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June 18, 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 Document Management Services

Do you have 500 or more defined contribution plans to restate for EGTRRA? Outsource them to us. SunGard’s expert Document Management Services (DMS) staff can work as your "invisible" back office resource to help you through the restatement process. Let us focus on your plan documents, so you can focus on growing your business. Contact Ellen Nasrallah at 800-326-7235, ext. 5968.

[Official Guidance] Text of Proposed IRS Regs on Accrual Rules for DB Plan Conversion to Cash Balance Formula (PDF)
6 pages. Excerpt: "The proposed regulations would provide a limited exception to the existing requirement under § 1.411(b)– 1(a)(1) to aggregate the accrued benefits under all formulas in order to determine whether or not the accrued benefits under the plan for participants satisfy one of the alternative methods under section 411(b)(1)(A) through (C). Under this limited exception, certain plans that determine a participant's benefits as the greatest of the benefits determined under two or more separate formulas would be permitted to demonstrate satisfaction of the 133-1/3 percent rule of section 411(b)(1)(B) by demonstrating that each separate formula satisfies the 133-1/3 percent rule of section 411(b)(1)(B)." (Internal Revenue Service)

[Guidance Overview] Amara v. Cigna, ERISA Class Actions, and Fiduciary Misrepresentations About Retirement Benefits
Excerpt: "A few months ago, I reported on the District Court's decision in Amara v. CIGNA, an important class-action case on ERISA retirement benefits and on alleged misrepresentations made by the Company about retirement benefits. Over the last few months, then, the court was asked to consider the issue of what is appropriate relief from the decision." (Workplace Prof Blog)

Those That Do Save Don't Save Wisely, According to Financial Engines
Excerpt: "A recent study of 1 million 401(k) accounts by pension investment advisers Financial Engines shows Americans are betraying their futures in two ways: many aren't saving enough, but the majority is doing such a poor job of investing they aren't giving their hard-earned savings a chance to bulk up." (Chicago Tribune)

Hecker v. Deere - Amended Brief of DOL Secretary as Amicus Curiae
In Support Of Plaintiffs-Appellants, April 2, 2008 (U.S. Department of Labor)

Proposed Funding Regs Could Lead to Under- or Overvaluation of Employer Plans, Experts Warn
Excerpt: "Practitioners acknowledged that the IRS 'got it mostly right' at a hearing on proposed funding plan regulations (CCH Pension Plan Guide ¶20,262G) at IRS headquarters in Washington, D.C. on May 29, 2008. However, testimony also indicated that the IRS needs to provide for asset smoothing as opposed to asset averaging, exclude unpredictable contingent event benefits from the definition of funding target, redetermine the yield curve and eliminate the inconsistencies between Code Sec. 430 and Code Sec. 436." (Wolters Kluwer)

Protecting Your Nest Egg from Inflation
Excerpt: "Wise retirement investors, as well as current retirees, have always taken inflation into account. Especially over the next five to ten years, however, inflation should become an even more significant variable in one's financial planning. The fact is that, by any measure and even at a seemingly modest rate, annual price increases will take a surprisingly large toll out of the purchasing power out of a dollar spent a few years from now." (Employee Benefit News; free registration required)

Deferred Annuities in Defined Contribution Plans (PDF)
4 pages. Excerpt: "Conventional deferred annuities are being repackaged as 'DB in DC' investment options. Various fiduciary and investment considerations are likely to impede their rapid growth." (The Vanguard Group, Inc.)

Transcript of Online Chat on Retirement Planning Issues
Excerpt: "Washington Post columnist Martha M. Hamilton was online Tuesday, June 17 at Noon ET for her final chat to answer questions about financial planning for retirement. She was joined by Teresa Ghilarducci, economist and author of 'When I'm Sixty-Four: The Plot Against Pensions and the Plan to Save Them.'" (The Washington Post; free registration required)

Retirement Benefits in State and Local Governments in the United States, 2007 (PDF)
63 pages. Excerpt: "This summary presents findings of the 2007 National Compensation Survey (NCS) regarding detailed provisions of retirement plans in State and local governments." (U.S. Bureau of Labor Statistics)

Kentucky Governor Calls Special Legislative Session to Address Pension Reform
Excerpt: "Beshear, in a news release Tuesday afternoon, estimated that passage of pension reform legislation could save state and local governments as much as $500 million per year. It is expected immediately to provide $56 million in relief to county and city governments and school districts." (Business First of Louisville)

Disclosure on 401(k) Fees Will Stay the Same—for Now
Excerpt: "Legislation approved by a House panel to require greater disclosure of 401(k) plan fees won't pass this year, the panel's chairman and a sponsor of the legislation said." (Financial Week; free registration required)

Cashed-Out Participants Keep Legal Standing Under ERISA
Excerpt: "A federal appellate court ruled that employees don't lose the right to pursue individual claims when they cash out their plan balances. The 4th U.S. Circuit Court of Appeals decision released Monday came in a consolidated action involving four lawsuits charging that employers violated their Employee Retirement Income Security Act (ERISA) fiduciary duties by investing plan assets in mutual funds that permitted market timing." (

