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August 8, 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

(Click on company name or banner to learn more.)
Banner ad for International Foundation of Employee Benefit Plans

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Smart is not a permanent state of being. What's your maintenance plan? Take advantage of the education and information available through the International Foundation of Employee Benefit Plans, a nonprofit educational association, and find out why over 35,000 industry professionals like Cindy Conway rely on the Foundation to stay informed and educated. Make sure you have the most comprehensive information on health, pension and compensation issues. Be smart by association. www.ifebp.org/memberkit

[Official Guidance] IRS Composite Corporate Bond Rate Table Updated for August 2008
Corporate Bond Weighted Average Interest Rate = 6.07 for August 2008 (Internal Revenue Service)


[Guidance Overview] DOL Staff Members Provide Informal Views on ERISA 404(c) Plans, Fiduciary Liability, and Plan Expenses
Excerpt: "The Joint Committee on Employee Benefits (JCEB) of the American Bar Association has posted a report on the May 7, 2008 Q&A session between JCEB representatives and DOL staff members. Highlights include the following unofficial, nonbinding remarks about these 401(k) plan topics: ERISA 404(c) plans, fiduciary liability, and plan expenses." (Employee Benefits Institute of America (EBIA))


[Guidance Overview] DOL's Enforcement Guidelines for Gifts and Entertainment Provided to Plan Fiduciaries (PDF)
2 pages. Excerpt: "The Department of Labor has added to its enforcement manual a new section providing guidelines to its investigators with respect to gifts and entertainment provided to fiduciaries of plans regulated by ERISA. The new text is paragraph 12 of the Fiduciary Investigations Program section of the manual. The guidelines contemplate that a plan fiduciary's acceptance, from a party dealing with the plan, of meals, gifts, entertainment or expenses associated with educational conferences is a possible fiduciary violation." (Sutherland)


[Guidance Overview] Recent Department of Labor ERISA Service Provider Fee Disclosure Initiatives (PDF)
6 pages. Excerpt: "In order to help our clients understand and comply with this regulatory flurry of activity, we set forth 'Action Items' below that highlight the steps plan fiduciaries and service providers should consider taking in light of these regulatory developments, followed by a brief overview of the proposed regulations under Sections 404(a), 404(c) and 408 (b)(2) and the changes to Form 5500." (Paul, Hastings, Janofsky & Walker LLP)


[Guidance Overview] IRS's Final Regulations on Mortality Tables Under PPA (PDF)
3 pages. Excerpt: "The IRS has issued final regulations defining the mortality tables to be used for defined benefit plan funding under the Pension Protection Act of 2006 (including for determining current liability for multiemployer plans). These tables are to be used beginning with 2008 plan years. The final regulations also provide rules for the use of plan-specific tables." (Buck Consultants)


[Guidance Overview] The DOL's Proposed 408(b)(2) Regulation: Impact on Independent Recordkeepers
Excerpt: "That regulation will mandate disclosures of 'comprehensive, straight forward and helpful information concerning [a] service provider's compensation and possible conflicts of interest.' . . . Here, we discuss the impact on independent recordkeepers, that is, plan recordkeepers that do not offer proprietary investment products either directly or through an affiliate. For purposes of this discussion, we have also excluded recordkeepers that may provide investment advice through an affiliated entity." (Reish Luftman Reicher & Cohen)


Treasury / IRS Say Pension Plan Liability Buyouts Illegal
Excerpt: "However, the Treasury outlined a series of proposed guidelines developed with the Labor and Commerce departments as well as the Pension Benefit Guaranty Corp. for any federal legislation that would clear the way for buyouts of frozen plans." (Workforce Management; free registration required)


DOL Web Site on Reasonable Contract or Arrangement Under Section 408(b)(2) Fee Disclosure
In addition to a link to the proposed rule, the site contains the Requests to Testify, Hearing Testimony/Transcripts, and Supplemental Materials. (U.S. Department of Labor)


Owners and Key Employees Can Defer the Maximum in 401(k) Contributions (PDF)
3 pages. Excerpt: "Adopt a 401(k) plan with a Safe Harbor election. With such an election, the company agrees to make modest employee contributions that may take several forms: a 3% of pay contribution, a basic matching contribution, or an enhanced matching contribution. In any of these scenarios, a 401(k) Safe Harbor contribution will allow all owners, their family members and Highly Compensated Employees to defer the maximum allowed ($15,500 in 2008), even if other employees don't participate." (MandMarblestone Group)


A Collective Trust Fund Overview
Excerpt: "The Cleveland based Victory Capital Management Inc., has produced a Collective Trust Fund Resource Guide for sponsors, advisors, and providers. This one page recap gives an overview of Collective Trust Funds (CTFs), outlines their advantages and discusses their recent growth in popularity." (401khelpcenter.com)


