Retirement Plans

To BenefitsLink home page Fill your job openings fast on!
Search Earlier Newsletters:

Sort by date
Sort by closest match

September 17, 2008

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

Today's sponsor is

(Click on company name or banner to learn more.)
Banner ad for

Need Form 5500 software?

Go to www. and sign up for our free online demo to see how can make your life easier.
  • All forms and schedules as well as SAR are included
  • 55Autofill technology – download last year's plan information
  • Batch SAR, batch Form 5558 and schedule uploads
  • Extensive error checking and context-sensitive help buttons
  • Error checking for new simplified reporting
  • Access for five concurrent users
Contact or call 800.596.0714 for more information.

[Official Guidance] Text of IRS Rev. Proc. 2008-56 Removes Retroactive Reliance 'Caveat', Relaxes Rules for Pre-Approved Plans Using Mass Submitter Language (PDF)
4 pages; modifies Rev. Proc. 2007-44. Excerpt: "[A]n eligible employer may rely on a pre-approved plan's EGTRRA opinion or advisory letter to retroactively amend its plan for EGTRRA and the other qualification changes listed in Notice 2004–84, 2004–2 C.B. 1030, ('the 2004 Cumulative List') by adopting the pre-approved plan within the adoption period ending on April 30, 2010, even if the application for the opinion or advisory letter for the plan was submitted off-cycle. Any EGTRRA opinion or advisory letters that have been issued with a caveat prohibiting retroactive reliance will be reissued by the Service to remove the caveat." (Internal Revenue Service)

[Guidance Overview] Text of DOL EBSA Chief's Testimony on Legislative Proposals for More Fee Disclosure
Excerpt: "The regulatory process currently underway ensures that all voices and points of view will be heard and provides an effective means of resolving the many complex and technical issues presented. I hope that as Congress considers this issue, it recognizes the Department's existing statutory authority and takes no action that could disrupt our current efforts to provide these important disclosures to workers. My testimony today will discuss in more detail the Department's activities related to plan fees. Also, I will describe the Department's regulatory and enforcement initiatives . . . ." (Employee Benefits Security Administration, U.S. Department of Labor)

[Guidance Overview] A Constant State of Exhaustion? LaRue v. DeWolff Revisited
Excerpt: "The real surprise in the U.S. Supreme Court's decision in LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S. _____, 128 S. Ct. 1020 (2008) ('LaRue'), was its purposeful suggestion that plan participants may be required to exhaust their administrative remedies before filing breach of fiduciary duty lawsuits. Both the five-member majority opinion, as well as the Chief Justice's concurring opinion (joined by Justice Kennedy), made this same point." (Benefits Law Journal via Jones Day)

[Guidance Overview] IRS Posts Information on Cycle C Filing Requirements for Governmental Plans
Excerpt: "IRS has posted on its Web site ( a set of FAQs that provides useful information on the submission of governmental plans in the initial remedial amendment Cycle C, which ends on January 31, 2009. Indicating that IRS is willing to work with sponsors whose plan document consists of documents from various sources – or whose plan never previously received a favorable determination letter – the FAQs outline avenues of approach for such sponsors and clarify some of the unique requirements applicable to governmental plans." (Deloitte via

[Guidance Overview] PBGC E-Filing Webcasts Are Scheduled
Excerpt: "As a result of the Pension Protection Act of 2006 and changes in PBGC regulations, all plans are required to make their premium filings electronically unless an exemption is obtained. For plan years beginning in 2008, previous Form 1-EZ, Form 1 and Schedule A are replaced with a new Comprehensive Filing. The earliest Comprehensive Filing due date for 2008 calendar year plans is October 15. PBGC has scheduled two Webcasts – on September 23 & 25 – to provide instruction on the e-filing process. Registration is available on the PBGC website (" (Deloitte via

Text of CRS Report for Congress: Older Workers -- Employment and Retirement Trends (Updated Sept. 15, 2008) (PDF)
19 pages; updated September 15, 2008. Excerpt: "Rather than reduce the normal retirement age in their pension plans, some employers would prefer that Congress amend the Internal Revenue Code to allow inservice pension distributions to employees who have reached the plan's early retirement age (or some age between the early retirement age and 62). . . . Amending the Internal Revenue Code to permit in-service distributions at the early retirement age would alter incentives to work or retire, as well as how much to work and for whom to work. Consequently, it would affect both labor force participation and hours worked among older employees. The net effect of these changes in labor force participation and hours worked would be almost impossible to predict." (Congressional Research Service, U.S. Library of Congress)

