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May 22, 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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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] Code Section 415 Amendment Timing
Excerpt: "Upon working with the Code §415 amendments, we discovered an anomaly that we expect could impact some employer plans. The problem develops because plan amendment deadlines are determined with reference to the plan year and the employer's tax year. The Code §415 Regulations, however, start the amendment period with reference to the plan's limitation year. A problem can arise if the limitation year is not consistent with either the plan year or the employer's tax year." (Rich Hochman via McKay Hochman Co., Inc.)

[Guidance Overview] In-Service Distributions
Excerpt: "In-service withdrawals prior to normal retirement age are only permitted under Profit Sharing, 401(k) and Stock Bonus Plans. A plan is not required to offer in-service withdrawals and can place restrictions on the availability of funds." (McKay Hochman Co., Inc.)

[Guidance Overview] Late Guidance Creates Confusion Regarding Quarterly Pension Contributions
Excerpt: "On April 15, 2008, the IRS published proposed regulations in the Federal Register on calculating and paying minimum required contributions for defined benefit plans, and the penalties for failing to meet the requirements. The rules address required quarterly contributions and the use of credit balances." (Watson Wyatt Worldwide)

[Guidance Overview] IRS Proposed Regulations on Notice Requirements Under PPA
Excerpt: "The IRS has proposed regulations regarding the notices defined benefit plan sponsors must provide as they comply with changes to funding rules enacted by the Pension Protection Act of 2006 (PPA)." (Watson Wyatt Worldwide)

[Guidance Overview] Distributions from Decedent's IRA to Beneficiary Calculated Based on Life Expectancy of Beneficiary
Excerpt: "The IRS has privately ruled that the required minimum distributions (RMDs) from a decedent's two IRAs could be calculated for all past and future years based on the life expectancy of the beneficiary as determined under the Single Life Table of Reg. §1.401(a) (9)-9." (Wolters Kluwer)

[Guidance Overview] In Conflict Between Plan Document and SPD, SPD Prevails to Participant's Detriment
Excerpt: "In Kolpacke v. CSX Pension Plan, No. 07-1959 (CA6, May 21, 2008), the 6th Circuit affirmed the district court's grant of summary judgment in CSX's favor, stating that Kolpacke had failed to show that CSX had arbitrarily and capriciously applied the terms of the pension plan in calculating Kolpacke's estimated benefits. Unlike most ERISA opinions from the 6th Circuit, the Court's entire opinion is two paragraphs long and does not provide any detail." (Pension Protection Act Blog)

[Guidance Overview] Now That We Know Exactly When 401(k) Contributions Have to Be Deposited, Just Who's Responsible for It?
Excerpt: "[Jim] Farley, Director Retirement Research, Lord Abbett & Co., got to the heart of matter better than did I in his Guest Article, Contribution Timing and Collection Responsibility, a Q&A, for 401(k) Help Center." (The Retirement Plan Blog)

Managing Public Investment Funds: Best Practices and New Challenges
Excerpt: "This paper examines how to better secure prudent and economically sound public fund management practices, focusing on ways to formulate and build a strong governance structure for managing the assets, how one might protect the assets from political interference, and what sensible investment policy might entail." (Pension Research Council; registration required to download fulltext of paper)

OPM Calls for End to Pension Penalty for Rehired Federal Retirees
Excerpt: "Allowing federal retirees to return to work without an offset to their pensions could help address many of the government's future workforce challenges, the Office of Personnel Management told a House subcommittee on Tuesday." (

More Than Two-Thirds of 401(k) Plan Participants Have Inefficient Portfolios
Excerpt: "Financial Engines examined nearly 1 million participant 401(k) portfolios from 82 plan sponsors, with a focus on three key dimensions of investor decision making: risk and diversification, company stock, and participant contributions." (Wolters Kluwer)

Pension Reform Around Europe
Excerpt: "Several European Union countries are facing pension crises, mainly due to an ageing population. Here are some details of pension reform plans around Europe." (Reuters)

Lawmakers Propose Sweeping Federal Thrift Savings Plan Changes
Excerpt: "A new proposal would allow the federal Thrift Savings Plan (TSP) to institute wide-ranging changes including adding additional investment options on its own, starting auto enrollment with a target-date fund default and adding a Roth option and a mutual fund window." (; free registration required)

New Jersey Governor's Office Unveils Early Retirement Plan
Excerpt: "After months of anticipation, the Corzine administration today finally made public its controversial early retirement plan. Available online, the plan would produce about $136 million in immediate budget savings, and more savings in future years, if officials do not refill the vacated positions. However, the plan also would expand long-term pension liabilities by several hundred million dollars." (The Star-Ledger)

[Opinion] State-Administered Retirement Plans for the Private Sector Is a Bad Idea
Excerpt: "Legislators throughout the country are proposing that states start to administer private sector retirement savings plans. While the details of these proposals vary from state to state, they all provide that the states should embark upon the business of managing private sector individual account arrangements." (Oxford University Press USA)

