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July 25, 2008

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

Today's sponsor is International Foundation of Employee Benefit Plans

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[Official Guidance] DOLs Model Comparative Chart under the Proposed Fee & Expense Disclosure Regulation
Plan fiduciaries will also have the flexibility to design their own charts or comparative formats. (U.S. Department of Labor)

[Official Guidance] Text of Proposed EBSA Regs: Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans (PDF)
32 pages. (Employee Benefits Security Administration, U.S. Department of Labor)

[Guidance Overview] Proposed DOL Regulations Reach to General Prudence Rules
Excerpt: "The general prudence rules, like the 404(c) rules, give the DOL a fairly free regulatory hand, as there is no clear limitation on the ability to add regulatory color on what it means to be proceeding in accordance with general prudence-type considerations. Thus, the new proposals would generally apply to all plans under which participants have the right to direct investments, even if the plan sponsor is willing to forego Section 404(c) relief." (Pension & Benefits Blog)

[Guidance Overview] FAQs on Retirement Plan Beneficiary Issues
Excerpt: "Q. May a pre-nuptial agreement allow the spouse to waive being the beneficiary on a qualified plan?" (McKay Hochman Co., Inc.)

[Guidance Overview] Cash Balance Plans Are Not Inherently Age-Discriminatory, According to Second Circuit
Excerpt: "Ruling in two consolidated class action lawsuits, the Second Circuit U.S. Court of Appeals has held that cash balance plans are not inherently age-discriminatory, even prior to amendments made by the Pension Protection Act of 2006 (PPA). The cases are Hirt, et al. v. The Equitable Retirement Plan for Employees, Managers, and Agents, et al. and Bryerton, et al. v. Verizon Communications, Inc., et al. (Nos. 06-4757, 06-5190, and 07-1680)." (Wolters Kluwer)

[Guidance Overview] DOL Issues FAQ Guidance on Revised Form 5500 Schedule C Disclosure Requirements (PDF)
4 pages. Excerpt: "On July 14, the U.S. Department of Labor (DOL) released a list of 40 frequently asked questions (FAQs) and answers regarding compliance with the new reporting requirements for service provider fees included in the revised Schedule C of the 2009 Form 5500. Among other things, the FAQs provide relief to service providers who have been struggling to modify their recordkeeping and information management systems in a timely fashion to comply with the new reporting requirements for the 2009 plan year." (Pillsbury Winthrop Shaw Pittman LLP)

[Guidance Overview] SEP Fix-It Guide Available from the IRS (PDF)
14 pages. Excerpt: "Tips on how to find, fix, and avoid common mistakes in SEP plans." (Internal Revenue Service)

[Guidance Overview] Hewitt Federal Legislation Quick Guide Updated July 23, 2008, for Retirement Plans (PDF)
6 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding retirement plans. (Hewitt Associates)

[Guidance Overview] DOL's Form 5500 Schedule C 'FAQs' (PDF)
6 pages. Excerpt: "This additional guidance responds to questions raised after DOL published final amendments to regulations, forms and instructions governing the annual reports filed by plans on Form 5500 in November 2007.1 In the 40 separate FAQs, DOL addresses a variety of questions, but leaves important issues unanswered." (Groom Law Group)

[Guidance Overview] Observations on DOL's Proposed Regs Governing Disclosure Requirements for Participant-Directed Individual Account Plans
Excerpt: "Some brief observations: (1) The regulations have a proposed effective date of January 1, 2009 and would apply to all participant-directed plans, regardless of whether or not they have sought to comply with ERISA section 404(c). (2) The DOL states its legal basis for issuing the regulations in the preamble . . . ." (Attorney B. Janell Grenier via

IRS Employee Plans Compliance Resolutions System Update with Numerous Changes to Be Issued
Excerpt: "It is updated every couple of years with IRS adding more correction procedures while streamlining the compliance process. The current version is Rev. Proc 2006-27. At a recent conference, an IRS representative stated that they are very close to issuing an updated version. One of the major goals of this revision is to streamline, simplify and expedite the process for a number of common errors." (McKay Hochman Co., Inc.)