Distributional Analysis of Pension and Social Security Reforms: Alternative Approaches and a Report on an Expert Panel Meeting
Excerpt: "In April 2008, the Urban Institute convened an expert panel of researchers inside and outside of government agencies to discuss how best to perform distributional analyses of proposals to reform Social Security and private pensions. The panel discussed key technical issues, including how to measure the baseline income distribution and characterize current policies, how to address changes that alter the timing of taxes and benefits, and how to measure and report gains and losses from policy interventions. The group revealed diverse viewpoints, but we conclude that current methods used in recent UI research fall within the range of reasonable alternatives." (The Urban Institute)

Deferred Annuities and Strategic Asset Allocation (PDF)
28 pages. Excerpt: "We show that a considerable fraction of wealth should be annuitized to skim the return enhancing mortality credit. The remaining liquid wealth (stocks and bonds) is used to hedge labor income risk during work life and to earn the equity premium. We find a marginal difference between a strategy involving deferred annuities and one where the investor can purchase immediate life annuities." (Michigan Retirement Research Center)

Rep. Lewis Announces a Hearing on the Pension Benefit Guaranty Corporation to be Held on September 24, 2008
Excerpt: "The Subcommittee will review the financial condition, operations, and governance of PBGC. The hearing will focus on the deficit in the single-employer pension insurance program, the change in investment policy, and the governance weaknesses identified by GAO. The Subcommittee also will examine the overall status of the defined-benefit pension system, including the rise in the number of frozen or voluntarily terminated plans." (U.S. House Committee on Ways and Means Subcommittee on Oversight)

Talking Points: Response to Recent Press Coverage on AIG's Liquidity (PDF)
3 pages. Excerpt: "VALIC underwrites, issues and guarantees our annuity products. VALIC is financially strong with $3.4 billion in adjusted capital and surplus as of 6/30/08. VALIC's capital and surplus are completely separate from our ultimate parent, AIG." (AIG Retirement Advisors, Inc.)

Los Angeles Times Reporters Suing Chief of the Newspaper's Parent, the Tribune Company
Excerpt: "Mr. Zell, the chairman and chief executive of Tribune, took control in December in an $8.2 billion deal that took the company private . . . . Since then, the company has eliminated more than 1,000 jobs, and sold assets to raise capital and meet debt payments. . . . The unusual takeover turned Tribune's stock over to an employee stock ownership plan, or ESOP, so the employees technically became the owners. . . . 'By orchestrating what was clearly an imprudent transaction,' the lawsuit states, Mr. Zell and the former Tribune management 'breached their fiduciary duties to the employee-owners.' It adds that Mr. Zell and his aides have compounded that breach in the way they have run the company, and by using money from the employees' pension fund to pay for buyouts and severance." (The New York Times; free registration required)

New Data Confirms Americans Working Through Retirement
Excerpt: "An analysis of new Census Bureau data by the Congressional Research Service (CRS) confirms earlier theories that Americans will work longer than in previous generations - either by choice or because they have to. According to an updated CRS summary of older workers' employment trends, 52% of men aged 62 to 64 were employed in March 2008, compared to 43% in 1995 and 42% in 1990. Of men aged 65 to 69, 33% were employed in March 2008, compared to 27% in 1995 and 26% in 1990." (; free registration required)

Surplus Pension Assets Can't Be Used for Replacement Matching Contributions, IRS Rules
Excerpt: "Surplus assets from a terminating pension plan cannot be used for matching contributions under a defined contribution (DC) replacement plan, according to two recent IRS letter rulings. Transferring surplus to a DC plan has been a common way for pension plan sponsors to avoid the reversion excise tax. The rulings, which say transferred amounts must be allocated as a nonelective contribution rather than a match, reflect a change in IRS position that might catch some employers by surprise. The IRS says the result is compelled by regulations redefining the term 'matching contributions.'" (Mercer)

IRS Updates Benefit Restriction Relief for Plans Using Year-End Valuation Dates
Excerpt: "New IRS guidance offers PPA benefit restriction relief for small pension plans (100 or fewer participants in all controlled-group DB plans) that previously used year-end valuation dates. But sponsors of calendar-year plans and their actuaries must act quickly to take advantage of this relief -- they must complete 2008 valuations and certify plans' 2008 funded percentages before Oct. 1, 2008, to avoid a plan freeze and cessation of lump sums. Larger noncalendar plans that must switch from year-end to beginning-of-year valuation dates in 2008 apparently can also take advantage of the relief." (Mercer)

