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August 19, 2008

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

Today's sponsor is ASC & The ASC Institute

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[Guidance Overview] Feuer on a Curious ERISA Case Before the Supreme Court
Excerpt: "Friend of the blog and prominent ERISA practitioner, Albert Feuer, has penned an indispensable commentary for anyone who is following the ERISA Supreme Court case of Kennedy v. Plan Administrator for Dupont Savings and Invest Plan. Kennedy is set to be argued in front of the Supreme Court this October." (Workplace Prof Blog)

[Guidance Overview] DOL's and SEC's Memorandum of Understanding to Share Retirement and Investment Information
Excerpt: "EBIA Comment: The DOL's news release makes clear that a primary goal of the MOU is to improve investigative and enforcement activities with respect to retirement plans, including 401(k) plans. In the portions of the MOU that address non-public information, however, the MOU focuses more specifically on information 'concerning investment advisers or other firms of mutual interest,' sending a strong message to the investment community about the agencies' continued commitment to combined oversight of those firms." (Employee Benefits Institute of America)

[Guidance Overview] IRS Restriction on Transfer of Frozen DB Assets to Unrelated Taxpayers Without Transfer of Assets, Operations, or Employees
Excerpt: "[S]uch transfers violate the exclusive benefit rule of Code Sec. 401(a). The guidance is meant to curb abuses caused by the direct or indirect transfer of frozen DB plan assets to unrelated third-parties." (Wolters Kluwer)

Does Employee Ignorance Undermine Shared Capitalism?
Excerpt: "The potential of shared capitalism to improve individual and organizational performance through financial incentives depends on employees knowing about and participating in compensation plans that link rewards to performance. This paper therefore analyzes a survey of employees from multiple companies to assess the extent to which employees are ignorant about company, group, and individual-based incentive pay plans and ESOPs. The findings reveal significant amounts of employee ignorance in both under- and overstating the extent to which such plans apply to them individually." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Managing Pension Funding Surpluses (PDF)
12 pages. Excerpt: "Higher funding targets under the U.S. Pension Protection Act of 2006 (PPA) and the reduction or elimination of future pension accruals are increasing the likelihood of significant surplus in defined benefit pension plans. Now is the time to develop a strategy for effectively managing emerging pension surpluses." (Towers Perrin)

Retiring Baby Boomers Prompt Increased Employer Interest In Phased Retirement
Excerpt: "With 25% of the work force nearing retirement age, an increasing number of companies are considering implementing phased retirement programs, according to a recent survey conducted by Hewitt Associates." (Wolters Kluwer)

Argentina Approves Its First Nationwide G.ay Rights Measure - the Right to Claim Deceased Partners' Pensions
Excerpt: "[S]ame-sex couples must prove they have been living together for at least five years to receive the benefit." (The Press Association)

3 Reasons Pensions Need Less Funding per Worker Than 401(k)s
Excerpt: "401(k) plans save employers money because workers fund a portion of them. But a new analysis says 401(k)'s are an inefficient way to finance a secure retirement. The nonprofit National Institute on Retirement Security calculated that a 62-year-old with a final salary of $50,000 would need to have $550,000 in a 401(k) to have an adequate retirement income, determined by the authors to be $26,684 a year. To achieve the same income, a traditional pension would need to have only $355,000 set aside for that worker, nearly $200,000 less." (U.S. News & World Report)

PBGC Head Fires Back on GAO Investment Policy Criticisms
Excerpt: "The nation's private-sector pension insurer on Monday defended itself against questions raised in a new Congressional oversight report about the Pension Benefit Guaranty Corporation's (PBGC) new investment policy. The Government Accountability Office (GAO) report, 'Implementation of New Investment Policy Will Need Stronger Board Oversight,' raised questions about whether the PBGC board has been sufficiently involved in approving investment policy changes in concept - including the one the board okayed in February 2008 . . . ." (; free registration required)

Rollover Market to Reach $500B in Five Years
Excerpt: "A new report predicts that the market for assets rolled over from employer plans should approach $500 billion by 2013. The Financial Research Corporation (FRC) study said rollover totals should increase steadily from their 2007 levels of $260 billion. In its 'IRA Rollover Dynamics 2008 -- Market Sizing, Benchmarks, & Best Practices,' FRC said the rollover trend should present money managers with 'significant retention opportunities.'" (; free registration required)

IRS Releases Anticipated Update and Expansion of Its Employee Plans Compliance Resolution System (EPCRS)
Excerpt: "The IRS has released the anticipated update and expansion of its system of voluntary correction programs for retirement plans, known as the Employee Plans Compliance Resolution System (EPCRS). The system includes three levels of correction programs -- a Self-Correction Program (SCP), the Voluntary Correction Program (VCP), and the Audit Closing Agreement Program (Audit CAP). The updated EPCRS revenue procedure generally will be effective January 1, 2009; however, plan sponsors will be permitted to apply the provisions of the updated revenue procedure beginning September 2, 2008." (Employee Benefits Institute of America)