Pension Fund Provisions Out of House Bill
Excerpt: "A bill concerning commodity speculation that was approved this afternoon by the House Agriculture Committee did not include provisions in a previous draft that would have barred pension funds from investing in agricultural and energy commodities and engaging in equity and interest rate swaps." (Pensions & Investments)

Alvin Lurie's Recent Employee Benefits Articles
Excerpt: "The first article, It's a PIP - Or Is It?, concerns 'an idea . . . to make employers in small businesses set up a payroll deduction facility for their employees not covered by employer-sponsored retirement plans, for the purpose of easing the making of contributions to an IRA established by or on behalf of the employee.' The second one, All in the Family on Foley Square, Lurie discusses the 2nd Circuit's recent cash balance plan decision in Hirt v. The Equitable Retirement Plan . . . . [And the third article is: Triple Play: Stevens to Roberts to Thomas or A View of LaRue.] (Workplace Prof Blog)

PBGC Extends Relief, Deadlines for Some Counties Affected by a Series of Natural Disasters
Excerpt: "The nation's private pension plan insurer, in Disaster Relief Announcements 08-18, 08-19, 08-20, 08-21, 08-22, and 08-23 has outlined relief from PBGC filing deadlines and penalties to companies and individuals in certain counties of: Indiana, Wisconsin, West Virginia, Nebraska, Illinois and Missouri variously affected by recent severe storms, tornadoes, floods, mudslides and landslides." (; free registration required)

Another Circuit Says Cashed-out Participants Have Right to Sue
Excerpt: "The 1st U.S. Circuit Court of Appeals became the latest federal appellate court to decide that former employees who allege that fiduciary breaches reduced their lump-sum distributions from a defined contribution plan have standing to sue as participants under the Employee Retirement Income Security Act (ERISA)." (; free registration required)

On Taking a Loan from Your 401(k) Plan
Excerpt: "Most people who diligently tuck money into a 401(k) know that those dollars are intended for retirement. But many 401(k)'s have provisions that allow workers to take loans when necessary. And economically squeezed workers are increasingly raiding their retirement plans to make ends meet." (U.S. News & World Report)

Special Pensions Cost Massachusetts Millions
Excerpt: "State and local governments over the last five years have committed to spending an estimated $115 million to $235 million on 386 public employees who were allowed to invoke an obscure part of a state law to win earlier and significantly larger pensions, a Globe analysis has found." (The Boston Globe)

[Opinion] Changes to Consider for Your Governmental 457(b) Plan in 2008
Excerpt: "If your public agency currently maintains an eligible deferred compensation plan pursuant to Code section 457(b), [Chang, Ruthenberg & Long recommend you consider the items listed on the target page], in order to comply with, or take advantage of, recent law changes." (Chang, Ruthenberg & Long PC)

[Opinion] New 401(k) Participant Disclosure Rules Appropriately Kill Automatic Prospectus Distribution Requirement (PDF)
28 pages. Excerpt: "DOL recognizes that requiring the giving of prospectuses is still sensible, just not useful and probably even counterproductive when forced out to those who do not want them. The new 404a-5 rule therefore switches the prospectus requirement from 'push' to 'pull.' Under the new rules, fiduciaries need only give prospectuses when participants request them. . . . [F]iduciaries of participant-directed plans have an affirmative obligation to ensure participants have enough information to make informed decisions -- with prescribed format and content -- and 404(c) protection is not available unless this basic obligation is first met. When combined with the additional transparency initiatives DOL has already completed -- the new 5500 rules and the 408b-2 contract rules -- the new participant disclosures round out a sensible array of regulations . . . ." (Pete Swisher of Unified Trust Company, N.A.)

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Links to Items on Executive Comp, Benefits in General

[Guidance Overview] The Heroes Earnings Assistance and Relief Tax Act Contains Number of Changes to Help Individuals in the Uniformed Service and Their Families
Excerpt: "It creates Code Section 401(a)(37) and affects qualified plan rules for those called into the military. It also has an impact on cafeteria plans and expatriation rules." (McKay Hochman Co., Inc.)

[Guidance Overview] Audio of Webinar: Recent ERISA Litigation - What's the Verdict?
Excerpt: "On July 23, David Levin with Gallagher Benefit Services hosting presented a webinar on recent ERISA litigation and the various issues for sponsors of ERISA plans. This webinar provided an overview of these recent cases and their impact on ERISA plans . . . ." (Drinker Biddle & Reath LLP)

[Guidance Overview] Hewitt Federal Legislation Quick Guide Updated July 23, 2008, on Human Resources & Employment Law (PDF)
8 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates)

[Guidance Overview] Ninth Circuit Sees Broader Discovery Rights for ERISA Claimants in Conflict of Interest Cases
Excerpt: "The open-ended nature of the inquiry into the existence and effect of structural conflicts of interest in MetLife v. Glenn suggests the possibility, if not the probability, that judges disinclined to give existing precedent hostile to broad discovery ample room to fall back upon the status quo." (Health Plan Law blog by Attorney Roy F. Harmon III)

