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June 27, 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.

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Banner ad for DATAIR Employee Benefit Systems, Inc.

DC/401(k) Administration Software from DATAIR

DATAIRís Defined Contribution System for Valuations, Discrimination Testing, and Proposals. Handles New Comparability Plans, Sole Proprietorships, 401(k) and 403(b) plans. Live, expert support.

DATAIRís DC/401(k) System includes

  • Download links to many allocated account fund providers
  • Automated loan processing
  • Flexible data import/export
  • Interface with DATAIRís 5500/1099R system.
Contact or call 1-888-328-2474 (1-888-DATAIR-4)

[Guidance Overview] IRS Cannot Require Taxpayer to Suspend Membership in Retirement Fund Prior to Retirement Age
Excerpt: "When the IRS is attempting to levy assets in the retirement fund account of a taxpayer who has not yet reached retirement age, the IRS cannot 'elect,' on behalf of the taxpayer, to suspend the taxpayer's membership in the retirement fund in order to secure the immediate release of the assets in that account, according to IRS Chief Counsel Advice." (Wolters Kluwer)

Tax Incentives for Supplementary Pension Insurance to Begin on Trial Basis in China's Tianjin Province
Excerpt: "A set of trial insurance reforms approved recently in the Binhai New District of China's Tianjin province will provide tax incentives for employers and employees that use supplementary pension insurance products. It is not clear when the trial will begin but some insurance companies have already begun to offer insurance products suitable for the trial." (Watson Wyatt Worldwide)

Text of Pension Protection Technical Corrections Act of 2008 (PDF)
66 pages. (U.S. House of Representatives via American Benefits Council)

Testimony: The Role of Individual Retirement Accounts in the U.S. Retirement System (PDF)
10 pages. Statement for the House Ways and Means Committee Select Revenue Measures Subcommittee hearing on The Role of Individual Retirement Accounts (IRAs) in the U.S. Retirement System, June 26, 2008. (Employee Benefit Research Institute)

Give Plan Participants the 'Green' Light to a More Secure Financial Future
Excerpt: "How much do portfolio construction errors cost your participants? And what can plan sponsors do to help them avoid or overcome such errors? These were just two of the questions addressed in Red, Yellow, and Green: Measuring the Quality of 401(k) Portfolio Choices, coauthored by Gary Mottola, a senior research analyst in CRR, and CRR Director Steve Utkus. The paper will be published as a chapter in a research volume on financial literacy, Improving the Effectiveness of Financial Education and Saving Programs, which is to be issued by the University of Chicago Press." (The Vanguard Group, Inc.)

When Changing Jobs, What Should You Do with Your Old 401k?
Excerpt: "While leaving your retirement account with a former employer is a better decision than cashing out your account and splurging on a boat, it may be more beneficial to consolidate your retirement savings by rolling your old 401k or similar employer-sponsored retirement plan into an IRA." (Linda Horn via

Detroit Police, Firefighting Retirees Sue to Stop Transfer from Pension Fund
Excerpt: "Retired Detroit police and firefighters filed a lawsuit Thursday asking the Wayne County Circuit Court to block the City of Detroit's plan to transfer $75 million from their pension fund to shore up the city's budget." (Detroit Free Press)

U.S. Chamber Sparks DOL Restraint on Union Pension Fund Abuse
Excerpt: "The U.S. Chamber of Commerce obtained an Advisory Opinion Letter from the U.S. Department of Labor's Employee Benefits Standards Administration (EBSA) restraining unions from leveraging their pension funds to pressure employers." (The FINANCIAL)

Steelworkers Reach Settlement with Freightcar America to Provide Pensions and Severance Pay to Johnstown Workers
Excerpt: "The United Steelworkers announced today that a tentative settlement has been reached with FreightCar America (FCA) that will provide pensions to 201 union members and severance pay to another 110 who were laid off in 2007." (

Companies not Actively Pursuing Ways to Ease Boomer Brain Drain
Excerpt: "A recent study by the Institute for Corporate Productivity (i4cp) finds that most companies are not looking for ways to keep the accumulated knowledge of baby boomer employees under their wings. The study found that 77% of responding organizations do not have a phased retirement program - allowing an employee who is approaching retirement to continue employment with a reduced workload." (; free registration required)

Nortel Hit with Defined Benefit Plan Freeze Suit
Excerpt: "A group of Nortel Networks employees not grandfathered into the company's defined benefit plan when it was frozen in June 2006 have filed a lawsuit charging they did not receive enough advance notice." (; free registration required)

Law Firm Continues Probes of Fiduciary Breaches
Excerpt: "The law firm of Stember Feinstein Doyle & Payne, LLC announced it is investigating conduct causing losses to the Fifth Third Bancorp Master Profit Sharing Plan, the company's 401(k) plan, which may have violated the Employee Retirement Income Security Act (ERISA)." (; free registration required)

Retirement Income Focus of DC Growth
Excerpt: "That was a key conclusion of a new McKinsey & Company study on the DC market's future based on the consultant's interviews with 50 experts and its own modeling and analysis, a news release said. The study asserted that by 2015, the transformed DC market will provide a variety of asset accumulation products, a wide range of personalized advice models, transition planning from work to retirement, and retiree lifetime income solutions." (; free registration required)

Hearing on Individual Retirement Accounts and Their Role in Our Retirement System
The target page presents the witness list and links to testimony. (U.S. House of Representatives, Committee on Ways and Means, Subcommittee on Select Revenue Measures)

How Does Your Retirement Program Stack Up? Integrated Retirement Financial Management Benchmarking Data (PDF)
48 pages. Excerpt: "[Mercer presents their] annual survey report of retirement programs sponsored by companies in the S&P 500 . . . . This report provides total and industry group benchmark data that encompasses the three policy levers of Mercer's Integrated Retirement Financial Management (iRFM) framework Ė design, contributions and investment." (Mercer LLC)

