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June 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 DATAIR Employee Benefit Systems, Inc.

(Click on company name or banner to learn more.)
Banner ad for DATAIR Employee Benefit Systems, Inc.

PPA’06 Defined Benefit Software from DATAIR

DATAIR’s Defined Benefit System for Valuations, Discrimination Testing, and Proposals. Includes 412(e)(3) insured plans, Cash Balance Plans, DB/DC combos and Sole Proprietors. Live, expert support.

DATAIR’s PPA’06 DB System includes

  • Funding Target & Target Normal Cost (3 Rate Segments)
  • Effective Interest Rate
  • Section 430 Minimum Contributions
  • Section 404(o) Cushion Amount
  • Shortfall Amortization Bases and Amounts
  • Funding Target Attainment Percentages (FTAPS)
Contact or call 1-888-328-2474 (1-888-DATAIR-4)

[Guidance Overview] Year-End Deadline for Section 403(b) Plans Approaches (PDF)
2 pages. Excerpt: "In July 2007, the IRS issued final regulations that govern these plans and impose new requirements on their non-profit sponsors. These new requirements are generally effective January 1, 2009. If your organization sponsors a section 403(b) plan, you must take certain compliance steps before December 31, 2008." (Locke Lord Bissell & Liddell LLP)

[Guidance Overview] Hewitt Federal Legislation Quick Guide Updated June 4, 2008, for Retirement Plans (PDF)
10 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding retirement plans. (Hewitt Associates)

Rep. Meek Introduces Legislation to Fix Public Safety Retiree Tax Issue
Excerpt: "Representative Kendrick Meek (D-FL) recently introduced legislation in the House of Representatives to fix issues related to public safety retiree taxation that came about as a result of recent changes to the tax code." (National Conference on Public Employee Retirement Systems)

Final Retirement Bill Reached in New Hampshire
Excerpt: "The New Hampshire Retirement System is $2.7 billion short on its long-term obligations, and with a funded ratio of 63 percent, it is among the worst-off public pension systems in the nation. The writers of the overhaul bill had many goals: ensuring compliance with the Internal Revenue Service code, heading off a threatened lawsuit from cities and towns over health costs, helping the poorest retirees, and shaking up the retirement system's board, which has overseen subpar investment returns over the past decade." (Concord Monitor)

More Dip Early Into Funds for Retirement - Hardship Withdrawals Can Cause Long-Term Jeopardy
Excerpt: "Record numbers of Americans are raiding their retirement savings as the economy has soured, threatening their long-term financial security to make their mortgage payments, pay medical bills, and cope with rising food and fuel costs." (The Boston Globe)

French Government Tries to Increase the Actual Retirement Age (PDF)
Excerpt: "The legal retirement age in France is currently 65. However, employees can retire with unreduced pensions from age 60 after a full career period, i.e., after a predetermined number of quarters during which they made contributions. In practice, the actual retirement age is closer to 61 than 65. In 2003, as a first step toward increasing the effective retirement age, legislation was adopted to increase the full careerperiod." (Towers Perrin)

Duke Energy Cash Balance Ruling a Mixed Bag
Excerpt: "A ruling by a federal judge in South Carolina in a lawsuit alleging Duke Energy Corp.'s cash balance plan violated the Employee Retirement Income Security Act (ERISA) awarded some of the contested issues to both sides." (; free registration required)

Individual Retirement Accounts: Government Actions Could Encourage More Employers to Offer IRAs to Employees (PDF)
64 pages. Excerpt: "GAO was asked to report on (1) how IRA assets compare to assets in other retirement plans, (2) what barriers may discourage small employers from offering IRAs to employees, and (3) the adequacy of the Internal Revenue Service's (IRS) and the Department of Labor's (Labor) oversight of and information on IRAs." (U.S. Government Accountability Office)

[Opinion] Outline of ASPPA Testimony at Public Hearing on Proposed Regulations of Hybrid Retirement Plans (PDF)
4 pages. Excerpt: "It is important that guidance be comprehensive enough to enable compliance. There always will be gray areas, but there are also issues that the IRS and Treasury see as black and white, some practitioners see as white and black, and explicit answers are at best found in a gray book – not formal guidance." (American Society of Pension Professionals & Actuaries)

Sponsored by: ASPPA

(Click on company name or banner to learn more.)
Banner ad for ASPPA

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] Miller & Chevalier's Focus on Employee Benefits, June 5, 2008 (PDF)
6 pages. The newsletter offers articles on: Health FSA and Mental Health Parity; Qualified Plan Queries: Differential Pay Now Compensation Under Code Section 415 and New Distribution Feature; Qualified Plan Queries: Military Survivor and Disability Benefits Under Tax-Qualified Plans; Exec Comp Corner: New Code Section 887A Impacting Withholding on Certain Expatriates' Deferred Compensation. (Miller & Chevalier Chartered)

[Guidance Overview] Hewitt Federal Legislation Quick Guide Updated June 4, 2008, on Human Resources & Employment Law (PDF)
10 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates)

