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July 16, 2008

Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy.

Today's sponsor is

(Click on company name or banner to learn more.)
Banner ad for now offers a 409A plan document.'s new Section 409A non-qualified deferred compensation plan is now available on its website. The plan includes an Adoption Agreement, Basic Plan Document, Plan Description, election forms, sample Rabbi Trust, inservice distribution form and more.

The document is available for $275/plan or purchase our Non-Qualified Annual Subscription for $775/year and get the 457(b) and 409A.

Contact Holly Roussel for details at 800.596.0714 or via email at

[Guidance Overview] Timing of Remittance of Employee-Withheld Plan Contributions
Excerpt: "To avoid civil and criminal penalties, and to reduce the risk of lawsuits and governmental scrutiny, employers should review their existing contribution practices to ensure that employee contributions are deposited to the proper plan as quickly as possible following each pay period. While the amount of time that is reasonable depends on the facts and circumstances of each individual case, every effort should be made to minimize delay." (Poyner Spruill)

[Guidance Overview] Malaysian Government Steps Up EPF Savings Program (PDF)
2 pages. Excerpt: "Companies doing business in Malaysia must comply with a new set of measures for participating in the Employees Provident Fund (EPF), the government's mandatory retirement program for employees." (Towers Perrin)

[Guidance Overview] How Does HEART Affect 415 and PPA Amendments?
Excerpt: "On June 17, 2008, the President signed the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART). Among other things, HEART will change the way retirement plans deal with employees in the military. This technical update will address three issues: When must plans be amended to conform to HEART? How does HEART affect final 415 regulation amendments? How does HEART affect PPA amendments?" (SunGard)

[Guidance Overview] Teacher Did Not Meet Early Retirement Plan's Minimum Age Requirement
Excerpt: "Without addressing the open question of whether the Iowa Civil Rights Act (ICRA) contemplates a cause of action for reverse age bias, the Iowa Supreme Court held that a school district did not violate ICRA's prohibition against age bias when it denied a teacher's application for early retirement incentives on the grounds that she did not meet the plan's minimum age requirement." (Wolters Kluwer)

[Guidance Overview] Financial Reporting of Pension and Postretirement Benefit Plan Assets
Excerpt: "In March, the Financial Accounting Standards Board (FASB) proposed a FASB Staff Position that would amend FASB Statement No. 132(R), Employers' Disclosures about Pensions and Other Postretirement Benefits. In this article we review the proposal and discuss the issue of alternative asset valuation generally, both with respect to DB and DC plans." (JPMorgan Chase & Co.)

Establishing an IRA for Simplified Employee Pension Contributions
Excerpt: "An employer must make its SEP plan contributions to each eligible employee's traditional IRA, which may be referred to as a SEP IRA in this case. A SEP contribution may not be made to a Roth IRA." (Wolters Kluwer)

Average Projected Postretirement Income Replacement Needed Among Employees of Large U.S. Employers Is 126 Percent of Final Pay
Excerpt: "[According to a Hewitt Associates report released July 1], Total Retirement Income at Large Companies: the Real Deal 2008, about 67 percent of the more than 1.8 million employees of 72 large U.S. employers tracked in the study are expected to have accumulated less than 80 percent of their projected needs at age 65." (Workplace Prof Blog)

401(k) Matches May Be Targeted in Market Downturn
Excerpt: "As the economy continues to sour, employees may soon find their 401(k) matches are the next casualty. In the last market downturn, in 2001-02, companies hit hardest -- such as Ford Motor Co. and Bethlehem Steel -- suspended their 401(k) matches to save money." (Workforce Management; free registration required)

Social Investing Revisited?
Excerpt: "There appears to be a continuing debate, with the Department of Labor's involvement, between the AFL-CIO and the U.S. Chamber of Commerce concerning use of plan assets in proxy voting and shareholder related activities as well as in connection with union organizing campaigns and union goals in collective bargaining negotiations." (Pension Protection Act Blog)