The Intersection of Pension Accounting Reform and Investment Risks
16 pages. Excerpt: "In this Perspective, we examine the potential changes to pension and postretirement benefit accounting and how they fit within the context of the broader accounting reform goals that the FASB and the IASB are pursuing Ė in particular, the movement toward 'market value' accounting and a new face of financial statements." (Mercer LLC)

Five Questions When Picking a Target-Date Fund
Excerpt: "The decision to provide these funds to participants is a no-brainer at this point, with about 80% of large companies offering target-date options in their 401(k)s, according to Greenwich Associates. But finding the appropriate family of target-date funds can be incredibly complicated for plan sponsors." (Financial Week; free registration required)

Government Actions Could Encourage More Employers to Offer IRAs to Employees (PDF)
Excerpt: "GAO was asked to report on (1) the role of IRAs in retirement savings, (2) the prevalence of employer-sponsored and payroll-deduction IRAs and barriers discouraging employers from offering these IRAs, and (3) changes that are needed to improve IRA information and oversight." (U.S. Government Accountability Office)

Present Law and Analysis Relating to Individual Retirement Arrangements (PDF)
56 pages. Excerpt: "This document, prepared by the staff of the Joint Committee on Taxation, includes a description of present law and analysis relating to IRAs." (Joint Committee on Taxation)

Ways and Means Committee Subcommittee to Discuss IRAs
Excerpt: "The hearing before the Select Revenue subcommittee . . . will explore, among other things, an idea that has garned a lot of attention recently -- namely, the concept of requiring employers to default employees into an 'automatic' payroll deduction IRA." (Baker & Daniels)

Helping Small Businesses Set-up Retirement Plans
Excerpt: "By itself, a retirement plan sponsored by a small business or a professional practice might be modest, with $1 million or less in assets. By pursuing several plans, though, advisors may discover that 'real money' is attainable." (Financial Planning)

[Opinion] CIEBA Letter on Proposed FASB Staff Position to Amend FASB Statement 132 (revised in 2003), Employers' Disclosures about Pensions and Other Postretirement Benefits (PDF)
5 pages. Excerpt: "As the chief investment officers for 110 major private-sector retirement plans, CIEBA members recognize the desirability of increased transparency and comparability in the financial statements of public companies. However, we posit that the proposals contained in this FSB will not lead to a meaningful increase in transparency and may reduce comparability." (Committee on Investment of Employee Benefit Assets)

Sponsored by: Prudential

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With 130+ years of leadership in insurance and financial services behind us, Prudential is the place for results-driven professionals seeking advancement potential, a supportive environment, and generous rewards. Prudential has been recognized for excellence in many ways, including being ranked in Business Weekís Top 50 Performing Companies, Fortune Magazineís Top 50 places for minorities, and Working Motherís Top 10 employers for working mothers. Donít miss this opportunity to be a part of our success and our plans for the future.

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An EO/AA employer committed to diversity in our workforce.

(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] U.S. Supreme Court's Rulings on Employee Benefits, Employment Practices (PDF)
2 pages. (Milliman)

[Guidance Overview] Deadline for 409A Compliance Approaching (PDF)
Excerpt: "With only six months remaining to make plans compliant with Section 409A, we advise employers to focus on their Section 409A review process now. Beginning the process now will allow sufficient time before December 31, 2008, for assessing compliance alternatives, taking advantage of the transition relief opportunities which are available only through December 31, 2008, drafting, approving, and adopting remedial amendments, and establishing operational procedures for compliance." (Haynes and Boone, LLP)

Decision Time on Same-Sex Benefits
Excerpt: "The recent California Supreme Court ruling allowing for same-sex marriages may not stick, but employers throughout the U.S. had better know now whether they will extend health care benefits to same-sex spouses." (Workforce Management; free registration required)

Employers Pump Up Mileage Reimbursement, but Offer Little Relief for Costly Commutes
Excerpt: "Americans are likely to get only modest help from employers in easing pain at the pump. Two recent surveys show the primary way companies are responding has nothing to do with getting to work." (Workforce Management; free registration required)

Newly Posted Events
(Post Yours!)

Benefits Plan Debit Cards: The Secrets to Cutting HR Costs and Paperwork While Increasing Employee Buy-In
Nationwide on July 8, 2008
presented by

Newly Posted Press Releases
(Post Yours!)

Trustees of Queens, N.Y., Union Benefit Plans Ordered To Pay $250,000 To Resolve U.S. Labor Department Lawsuit
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Department of Labor Sues Fiduciaries of Dadeville, Ala., Employee Leasing Company to Restore More Than $200,000 to Pension Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Department of Laborís ERISA Advisory Council Schedules Meetings for July 2008
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Labor Department Solicits Nominations For 2009 ERISA Advisory Council
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

New Survey Reveals How Much Employers Spend on Incentives for Health Management Programs
ERIC (ERISA Industry Committee)

Wilmington Trust Makes Another Acquisition
Wilmington Trust

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Account Manager
for Retirement Services
in NY

Pension Sr Associate
for MHM Retirement Plan Solutions
in KS

Pension Plan Administrative Support
for Tegra Financial Partners
in GA

Retirement Plan Conversion Consultant
for Charles Schwab
in OH

Retirement Plan Consultant
for Weaver and Tidwell, LLP
in TX

Defined Contribution Client Account Manager
for New York Life Retirement Plan Services
in MA

Retirement Plan Specialist
for New York Life Retirement Plan Services
in MA

CRTFL - Sr. Customer Manager
for Citi
in FL

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