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August 4, 2008

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

Today's sponsor is Employee Benefits Institute of America (EBIA)

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[Guidance Overview] Managing PPA DB Contributions and the September 15, 2008, Due Date
Excerpt: "It's the summer of 2008 and defined benefit plan sponsors have unique opportunities with regard to funding their plans. Have you thought about this? Do you know what you can accomplish by funding before September 15 has come and gone? This article should have relevance to anyone involved in financial decisions around pensions, no matter what their specific role. In the article, we'll review those opportunities in a way that should be relevant to you whether your plan is well-funded or not as well-funded, whether you have lots of cash available or not as much cash available. And, we'll discuss why, as a result of the Pension Protection Act of 2006 (PPA), this may be the best opportunity you'll ever have." (JPMorgan Chase & Co.)

[Guidance Overview] Hewitt Federal Legislation Quick Guide Updated July 30, 2008, for Retirement Plans (PDF)
7 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] Evaluating the Res Requirement for Benefit Overpayment Claims
Excerpt: "In an effort to find a remedy for fiduciaries to recover allegedly overpaid benefits, several courts have construed the Supreme Court 's holding in Sereboff v. Mid Atlantic as diminishing the requirement for a res to support a claim under section 1132(a)(3). This recent district court decision provides an opportunity to take a closer look at this reasoning." (Health Plan Law blog by Attorney Roy F. Harmon III)

[Guidance Overview] Proposed DOL Regs Would Require Enhanced Disclosure to 401(k) Plan Participants
Excerpt: "The proposed regulations under ERISA 404(a) stress the DOL position that a fiduciary in compliance with the proposed disclosure requirements remains subject to a duty under ERISA to prudently select and monitor providers of services to the plan or designated investment alternatives under the plan." (Wolters Kluwer)

[Guidance Overview] Transfers to Puerto Rican Qualified Plans May Be Treated as Distributions and May Raise Disqualification Issues (PDF)
Page 2 of 5 pages. Excerpt: "On July 1, 2008, the IRS issued Revenue Ruling 2008-40, 2008-30 IRB, which clarifies the treatment of assets transferred from a qualified pension plan to a plan qualified under section 1165(a) of the Puerto Rico Internal Revenue Code (the 'PRIRC')." (Miller & Chevalier Chartered)

Massachusetts Lawmakers OK Pension Boost for State Workers
Excerpt: "Massachusetts lawmakers, moving quickly and without debate in the final hours of the legislative session, approved a pension increase for state workers that could cost more than $3 billion over the next 20 years, sparking criticism from fiscal watchdogs who say the state cannot afford such a costly benefit." (The Boston Globe)

Retirement Age Top Issue in Social Security Reform Debate
Excerpt: "Want to keep Social Security from going bankrupt? Make future recipients wait longer for their first benefit check because they probably will live longer anyway, an influential group of actuaries says." (CBS News)

American Bar Association's Joint Committee on Employee Benefits Posts 2008 Agency Q & As
Excerpt: "Many readers will be interested in DOL Q & A 19 in which the DOL appears to take issue with what many practitioners had thought might be a viable structure for insulating corporate boards of directors from the ongoing fiduciary duty to monitor . . . ." (Attorney B. Janell Grenier via

Sponsors Must Beware Paying Plan Expenses from the Plan
Excerpt: "An employer might ask: Can plan expenses be paid from my pension plan or 401(k) plan? Yes, they certainly can and, in fact, probably already are. However, the decision to do so must be made by the responsible plan fiduciaries who make sure that proper documentation and disclosures are provided." (Employee Benefit News; free registration required)

401(k) Debit Cards: What You Might Not Know
Excerpt: "Unlike a debit card that deducts money from your checking or savings account, a 401(k) debit card withdrawal is a loan you make to yourself out of your retirement savings. More akin to a traditional credit card, you must repay the money you withdraw using the card, along with fees and interest - or you may incur substantial penalties." (U.S. Securities and Exchange Commission)

When 401(k) Investing Goes Bad: Teachers in West Virginia Offer Valuable Lesson for What Not to Do
Excerpt: "Seventeen years ago, West Virginia school employees joined millions of workers nationwide in a shift from a pension plan that guaranteed a monthly check, to a retirement-savings plan that would make the teachers, bus drivers, custodians and other staff responsible for their own investment accounts." (The Wall Street Journal)

Companies Tap Pension Plans To Fund Executive Benefits
Excerpt: "At a time when scores of companies are freezing pensions for their workers, some are quietly converting their pension plans into resources to finance their executives' retirement benefits and pay. In recent years, companies from Intel Corp. to CenturyTel Inc. collectively have moved hundreds of millions of dollars of obligations for executive benefits into rank-and-file pension plans.' (The Wall Street Journal)

401(k) Plans - The Employer Match
Excerpt: "With automatic enrollment an increasingly prevalent tool for boosting participation in 401(k) plans, some retirement savings experts are asking whether plans should consider eliminating their employer match." (; free registration required)

Fox/Business to Focus on Pensions Monday Morning
Excerpt: "Pensions will be the topic on Fox\Business tomorrow (Monday) morning at 8 a.m. when Bradley Belt, former executive director of the Pension Benefit Guaranty Corporation, will presumably discuss the dire situation with our country's pension system." (John Bury via

Federal Pension Agency Seeks Investment Partners
Excerpt: "The federal agency that backs the retirement benefits of 44 million Americans is seeking financial firms to invest about $2.5 billion of its assets in private equity and real estate. The Pension Benefit Guaranty Corp. . . . adopted a new policy in February to shift a greater portion of its $55 billion in assets to stocks and alternative investments such as private equity funds." (AP via

