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May 27, 2008

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

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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.

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800-326-7235, ext. 1100.

[Guidance Overview] Tax Court Case Upholding IRS's Disallowance of Deductions for Contributions to Faulty SEP
Excerpt: "Know how the attribution rules under Section 318 of the Internal Revenue Code can sometimes wreak havoc for employers under the controlled group provisions? The taxpayer here tried to apply his 'creative' interpretation of the attribution rules by arguing that it didn't matter that contributions were not made for the wife because the SEP contributions made on behalf of the husband should be 'attributed' to the wife. It is no surprise that the Tax Court didn't buy that argument." (Attorney B. Janell Grenier via

[Guidance Overview] Third Circuit Opines That 'Rousey' Overruled 'Clark'
Excerpt: "Many will remember how, close on the heels of the U.S. Supreme Court's 2005 decision in Rousey v. Jacoway, 125 S.Ct. 1561 (2005), the Bankrup.tcy Abuse Prevention and Consumer Protection Act of 2005 ('BAPCPA') was signed into law, providing IRAs with greater bankrup.tcy protection. . . . A recent Third Circuit Court case, In Re: Krebs, finally puts to rest some confusion going on in the Third Circuit about the impact of Rousey as it pertains to pre-BAPCPA bankrup.tcy cases." (Attorney B. Janell Grenier via

[Guidance Overview] Court Gives ERISA Plan Fiduciaries Presumption of Prudence (PDF)
3 pages. Excerpt: "Fiduciaries of 401k plans and other eligible individual account plans recently received some comfort from the U.S. Court of Appeals for the Fifth Circuit, which affirmed a grant of summary judgment for defendants in a class action alleging that the fiduciaries should have ceased investing plan assets in employer stock, contrary to the plan's express requirements." (Pillsbury Winthrop Shaw Pittman LLP)

[Guidance Overview] Trustees Given Greater Oversight of United Kingdom Multiemployer Pension Plans (PDF)
2 pages. Excerpt: "Trustee boards of U.K. multiemployer defined benefit (DB) pension plans have been given more power over financial arrangements when an employer leaves the plan. Revised (amending) regulations that took effect April 6, 2008 are intended to ensure that departing employers do not avoid their pension liabilities, while at the same time enabling more flexible arrangements when the company is involved in a merger or other type of corporate transaction." (Towers Perrin)

Sugar Workers Say Company Cheated Them on Pensions
Excerpt: "Workers at U.S. Sugar thought they were getting a good deal when the company shelved their pension plan and gave them stock for their retirement instead. They had a heady sense of controlling their own destiny as they became the company's biggest shareholders, Vic McCorvey, a former farm manager there, said. . . . Now that many U.S. Sugar workers are reaching retirement age, though, the company, the largest U.S. producer of cane sugar, has been cashing them out of the retirement plan at a much lower price than an outside investor offered for their shares." (International Herald Tribune)

Tracking Retirement Savings Concerns During a Falling Market
Excerpt: "As the level of responsibility an individual has in saving for retirement increases, combined with a boost in longevity, especially for the well off, and healthcare expenses eating up a bigger-than-anticipated chunk of those savings in retirement, the troubled markets of 2008 may drive clients into a frenzy, anxious about how they are supposed to save for retirement while there's less money to go around." (Investment Advisor)

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% added a Roth option as of March 31, 2008." (Employee Benefit Adviser; free registration required)

Workplace Retirement Resource in Spanish
Excerpt: "Read a new fact sheet on workplace retirement plans in Spanish from the University of Illinois Extension Service: Inscríbase en su Plan de Jubilación." (Women’s Institute for a Secure Retirement)

The European Employee Ownership Top 100 in 2007
Excerpt: "The European Employee Ownership TOP 100 is designed with respect to two rankings of Europe's largest companies, considering employee ownership." (European Federation of Employee Share Ownership)

Annual Economic Survey of Employee Ownership in European Countries - Year 2007
Excerpt: "The full Annual Economic Survey was published on May 23, 2008. It is available both in electronic or paper version." (European Federation of Employee Share Ownership)