Plan Changes for Sponsors in Benefits Offered to Returning­ National Guard Service Members and Their Beneficiaries
Excerpt: "The Heroes Earning Assistance and Relief Tax (HEART) Act of 2008 includes a broad package of mandated benefits changes including substantive shifts in how employers determine death benefits for service members. The death benefit changes were contained in the Honoring Existing Retirement Obligations for Every Service Member (HEROES) Act that was part of the larger bill." (PLANSPONSOR.com; free registration required)


Sustaining Income Through Retirement: Four Strategies for Retiring Clients
20 pages. Excerpt: "The objective of this paper is to potentially add to a financial professional's knowledge base by discussing and contrasting four strategies for turning retirement savings into a sustainable retirement income stream for their clients. To accomplish this, we will look specifically at the use of mutual funds with automated income payments, variable annuities with guaranteed minimum withdrawal benefits, income annuities, and combinations of mutual funds and income annuities." (The Principal Financial Group)


Pentagon Study Recommends Complex Four-Part Retirement Plan Be Tested on Few Thousand Military Volunteers
Excerpt: "The 'flexible' retirement plan . . . would apply both to active and reserve component members. All members would come under two of its features -- a defined annuity plan and a government-funded Thrift Savings Plan account -- with vesting after only 10 years of service." (Stars and Stripes)


Senior Execs Increasingly Weigh In on 401(k) Plan Decisions
Excerpt: "Significantly more senior executives are taking a direct role in decisions regarding their organizations' 401(k) plans than in the past, according to Cowden Associates, Inc.'s Second Annual Tri-State Defined Contribution Plan Sponsor Survey." (PLANSPONSOR.com; free registration required)


[Opinion] Fiduciary Focus: The Department of Labor Didn't Say Anything, It Just Talked (PDF)
4 pages. Excerpt: "Advisors should understand that the essential problem with the Department of Labor's proposed rule is that it requires only basic (as opposed to complete) disclosure of investment and other costs impacting a plan participant's account balance. What's needed under this rule, instead, is full disclosure of the total economic impact that both 'visible' costs (e.g., the annual expense ratio of mutual funds) and 'invisible' costs (e.g., the bid-ask spreads of mutual funds) have on the accounts of participants in retirement plans." (Prudent Investor Advisors, LLC)


[Opinion] American Benefits Council / U.S. Chamber of Commerce Letter in Support of H.R. 5160 (PDF)
2 pages. Excerpt: "[W]e are writing with respect to your bill, H.R. 5160, the Small Businesses Add Value for their Employees Act of 2008 (the 'SAVE' Act), to tell you that we support the improvements to the retirement savings system that your bill proposes. Your bill will increase overall retirement savings plan coverage -- a goal that we strongly support -- by making it easier for small businesses to sponsor a retirement arrangement." (American Benefits Council / U.S. Chamber of Commerce)



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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)

Links to Items on Executive Comp, Benefits in General

[Guidance Overview] Heroes Earnings Assistance and Relief Tax Act of 2008: Impact on Employee Benefit Plans (PDF)
4 pages. Excerpt: "[The Heroes Earnings Assistance and Relief Tax Act of 2008 (the 'HEART Act')] contains mandatory and optional provisions that impact retirement plan benefits and Health FSAs provided to employees performing 'qualified military service' (generally, military service that is covered by USERRA). These provisions are summarized [on the target page]." (Seyfarth Shaw LLP)


[Guidance Overview] Milliman's Monthly Benefit News and Developments, August 2008 (PDF)
2 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee benefits. (Milliman)


[Guidance Overview] Same-Sex Marriage Issues Complicate Employee Benefit Plan Administration (PDF)
4 pages. Excerpt: "California recently became the second state after Massachusetts to legalize same-sex marriage, but without a residency requirement. Last week, Massachusetts repealed a law that generally limited same-sex marriage to its residents, effectively opening the door for same-sex couples throughout the U.S. to marry on both coasts. This changing legal landscape is complicating plan administration for many employers across the country." (Buck Consultants)


[Guidance Overview] The Heroes Earnings and Assistance Relief Tax Act (PDF)
Excerpt: "This Regulatory Brief summarizes the key retirement plan provisions included in the Act, along with the relevant decision points for plan sponsors. It also provides a brief overview of the provisions in the Act applicable to cafeteria plans." (The Vanguard Group)


[Guidance Overview] Letter From Employee's Attorney Is a Claim for Severance Benefits
Excerpt: "The court noted that although the plan provided that the employee could 'make a claim in writing' to the plan administrator, it gave no guidance as to what type of writing qualified as a claim. The court reasoned that the letter identified an ERISA plan and asserted the employee's entitlement to plan benefits." (Employee Benefits Institute of America (EBIA))


