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July 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 DATAIR Employee Benefit Systems, Inc.

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

PPA’06 Defined Benefit Software from DATAIR

DATAIR’s Defined Benefit System for Valuations, Discrimination Testing, and Proposals. Includes 412(e)(3) insured plans, Cash Balance Plans, DB/DC combos and Sole Proprietors. Live, expert support.

DATAIR’s PPA’06 DB System includes

  • Funding Target & Target Normal Cost (3 Rate Segments)
  • Effective Interest Rate
  • Section 430 Minimum Contributions
  • Section 404(o) Cushion Amount
  • Shortfall Amortization Bases and Amounts
  • Funding Target Attainment Percentages (FTAPS)
Contact or call 1-888-328-2474 (1-888-DATAIR-4)

[Guidance Overview] Securities Lending by Pensions - Two Articles
The articles are: An Emerging Duty of Best Execution in Securities Lending? and Single Stock Futures: An Alternative to Securities Lending. (Benchmark Financial Services, Inc.)

Calculating the Combined Value of San Diego's Two Pension Plans
Excerpt: "As a city, San Diego is unusual -- almost unique -- in that it provides its 'general' city employees (all but police and firefighters) with not just one, but TWO FULL MATCHING PENSIONS. In addition to the traditional government defined benefit (DB) plan common to all cities, San Diego also provides such employees with a 401k-type, defined contribution (DC) plan -- their SPSP plan. These employees must put in a minimum of 3% into their earmarked account, and can put in more up to set limits (see Excel spreadsheet [on the target page]). Whatever they put in, the city will match dollar-for-dollar. This spreadsheet is designed to show the combined value of these two benefits." (PensionWatch)

What Do the QDIA Regulations Mean for Your Plan?
Excerpt: "The use of qualified default investment alternatives (QDIAs), therefore, is a practical option for plan sponsors that want to help their participants take part in the company-sponsored retirement plan but want to have protection under the Employee Retirement Income Security Act (ERISA)." (; free registration required)

Labor Department Proposes Dollar-Based 401(k) Fee Disclosure
Excerpt: "The Department of Labor on Tuesday proposed requiring 401(k) plan fiduciaries to supply investors with standard account summaries that will clearly state fees, expenses and any administrative costs such as legal, accounting and recordkeeping charges -- in actual dollars; performance and comparable benchmark returns; investment options; and how to obtain more detailed information, including education and/or advice." (Money Management Executive via On Wall Street)

Comparison Chart of Selected Features of Public Sector Hybrid Retirement Benefit Plans (PDF)
2 pages. (National Association of State Retirement Administrators)

Experts Ponder Implications of Longer Life Spans
Excerpt: "[In a session titled:] 'Implications of Longer Life Spans: What Does It Mean To Us?' presented at the recent Society of Actuaries (SOA) 2008 Living to 100 Symposium . . . experts were assembled to speak about the opportunities, pitfalls and challenges of aging from five differing stakeholder views: the individual, the employer, life insurance and annuity companies, long–term care insurance companies, and the health care system." (Society of Actuaries)

District Court Muddles Directive Provided in MetLife v. Glenn
Excerpt: "In this case, Mr. Carnes alleges a conflict of interest based on (1) the dual roles of Devon as both sponsor and administrator of the plan and (2) belief that as a company plan, Devon is solely responsible if the plan becomes underfunded making it in the best interest of the company to pay as few benefits as possible." (Health Plan Law blog by Attorney Roy F. Harmon III)

'Collective Funds' Gain Traction in 401(k)s
Excerpt: "In a drive to cut costs, 401(k) plans are replacing familiar mutual-fund investment options with more-obscure vehicles known as 'collective investment funds.' Just like mutual funds, collective funds pool investors' assets and invest in stocks, bonds and other securities. The chief difference: Collective funds are typically available only in retirement plans. Because they aren't sold directly to the general public, they generally aren't regulated by the Securities and Exchange Commission." (The Wall Street Journal)

More Players Call Foul on National Football League's Pension System
Excerpt: "The National Football League's pension system continues to pay players less than they are entitled to for disabilities caused by on-field injuries, a lawsuit filed in U.S. District Court in Baltimore claims. The pension suit against the league is the third one filed by attorney Cyril V. Smith, who won a verdict of more than $1.5 million for the family of the late 'Iron Mike' Webster in 2005. The decision was affirmed by the 4th U.S. Circuit Court of Appeals." (The Daily Record)

Draft Bill Includes Energy, Swaps Ban As Pension Fund Investments
Excerpt: "Draft legislation by the House Agriculture Committee that was being circulated on Capitol Hill would bar pension funds from investing in agricultural and energy commodities -- and prevent the funds from engaging in equity and interest rate swaps." (Pensions & Investments)

401(k) Participation Rates Stall Despite Rise of Auto-Enrollment
Excerpt: "Despite the best efforts of many plan sponsors, participation rates in a survey of more than 400 corporate plan sponsors remained basically the same over the past two years -- on average, 76% of employees now participate in their company's 401(k) plan, according to a new study by Deloitte Consulting." (Financial Week; free registration required)

Sponsored by: ASPPA

(Click on company name or banner to learn more.)
Banner ad for ASPPA

ASPPA Annual Conference

How do the elections this fall affect you as a pension professional?
Attend the ASPPA Annual Conference in Washington, DC October 19-22 and find out. Network with over 1600 pension professionals, attend more than 60 interactive workshops and hear the latest election talk from our Keynote Speakers James Carville and Mary Matalin. Don't wait, register now and be a part of it all with ASPPA.

(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] 409A Year-End Survival Guide (PDF)
2 pages. Excerpt: "As widely reported, the IRS is highly unlikely to postpone the December 31, 2008 deadline for revising executive compensation arrangements to comply with Code section 409A. This date also marks the end of the 409A transition period, which has already lasted nearly four years and provided employers and executives with great flexibility. In the attached memo we offer (1) drafting tips for amending these arrangements, (2) aids in identifying arrangements subject to 409A, and (3) action items in light of the transition period ending." (Groom Law Group)

Will Employers Want Aging Boomers?
Excerpt: "This report examines the current employer demand for older workers and explores how demand may be changing over time. It begins by displaying the occupations at which older workers are most likely to be employed today. The report then discusses the personal and social benefits of increased work by older adults and the reasons why boomers are likely to try to work longer than earlier generations. Later sections of the report examine whether employers will want older workers and how changes in the nature of work, demands for different occupations, the characteristics of older workers, and overall labor force growth will affect the future demand for older workers. The report concludes with some policy recommendations." (The Urban Institute)

How the Seven Largest Audit Firms Approach Flexible Work Arrangements
Excerpt: "Many companies of all types have responded to the workforce's growing demand for work-life balance with a raft of programs. But few have bent as far as the accounting firms. There, after only a couple years of employment, client-service staffers generally are free to work how, where, and when they want, bestowed with seemingly endless options for customizing their careers." (

Some More Thoughts on the Primacy of the ERISA Plan Document
Excerpt: "Although the court was not delving too deeply into this particular issue, the court noted that 'in more recent cases, the First Circuit has held that courts should not look beyond the express terms of an ERISA-regulated plan unless the disputed term is ambiguous,' and that '[i]n ERISA cases . . . the central issue must always be what the plan promised . . . and whether the plan delivered.'" (Stephen Rosenberg of The McCormack Firm, LLC)

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in DC

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