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August 21, 2008

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

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[Guidance Overview] Supreme Court to Examine QDROs as the Only Waiver to Retirement Benefits (PDF)
Pages 2-3 of 5 pages. Excerpt: "Next term, the U.S. Supreme Court will decide whether there is an exception to the general ERISA rule of non-alienation that a qualified domestic relations order (QDRO) is necessary to divest a party of a retirement benefit in the divorce context. The exception would permit a plan to treat a spouse's benefit as having been divested as a result of the spouse's execution of a divorce decree waiver." (Miller & Chevalier Chartered)

California Appeals Court Says the IRS Was Wrong About ERISA's Anti-Backloading Rule
Excerpt: "A U.S. Court of Appeals sided with corporations yesterday when it rejected an Internal Revenue Service interpretation of pension plan rules. At issue was whether pension plans that use so-called cash balance formulas violate provisions of the federal Employee Retirement Income Security Act (ERISA) and California state employment law." (

Will People Be Healthy Enough to Work Longer? (PDF)
40 pages. Excerpt: "Using the National Health Interview Survey, this paper shows that healthy life expectancy increased by about three years over 1970-2000 for the average 50-year old man. This increase is largely the result of men moving up the education ladder, with minimal increases within educational groups. Moreover, major disparities in healthy life expectancy remain between those in the bottom and top quartiles of the population. And these disparities mean that a vulnerable portion of the population – perhaps those who most need to work longer – might not be able to extend their work lives." (Center for Retirement Research at Boston College)

The Housing Bubble and Retirement Security (PDF)
39 pages. Excerpt: "Using the 2004 Survey of Consumer Finances (SCF) this paper investigates the probability of households extracting home equity through an increase in housing-related debt, the probability that they use their housing-related borrowing for consumption, and finally the factors that determine the level of consumption spending out of their increased debt. The results show that while homeowners appear to take the present discounted value of future rents into account, many of them extracted equity and used it for consumption. A substantial proportion – perhaps 30 percent – of older households will be less secure in retirement because of the housing bubble." (Center for Retirement Research at Boston College)

How Much Do State Economic and Other Characteristics Affect Retirement Behavior? (PDF)
35 pages. Excerpt: " The results show that the state-level variables explain almost none of the variation in the probability of working or the expected retirement age . . . ." (Center for Retirement Research at Boston College)

IRS Proposed Rule Permitting Governmental Plans to Comply with Required Minimum Distribution Rules
Excerpt: "The IRS has issued a proposed rule permitting governmental plans to comply with the required minimum distribution rules under Code Sec. 401(a)(9) by using a 'reasonable good faith interpretation' of the statute." (Wolters Kluwer)

Pension Ruling a Partial Win for Both Sides - Appeals Court Says Cash Balance Plans Are Legal
Excerpt: "In a ruling that appears to have something for everyone, a U.S. appeals court in Pasadena decided Wednesday that Southern California Gas Co. did not discriminate against older employees when it converted its traditional pension to a cash-balance plan 10 years ago. But, the court said, the company owed its workers fair warning so that they could save more -- or find another employer. The ruling in Hurlic vs. Southern California Gas concurred with other recent appeals court rulings . . . ." (Los Angeles Times)

ERISA Fiduciaries Ask, 'Could I Really Go to Jail?'
Excerpt: "While it is hard to picture the term 'criminal penalties' in conjunction with mundane things like SPDs, SARs, Form 5500 filings and other run-of-the-mill benefit plan documents, there is potential liability when fiduciaries fail in their duties under the plan. When the Department of Labor (DOL) uncovers egregious behavior involving benefit plans, they have historically brought criminal charges under three sections of ERISA and three sections of the United States Criminal Code." (Aiken & Aiken)

[Opinion] The Failure of COPA - College of Pension Actuaries
Excerpt: "There is a pension tsunami about to destroy retirement as we know it in this country and it's coming from four main fronts: 1) The 401(k) is not a pension plan. . . . 2) People will live longer . . . . 3) Multiemployer (union sponsored) plans are about to all go bankrupt simultaneously. 4) Government plans are not subject to ERISA . . . ." (

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Links to Items on Executive Comp, Benefits in General

[Guidance Overview] DOL Service Provider Disclosure Regs: A New and Improved (?) Way of Doing Business
Excerpt: "The proposed regulations are intended to introduce transparency to service providers' fees and potential conflicts of interest, so as to provide plan fiduciaries with sufficient information to be able to make informed decisions about services and costs, and will require major changes in how service providers operate as well as impact employers who contract for those services. The regulations would take effect 90 days after publication of the final regulations." (Patterson Belknap Webb & Tyler LLP)

[Guidance Overview] IRS Proposed Regs Clarify Rules for Tax Deadline Postponement Due to Disaster, Terrorism or Military Action
Excerpt: "The IRS has issued proposed regulations, amending existing regulations under Code Sec. 7508A, to clarify rules relating to the postponement of certain tax-related acts by reason of a Presidentially declared disaster or terroristic or military action." (Wolters Kluwer)

Supreme Court Cases May Impact Non-Qualified Deferred Compensation Plans
Excerpt: "As I discussed last Friday, the 2008 term of the U.S. Supreme Court was a bad one for qualified and non-qualified plan sponsors. The Court's rulings in Metropolitan Life Ins. Co. v. Glenn and LaRue v. DeWolff, Boberg & Associates, Inc., made it significantly easier for plan participants to bring legal challenges against the decisions of employers and retirement plan fiduciaries." (Michael S. Melbinger via Winston & Strawn LLP)

Executive Pay Guidelines are Changing
Excerpt: "Responding to criticism of executive pay packages, a growing number of U.S. companies are making their executive pay programs, as well as portions of their executive benefit plans and severance policies, more shareholder friendly, Watson Wyatt found." (; free registration required)

Delivery Firm Seeks OK to Use In-House Insurance Firm for U.S. Benefits
Excerpt: "U.S. affiliates of German delivery giant Deutsche Post, including DHL Express, are asking the Labor Department for permission to fund employee benefit risks through the Vermont branch of its in-house insurance company." (Workforce Management; free registration required)

Newly Posted Events
(Post Yours!)

403(b) Plan Documents Webcast
Nationwide on September 3, 2008
presented by

ERISA Plan Fee Disclosures
Nationwide on September 9, 2008
presented by Paul, Hastings, Janofsky & Walker LLP

Reforming the U.S. Health Care System: Supporting the Role of Individuals Webcast
Nationwide on August 25, 2008
presented by

Newly Posted Press Releases
(Post Yours!)

Companies Making Executive Pay Programs More Shareholder Friendly, Watson Wyatt Proxy Analysis Finds
Watson Wyatt

Segal Trend Survey Predicts Continued Declines in All Trends: Rx Drops to Single Digit
The Segal Company

Ninth Circuit Rejects IRS Interpretation of ERISA's Anti-Backloading Rules
ERIC (ERISA Industry Committee)

During Economic Bust, Best Companies Don’t Burden Employees
Principal Financial Group Announces Reaching The 1,500 Customer Mark.

401k Averages Book - All New Average 401(k) Fee Information
401k Averages Book

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Director Nonqualified Plan Services
for Retirement Capital Group, Inc. (RCG)
in CA

Senior Actuary
for Major pension fund in NYC
in NY

Defined Benefit Data Analyst I
for Diversified Investment Advisors, Inc.
in MA

Pensions Administration Specialist (Pre Sale)
for Nationwide Financial
in OH

Senior Compliance Manager-HR Services Risk & Compliance
for Fidelity Investments
in MA, NC, NH

Benefit Plan Administrator
for McCamish Systems
in GA

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