[Guidance Overview] 409A Spurs More Companies to 'Fund' Their Non-Qualified Plans
Excerpt: "The most prevalent reason for this increase in funded plans is the new, six-month waiting period required by 409A." (Michael S. Melbinger via Winston & Strawn LLP)

[Guidance Overview] More on Funding Non-Qualified Plan Benefits
An earlier blog on funding non-qualified plan benefits generated several questions, which are answered on this page. (Michael S. Melbinger via Winston & Strawn LLP)

[Guidance Overview] 'Golden Coffins' Offer Big Payouts
Excerpt: "To the list of golden parachutes and golden handcuffs, add 'golden coffins': lavish death benefits for CEOs that can include massive severance payments made to an executive's estate after he or she dies." (Human Resource Executive Online)

Report Counters Perceived View of Obese Workers
Excerpt: "A new report from Michigan State University and Hope College researchers shows overweight and obese employees are no different from their thin coworkers." (; free registration required)

Newly Posted Events
(Post Yours!)

401(k) Plans
in Colorado on October 7, 2008
presented by EBIA / Thomson Reuters

401(k) Plans
in Arizona on October 14, 2008
presented by EBIA / Thomson Reuters

Cafeteria Plans
in Colorado on October 8, 2008
presented by EBIA / Thomson Reuters

Cafeteria Plans
in Arizona on October 15, 2008
presented by EBIA / Thomson Reuters

COBRA Compliance for Group Health Plans
in Colorado on October 10, 2008
presented by EBIA / Thomson Reuters

COBRA Compliance for Group Health Plans
in Arizona on October 17, 2008
presented by EBIA / Thomson Reuters

ERISA Compliance for Health & Welfare Plans
in Colorado on October 9, 2008
presented by EBIA / Thomson Reuters

ERISA Compliance for Health & Welfare Plans
in Arizona on October 16, 2008
presented by EBIA / Thomson Reuters

HIPAA Portability, Privacy & Security
in Colorado on October 10, 2008
presented by EBIA / Thomson Reuters

HIPAA Portability, Privacy & Security
in Arizona on October 17, 2008
presented by EBIA / Thomson Reuters

HSAs, HRAs, and Consumer-Driven Health Care
in Colorado on October 9, 2008
presented by EBIA / Thomson Reuters

HSAs, HRAs, and Consumer-Driven Health Care
in Arizona on October 16, 2008
presented by EBIA / Thomson Reuters

Newly Posted Press Releases
(Post Yours!)

Next Generation of 401(k)s Shows Automatic Enrollment and Step-Up Provisions Doubling Among Employers: Deloitte Survey

U.S. Employers Keeping Pay Raises Steady for 2009, Watson Wyatt Survey Finds
Watson Wyatt

Small Business CHOICE Act Would Bring Healthcare Coverage to Millions of Americans
U.S. House Small Business Committee

PBGC Negotiates Deal To Strengthen Pension Funding At Elkem Metals Inc.
Pension Benefit Guaranty Corporation (PBGC)

ERIC Applauds DOL's Efforts at Improving 401(k) Fee Disclosure, But Warns that Rules Must Balance Needs of Participants and Employers
ERIC (ERISA Industry Committee)

New Directory Provides Information on Health Care Coalitions
International Foundation of Employee Benefit Plans

With Economy Prompting Growing Numbers of Workers to Cash Out 401(k)s, RolloverSystems Helps Stem Tide With 'Cash-Out Calculator'

Updated Liberty Mutual Web Tools Put More Benefits Power into the Hands of Customers
Liberty Mutual

The DOL Releases New Proposed Fee Disclosure Regulations
Qualified Pension Consulting, Inc.

Microsoft HealthVault and RelayHealth to Connect Doctors and Patients

Compliance for Lifeô Medication Dosing Reminders Go Global
iReminder, LLC

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Daily 401 (k) Administrator
for Geller Group, LLC
in NY

Account /Client Services Manager (Insurance/TPA)
for Zenith Administrators
in IN

Primary Administrator for Qualified Retirement Plans
for Kidder Benefits Consultants, Inc.
in AZ

Account Administrator
for Pension Inc.
in IA

Senior Manager, Retirement Plan Division
for Pension Services Company
in NJ

Retirement Compliance Testing Administrator
for Vanguard
in PA

Retirement Compliance Testing Manager
for Vanguard
in PA

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