American Academy of Actuaries' Response to NYT Article, 'Actuaries Scrutinized on Pensions' (PDF)
1 page. Excerpt: "The American Academy of Actuaries, an association of 16,000 U.S. actuaries, recognizes the importance of the issues raised by Mary Williams Walsh in her May 21 article, 'Actuaries Scrutinized on Pensions.'" (American Academy of Actuaries)

401(k) Contributors Face More Trading Restrictions
Excerpt: "Federal employees and millions of private-sector workers with 401(k) plans now face limits on trading within their retirement accounts. But while the limits upset some workers, only a tiny fraction will feel any impact because most people don't make trades in their accounts. As restrictions mount in both spheres, however, there may be a point where they begin to interfere with legitimate efforts to maximize retirement savings, so it pays to keep an eye on your plan's rules, experts say." (Chicago Tribune)

State of Washington Considers Adding Life-Expectancy Patterns to Its Pension Planning
Excerpt: "Washington's life expectancy grows by about two years every decade. But the state doesn't automatically account for the increasing average life span in its pension planning. The state is considering adding continuously increasing life expectancies to its pension calculations. The change likely would require workers and the state to pay more into their retirement plans, but it could save the state from catch-up payments later." (Tacoma News Inc.)

ERISA Advisory Council Issues Reports on Benefit Statements, Fiduciary Duties, Financial Literacy
Excerpt: "In a series of recently released reports, three working groups of the ERISA Advisory Council presented their recommendations on participant benefit statements, fiduciary responsibilities and revenue-sharing practices, and financial literacy of pension plan participants." (Wolters Kluwer)

What's an ERISA Account?
Excerpt: "ERISA accounts, sometimes referred to as ERISA 'budgets,' have gained increased prominence in recent months as part of a renewed focus on 401(k) plan fees and expenses. The accounts - which can facilitate the use of revenues generated by the plan to offset certain plan expenses - are not a new concept, nor is their design to be found anywhere in the Employee Retirement Income Security Act. But it seems fair to say that the opportunities behind the concept have only just begun to be fully exploited. On May 15, PLANSPONSOR's Plugged In series featured an informative webcast on the subject - with Nevin Adams, Editor in Chief of PLANSPONSOR, and Mark Davis, from KDS Advisors, along with special guests Jason K. Bortz of law firm Davis & Harman and Pete Swisher, Vice President and Senior Institutional Consultant, Unified Trust Company." (; free registration required)

New Hampshire Law Lets Teachers Delay Retirement
Excerpt: "New Hampshire Governor John Lynch has signed into law a bill designed to protect the state from an onslaught of teacher retirements and shore up the underfunded pension system." (; free registration required)

Reforming Social Security with Progressive Personal Accounts
Excerpt: "We describe a system of 'progressive personal accounts' that preserves the core goals of both parties, and that is self-balancing on an ongoing basis. Progressive personal accounts have two critical features: (1) accruals into the personal accounts would be exclusively in a new kind of derivative security (which we call a PAAW for Personal Annuitized Average Wage security) that pays its owner one inflation-corrected dollar during every year of life after his statutory retirement date, multiplied by the economy wide average wage at the retirement date and (2) households would buy their new PAAWs each year with their social security contributions, augmented or reduced by a government match that would add to contributions from households with low lifetime incomes by taking from households with high lifetime incomes." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Retirement News for Employers - Spring 2008 Edition from the IRS (PDF)
11 pages. This edition contains the following: EP Connections: Interview with Joyce Kahn - New Law...Help for the Small Employer; Desk Side Chat with Monika Templeman - What Do I Do if My Plan is Selected for an Examination? New on the Web; We're Glad You Asked! ERPA is Picking Up Speed; Product Profile - 401(k) Fix-It Guide - Online Resource; Written Plan Requirement for 403(b) Plans; This Way to the Forums; Recent Guidance; DOL News; Fixing Common Plan Mistakes - Hardship Distributions in a 401(k) Plan. (Internal Revenue Service)