More Employers Stepping Up to Provide Employees with Financial Education and Advice
Excerpt: "Employees are increasingly looking to the workplace as a source of financial and retirement-planning advice, recent survey data suggests. At the same time, many employers are surrendering their traditional skittishness about making such advice available -- in part for the same reason they had originally been reluctant to do so: Fear of litigation." (Human Resource Executive Online)

Are Cash Balance Pension Plans Right for Business?
Excerpt: "A cash-balance plan allows the business to make tax deductible contributions for eligible employees determined under a nondiscriminatory formula that may exceed the dollar limits for defined contribution plans. Contributions are in addition to amounts contributed for an employee to a defined contribution plan. Ideal candidates are companies with owners, partners or other highly compensated employees who may have neglected retirement savings to either grow their business or otherwise desire to catch up on savings." (The Spectrum)

[Opinion] American Academy of Actuaries' Comments on Regulations on Determination of Minimum Required Pension Contributions (PDF)
5 pages. Excerpt: "On behalf of the American Academy of Actuaries Pension Committee, we respectfully request your consideration of our comments regarding the proposed regulations on the Determination of Minimum Required Pension Contributions (REG-108508-08). The proposed regulations provide much needed guidance regarding the new contribution rules in the Pension Protection Act of 2006 (PPA). The primary focus of our comments pertain to the means by which the carryover and prefunding balances may be used to satisfy quarterly contribution requirements." (American Academy of Actuaries)

Sponsored by: University Conference Services

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Banner ad for University Conference Services

Can Your Retirement Plan Handle a Storm?

The climate has changed in the world of retirement and pension plan management. The Chicago Mid-Sized Retirement & Pension Plan Management Conference, October 1417, 2008, gives you up-to-date information and real-world strategies for making sure you and your plan are protected.

(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] Hewitt Federal Legislation Quick Guide Updated July 30, 2008, on Human Resources & Employment Law (PDF)
9 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] IRS Issues Proposed Regulations on IRC Sec. 423 Employee Stock Purchase Plans
Excerpt: "The proposed regulations would provide a comprehensive set of rules governing stock options issued under an employee stock purchase plan and would incorporate substantially all of the rules contained in the existing regulations under Sec. 423." (Wolters Kluwer)

[Guidance Overview] SEC Releases Interpretive Guidance on New Executive Compensation Disclosure Rules (PDF)
Excerpt: "The interpretative guidance is briefly summarized . . . with the July 3, 2008 guidance presented in italics. [Originally published January 29, 2007; updated July 31, 2008]" (Frederic W. Cook & Co., Inc.)

[Guidance Overview] Section 409A Documentary Compliance Deadline Looms (PDF)
Pages 1-2 of 5 pages. Excerpt: "Although there is much to be done to have all plan documents and agreements compliant with section 409A by the end of 2008, taxpayers who have begun the process and even those who have not, but who take prompt action this summer, still should be able to meet the upcoming plan documentation deadlines." (Miller & Chevalier Chartered)

Adding Performance Criteria to Your Stock Options
Excerpt: "As performance-based long-term incentives have become more prevalent in the United States (US) in recent years, the question has arisen whether performance features should be extended to stock options. The consensus has been that stock options are inherently performance-based since no benefit is obtained unless the share price increases from the grant date value. While the addition of performance features to stock options is not yet a common practice in the US, we are seeing more (and at times notable) instances of their use." (Hay Group)

Executive Perquisites
Excerpt: "Hay Group's examination of 2008 proxy statements found that most companies now are disclosing all perks, even where they total less than $10,000 in value. Of course, some organizations follow the reporting requirements precisely and do not disclose the smaller perks." (Hay Group)

Same-Sex Couples Who Marry Could Be Eligible for a Number of New Benefits
Excerpt: "As part of its push to legalize g.ay marriage in New York State, the Pride Agenda joined with the New York City Bar Association to mine state and local law books and find privileges reserved for married couples, and came up with 1,324 items." (The New York Times; free registration required)

Employee Assistance Programs Can Combat the Negative Side Effects of Financial Problems
Excerpt: "In the last year, EAP programs have begun to see an increase in the volume of calls related to stress, depression and other work-life challenges. After talking through issues with an EAP professional, many of these individuals specify that financial challenges are a contributing factor to their underlying problems." (Employee Benefit News; free registration required)

Newly Posted Events
(Post Yours!)

Designing Wellness Programs that Are Legal and Effective
Nationwide on August 27, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group

Employee Benefit Plans: A Unique Audit Challenge
in Massachusetts on August 12, 2008
presented by ASPPA Benefits Council (ABC) of New England

Privacy and Nondiscrimination in Genetic Testing Webcast
Nationwide on August 7, 2008
presented by West LegalEdcenter

VEBAs and Pre-Funding Retiree Health Benefits Webcast
Nationwide on September 17, 2008
presented by Global Media Dynamics

Newly Posted Press Releases
(Post Yours!)

PBGC Solicits Strategic Investment Partnerships
Pension Benefit Guaranty Corporation (PBGC)

Connecticut Pension Trustees Sued By U.S. Labor Department For Misuse Of Plan Funds
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Actuaries to Policymakers: Fix Social Security, Start by Increasing Retirement Age
American Academy of Actuaries

Benefit Informatics Launches .mobi Website
Benefit Informatics

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Regional Sales Manager
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in NY

Pension Administrator
for Platinum Pension Group, LLC
in MA

Data Conversion Specialist
for Vanguard
in PA

Managing Director - Northern California
for MassMutual Financial Group
in CA

Financial Services Firm - Client Manager
for Pension Advisors
in OH

Finance Manager Pension & Benefits Administration
for Indiana Public Employees' Retirement Fund
in IN

401(K) & Pension Customer Service Representative
for The United Companies
in NY

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