Do State Economics or Individual Characteristics Determine Whether Older Men Work? (PDF)
13 pages. Excerpt: "The difference in labor force participation rates of men aged 55-64 across the United States is astounding. For example, West Virginia has a participation rate below 60 percent, while South Dakota has a participation rate approaching 90 percent (see Figure 1). This fact in itself has significant implications for the pressures that states will face as the baby boom starts to retire in the face of a contracting retirement income system, declining housing prices, and a lackluster stock market." (Center for Retirement Research at Boston College)

Equifax to Phase Out Defined Benefit Plan
Excerpt: "Equifax Inc. is phasing out its defined benefit pension plan and enhancing its 401(k) plan. Effective Jan. 1, 2009, Equifax, the Atlanta-based credit information company, will no longer offer its defined benefit plan to new and current employees, other than those who meet grandfathering criteria. Affected employees will earn retirement benefits through an enhanced 401(k) plan in which Equifax will make an automatic contribution ranging from 1.5% to 4% of pay, with the amount based on years of service. Additionally, Equifax will match 100% of employees' 401(k) salary deferrals, up to 4% of pay." (Business Insurance)

Ex-AIG Employee Sues Insurer, Board Over Retirement Plan
Excerpt: "A former American International Group (AIG) employee sued the insurance giant and its directors Tuesday, claiming they failed to adequately vet the insurer's subprime mortgage exposure in administering the insurer's retirement plan. The lawsuit, filed in U.S. District Court in Manhattan, alleges AIG and its directors breached their fiduciary duties to plan participants by allowing their retirement savings to be invested in the company's stock." (

[Opinion] Links to Comments Received by DOL on Proposed Regs on Fee Disclosure for Self-Directed Retirement Plans
91 comments. (Employee Benefits Security Administration, U.S. Department of Labor)

[Opinion] ERIC Recommends Final Regs Clarify Anti-Backloading Rules Retroactively As Well As Prospectively (PDF)
11 pages. Excerpt: "The ERISA Industry Committee ('ERIC') is pleased to submit this response to Prop. Treas. Reg. § 1.411(b)-1, which addresses the application of the anti-backloading rules for defined benefit plans under section 411(b)(1)(A)-(C) of the Internal Revenue Code (the 'Code') and the parallel provisions under section 204(b)(1)(A)-(C) of Title I of ERISA. The proposed regulations were published in the Federal Register on June 18, 2008. 73 Fed. Reg. 34,665." (The ERISA Industry Committee)

[Opinion] The Committee on Investment of Employee Benefit Assets Comments on Fee Disclosure (PDF)
Excerpt: "[CIEBA] members have identified several areas of concern in the proposed regulation and we encourage the Department to revisit these issues prior to finalizing the regulation." (The Committee on Investment of Employee Benefit Assets)

[Opinion] American Benefits Council Comment Letter to IRS on Backloading/Accrual Rules to 'Greater of' Formulas (PDF)
9 pages. Excerpt: "We are . . . very concerned that the proposed regulations only address one aspect of the greater of issue, albeit a critical aspect. We urge you to broaden the proposed regulations in two ways: 1) Most importantly, it is critical that the 'different basis' requirement be deleted. 2) The separate testing rule should apply for purposes of all three backloading rules, not just the 133 1/3% rule." (American Benefits Council)

[Opinion] ERISA, ESOP and the LA Times
Excerpt: "What happens when journalists, Sam Zell, ERISA and employee stock ownership plans collide? Well, at a minimum, you get a really interesting and well written complaint alleging breach of fiduciary duty under ERISA." (Stephen Rosenberg of The McCormack Firm, LLC)

Sponsored by: ASPPA

(Click on company name or banner to learn more.)
Banner ad for ASPPA

ASPPA Credentials Signal Success

Looking to get ahead in the pension industry? Career advancement requires specialized knowledge, skills and credentialing. ASPPA is the industry’s premier provider of credentialing and education programs that will help put you in the driver’s seat of your career. Registration for webcourses and/or fall examinations is currently open. You’ve got the green light to start on your road to success. Visit and begin your journey today.

