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June 24, 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's RELIUS Education

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2008 Chicago Advanced Pension Conference

Downtown Chicago, September 3-5 – Leading ERISA experts present the most current analysis of new legislative and regulatory guidance. Join us and learn all about new disclosure mandates for 401(k) fees, EGTRRA updating, how to handle IRS and DOL audits, participant disclosure update, cash balance plans for DC administrators, practical advice on 403(b) plans, and much more. Plus, "Ask the Experts" workshop, more concurrent sessions, and over 900 minutes of CE credits. Register today.

Relius Education by SunGard.

[Guidance Overview] Supreme Court Charts New Course in Pension Plan Case Interpreting ADEA
Excerpt: "In Kentucky Retirement Income Systems v. Equal Employment Opportunity Commission, No. 06-1037 (June 19, 2008), the United States Supreme Court interpreted the Age Discrimination in Employment Act (ADEA) to permit Kentucky to increase disabled public safety workers' pensions to the level they would have attained at normal retirement age, even though that meant workers who became disabled after reaching retirement age would not receive any pension increase." (Littler Mendelson P.C.)

Preliminary Approval of Dynegy Settlement
Excerpt: "[In Lively v. Dynegy, Inc., t]he class plaintiffs alleged that the fiduciaries of the Illinois Power Company Incentive Savings Plan for Employees Covered Under a Collective Bargaining Agreement breached their duties to the Plan's participants by investing and permitting the investment of Plan assets in stock of the sponsoring employer, Dynegy, Inc." (Lewis, Feinberg, Lee, Renaker, & Jackson, P.C.)

Supreme Court Grants Cert. in Hulteen Retroactive Pregnancy Discrimination Act Case
Excerpt: "The case concerns whether Title VII permits an employer, when setting retirement benefits, to discriminate between women who took pregnancy disability leaves before the Pregnancy Discrimination Act (PDA) came into effect and other employees who took any other kind of temporary disability leave during that same period. The en banc Ninth Circuit held that AT&T's employment benefits system violated the PDA." (Workplace Prof Blog)

Cross-Border Pension Plans Open Up (PDF)
1 page. Excerpt: "Two recent developments have opened up the possibility of using a single pension plan to cover employees in multiple countries: Towers Perrin is working with a major multinational employer to set up a ground-breaking, cross-border plan sited in the EU and covering employees both in multiple countries within the EU and even some outside of it." (Towers Perrin)

SSA's International Update, June 2008
Excerpt: "This monthly publication covers recent developments in foreign private and public pensions, social security, and retirement." (U.S. Social Security Administration)

The Future of Public Employee Retirement Systems
Excerpt: "At a recent Wharton Impact conference hosted by the Pension Research Council, an energetic cast of academics, financial experts, regulators, and plan sponsors examined the challenges facing public retirement systems in the US and around the world." (Pension Research Council; registration required to download fulltext of paper)

How Changes in Social Security Affect Recent Retirement Trends
Excerpt: "According to CPS data, men 65 to 69 were about six percentage points less likely to be retired in 2004 than in 1992. CPS and Health and Retirement Study (HRS) data indicate a corresponding difference of 3 percentage points between 1998 and 2004. Simulations with a structural retirement model suggest changes in Social Security rules between 1992 and 2004 increased full time work of 65 to 67 year old married men by a little under 2 percentage points, about a 9 percent increase, and increased their labor force participation by between 1.4 and 2.2 percentage points, or 2 to 4 percent, depending on age." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Retirement Groups Urge Change in Method of Estimating Revenue Effects of Legislative Proposals
Excerpt: "A group consisting of ten retirement advocacy organizations . . . has issued a research report which advocates the use of present-value accounting instead of cash-flow accounting when estimating the revenue cost of proposed legislative changes affecting retirement policy." (Wolters Kluwer)

403(b) Rule Changes Spur New Approach
Excerpt: "With new 403(b) regulations looming, plan providers, consultants and plan sponsors are changing how they market, advise and manage the plans. The regulations, effective Jan. 1, require plan executives to provide a written plan document, account for excess contributions and monitor the transfer of assets among multiple plan service providers." (Pensions & Investments)

New Jersey Pension Changes Win Approval in Legislature
Excerpt: "It took three and a half hours of cajoling and twisting arms, but the Assembly finally passed a bill to tighten eligibility for state pensions and eliminate one state holiday just after 11 o'clock Monday night. After easily passing the Senate, the bill stalled in the Assembly, forcing Democratic leaders to scurry to line up the 41 votes needed to pass it." (

