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August 20, 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] ERISA Advisory Council to Meet in D.C. Next Month; Open to Public, Comments Accepted; September 2 Deadline (PDF)
Excerpt: "The focus of the Working Group meeting on September 9 will be on phased retirement, including issues facing employers who wish to create phased retirement plans, as well as the issues facing employees who wish to take part in phased retirement programs, and whether there are any legal impediments that discourage American workers from continuing to work in their retirement years. The focus of the Working Group meeting on September 10 will be on spending down retirement assets, including the issues and barriers facing plan fiduciaries, plan sponsors, and plan participants as they attempt to evaluate approaches that guarantee periodic income levels at retirement. The focus of the Working Group meeting on September 11 will be on hard to value assets and target date funds, including potential risks and the roles of fiduciaries, trustees, investment managers, accountants/auditors and participants when employee benefit plans invest in hard to value assets, a review of regulatory policy involving assets for which there is not a generally recognized market, and challenges and risks associated with plans' use of target date funds." (Employee Benefits Security Administration, U.S. Department of Labor)

[Guidance Overview] IRS Enhancement of the Voluntary Correction Program for Retirement Plans (PDF)
4 pages. Excerpt: "The new EPCRS retains the basic structure (and plethora of acronyms) of its predecessor, Rev. Proc. 2006-27. The program continues to have a self-correction program (SCP) available for minor errors and more significant, recent errors; a voluntary submission program (VCP) involving a submission to the IRS and a fixed fee for errors that cannot be corrected through SCP; and a correction program for errors discovered by the IRS on audit (Audit CAP)." (Sutherland)

[Guidance Overview] Form 5500/ERISA 408(b)(2) Proposed Regulations Webcast (PDF)
30 pages. Excerpt: "To aid plan fiduciaries and participants in assessing reasonableness of compensation paid to service providers and potential conflicts of interest, DOL has finalized/proposed the following: Form 5500 Schedule C rules - [FINAL]; Regs under ERISA Section 408(b)(2) - [PROPOSED]; Regs with respect to self-directed individual account plan fees –[PROPOSED]" (Morgan, Lewis & Bockius LLP)

[Guidance Overview] Fifth Circuit Applies Glenn Principles on Conflict of Interest Issue
Excerpt: "Crowell v. Shell presents a number of interesting issues, including an in-depth look at when supplemental retirement benefits conferred through 'letters of agreement' may constitute ERISA plans. The conflict of interest issue, however, is of particular interest given the fresh look it provides into how the Fifth Circuit will incorporate that holding into its precedent on judicial review of benefit denials. It appears the Court has acknowledged at least one significant change. When a plan administrator operates under a conflict of interest?" (Health Plan Law blog by Attorney Roy F. Harmon III)

[Guidance Overview] An Insurance Company, an Agent, and ERISA Preemption
Excerpt: "[The defendants] recommended that the [plaintiff Maria Miara and her husband Richard] purchase a Defined Benefits Plan ('DBP'), and represented to the plaintiff that under the DBP the 'Pension Benefit Guaranty Corporation ('PBGC') guaranteed 100% spousal benefits in the event that anything was to happen to either [Miara or her] husband.' . . . 'In a letter dated June 12, 2002 and addressed to the estate of Richard A. Miara, the PBGC informed Miara, in her role as executrix of her late husband's estate, that under the remnants of the DBP, she was entitled to a monthly payment of $531.76 for the remainder of her life [rather than the earlier-quoted amount of $2,664.35]." (Massachusetts Lawyers Weekly)

Small Firms Beef Up Retirement Services for Employees
Excerpt: "It is no longer enough to simply give workers a vehicle by which to save. So some companies are turning to consulting firms that provide small businesses with services and tools to help workers better manage their investments -- for a fraction of the cost of doing it in-house." (The Wall Street Journal)

NAGDCA 2008 Survey of State and Local Government Defined Contribution Plans II
Excerpt: "This report contains two sections. The National Summary provides a narrative overview of the key areas involved in administering governmental 457, 401(k), 401(a), and 403(b) plans. The Overall Survey Results section, provided as a PDF, offers a look at the survey through charts and responses from all participating entities." (National Association of Government Defined Contribution Administrators, Inc.)

Target Date Funds: Selecting the Right One for Your Plan (PDF)
3 pages. Excerpt: "Although the asset arrangements and allocations of target date funds vary, they include a broad range of alternatives which are designed to achieve a desired risk/return profile for the fund's investors over a relatively 'long time horizon,' attempting to provide a diversified investment structure similar to a traditional DB plan. [This paper offers observations on evaluating the funds.]" (National Association of Government Defined Contribution Administrators, Inc.)