U.S. Retirement System Should Look at Australian Superannuation System
Excerpt: "The Australian superannuation system, adopted in 1992, requires employers to contribute a percentage of pay (currently 9%) to an employee's pension. More recently, employees gained the ability to select the funds to which their employers contribute." (Employee Benefit News; free registration required)

Schwab Asked Four Generations to Share Hopes, Dreams – and Fears – About Retirement in Landmark Survey
Excerpt: "We found common retirement themes among all generations. Americans surveyed see retirement as a time for a new, exciting chapter in life. But we're concerned about our financial future. We see more financial responsibility shifting to the individual." (Charles Schwab & Co., Inc.)

Is It Time to Reboot Your Defined-Contribution Plan?
Excerpt: "Re-enrollment is essentially the same as 'rebooting' the plan. It is a way of unwinding all of the poor investment decisions that plan participants have made in years past. It is also a way of seeing to it that existing participants more fully benefit from a plan that may look very different -- and much more investor-friendly -- from the plan in which they initially participated." (Workforce Management; free registration required)

The Next 401(k) Policy Initiative: Adequacy
Excerpt: "The Government Accountability Office released a report titled 'Private Pensions – Low Defined Contribution Plan Savings May Pose Challenges to Retirement Security, Especially for Many Low-Income Workers.' In this article we review the GAO report and various policy initiatives being considered to improve 401(k) plan 'adequacy.'" (JPMorgan Chase & Co.)

Federal Judge Approves Plan Distribution and Termination
Excerpt: "A federal judge in Ohio has issued an order allowing the U.S. Department of Labor's Employee Benefits Security Administration (EBSA) to distribute more than $600,000 in 401(k) assets to ex-employees of a Dublin company. An EBSA news release said the money will be given out to former workers for American Systems Consulting, Inc." (; free registration required)

Defined Benefit Plans of the Future - Greater Funding, Less Risk
Excerpt: "Among other conclusions made in a recent report, Russell Investments says the defined benefit plan of 2017 will likely be better funded and accept less risk than pension plans today. Projections of the status of a wide range of DB plans based on the projection engine of Russell's Strategic Review process indicate barely one plan in every four will be below 90% funded in 2017. Russell says this is understandable given new funding rules dictated by the Pension Protection Act." (; free registration required)

Annuities As a Retirement-Income Solution for Defined Contribution Plans
Excerpt: "Consumers ought to think of annuities with a long-term consumption frame, focused on what can be spent over time. A person with that mindset will think, 'I would rather know that I will have $4,000 a month to spend, regardless of whether the market goes up or down, or regardless of whether my health is good or poor,' says Jeffrey Brown, a University of Illinois at Urbana-Champaign finance professor and a TIAA-CREF Institute fellow . . . ." (; free registration required)

[Opinion] Text of Amicus Brief in re: Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, et al. (PDF)
40 pages. Excerpt: "The rule proposed by Petitioner – under which plan administrators would be required to recognize beneficiary waivers that are not contemplated in the applicable plan documentation – would wreak havoc on plan administration. Petitioner's rule would also impose enormous burdens and costs on plans and their participants and give rise to costly disputes, litigation, and the possibility of double payment of plan benefits." (American Benefits Council)

[Opinion] 'Funds' on the Form 5500
Excerpt: "I'm writing here to take note of an arguably arcane but ultimately critical and interesting feature of the FAQs, relating to the nature of what is an 'investment fund' for purposes of the new 5500 rules." (Pension & Benefits Blog)

[Opinion] Service Employees International Union National Industry Pension Plan Only 75% Funded in 2006
Excerpt: "Some of this might be the result of poor investment performance, but the main problem is that the SEIU hasn't negotiated adequate employer contributions to the plans. This is a common practice: Unions and management take credit for bargaining deals that promise generous retirement benefits, even as they ignore how they'll be funded." (The Wall Street Journal)