Judge Refuses to Halt New York's Pension Probe
Excerpt: "A judge Friday refused to immediately stop state Attorney General Andrew Cuomo and Comptroller Thomas DiNapoli from acting against four attorneys - two from Long Island - who they believe are improperly benefiting from the state pension system." (NewsDay)

Solutions for Illinois Pension Funding Not Easy to Implement
Excerpt: "Finding a possible solution for Illinois' massive pension debt problem isn't difficult. Tax increases, more borrowing, selling state assets, trimming future benefits -- all are on the table for discussion. But seeing any of those become reality is a much bigger hurdle. None are easy to adopt." (AP via Rockford Register Star)

Refresh Your Retirement Plans Now
Excerpt: "For investors nearing retirement, the continuing stock-market turmoil should sound an alarm: Give your retirement accounts a thorough checkup sooner rather than later." (The Wall Street Journal)

New York's Cuomo and Legislators Seek to Cut Abuse of State's Retirement Systems
Excerpt: "Alleged abuses of the retirement system -- which one lawmaker called 'thievery' -- were the focus of a public hearing Thursday on Long Island. The hearing, which drew lawmakers from both sides of the aisle, looked at two different issues. One was what Attorney General Andrew Cuomo has termed 'payroll padding' by school districts and BOCES organizations, in which lawyers were listed as employees in order to access the lucrative state pension system. The other was 'double dipping' by retired superintendents, other school administrators and teachers who draw hefty pensions while going back to work as interim employees." (Times Union)

History of Illinois State Pension System Woes
Excerpt: "Illinois' pension debt problem is the nation's worst when accounting for both the money owed and how underfunded the systems are. Here is a look back at how the pension problem developed, according to information reviewed by The Associated Press." (AP via The Times)

ProxyDemocracy Web Site Provides Tools to Help Investors Put Their Voting Power to Use
Excerpt: "ProxyDemocracy provides a set of tools to help investors use their voting power to produce positive changes in the companies they own. It is a nonprofit, nonpartisan project supported by foundations that are themselves interested in being responsible investors." (ProxyDemocracy)

Pennsylvania Pensions Would Be Jacked Up for Retired Teacher Union Members and Disgraced Former State Politicians
Excerpt: "By trying to give away $10.4 billion in taxpayers' money as cost-of-living-adjustments to 250,000 state retirees -- including public school teachers and politicians -- the Pennsylvania House is giving voodoo economics a bad name. Even though the Pennsylvania State Employees' Retirement System and the Pennsylvania Public School Employees' Retirement System are severely underfunded -- combined roughly $10 billion short just to pay current obligations -- a bill with 155 co-sponsors would double the taxpayers' burden." (Pittsburgh Tribune-Review)

Majority Expected to Transfer Out of West Virginia Teacher Pension Plan
Excerpt: "The official results won't be announced for another week, but teacher groups are guardedly optimistic that enough members signed on to allow voluntary transfers out of West Virginia's only public 401 -style retirement plan." (AP via

[Opinion] ASPPA Comments on Proposed Regulations Regarding Automatic Contribution Arrangements (PDF)
6 pages. Excerpt: "Encouraging the adoption of Automatic Contribution Arrangements so that an increased number of employees have a vehicle available at the workplace to provide retirement savings is an important goal, and ASPPA supports those legislative and regulatory initiatives that promote such a goal without unduly burdening small employers and without discouraging formation and continued maintenance by employers of qualified retirement plans." (American Society of Pension Professionals & Actuaries)

Sponsored by: ASPPA

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The Western Benefits Conference, July 13-16, 2008, Seattle, Washington

It's the best of both worlds, and should not be missed. Join the Western Pension & Benefits Conference and ASPPA for this unique conference designed with all retirement, health, welfare and benefits professionals in mind. The Western Benefits Conference offers attendees seven separate professional learning tracks with over 50 individual sessions all led by nationally renowned speakers and both national and local government representatives. Network with your peers, private sector experts, and government officials at planned events throughout the conference. Be in Seattle with over 900 of your colleagues July 13-16, 2008 and experience this conference first hand. Register NOW and don't miss out.