[Opinion] PPA's Auto-Pilot Features Bound to Fail
Excerpt: "The trouble with automatic enrollment is that it necessitates a negative action associated with opting out of a plan rather than giving employees the chance to opt in, which is more ­positive and a better way for plan participants to embrace the retirement savings concept. It also places an undue strain on younger and lower-paid employees, and can be seen as embarrassing. As for the deferral amount, which rises incrementally until it hits 6% of earnings, savings might be adequate under a few fading scenarios." (; free registration required)

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

Consider a Matrix of the Key Roles and Responsibilities for the Compensation Process and Governance
Excerpt: "As the executive compensation process continues to become more complex important, and investors, the media and some plaintiffs' lawyers continue to focus on it, more companies and compensation committees are creating a matrix of the key roles and responsibilities of the parties involved in compensation and governance. These parties include the Compensation Committee, the full Board, the CEO, and HR and other company management, inside counsel and/or outside counsel and the compensation consultant. The input of each party is critical in preparing the matrix." (Michael S. Melbinger of Winston & Strawn LLP)

Comprehensive Executive Compensation 'Reform' Bill Introduced into Senate (PDF)
4 pages. Excerpt: "Senator Clinton's bill is a broad response to concerns over executive pay practices at publicly traded companies, and it is currently unclear whether it will be voted out of Committee. As of the date of this writing, there are no co-sponsors; however, it is realistic to expect that similar legislation will be introduced next year under a new Administration." (Frederic W. Cook & Co., Inc.)

Wachovia Offers Employees Three-Year Leave Plan
Excerpt: "The program does not grant job protection. Once on leave, individuals are considered inactive employees and their benefits are on hold. But the program provides a formal way for employees to maintain a presence with the nation's fourth-largest bank." (Workforce Management; free registration required)

House Bill Extends Benefits Breaks to Active Reservists
Excerpt: "Several provisions of a bill passed unanimously by the U.S. House of Representatives - including one allowing penalty-free withdrawals from a flexible spending account – affect workplace benefits for armed services members. The bill (H.R. 6081), the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008, gives a series of tax breaks and other economic incentives to U.S. Armed Services members. Representative Charles B. Rangel (D-New York) was the sponsor of the measure that passed 403 to 0." (; free registration required)

Newly Posted Events
(Post Yours!)

Account-Based Health Plans: What Works, What Doesn't and Why Webcast
Nationwide on June 19, 2008
presented by International Foundation of Employee Benefit Plans

ERIU Interactive Webinar to Examine How the Health Reform Landscape Has Changed Since 1994
Nationwide on June 2, 2008
presented by Robert Wood Johnson Foundation

Gearing Up For A Downturn - A Primer On Key Benefits Issues -- Free Webinar
Nationwide on June 3, 2008
presented by Ogletree Deakins

Lessons Learned From Hawaii's Prepaid Health Care Act Webcast
Nationwide on June 5, 2008
presented by International Foundation of Employee Benefit Plans

Retirement Plans in Mergers and Acquisitions: An Overview
Nationwide on June 12, 2008
presented by SunGard Relius

The Latest on Federal Legislative and Regulatory Activity for Public Plans Webcast
Nationwide on June 10, 2008
presented by International Foundation of Employee Benefit Plans

Newly Posted Press Releases
(Post Yours!)

Large Employers Slow Changes to Retirement Plans, Watson Wyatt Finds
Watson Wyatt

U.S. Secretary of Labor Elaine L. Chao Highlights Accomplishments in Reforming Employee Benefits System at ‘DOL Speaks’ Conference
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Employers Using Benefits to Help Employees Fill the Tank
Society for Human Resource Management (SHRM)

National Coalition on Benefits Marks Milestone 100 Members Strong, Still Growing
National Coalition on Benefits

Leading Pioneer of Retirement Advice is Providing The "411" on 401(k) Investing
Scarborough Capital Management, Inc.

Pacific Life Extends Support to the 401k Market
Pacific Life

New Retirement Organization Issues First Research Brief, Launches Web Site
National Institute on Retirement Security

STOP Obesity Alliance Announces New Research Indicating That Employers Want to Address Obesity in the Workplace, Need More Guidance
Strategies to Overcome and Prevent (STOP) Obesity Alliance

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Compliance Testing Consultant
for Diversified Investment Advisors
in NY

401(k) / Defined Contribution Administrator
for Pension Investors Corp.
in FL

Director, Plan Services
for Diversified Investment Advisors
in NY

Sales Implementation Specialist
for ePlan Services, Inc.
in CO

Employee Benefits Service Coordinator
for Growing Financial Services Firm
in TX

Retirement Distribution Manager
for Charles Schwab & Company
in AZ

Defined Contribution Analyst
for Medium sized TPA firm in Central Ohio
in OH

Defined Benefit/Defined Contribution Administrator
for Red Bank Pension Services, Inc.
in NJ

IRA Product Manager
for Merrill Lynch
in NJ

ML Retirement Income Service Product Manager
for Merrill Lynch
in NJ

401(k) Administrator
for Pension Performance, Inc.
in IL

Nonqualified Deferred Compensation Consultant
for Retirement Capital Group, Inc
in CA

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