Retirement Research Consortium Conference, Determinants of Retirement Security
The 10th annual conference of the Retirement Research Consortium (RRC), Determinants of Retirement Security, was held August 7-8, 2008, in Washington, DC. The target page includes links to the papers and presentations that are currently available. (Center for Retirement Research at Boston College)

Next Generation of 401(k)s Shows Automatic Enrollment and Step-Up Provisions Doubling Among Employers
Excerpt: "Employers are taking decisive actions to make 401(k) plan participation as easy as possible for employees, according to the 2008 401(k) Benchmarking survey, conducted by Deloitte, the International Foundation of Employee Benefit Plans and ISCEBS." (International Society of Certified Employee Benefit Specialists)

The Issue of Debit Cards Attached to 401(k) Loans
Excerpt: "Recently, the SEC issued a bulletin warning consumers that such 401(k) 'debit' cards were, in fact, credit cards against funds that must be repaid. If borrowers fail to repay the loan within five years, or if they miss three consecutive months of payments, that loan will be treated as a 401(k) distribution, and taxes will be assessed on the balance. If the borrower is under 59 and one-half years old, they'll also get slapped with a 10-percent penalty for early withdrawal." (Human Resource Executive Online)

IRA Rollover Dynamics 2008: Market Sizing, Benchmarks, & Best Practices - Overview and Table of Contents (PDF)
11 pages. Excerpt: "The study evaluates existing distribution platforms and assesses the involvement and impact of asset managers in capturing and retaining rollover assets. A detailed examination of current and future market size projections offers a unique analysis behind the trends shaping these projections. The study also provides insights into advisor preferences for value-added programs that will assist in better positioning and targeting these programs with relation to retirement and rollovers." (Financial Research Corporation)

IRS Rules That Wall Street Cannot Buy Your Company's Pension Plan - at This Time
Excerpt: "The proposal has its advocates and its detractors. The fact that the idea has arisen now certainly reflects the desperate situation in which many defined benefit pension plans find themselves in light of the recent bear market, which has exacerbated an already troubled funding situation. One has to wonder, however, whether the timing of such a proposal is propitious, in light of the current instability of financial institutions and the ongoing credit crisis. Furthermore, a Democratically controlled Congress presumably would be reluctant to adopt such a measure, particularly in view of the strenuous opposition that has been voiced by the AFL-CIO and AARP, among others." (Tax Management Inc.)

Home Depot Retirement Fund Participants Get Second Chance in Court
Excerpt: "Former Home Depot employees get a second chance at recovering losses to their ERISA portfolios after a federal appellation court reversed a dismissal of their lawsuit. Several lawsuits have been filed against Home Depot's former CEO and retirement plan management for the imprudent investment of employee retirement funds." (Online Legal Marketing)

Workers Swearing Off 401(k) Loans, According to Survey
Excerpt: "Credit crunched consumers aren't raiding their employer-sponsored nest eggs any more than usual, with the percentage of workers with outstanding 401(k) loans increasing by less than 1% so far this year, according to data provided to Financial Week by Hewitt Associates. Specifically, the benefits consulting firm estimates that about 22% of workers are now borrowing from their 401(k) plans." (Financial Week; free registration required)

Sponsored by: University Conference Services

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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 14–17, 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

Principal Announces 2008 10 Best Companies for Employee Financial Security
Excerpt: "By providing financial security in what some are calling a recession, 10 growing companies have earned national acclaim for standing by their employees. An independent panel of benefits experts selected The Principal 10 Best Companies for Employee Financial Security -- 2008, in large part for finding ways to maintain and expand benefits rather than slash them." (; free registration required)

Lower Costs, Higher Morale Benefits of Four-Day Work Week
Excerpt: "Chrysler LLC is the latest to propose workers shift to four 10-hour days. The state of Utah adopted it earlier this month, and so have hundreds of U.S. cities. Closer to home, officials in Nova Scotia and the city of Hamilton are interested in the idea, and some industrial plants have quietly made the change." (The Globe and Mail)

ESOP Rules for Government Contractors Finalized
ESOP consultant Ronald Gilbert discusses recently finalized rules for federal government contractors who sponsor ESOPs. The rules address the 'allowable cost' that federal government contractors may claim for contributions or dividends paid to an ESOP. (National Center for Employee Ownership)

Newly Posted Events
(Post Yours!)

Changes to Cafeteria Plans: What You Need to Know to Prepare
in Alaska on October 6, 2008
presented by Lorman Education Services

The Open Enrollment Challenge - Strategies for Success
Nationwide on October 1, 2008
presented by Lorman Education Services

Newly Posted Press Releases
(Post Yours!)

AHIP Welcomes New Pro-Reform Ad Featuring Harry and Louise
America’s Health Insurance Plans (AHIP)

ZAG: 2009 Will Be The Year That Tougher Fiduciary Standards For Investment Advisors Take Hold, Group Urges Lifetime Ban For Breach Of Trust
Zero Alpha Group

CFA Institute to Focus on Six Key Investor Initiatives from U.S. SEC Financial Reporting Standards Report
CFA Institute Centre

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ERISA Attorney
for Ascensus
in MN

Retirement Services Supervisor
for County of Sacramento
in CA

Retirement Plan Conversion Manager
for Charles Schwab
in OH

Attorney - Counsel - Retirement Plans Division
for Transamerica Retirement Services
in CA

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