Sponsored by: ASPPA

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Banner ad for ASPPA

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(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] State Laws on Marriage: Implications for Employee Benefit Plans (PDF)
2 pages. (Milliman)

[Guidance Overview] Supreme Court Provides Further Guidance on Judicial Review of Benefit Claim Denials
Excerpt: "Last month, in a case closely watched by those who sponsor and administer ERISA plans, the Supreme Court provided additional guidance regarding what constitutes a conflict of interest and how courts should weigh such conflicts. The Supreme Court 's decision potentially affects benefit claims under all types of retirement and welfare plans subject to ERISA." (Faegre & Benson LLP)

[Guidance Overview] Supreme Court Issues Two Significant Employee Benefits Decisions, But Uncertainty Remains (PDF)
4 pages. Excerpt: "In its recent decisions in Kentucky Retirement Systems v. E.E.O.C. and Metropolitan Life Insurance Company v. Glenn, the United States Supreme Court addressed several important issues regarding the design of employee benefit plans and related litigation. Both decisions, however, have unfortunately left a number of significant issues undecided and may lead to confusion and uncertainty for litigants and courts alike." (Dechert LLP)

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

Employee Ownership Update for July 15, 2008
NCEO Executive Director Corey Rosen discusses innovative ideas in compensation, including an ESOP company that allows managers to choose between fixed and incentive-based compensation; a suit against Sovereign Bank by employees over the company's ESOP and company stock in the 401(k) plan; a restricted stock/stock unit practice guide from the CEP Institute; and the final opportunity to take the NCEO's new survey on equity compensation practices in closely held companies. (National Center for Employee Ownership)

[Opinion] Understanding ERISA Preemption as a Legitimate Congressional Policy Determination
Excerpt: "[Preemption] was a legitimate policy choice by the Congress that passed ERISA to maintain one consistent federal policy and body of law for purposes of employee benefits. It is worth noting that, some thirty years, countless judicial decisions enforcing preemption, and even more countless numbers of critics later, Congress still has never acted to change that - to, in effect, preempt preemption." (Stephen Rosenberg of The McCormack Firm, LLC)

Newly Posted Events
(Post Yours!)

Plan Administrator Year-end "To-Dos" for 401(k) and 403(b) Retirement Plans Webcast
Nationwide on July 31, 2008
presented by ALI-ABA (American Law Institute-American Bar Association)

Newly Posted Press Releases
(Post Yours!)

U.S. Labor Department Protects 401(k) Plan Assets of Former American Systems Consulting Inc. Employees in Dublin, Ohio
U.S. Department of Labor, Employee Benefits Security Administration (EBSA) announces the release of its 409A Plan Document Software

Alabama Service Provider Joins Select Group of ASPPA Certified Firms
Roland|Criss Fiduciary Services

Mercer’s Enterprise Momentum™ Brings State-of-the-Art, Affordable Benefits Management to Small, Medium Employers

Center for Health Value Innovation Cites HEREIU’s Dramatic Achievements In Value-based Design
Center for Health Value Innovation

Firms Team Up to Provide 401k Sales Education to Regional Banks

We're one of the top 350 employment sites on the web!Newly Posted or Renewed Job Openings
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401(k) / Defined Contribution Administrator
for DATAIR Employee Benefit Systems, Inc.
in IL

Retirement Plan Analyst
for BeneTrends, Inc.
in PA

Account Executive - Retirement Services
for Principal Financial Group
in TX

Attorney- Associate General Counsel, 403(b)
for Leading Financial Services Company
in TX

Financial Analyst - Corporate Insurance
for M Benefit Solutions
in OR

Relationship Manager
for Vanguard
in AZ

Financial Consultant - Corporate Insurance
for M Benefit Solutions
in OR

Insurance Analyst - BOLI
for M Benefit Solutions
in OR

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