[Opinion] Behavioral Economics: Lessons from Retirement Research for Health Care and Beyond (PDF)
14 pages. A Presentation by CBO Director Peter Orszag to the Retirement Research Consortium. Excerpt: "Research has increasingly shown that decisions are not made in a vacuum. Defaults matter. Perceptions of social norms matter. And policy designs need to account for those factors that, until recently, received little consideration in economic and policy analysis. Current pension policies are at the forefront of efforts to incorporate the lessons of behavioral economics. I hope that the same energy and care can be applied to research and policy development in the health care arena. The endeavor has the potential to yield great insight into how to better contain costs and improve people's health -- perhaps especially the health of those on the lower rungs of the socioeconomic ladder." (U.S. Congressional Budget Office)




Newly Posted Events

A Company of Entrepreneurs: Getting Employees Involved
Nationwide on November 5, 2008
presented by National Center for Employee Ownership

Acquisitions, Divestitures, and Second-Stage ESOP Transactions
in Colorado on October 2, 2008
presented by National Center for Employee Ownership

Advanced Valuation Issues
Nationwide on September 18, 2008
presented by National Center for Employee Ownership

Beyond Open-Book Management: Ways to Turn Employee Information Sharing into Employee Ideas
Nationwide on September 3, 2008
presented by National Center for Employee Ownership

Communicating Your ESOP
Nationwide on September 25, 2008
presented by National Center for Employee Ownership

Effective Boards of Directors: Best Practices in Governing an ESOP Company
in Maryland on November 18, 2008
presented by National Center for Employee Ownership

ESOP Feasibility
in Washington on November 5, 2008
presented by National Center for Employee Ownership

ESOPs as a Business Transition Tool
Nationwide on September 4, 2008
presented by National Center for Employee Ownership

Executive Compensation for ESOP Companies
Nationwide on November 25, 2008
presented by National Center for Employee Ownership

Fiduciary Issues of Stock Drop Lawsuits in ESOPs and 401(k) Plans
Nationwide on October 7, 2008
presented by National Center for Employee Ownership

Get the Most Out of Your ESOP Three-Day Conference on Best Practices for an Effective ESOP Culture
in Minnesota on October 27, 2008
presented by National Center for Employee Ownership

Handling the ESOP Repurchase Obligation
Nationwide on December 16, 2008
presented by National Center for Employee Ownership

Incentive Plans that Support Employee Ownership
Nationwide on September 11, 2008
presented by National Center for Employee Ownership

Is an ESOP Right for You? Finance, Valuation, and Culture
Nationwide on December 11, 2008
presented by National Center for Employee Ownership

Is an ESOP Right for You? The Basics
Nationwide on December 9, 2008
presented by National Center for Employee Ownership

Learn From Failures: The Dark Side of ESOPs
Nationwide on September 9, 2008
presented by National Center for Employee Ownership

Minimizing Cynicism in Employee-Owned Companies
Nationwide on September 16, 2008
presented by National Center for Employee Ownership

Navigating the 409A Deferred Compensation Plan Rules
Nationwide on December 4, 2008
presented by National Center for Employee Ownership

NCEO/Beyster Institute 2009 Employee Ownership Conference
Nationwide on April 22, 2009
presented by National Center for Employee Ownership (NCEO) and the Beyster Institute

Running an Effective Board
Nationwide on October 15, 2008
presented by National Center for Employee Ownership

S Corporation ESOPs
Nationwide on November 18, 2008
presented by National Center for Employee Ownership

The ESOP Company Symposium (3 day event)
in Georgia on October 21, 2008
presented by National Center for Employee Ownership

Using ESOPs as an Acquisition Strategy
Nationwide on December 2, 2008
presented by National Center for Employee Ownership

What They're Saying: An Overview of Public Pension Research Webcast
Nationwide on September 10, 2008
presented by International Foundation of Employee Benefit Plans

What You Need to Know as an Internal ESOP Fiduciary
Nationwide on December 10, 2008
presented by National Center for Employee Ownership



Newly Posted Press Releases

Pension Rights Center Applauds Treasury Ruling Barring Pension Plan Buyouts
Pension Rights Center

Employee Benefit Plan Officials Are Sentenced
U.S. Department of Justice

More Senior Executives Taking a Role in Managing Employee 401(K) Plans
Cowden Associates, Inc.

PPC™ Designation Approved for Use by AIG Advisor Group Across AIG Network
Financial Service Standards, LLC

New Employee Wellness Program, The 7 Habits of Healthy People, Inspires Individuals to Improve Health, Reducing Employee Healthcare Costs
FranklinCovey



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Defined Benefits Plan Conversion Specialist
for Lynchval Systems Worldwide Inc.
in TX

Participant Service Center Conversion Project Specialist
for New York Life Retirement Plan Services
in MA

Benefits/ERISA Paralegal
for Reinhart Boerner Van Deuren s.c.
in WI

Benefits Specialist
for The Urban Institute
in DC

Stock Option Plan / EPP VP & Relation Manager
for New York City / Largest Financial Institution
in NY

WRS Relationship Manager I
for Wachovia
in MD




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