[Opinion] Washington Offers No Relief for Savers, Those Who Follow the Rules
Excerpt: "[T]ens of millions of people pay their mortgages on time, don't max out their credit cards and put money into retirement funds. They may even save a little extra on the side. In return, they get rates on their savings that don't even keep up with inflation. They also are witnessing the horror of their nest eggs shrinking as the value of their homes plummets and the stock market tumbles. Washington policymakers seem more focused on rescuing those who behave badly by putting at risk taxpayers who've played by the rules and shunned the get-rich-quick schemes of Wall Street croupiers." (AP via The New York Times; free registration required)

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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] Employer's Dollar Limit on Nontaxable Gifts Is Not Imposed by De Minimis Fringe Benefit Rules
Excerpt: "EBIA Comment: Many employers use a fixed dollar limit to identify gifts that will be considered de minimis, and thus not reported as income. As this information letter reminds us, though, the Code's de minimis fringe benefit rules do not set any fixed dollar limit -- they use a less precise standard. This puts employers in a difficult position. Making individualized determinations seems practically impossible but any fixed dollar limit may include too much or too little in income." (Employee Benefits Institute of America)

[Guidance Overview] MetLife v. Glenn Enters the Executive Compensation Arena
Excerpt: "The recent case of Sluimer v. Verity Inc. (N.D. Cal. 2008) involved a relatively routine question of whether a company properly denied severance benefits to a former employee under an ERISA plan. However, the case is significant for all executive compensation professionals because it marks the first entry of the U.S. Supreme Court's recent decision in Metropolitan Life Ins. Co. v. Glenn, 128 S. Ct. 2343, 2346 (2008), into the executive compensation arena." (Michael S. Melbinger via Winston & Strawn LLP)

A New Grad's Guide to Insurance
Excerpt: "If you want to save some money and protect what you've got (along with what you'll soon be earning), it's time to think insurance. You don't have to spend a bundle. Just putting a few bucks on the right kind of coverage can make a big difference in your life. And, with some jobs, it's just a matter of checking the right box on the benefits form." (FOX Business)

Newly Posted Events
(Post Yours!)

401(k) Fees: What a Plan Sponsor Must Know
Nationwide on September 4, 2008
presented by AFS Financial Group

Advisory Council on Employee Welfare and Pension Benefit Plans
in District of Columbia on September 10, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Working Group on Hard to Value Assets and Target Date Funds
in District of Columbia on September 11, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Working Group on Phased Retirement
in District of Columbia on September 9, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Working Group on Spending Down Retirement Assets
in District of Columbia on September 10, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Newly Posted Press Releases
(Post Yours!)

NIPAís APA/APR Online Exam Registration Deadline Is October 15
National Institute of Pension Administrators

PBGC Responds To GAO Report On Investment Policy Implementation
Pension Benefit Guaranty Corporation (PBGC)

President Names Three Members To PBGC Advisory Committee
Pension Benefit Guaranty Corporation (PBGC)

U.S. Department of Laborís ERISA Advisory Council Sets September 2008 Meetings
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Aon Corporation Named Industry's Best Retail Broker, Reinsurance Broker, Employee Benefits Consultant by Business Insurance Readers
Aon Consulting

CEBS Introduces A New Curriculum for the Group Benefits Associate (GBA) Designation
International Foundation of Employee Benefit Plans

New Disease Management Quality Measures Released For Public Comment
National Committee for Quality Assurance (NCQA)

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Plan Administrator/Trust Accountant
for Thomas F. Barrett, Inc.
in DC, MD, VA

DC Testing Specialist
for Kravitz - Louis Kravitz & Associates

Relationship Manager - Defined Contribution Plans
for Vanguard
in PA

401k Administrator
for Vanguard
in PA

Relationship Manager - Defined Contribution Plans
for Vanguard
in AZ

Compliance Specialist
for The Newport Group
in NC

Senior Compensation Analyst
for Teach For America
in NY

Pension Administrator
for Sentinel Financial Group
in MA

Retirement Plan Analyst
for Taylor/Webster
in TN

Retirement Plan Specialist
for Benefit Plans Plus, L.L.C.
in MO

Pension Analyst
for Benefit Plans Plus, L.L.C.
in MO

401(k) Plan Administrator
for Capital Retirement Plan Services, Inc.
in PA

Sr Calc/Complex Spec
for Prudential Financial
in CT

Retirement Plan Administrator
for Professional Capital Services, LLC
in PA

Senior Consultant
for Beasley & Company
in OK

Retirement Plan Sales
for Multi-Bank Holding Company
in CO

Plan Document Specialist
for Kravitz - Louis Kravitz & Associates
in CA

VP Retirement Plans Division Operations
for Mutual of Omaha
in NE

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