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June 19, 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. SunGardís 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.

[Guidance Overview] Beware of PBGC 'Downsizing Liability'!
Excerpt: "A downsizing employer with a PBGC-covered pension plan may have to grapple with a PBGC demand to protect that plan in the event it terminates in a distress or involuntary termination within the next five years. The protection may take the form of a bond, an escrow, or -- more likely -- a negotiated alternative, such as an additional contribution to the plan. [This article was republished with permission from the Journal of Pension Benefits.]" (Keightley & Ashner LLP)

[Guidance Overview] Revisiting the Concept of Standing As a Defense to ERISA Actions After LaRue
Excerpt: "One of the less noticeable casualties of the LaRue decision may be the erstwhile vaunted role of standing as a predicate to ERISA actions. Wangberger provides a small hint of this possibility, but that decision does not necessarily measure the watermark of this influence at high tide. I say that because Wangberger involved a cashed out plan participant which was similar to the situation before the Court in LaRue." (Health Plan Law blog by Attorney Roy F. Harmon III)

Target Date Funds Tops for Retirement Plans
Excerpt: "In a study of QDIA selection over the past six months, target date funds were the top choice of plans . . . ." (Investment News; free registration required)

ASPPA Calls for Clarifications in IRS's Regs on Cash Balance, Other Hybrid Retirement Plans
Excerpt: "Testifying at a June 6 hearing on the Internal Revenue Service's proposed regulations governing cash balance plans and other hybrid retirement plans, the American Society of Pension Professionals & Actuaries (ASPPA) called for certain clarifications in the final regulations. The IRS issued the proposed regulations on Dec. 28, 2007." (Wolters Kluwer)

Supreme Court Finds No Age Bias in Kentucky Retirement System
Excerpt: "The court, in a 5-4 ruling, says the retirement system reasonably takes age and length of service into account when structuring benefits for disabled workers who are eligible for retirement." (AP via The New York Times; free registration required)

Study Indicates Majority-Owned ESOP Firms Enjoy Greater Productivity
Excerpt: "Recent research by Brent Kramer, a doctoral candidate at the City University of New York, 'provides strong evidence that majority employee-owned businesses have a significant advantage over comparable traditionally-owned businesses in sales per employee.'" (; free registration required)

South Africa's National Pension Plan Delayed
Excerpt: "THE proposed National Social Security System (NSSS) is unlikely to be implemented by 2010 as first expected, and the government favoured a phased implementation of the model, Elias Masilela, a chief strategist at Sanlam's employee benefits division, said yesterday." (

Illinois Lawmakers Take No Action on Huge Pension Debt
Excerpt: "State lawmakers had the incentive and the opportunity to work on the nation's worst pension debt problem, but they left town last month without a new solution -- and with even more money problems because of their inaction. Here are some questions and answers about the latest on state government pensions." (AP via Chicago Tribune)

Coalition Tells Congress to 'Get it Right' About Public Pension Funding
Excerpt: "A coalition of government officials, retirement systems, and unions has sent a letter to Congress saying the use of inappropriate and incomplete information by some organizations distorts the truth regarding public pension finance." (; free registration required)

Pension Plan Returns Top 401(k)s, according to Watson Wyatt Study
Excerpt: "Pension-plan returns outperformed 401(k) retirement accounts from 2003 to 2006, the most recent bull market, according to a study." (Bloomberg)

[Opinion] Joint Letter to Members of Congress Regarding Strength and Viability of Public Retirement Systems (PDF)
4 pages. Excerpt: "On behalf of the 20 national organizations listed . . . representing State and local governments and officials, public employee unions, public retirement systems, and more than 20 million working and retired state and local government workers and their beneficiaries -- we are writing to set the record straight with regard to the long-term viability and strength of State and local government employee retirement systems." (National Association of State Retirement Administrators)

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] IRS Guidance on Proper Income Tax Withholding for Nine Common Supplemental Wage Payment Scenarios
Excerpt: "For each of the situations discussed, the IRS assumes that there is no constructive receipt or constructive payment of wages before the actual payment of wages, that no amounts are required to be included in income under section 409A before the actual payment of wages, and that all payments are made on or after January 1, 2007." (Littler Mendelson P.C.)