John W. Livick v. The Gillette Company; The Gillette Company Retirement Plan
Excerpt: "The Question: Does the Employee Retirement Income Security Act (ERISA) require that a plan pay benefits beyond those provided in the plan document when a company representative and an online benefit calculator provided a mistaken benefits estimate?" (; free registration required)

ERISA Accounts Have Gained Increased Prominence Recently As Part of Renewed Focus on 401(k) Plan Fees and Expenses
Excerpt: "'ERISA accounts are a compromise made by plan sponsors that do not want to pay plan expenses themselves, but want to ensure the participant fees are reasonable,' says Mark Davis, Partner, Kravitz Davis Sansone." (; free registration required)

In Down Economy, Less Upside to DC Plans
Excerpt: "Pensions may be seen as a mill-stone around the corporate neck, but for some companies, these relics of business largesse might actually provide labor management flexibility that their defined-contribution cousins can't match. And that flexibility may come in especially handy if the economy continues to head south and layoffs become inevitable." (Financial Week; free registration required)

401(k) Sponsors Push for Fee Cuts
Excerpt: "Employers aren't waiting for the outcome of a slew of 401(k)-fee lawsuits now mired in the courts to define what are reasonable costs: Many are putting the squeeze on their 401(k) providers, insisting on more frequent negotiations over pricing and using their growing size to ensure participants aren't paying the corporate equivalent of retail." (Financial Week; free registration required)

The Law of Unintended Consequences As Applied to a Business Owner's Retirement Plan
Excerpt: "[A 1936 article has since been popularized as The Law of Unintended Consequences, as] in case of a business owner using the tax laws to exclude Non-Highly Compensated Employees (Non-HCEs) from his or her retirement plan if asset protection is a key objective. Why? Because a retirement plan covering only the business owner and/or the owner's spouse is not an ERISA plan, and does not qualify for anti-alienation protections under Title I of ERISA." (The Retirement Plan Blog)

Fiduciary Concerns on the Rise, Advisers Say
Excerpt: "Three out of four advisers have observed heightened fiduciary concerns from plan sponsors since last year, according to a survey by Putnam Investments. The Putnam survey of 154 retirement plan advisers found that advisers see fiduciary concerns as an important issue for plan sponsors; favor target-date-type products; and, amid fee regulation, think their fees are on par with industry standards." (

Supreme Court to Rule on Pension Credit for Old Maternity Leaves
Excerpt: "The Supreme Court agreed Monday to decide whether decades-old maternity leaves should count in determining pensions. The issue has split federal appeals courts and could become increasingly important as women who took maternity leaves in the 1960's and 70's approach retirement." (Associated Press)

[Opinion] Jottings from a Plan Designs Conference
Excerpt: "[Nevin E. Adams recalls what he heard at the conference:] new ideas, modifications of existing 'assumptions,' and the occasional validation of the 'tried and true.'" (; free registration required)

[Opinion] Proposed Rule Would Create a 'Safe Harbor' for Participant Contributions Deposited Within Seven Business Days of Receipt or Withholding
Excerpt: "DoL's position, as stated in numerous Field Assistance Bulletins and Advisory Opinions, is that an employer impermissibly 'uses' plan assets if it fails to transmit partic­ipant contributions to the plan as soon as they are 'reasonably segregable' from the employer's general assets. This 'use of plan assets' is a potential prohibited transaction, subjecting the employer to remedies (e.g., making the plan whole), excise taxes, and penalties." (; free registration required)

Sponsored by: Prudential

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Links to Items on Executive Comp, Benefits in General

[Guidance Overview] Supreme Court Issues Two Decisions Affecting Benefit Plans (PDF)
5 pages. Excerpt: "On June 19, the United States Supreme Court issued decisions in Kentucky Retirement Systems v. Equal Employment Opportunity Commission, . . . and in Metropolitan Life Ins. Co. v. Glenn, . . . . The first decision discusses the disparate impact test under the Age Discrimination in Employment Act (ADEA); the second addresses the standard of review to be applied by the courts when reviewing a decision of a claims fiduciary that may have a financial interest in the outcome of the decision." (Morgan, Lewis & Bockius LLP)

[Guidance Overview] Penalties Imposed for Failure to Timely Provide Severance Plan Document and SPD; No Penalties for Documents Specific to Claim
Excerpt: "The risk of penalties under ERISA calls for a careful response to all document requests received by a plan during the claims process. Under ERISA Section 502(c)(1), a plan administrator that fails to furnish requested information required by ERISA may be liable for penalties of up to $110 per day from the date of such failure or refusal. This court is not the first one to impose statutory penalties only for failure to provide documents required under ERISA's statutory language, and not for failure to provide documents relating to claims." (Employee Benefits Institute of America)