(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] California Same-Sex Marriage Ruling - Employee Benefit Plan Implications
Excerpt: "Same-sex marriages present benefits-related difficulties for employers because federal and state governments have given mixed messages regarding the status of same-sex couples throughout the United States." (McDermott Will & Emery)

[Guidance Overview] Ninth Circuit Rules That Employer Was Free to Terminate Severance Benefits Because They Were Not Vested Under ERISA
Excerpt: "Over the years, we've seen a steady trickle of decisions addressing severance plan claims similar to those raised in this case. . . . As in those decisions, this case reminds us that, unlike pension plan benefits, severance benefits that are ERISA welfare benefits do not vest unless the plan documents clearly say so. And, importantly, employers who do not wish to create vested welfare plan rights must ensure that plan documents clearly reserve the employer's right to amend or terminate a plan." (Employee Benefits Institute of America)

Pensions for Executives Often Appear Unfair
Excerpt: "[M]ost chief executives continue to enjoy lavish pension plans -- on top of their multimillion-dollar pay packages and sundry other perks. How can that be fair? The short answer, of course, is that it isn't. But fairness was never the point. This is about giving CEOs what they want, regardless of what's given to other company employees." (Los Angeles Times)

California City of Vallejo Declared Bankrupt
Excerpt: "The fate of Vallejo . . . has sent shock waves across the country as scores of other local authorities also struggle to balance the books in the face of slumping incomes. Councillors took the drastic step because falling property tax revenues mean they can no longer pay the generous salaries negotiated for firefighters and police officers during the flush years." (Telegraph)

Telecommuting Could Save Money for Workers and Employers
Excerpt: "Telecommuting, or using computer technology to work from home, was a buzzword in the 1990s, but it's debatable whether the trend truly caught on. As the nation struggles with soaring gas prices, air pollution and traffic congestion, telecommuting is appealing to many workers." (The Augusta Chronicle)

Retirement and Health Care Most Changed Benefits from a Decade Ago
Excerpt: "The Families and Work Institute's 2008 National Study of Employers (NSE) reveals stability in the practices, policies, programs, and benefits provided by a nationally representative group of U.S. employers over the past decade." (; free registration required)

Middle East Demographics Drive HR and Benefits Change
Excerpt: "The formation of HR functions in the Middle East region is in such a period of growth, that it may well be leapfrogging traditional Western models, particularly with respect to the use of technology. This begs the questions of how HR strategy and policy will develop, and what will best practices look like for this developing market. It will be interesting to see in what ways the leapfrogging is most beneficial and what successes can be transported back to the rest of the world." (Mercer LLC)

Newly Posted Events
(Post Yours!)

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

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

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

Roth 2008: The Longer We Go, The More We Know
Nationwide on June 19, 2008
presented by SunGard Relius

The Radford Benefits Survey
in California on June 4, 2008
presented by International Society of Certified Employee Benefit Specialists - Orange County Chapter

Understanding Your PBM -- Evaluating PBM Services and Revenue Streams, Transparency, Alternatives, Trends and Hot Topics
in Illinois on June 26, 2008
presented by WEB - Chicago West

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Manager - 401(k)/Defined Contribution Valuation Processing Department
for National Retirement Services, Inc.
in NC

401(k) Administrator Quiz
for The Pension Group, Inc.
in CA

Client Employee Benefits Advisor
for Morgan, Lewis & Bockius LLP
in PA

Retirement Research Consultant
for Hewitt Associates
in IL

Senior Health and Welfare Benefits Attorney
for Ice Miller LLP
in IN

Experienced Employee Benefits Attorney/Partner
for Ice Miller LLP
in IN

Employee Benefits Attorney
for Ice Miller LLP
in IN

Retirement Plan Administration Specialist
for Consulting Actuaries Incorporated
in NJ

Pension Administration
for Employee Incentive Plans, Inc.
in TX

CRTFL - IS Sr. Project Manager
for Citi
in FL

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