[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 Andrews & Ingersoll, LLP)

[Guidance Overview] DOJ releases opinion interpreting Social Security Act in way that will benefit families headed by same sex couples in some states
Excerpt: "Although the opinion was about Social Security health insurance benefits, it may apply to other federal statutes and regs worded in the same way. (And so may reach federal employees or other insurance programs--thus the tie-in to the workplace)." (Workplace Prof Blog)

[Guidance Overview] Bush Signs Military Reservist Benefits Measure
Excerpt: "Employees no longer will have to forfeit unused balances in their health care flexible spending accounts when called up from the reserves for active military duty." (Workforce Management; free registration required)

[Guidance Overview] Milliman's Monthly Benefit News and Developments, June 2008 (PDF)
2 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee benefits. (Milliman)

[Guidance Overview] When Federal and State Definitions of 'Marriage' Conflict - Overview for Employee Benefit Plan Sponsors (PDF)
Pages 6-7 of 10 pages. Excerpt: "The fact that same-sex spouses are not treated as 'spouses' under federal laws does not mean employers cannot extend comparable rights to their employees' same-sex spouses. For example, as some employers now do for domestic partners, an employer might create parallel COBRA-type rights for employees' same-sex spouses. Likewise, an employer could offer FMLA-type rights for employees to take unpaid leave to care for same-sex spouses even though they are not required to do so under federal law." (Deloitte LLP)

[Guidance Overview] HEART Act Requires Employers to Provide Benefits to Employees Called to Military Service
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 Andrews & Ingersoll, LLP)

[Guidance Overview] New Military Law Impacts Treatment of Wages and Benefits (PDF)
Excerpt: "President Bush has just signed the Heroes Earnings Assistance and Relief Tax Act of 2008 into law. In addition to providing tax breaks and incentives for military personnel, the law impacts employers' treatment of differential wage payments and their retirement plans. It could also affect their health flexible spending arrangements." (Buck Consultants)

[Guidance Overview] A Discussion of Amschwand v Spherion Corp.
Excerpt: "In Amschwand v Spherion Corp., 505 F.3d 342, 41 EBC 2697 (5th Cir. 2007), Mr. A was on medical leave for terminal cancer and still covered by Spherion's life insurance plan. At the end of the year, Spherion changed to a new insurance carrier and was supposed to list Mr. A as one of the carryovers to the new policy -- but didn't." (Pension & Benefits Blog)

[Guidance Overview] Understanding the Option Dating Controversies: Practical Problems and Issues
Excerpt: "The prior installment of this article series discussed the myriad of legal problems and issues that option backdating participants face. If those were not enough, option manipulation activity raises a host of practical and business-related issues. This installment of the series highlights some of the more common practical issues, although it is by no means an exclusive list of problems that such companies are facing or will face in the future." (Employee Benefit Plan Review via Blank Rome LLP)

Helping Employees Fight Rising Fuel Costs
Excerpt: "Helping employees fight increasing gas prices doesn't have to cost you anything but a little time; however, if you have the budget available, small incentives may mean a lot to employees. These can include raffles for gas gift cards for carpoolers; train tickets for commuters; even movie tickets or restaurant gift cards, since employees are probably cutting back on entertainment with the extra cost of gas." (The Precept Employee Benefits Blog)

Updated Employee Ownership 100 List
The National Center for Employee Ownership presents the latest version of the Employee Ownership 100 list, which lists the largest U.S. companies that have at least 50% of their stock owned by an ESOP, a stock purchase plan in which most full-time employees can participate, a profit sharing plan or other trust, or some combination of such plans. (National Center for Employee Ownership)

Newly Posted Events
(Post Yours!)

403(b) Plans Issues and Answers Forum
in Texas on August 18, 2008
presented by SPARK Institute

403(b) Plans Issues and Answers Forum
in Florida on September 4, 2008
presented by SPARK Institute

Newly Posted Press Releases
(Post Yours!)

Pensions Outperformed 401(k) Plans During Last Bull Market, Watson Wyatt Analysis Finds
Watson Wyatt

Baucus, Grassley Military Tax Relief Package Becomes Law
U.S. Senate Finance Committee

The SPARK Institute Announces 403(b) Plan Conferences
SPARK Institute

Groundbreaking New Survey Asks American Workers, Ages 44-70, About Longer Working Lives

Understanding Retirement Plans Is Essential For Plan Administrators and Business Owners
International Foundation of Employee Benefit Plans

CPI Names National Director of Broker Dealer Relationships
CPI Qualified Plan Consultants, Inc.

Twenty National Organizations Dispute Portrayal of State & Local Retirement Systems In Letter To Congress
National Association of State Retirement Administrators

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Tax Manager - Technical Editor
for Thomson Reuters
in TX

Benefit Analyst
for Kibble & Prentice
in WA

Plan Document Specialist
for Preferred Pension Planning Corporation
in NJ

Client Services Manager
for SunTrust Retirement Services
in DC

Senior Compliance Manager-HR Services Risk & Compliance
for Fidelity Investments
in MA, NC, NH

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