Rep. Waxman Targeting Compensation Committees and Their Consultants
Excerpt: "Rep. Henry Waxman has been a leading voice in the fight against excessive executive compensation, grilling high-profile Wall Street executives on their severance pay and criticizing compensation consultants. But the California Democrat may do more to address the issue, such as focusing on other 'insiders' who are involved in the compensation-approval process." (Financial Week; free registration required)

Employers Are Changing Their Benefit Offerings, According to Survey
Excerpt: "SHRM's annual benefits survey shows continuing erosion of defined-benefit pension plans and traditional indemnity health care coverage." (Workforce Management; free registration required)

IRS Grants Tax Relief to Victims of Storms, Floods and Tornadoes in Indiana and Wisconsin
Excerpt: "The IRS has announced special tax relief for taxpayers within a 28-county disaster area in Indiana affected by severe storms, floods and tornadoes beginning May 30, 2008. . . . The IRS has announced special tax relief for taxpayers within a seven-county disaster area in Wisconsin affected by severe storms, tornadoes and flooding on June 5, 2008." (Wolters Kluwer)

The DOL Announces Disaster Relief after Severe Weather
Excerpt: "The DOL announced an extension of the Form 5500 and Form 5500 EZ annual report/returns deadline after severe weather hits Colorado, Georgia, Mississippi, Missouri, Iowa, Indiana, Wisconsin, Maine, Arkansas, and Oklahoma . . . ." (ERISA Rules and Regulations)

Employers, Employees Split on Benefit Program Perceptions
Excerpt: "A new MetLife survey shows a significant disconnect between employers' views about their workplace benefit program and the perceptions of employees.' (; free registration required)

President Signs Heroes Earnings Assistance and Relief Tax Act of 2008 into Law
Excerpt: "In addition to provisions that may affect benefits under 401(k) plans for certain participants in military service (such as survivor benefits, differential pay, and elective deferrals), the Act allows cafeteria plans to provide qualified reservist distributions from health FSAs. It also extends the mental health parity provisions of the Code, ERISA, and the PHSA." (Employee Benefits Institute of America)

Ampad Implements Programs to Help Reduce Employee Commuting Costs
Excerpt: "Ampad CEO Don Meltzer stated, 'In a recent management meeting, our leadership team discussed the impact of the rising price of gasoline on our employees. The daily drive to and from work is probably the largest fuel cost they face. We implemented new employee programs in an effort to help our employees offset some of these escalating costs.'" (BusinessWire)

Newly Posted Events
(Post Yours!)

WEB West Golf Outing And Summer Social
in Illinois on July 24, 2008
presented by WEB - Chicago West

You've Gotta Have HEART: New Pension Rules for Veterans
Nationwide on July 17, 2008
presented by SunGard Relius

Newly Posted Press Releases
(Post Yours!)

Pension Funds Drive Growth of Alternative Assets, Watson Wyatt Research Shows
Watson Wyatt

Companies Continue Move Toward Selective Outsourcing Approach, Watson Wyatt Finds
Watson Wyatt

Insurance Carrier Enters Into Agreement To Cooperate With Government Investigation And Pay $5,550,000 In Fines And Penalties For Its Role Failing To Disclose Hidden Fees
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

IRS Increases Mileage Rates through Dec. 31, 2008
Internal Revenue Service (IRS)

Video from Wachovia Shows 401(k) Users How to Achieve Retirement Success
Wachovia Corporation

U.S. Prevention Medicine: Employers Can Help Workers Avoid Heart Attacks
U.S. Preventive Medicine

CFA Institute Launches Global Code of Conduct for Pensions Schemes
CFA Institute Centre

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Manager of Compliance, Testing, & 5500
for Retirement Alliance, Inc.
in NH

for Buck Consultants
in IL

Pension Administrator
for S & A Administrators, Inc.
in PA

Client Relations Associate
for Alliance Benefit Group of Michigan
in MI

Retirement Plan Coordinator
for The Capital Group Companies
in CA, IN, TX

Sales Manager - California Teachers Association
for The Standard
in OR

RVP / External Wholesaler - North Ohio
for Transamerica Retirement Services
in OH

Customer Service Representative
for Citi
in MA

U.S. Benefits Manager
for One of the world's top-ranked global consulting firms
in MA

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