[Opinion] Comments on Proposed Regulations Relating to Multiemployer Plan Funding (PDF)
5 pages. Excerpt: "This letter is submitted on behalf of the American Benefits Council, the U.S. Chamber of Commerce, and the Food Marketing Institute to provide comments on the proposed regulations issued by the IRS on March 18, 2008 under Section 432 of the Internal Revenue Code (the 'Code'), relating to multiemployer plans in endangered or critical status." (American Benefits Council)

[Opinion] South Florida Cities Should Reform Their Pension Plans: Rich Payouts a Threat to Essential Services
Excerpt: "Pensions administered by some South Florida cities are so far out of line with reality that some government workers would be better off financially by retiring than working. This is a lose-lose situation for local residents whose taxes support the generous pensions, and city officials would be smart to begin to rethink their options." (The Miami Herald via Human Resource Executive Online)

[Opinion] Pennsylvania Must Be Prudent with State Pensions
Excerpt: "The stock market's performance also affects, in part, the financial health of two big public pension plans -- the State Employees' Retirement System (SERS) and the Public School Employees' Retirement System (PSERS). Everybody is pretty familiar with the concerns about the long-term financial health of the Social Security System and Medicare. Well, Pennsylvania has a similar problem with its two public pension plans, and the ramifications for taxpayers are significant and imminent." (The Morning Call)

Sponsored by: SunGard's RELIUS® Education

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SunGard’s Relius® Education Summer Programs

Designed for employee benefits professionals, SunGard’s educational programs help you and your staff stay updated on the latest legislative, IRS, and DOL guidance. Our employee benefits experts use case studies that illustrate day-to-day situations, and provide valuable solutions. Relius Education’s programs and workshops offer a high level of broad, current, and in-depth knowledge.

Relius Education by SunGard.

(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] Heroes Earnings Assistance Act Awaiting Signature By President
Excerpt: "Passed unanimously by the House and Senate, The Heroes Earnings Assistance and Relief Tax Act of 2008 (H.R. 6081) now awaits signature by the President. Sponsored by Rep. Charles B. Rangel (DN.Y.), the Act provides a panoply of adjustments aimed at providing financial relief to military families." (Deloitte via

[Guidance Overview] When Federal and State Definitions of Marriage Differ - An Overview for Employee Benefit Plan Sponsors
Excerpt: "The different definitions of 'marriage' and 'spouse' under federal and state law can raise a number of complicated legal questions for employee benefit plan sponsors. For example, what is the appropriate tax treatment of health coverage provided to an employee's same-sex spouse?" (Deloitte via

[Guidance Overview] White House Calls for Regulations to Be Finalized by November 1, 2008
Excerpt: "On May 9, 2008, the White House issued a Memorandum to the Heads of Executive Offices and Agencies stating that, 'except in extraordinary circumstances, regulations to be finalized in this Administration should be proposed no later than June 1, 2008, and final regulations should be issued no later than November 1, 2008.' It is not clear how this Memorandum will affect the many pending regulations relating to employee benefit plans, including those relating to the Pension Protection Act of 2006." (Deloitte via

[Guidance Overview] Arbitration of ERISA Claims Proves Expensive Dispute Resolution Alternative
Excerpt: "In this fascinating decision, the marked disparity between an arbitrated employee benefits dispute and the likely outcome were the issue litigated in federal court could not be more dramatic. The case encompassed, among other things, an ERISA Section 510 claim. One need not read ERISA cases for long before developing the impression that these claims often miss the mark." (Health Plan Law blog by Attorney Roy F. Harmon III)

Web Resource Helps United Services Automobile Association Employees Help Themselves
Excerpt: "The Personal Balance Tool (PBT), developed in 2006 by USAA, Harris, Rothenberg International (HRI) and ValueOptions, is a web resource that more than half of USAA employees use to address a variety of personal concerns that will impact their work life." (Employee Benefit News; free registration required)

Bush Signs Bill Protecting Survivor Benefits of Military Members
Excerpt: "Legislation to protect the survivor benefits of service members killed in action was signed into law by President Bush on Tuesday." (; free registration required)

Newly Posted Press Releases
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Bloomberg TV Investigates Hidden Fees in 401k Plans
Bloomberg Television

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Pension Administrator/TPA
for Block Consulting Actuaries, Inc.
in CA

Account Manager
for The Standard
in AZ, CA, CO, IA, MA, OH, OR

401(k)/DC Third Party Plan Administrator
for Retirement Plan Services Company
in GA

Senior Relationship Manager
for Principal Financial Group
in DC, GA, IL, MA, PA

Internal Sales Consultant
for Transamerica Retirement Services
in IA, MA, PA

401(k) Plan Manager
for AlphaStaff
in FL

Plan Termination Specialist
for Kravitz - Louis Kravitz & Associates
in CA

Plan Document Specialist
for Kravitz - Louis Kravitz & Associates
in CA

Defined Benefit Pension Administration Team Leader
for Milliman, Inc.
in NJ

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