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July 17, 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.

(Click on company name or banner to learn more.)
Banner ad for DATAIR Employee Benefit Systems, Inc.

5500 / PBGC / 1099-R / 5300 / FAS 158 Software from DATAIR

DATAIR Pension Reporter System. Easy to use and economical for electronic and paper filing with instant access to forms and instructions. Live, expert support included. Choose from 4 modules:
  • Annual Reporting Series: EFAST 5500-series, PBGC Premium-series, SAR, and 5500 electronic filing;
  • 1099-R Series: 1099-R and related forms, 945/945-A, and 1099 electronic filing;
  • Qualification & Termination: 5300/5310-series and PBGC 500/600-series forms.
  • FAS 132/158: Audit Letter, Worksheets, Schedules
Contact sales@datair.com or call 1-888-DATAIR-4 (1-888-324-2474)

[Guidance Overview] Supreme Court ADEA Cases Address Disability Pension Provision and Downsizing (PDF)
Excerpt: "This case clarifies that differential treatment based on pension status does not automatically correlate with age discrimination, but recognizes that discrimination can be shown where pension status is a proxy for age or a plan design is impermissibly motivated by age. To minimize potential exposure to age discrimination claims, employers should exercise particular caution in structuring benefit plans or programs that take age into account, such as phased retirement programs, or that base eligibility on pension status." (Buck Consultants)


[Guidance Overview] HEART Act Changes Social Security Tax Rules for Foreign Entities' Employees Working on U.S. Gov't Contracts
Excerpt: "Section 302 of the HEART Act adds a sixth type of American employer: entities that are part of a domestically controlled group of entities and that employ any U.S. citizen or resident who performs services in connection with a contract between the U.S. government (including instrumentalities) and any member of the domestically controlled group of entities." (Deloitte via BenefitsLink.com)


[Guidance Overview] Rollovers to Plan Service Providers Present Fiduciary Concerns
Excerpt: "Plan sponsors and retirement plan service providers each have reason to be concerned about a recent decision in an ERISA lawsuit pending before a federal court in Iowa. That decision allowed former participants in two separate 401(k) plans to proceed with their claims that the Principal Financial Group, the third-party service provider for each plan, breached its fiduciary duties by encouraging retired participants to roll their plan accounts into high-cost IRA products affiliated with Principal. (Young v. Principal Financial Group, Inc.)" (Spencer Fane Britt & Browne LLP)


Please Pardon Our Link on July 14 to a 7-Year-Old Article About Variable Annuities
On Monday July 14 we accidentally linked you to an article published by the Los Angeles Times on August 19, 2001 ('Sales Are Plummeting for Variable Annuities As Retirement Investment'). We sincerely regret the error. There is no charge for the daily email newsletter or the links on the Benefits in the News web page, but we know that you pay for them in the form of your valuable time and attention. Please accept our apology! (BenefitsLink)


Automatic Enrollment in 401(k) Plans Comes at a Price for the Company
Excerpt: "According to a Hewitt Associates survey of 190 companies, greater dollar matches were cited as the primary impediment to automatic enrollment by nearly half the companies that did not intend to adopt the practice in the near future. Pam Hess, Hewitt's director of retirement research, estimates that a company that automatically enrolled all its employees in a plan would hike the amount it spent in matches by 20 to 30 percent." (CFO.com)


Federal Thrift Savings Plan Automatic Enrollment Bill Clears House Committee
Excerpt: "The legislation (H.R. 6500) would require agencies to invest the automatic contributions in the plan's stable government securities fund. The bill originally called for default investment in the life-cycle funds, which initially focus on riskier but higher yielding investments and then switch to a more conservative mix of investments as an employee nears retirement." (GovernmentExecutive.com)


Senate Committee Examines Ability of Participants to Access Funds Before Retirement Age
The target page provides links to a Webcast of the hearing, Statements of Committee Members, and witness statements. (U.S. Senate Special Committee on Aging)


Next Round of Pension Accounting Rules Will Include More 'Granular' Information About Assets
Excerpt: "The Financial Accounting Standards Board met on Wednesday to discuss its project on post-retirement benefit obligations, focusing on how to update disclosures about plan assets. The meeting was part of FASB's effort to rework guidance on FAS 132(R), Employers' Disclosures About Pensions and Other Postretirement Benefits, to improve transparency about the types of assets held in plans." (CFO.com)


San Diego Pension Plan Predicted to Pass
Excerpt: "Mayor Jerry Sanders took his pension plan for city workers on the road yesterday, seeking understanding and support from Scripps Ranch voters at a town-hall meeting. The plan, designed to save the city money in the future, would cut retirement benefits for non-public-safety employees hired on or after July 1, 2009." (San Diego Union Tribune)


Divorce Decree Submitted after Participant's Death Is not a QDRO
Excerpt: "The U.S. District Court for the Middle District of Alabama ruled that a divorce decree did not meet the requirements a Qualified Domestic Relations Order (QDRO) because of technical failures and untimely submission to the plan administrator." (PLANSPONSOR.com; free registration required)


