America
Prudential Financial, Inc.

ShareBuilder401k Reports Surging Demand for Small Biz 401k Plans

Employer Study From Families and Work Institute Shows Significant Changes for U.S. Workers Since 1998
Families and Work Institute

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Senior Actuarial Analyst
for Stanley, Hunt, DuPree, & Rhine Inc.
in SC

Compliance Analyst - ERISA
for T. Rowe Price
in CO

Pension Consultant
for Mercer Advisors
in CA

Senior Compliance Analyst - ERISA
for T. Rowe Price
in MD

Manager of Daily Operations
for Plan Benefit Services, Inc.
in TX

Sr Benefits Specialist- Health and Welfare
for Freeport McMoRan Copper and Gold Inc.
in AZ

PSC Site Manager
for Citi
in ME

Senior Conversion Analyst
for Administaff
in TX

Director ERISA Consultant
for Charles Schwab & Company
in AZ

TOA Operations Manager
for Charles Schwab & Company
in AZ

Mutual Fund Senior Operations Manager
for Charles Schwab & Company
in AZ

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