[Guidance Overview] HEART Act Requires Employers to Provide Benefits to Employees Called to Military Service (PDF)
2 pages. Excerpt: "Certain HEART Act provisions are immediately effective for employee benefit plans. Plans generally must be amended to comply with the HEART Act provisions by the 2010 plan year." (Ballard Sphar)

[Guidance Overview] Spring-Loading Options - Emerging Trends in the Law of Fiduciary Duty
Excerpt: "This article was originally published in the Law Journal Newsletters – The Corporate Counselor, Volume 22, Number 12, May 2008. It is reprinted here with the publisher's permission. Delaware courts are beginning to analyze claims concerning the controversial practice of spring-loading options. Spring-loading is the granting of options just prior to the release of favorable company information (in the company's possession at the time of the grant)." (Winston & Strawn LLP)

[Guidance Overview] Deadline Approaching for Amending Deferred Compensation Arrangements under Section 409A
Excerpt: "All covered deferred compensation arrangements must be amended on or before December 31, 2008. The process of identifying and adopting any necessary amendments to existing compensation arrangements can be time consuming and complex. This update provides general background information on Section 409A and offers practical tips and guidance on actions that should be taken immediately in light of the upcoming deadline." (Perkins Coie LLP)

[Guidance Overview] Issue Brief: The Final 409A Deferred Compensation Regulations
The NCEO presents excerpts from its new issue brief on the final deferred compensation regulations under Section 409A of the Internal Revenue Code. (National Center for Employee Ownership)

A Proposal for 'Hands-Off Options'
Excerpt: "Despite recent reforms, public company executives can still use inside information to time their stock sales, secretly boosting their pay. They can also still inflate the stock price before selling. Such insider trading and price manipulation imposes large costs on shareholders. This paper suggests that executives' options be cashed out according to a pre-specified, gradual schedule. These hands-off options would substantially reduce the costs associated with current equity arrangements while imposing little burden on executives." (Social Science Research Network)

Latest Options Backdating Settlement First to Include Consultant
Excerpt: "Cablevision Systems Corp has agreed to a $34.4 million settlement of an investor lawsuit over its stock options award practices." (; free registration required)

Maximizing Retirement Compensation for Senior Executives
Excerpt: "Given . . . restrictions, particularly for companies where retirement plan participation is low, finding additional ways to provide higher retirement income for senior executives can be important for recruiting and retention purposes. It takes good planning, but there are several options available. Generally, they include: Boosting overall retirement plan enrollment; Creating specific types of qualified retirement plans; Offering exclusive Supplemental Retirement and Compensation Plans (SERPs)" (Industrial Distribution)

Employee Benefit Market Undergoing a Total Transformation
Excerpt: "Before an audience of top benefits professionals and insurance carriers, Samuel Fleet, CEO, AmWINS Group Benefits, today gave brokers the stark choice to either adapt to marketplace changes or become extinct . . . ." (Managed Care Weekly Digest via NewsEdge via Human Resource Executive Online)

[Opinion] Groom Law Group Weighs in on Supreme Court Debate over Conflict of Interest Case: MetLife Insurance Co. v. Glenn
Excerpt: "At issue is whether and how a court will consider the fact that the same entity that funds a benefit plan also decides a participant's claim for benefits under the plan. Some courts have viewed this dual role as a conflict of interest that requires a more heightened standard of review of the benefit claim decision than otherwise would be required. Why should retirement plan administrators care about this case? Under current law, if the entity that funds the plan also decides claims for benefits under the plan, the standard of review of a benefit claim will vary, even though the facts are the same, depending on the court that reviews the benefit claim. The Supreme Court's decision in this case should provide a more uniform standard throughout the country." (Business Wire)

Newly Posted Events
(Post Yours!)

Are You Ready For EGTRRA Restatements?
Nationwide on June 10, 2008
presented by

Are You Ready For EGTRRA Restatements?
Nationwide on June 24, 2008
presented by

Form 5500 Refresher Course
Nationwide on June 18, 2008
presented by

Newly Posted Press Releases
(Post Yours!)

Newkirk Adds Investment Change Notice To Targeted Communications

Pension Rights Center Asks Congress to Protect Workers’ Retirement Security in Corporate Bankruptcies
Pension Rights Center announces free trial of InfoLink until July 31st

SunTrust Investment Services Announces Simplified Retirement Planning Program, Retirement GamePlan(TM)
SunTrust Banks, Inc.

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Data Conversion Specialist
for Vanguard
in PA

Benefits Consultant
for Northwestern Benefit Corporation of Georgia
in GA

Pricing Consultant/Underwriter
for Diversified Investment Advisors
in NY

Client Services Manager Retirement Services
for Charles Schwab & Company
in AZ

Director – Relationship Management
for Charles Schwab & Company
in AZ

Product Manager
for Prudential Financial
in NJ

Sr. Retirement Plan Administrator
for Charles Schwab
in TX

Proposal Writer-Retirement Services
for Charles Schwab
in AZ, MA, OH

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