PPA Technical Corrections Bill Passes House with Smoothing Provisions
Excerpt: "The Pension Protection Technical Correction Act of 2008 (H.R. 3361) Ė introduced June 26, 2008 by Charles Rangel (D-NY) and George Miller (D-CA) Ė passed the House of Representatives on July 9. The Act contains the 24-month asset smoothing provisions approved by the Senate last December 2007 (in S. 1974), and constitutes a significant move forward in finalizing the long-awaited PPA technical corrections." (Deloitte via BenefitsLink.com)


Senators Seek to Cap Loans from 401(k)s
Excerpt: "Legislation setting limits on the number of loans that can be taken from 401(k) plans as well as prohibitions on 401(k) debit cards is to be introduced today by Senate Special Committee on Aging Chairman Herbert Kohl, D-Wis., and Sen. Charles Schumer, D-N.Y." (Investment News; free registration required)


[Opinion] Pension Rights Center's Statement to Senate July 16, 2008, Hearing on Participants' Access to Funds Before Retirement (PDF)
4 pages. Excerpt: "The Pension Rights Center -- the nation's only consumer organization dedicated solely to protecting and promoting the retirement security of American workers, retirees and their families -- commends the Senate Aging Committee for holding this aptly-named hearing 'Saving Smartly for Retirement. Are Americans Being Encouraged to Break Open the Piggy Bank?'" (Pension Rights Center)


[Opinion] A Discussion of the LaRue Case
Excerpt: "The case presented a classic legal issue of justiciable damage and cognizable remedy such as has run through the law from time immemorial in all its venues and all its branches. It was here set in an ERISA context, which presents its own unique opportunities for doubt and division; and it proceeded to do just that, first with the judges from trial to high appeal, then with the commentators, and now with practitioners." (Alvin D. Lurie via MJM401k, LLC)


[Opinion] Buck Consultants' Comments on Proposed Regs Regarding Determination of Minimum Required Contributions for Single-Employer Defined Benefit Plans (PDF)
5 pages. Excerpt: "Our comments focus on various technical issues of application that should be clarified in the final regulation, and the interaction of this proposed regulation with the proposed regulation on measurement of assets and liabilities for pension funding purposes and the proposed regulation on the effect of prefunding balances and carryover balances under subsection 430(f)." (Buck Consultants)



Sponsored by: The SPARK Institute

(Click on company name or banner to learn more.)
Banner ad for The SPARK Institute

The SPARK Institute 403(b) Plans Issues & Answers Forums

New rules that go into effect in 2009 will require major changes to 403(b) plans. The SPARK Institute 403(b) Plans Issues and Answers Forums are must-attend meetings for anyone responsible for 403(b) plans at K-12 schools, universities, hospitals, non-profits, TPAs and financial advisors. Sessions will cover fiduciary concerns, plan documents, preparing for 2009 and beyond, information sharing best practices, working with vendors and much more.

(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

[Official Guidance] Text of Prop. IRS Regs on Required Returns and Employee Statements for ESOPs, Incentive Stock Options and Sec. 423 Employee Stock Purchase Plans (PDF)
5 pages. Excerpt: "This document contains proposed regulations relating to the return and information statement requirements under section 6039 . . . [which] reflect changes [made by] the Tax Relief and Health Care Act of 2006. These proposed regulations affect corporations that issue statutory stock options . . . [under sections 422 or 423]. As amended by the Act, section 6039 requires corporations to file an information return with the IRS, in addition to providing employees with an information statement, following a stock transfer. The time and manner for filing a return with the IRS, as well as the information to be contained in the return and furnished to employees, is addressed in these proposed regulations. Section 6039, as amended by the Act, applies to stock transfers occurring on or after January 1, 2007." (Internal Revenue Service)


[Guidance Overview] Impact of the Heroes Earnings Assistance and Relief Act of 2008 on Your Employee Benefit Plans
6 pages. Excerpt: "This newsletter explains how HEART's provisions impact sponsors' administration of health FSAs, qualified 401(k) and other retirement plans, and 403(b) tax-sheltered annuities." (Utz, Miller, Kuhn & Eickman, LLC)


Voluntary Benefits Becoming More Popular as Employers Scale Back Health Benefits
Excerpt: "Non-health policies include accident, life, home and auto insurance as well as non-traditional benefits that offer shopping discounts, identity-theft protection, wedding protection and group legal plans." (AISHealth.com)


Legislator Proposes Commuter Relief from Gas Prices
Excerpt: "U.S. Representative Steven C. LaTourette (R-Ohio) has introduced legislation to reimburse workers for some of the cost of their commute to work." (PLANSPONSOR.com; free registration required)


Mercer's HRadio Podcast, July 15, 2008
This week's lineup includes: News highlights; Understanding health care predictive models; Hurdles in the road to global pay; Socially responsible investing goes mainstream. Total time: 15:26 (Mercer LLC)




Newly Posted Events
(Post Yours!)

