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August 6, 2008

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

Today's sponsor is ASPPA

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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.

[Official Guidance] Text of IRS Rev. Rul. 2008-45: Transferring Sponsorship of Frozen DB Plans to an Unrelated Company (PDF)
4 pages. Kaboom! Wall Street meets the 'exclusive benefit of employees and their beneficiaries' rule in section 401(a) of the Internal Revenue Code. (Internal Revenue Service)

[Guidance Overview] Frequently Asked Questions About Schedule C Fee Disclosures for Defined Contribution Plans (PDF)
2 pages. Excerpt: "The new Form 5500, which was finalized in November of last year, is effective for 2009 plan years, which means it must be filed (electronically) by the end of July 2010 for calendar-year plans . . . . " (Milliman)

[Guidance Overview] Choosing Between 401(k) and 403(b): Legal Considerations for Non-Profit Employers Other Than Public Schools
Excerpt: "In the wake of the 403(b) regulations under the Internal Revenue Code, tax-exempt entities are asking whether they should forget the 403(b) arrangement and adopt a 401(k) plan instead. (Public schools don't have the option; government entities haven't been able to sponsor a 401(k) plan since the Tax Reform Act of 1986.) Some considerations are highlighted below." (

Investment Management Firms Seek to Acquire Frozen DB Plans (Note: Written Before Issuance of Rev. Rul. 2008-45 This Morning)
Excerpt: "The $2.3 trillion pension honey pot has $500 billion in 'frozen plans' that are closed to new employees and whose benefits are capped, including those at IBM (IBM), Hewlett Packard (HPQ), Verizon (VZ), and Alcoa (AA). And that figure could triple by 2012, according to consulting firm McKinsey. By managing those troubled plans, Wall Street also gains entrée to an appealing set of customers to whom it can sell a broad array of fee-generating products." (BusinessWeek)

Massachusetts Pension Fund Chief Getting Bonus Despite Fund Performance
Excerpt: "The executive director of the state's pension fund is getting a $64,000 bonus even though the fund lost more than $1 billion. Michael Travaglini, whose $322,000 annual salary makes him the highest paid state employee, will get the bonus . . . . " (Associated Press via

New Jersey Bill Would Strip Corrupt Politicians of Retirement Benefits
Excerpt: "Republicans reacted strongly to last week's sentencing of former Newark mayor and state Sen. Sharpe James, who received a 27-month term for his role in the cut-rate sale of city land to his former mistress." (

Europe Tries to Handle Political Fallout of Pension Cuts
Excerpt: "Social Security is known as the 'third rail' of American politics, and fiddling with retirement benefits can prove politically fatal in Europe too. Yet, in recent months and years some Europeans have tried to defuse the time bomb posed by millions of retirees receiving government benefits." (New York Times)

Retirement Assets Continue to Grow, Hybrid Plans Get Bulk of New Money - 8/6/08
Excerpt: "Retirement assets grew in the United States from $16.509 trillion at the end of 2006 to $17.619 trillion at the end of 2007 . . . ." (Wolters Kluwer)

GM Set to Offer Pension to Younger Salaried Workers - Full Benefits Could Come at 58
Excerpt: "Salaried employees who have been briefed said GM appears to be planning to offer full pension payments and six months of separation pay to workers 58 and older with at least 10 years of service. Typically, workers must reach age 62 to qualify for 100% of their pensions." (Detroit Free Press)

The Evolution of Retirement from Bismarck to Bush
Excerpt: "[T]he U.S. was in the forefront of developing industrial pensions. The American Express Company set up the nation's first employer-provided retirement plan in 1875. A few years later, the Baltimore and Ohio Railroad developed a plan financed by both employer and employee contributions. In 1900, the Pennsylvania Railroad, the country's biggest private employer, created a pension that became a widely used model." (

Court Tells 401(k) Participants at Home Depot They Can Sue
Excerpt: "A lawsuit that 401(k) participants filed against Home Depot and former executives -- including Robert Nardelli and Ken Langone -- has been given new life. The suit, which was dismissed in district court, has now been revived by an appeals court ruling that asserted participants may sue the company to recover losses that were sustained from holding Home Depot stock in their 401(k) plans." (Financial Week; free registration required)

Military Retirement System Should Be Overhauled, Quadrennial Review Board Says
Excerpt: "An independent panel examining military retirement, health care and quality of life programs concluded that significant changes should be made, particularly in retirement benefits, to help the military services attract and retain people with needed skills. The current retirement system is viewed as 'inequitable, inflexible and inefficient,' the 10th Quadriennial Review of Military Compensation found." (

[Opinion] Workers Deserve Index Fund Options in Self-Directed Plans
Excerpt: "The inconvenient truth about mutual funds is that the low-cost, generic version of a fund also is a better performer than its managed counterpart. . . . If plan sponsors could only offer index funds, as is the case with the thrift savings plan that covers many federal employees, the funds would never be dumped because they are the benchmark." (Jane White in Employee Benefit News)

[Opinion] Costs and Benefits of DOL's Fee Disclosure Proposal
Excerpt: "Personally, I think the projected costs are too conservative, and the projected benefits far too optimistic, based on my experience working with retirement plan participants. That the gap between the two is narrower than projected, however, doesn't mean there isn't a gap, and surely shouldn't suggest that there isn't a net benefit to be found in the regulations proposed -- or in a later, better version." (Nevin E. Adams via; free registration required)

[Opinion] Pension Governance: Preventing Fraud at Public Pension Funds
Excerpt: "Today I am going to discuss a subject that very few people really understand: preventing fraud at public pension funds. Fraud can happen at any institution but when big money is involved, it is imperative that fiduciaries and stakeholders take the necessary measures to prevent fraud from occurring in the first place." (Leo Kolivakis via Pension Pulse)

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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)

Newly Posted Events
(Post Yours!)

19th Annual National Institute on Health and Welfare Benefit Plans: Responding to Change
in Virginia on October 27, 2008
presented by ABA Joint Committee on Employee Benefits

2009 Business Management Conference (2009BMC)
in Arizona on January 10, 2009
presented by National Institute of Pension Administrators

2009 NIPA Annual Forum & Expo (2009NAFE)
in Nevada on April 26, 2009
presented by National Institute of Pension Administrators

Investments and Fees: The New Disclosure Regulation - 11:00 a.m. ET
Nationwide on August 19, 2008
presented by SunGard Relius

Newly Posted Press Releases
(Post Yours!)

ExpertPlan Unveils ExpertNvest: First Fully-Managed, Independent 401(k) Plan Solution

Treasury, IRS Issue Ruling Preventing Certain Pension Transfers
U.S. Treasury Department and Internal Revenue Service

New Interactive Webcasts Allow for Team Building and Skill Checking
International Foundation of Employee Benefit Plans

Benefit Plans Plus Launches Fiduciary Health Check
Benefit Plans Plus

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