Fundamentals of Employee Benefits Programs Certification Course: B1
in North Carolina on July 21, 2008
presented by WorldatWork

Fundamentals of Employee Benefits Programs Certification Course: B1
in District of Columbia on August 6, 2008
presented by WorldatWork

Fundamentals of Employee Benefits Programs Certification Course: B1
in California on August 13, 2008
presented by WorldatWork

Fundamentals of Employee Benefits Programs Certification Course: B1
in Illinois on August 19, 2008
presented by WorldatWork

Fundamentals of Employee Benefits Programs Certification Course: B1
in Colorado on September 15, 2008
presented by WorldatWork

Fundamentals of Employee Benefits Programs Certification Course: B1
in Pennsylvania on September 17, 2008
presented by WorldatWork

Fundamentals of Employee Benefits Programs Certification Course: B1
in Illinois on September 29, 2008
presented by WorldatWork

Fundamentals of Employee Benefits Programs Certification Course: B1
in New York on October 27, 2008
presented by WorldatWork

Health Care and Insurance PlansóDesign and Management Certification Course: B3
in California on August 18, 2008
presented by WorldatWork

Health Care and Insurance PlansóDesign and Management Certification Course: B3
in California on October 14, 2008
presented by WorldatWork

Health Care and Insurance PlansóDesign and Management Certification Course: B3
in Illinois on October 28, 2008
presented by WorldatWork

Health Care and Insurance PlansóDesign and Management Certification Course: B3
in California on November 14, 2008
presented by WorldatWork

Health Care and Insurance PlansóFinancial Management Certification Course: B3A
in New York on September 22, 2008
presented by WorldatWork

Health Care and Insurance PlansóFinancial Management Certification Course: B3A
in Georgia on November 17, 2008
presented by WorldatWork

Managing Flexible Benefits Certification Course: B5
in Massachusetts on July 23, 2008
presented by WorldatWork

Managing Flexible Benefits Certification Course: B5
in Illinois on September 8, 2008
presented by WorldatWork

Managing Flexible Benefits Certification Course: B5
in Oregon on October 8, 2008
presented by WorldatWork

Retirement PlansóDesign and Management Certification Course: B2
in New York on July 21, 2008
presented by WorldatWork

Retirement PlansóDesign and Management Certification Course: B2
in California on August 25, 2008
presented by WorldatWork

Retirement PlansóDesign and Management Certification Course: B2
in New York on September 3, 2008
presented by WorldatWork

Retirement PlansóDesign and Management Certification Course: B2
in South Carolina on September 15, 2008
presented by WorldatWork

Retirement PlansóDesign and Management Certification Course: B2
in Iowa on September 17, 2008
presented by WorldatWork

Retirement PlansóDesign and Management Certification Course: B2
in Iowa on September 17, 2008
presented by WorldatWork

Retirement PlansóDesign and Management Certification Course: B2
in Illinois on November 12, 2008
presented by WorldatWork

Total Rewards 2009
in Washington on May 31, 2009
presented by WorldatWork

Total Rewards Management Certification Course: T1
in District of Columbia on July 23, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in California on July 23, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in Illinois on August 19, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in New York on September 22, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in Texas on September 24, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in Georgia on September 29, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in California on October 8, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in Ohio on October 15, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in Florida on November 3, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in Kansas on November 10, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in Illinois on November 12, 2008
presented by WorldatWork

Total Rewards Management Certification Course: T1
in District of Columbia on December 3, 2008
presented by WorldatWork

Webinar: Managing Rewards in Emerging Markets ó Beyond BRIC
Nationwide on September 4, 2008
presented by WorldatWork

Webinar: Total Rewards Statements ó Building the Business Case
Nationwide on August 5, 2008
presented by WorldatWork



Newly Posted Press Releases
(Post Yours!)

While HMO Premiums Remain High, Rate of Increase to Decline in 2009, According to Hewitt Associates
Hewitt Associates LLC

The NTSAA Announces Plan Sponsor Resources on the NTSAA Web Site
National Tax Sheltered Accounts Association

New DSG Study Finds That Most Plan Service Providers Continue to Struggle with Retaining Defined Contribution Plan Assets
Diversified Services Group, Inc. (DSG)

Schwab Study Finds Four Generations of American Adults Fundamentally Rethinking Planning for and Living in Retirement
Charles Schwab Corporation

se≤ Brings 403(b)connect to the Marketplace; Offers Complete Solution to 403(b) Regulations Compliance
se≤

Nonprofit Organizations Need to Prepare Now for New 403(b) Plan Audit Requirements in 2009
Buchbinder Tunick & Co



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Client Relationship Manager
for AMCORE Bank
in WI

Qualified Plan Administrator
for Philip Vogel & Co. PC
in TX

Savings Plan Advisor
for ConocoPhillips
in TX

Stock Plan Services Licensed Operations Specialist
for Charles Schwab & Company
in AZ

Corporate Brokerage Services Support Manager
for Charles Schwab & Co.
in AZ




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