(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] Important Changes for Transportation Plans
Excerpt: "More employers may want to consider transportation plans, based on two recent developments and the continuing high cost of gasoline. Almost two years ago, the IRS clarified how debit cards should be used for Section 132 Transportation Plans. These rules, issued in Revenue Ruling 2006-57, were supposed to take effect on January 1, 2008. In 2007, Notice 2007-70 delayed the effective date for one year. In September 2008, Notice 2008-74 delayed the effective date one more year to January 1, 2010." (infinisource)

[Guidance Overview] Sixth Circuit Applies Trilogy of Supreme Court ERISA Cases in Upholding State Law
Excerpt: "The Sixth Circuit opinion in Associated Builders candidly discusses the shortcomings of the intentionalist model of statutory construction while also providing important comment on the Court's understanding of several seminal Supreme Court preemption cases." (Health Plan Law blog by Attorney Roy F. Harmon III)

[Guidance Overview] Deadline for Compliance with Section 409A Approaching (PDF)
3 pages. Excerpt: "The deadline for ensuring that all deferred compensation plans, agreements, and other arrangements subject to section 409A of the Internal Revenue Code (IRC) comply with the 409A requirements is December 31, 2008. It is highly unlikely that this rapidly approaching deadline will be extended." (Morgan, Lewis & Bockius LLP)

[Guidance Overview] Recent Developments Regarding the Effect of Equity Compensation on Earnings per Share (PDF)
3 pages. Excerpt: "There are two recent developments . . . regarding the effect of equity compensation (referred to as 'share-based payments') on the calculation of basic and diluted earnings per share (EPS)." (Frederic W. Cook & Co., Inc.)

Social Security Programs Throughout the World: Europe, 2008
Excerpt: "This report, which is part of a four-volume series, provides a cross-national comparison of the social security systems in 44 countries in Europe. It summarizes the five main social insurance programs in those countries: old-age, disability, and survivors; sickness and maternity; work injury; unemployment; and family allowances." (U.S. Social Security Administration)

Treasury Responds to Lawmaker's Inquiry About Companies Moving SERP Benefits to Qualified Plans
Excerpt: "A Treasury Department letter responds to questions from Rep. Peter Welch, D-VT, about moving supplemental executive retirement plan benefits to qualified pension plans. Treasury is 'aware of no evidence' that the practice significantly affects pension solvency . . . ." (Mercer)

Newly Posted Events
(Post Yours!)

2008 Web/Telephone Seminar: Advanced HSAs
Nationwide on October 16, 2008
presented by Ascensus

2008 Web/Telephone Seminar: HSA Basics
Nationwide on October 30, 2008
presented by Ascensus

2008 Web/Telephone Seminar: Introduction to 401(k) Plans
Nationwide on October 30, 2008
presented by Ascensus

2008 Web/Telephone Seminar: IRA Frontline Fundamentals - Part 1
Nationwide on October 23, 2008
presented by Ascensus

2008 Web/Telephone Seminar: IRA Frontline Fundamentals - Part 2
Nationwide on October 28, 2008
presented by Ascensus

2008 Web/Telephone Seminar: Withholding
Nationwide on October 14, 2008
presented by Ascensus

DOL's Proposed Regulations on Participant Fee Disclosure
Nationwide on September 30, 2008
presented by American Society of Pension Professionals & Actuaries (ASPPA)

Fall "Just the Basics" IRA Seminar Tour
Nationwide on September 23, 2008
presented by Wolters Kluwer Financial Services

Fall "More than the Basics" IRA Seminar Tour
Nationwide on September 23, 2008
presented by Wolters Kluwer Financial Services

Updated EPCRS and Plan Interim Amendments: New Rules and Coordination Issues
Nationwide on October 7, 2008
presented by ABA Joint Committee on Employee Benefits

Using Technology in Health and Welfare Plan Communications Webcast
Nationwide on October 2, 2008
presented by International Foundation of Employee Benefit Plans

Newly Posted Press Releases
(Post Yours!)

Watson Wyatt Data Services Releases 2008/2009 Survey Report on Human Resources Personnel Compensation
Watson Wyatt Data Services

John F. Greenberg Named Chief Investment Officer At The PBGC
Pension Benefit Guaranty Corporation (PBGC)

U.S. Department Of Labor Official Testifies Before Senate Committee On Fee Disclosures For 401(k)-Type Plans
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

ERIC Says Plan Sponsors Should Not be Penalized for Offering Employees Generous Benefits
ERIC (ERISA Industry Committee)

We're one of the top 350 employment sites on the web!Newly Posted or Renewed Job Openings
(Post a Job | View All Jobs | RSS feed for jobs RSS Feed )

Retirement Plan Services Operations Manager
for Kibble & Prentice, A USI COMPANY
in WA

Daily Record Keeping Specialist
for AKT Retirement Plan Services LP
in OR

Installation/Conversion Specialist
for Professional Capital Services, LLC
in PA

Manager - Operations
for Professional Capital Services, LLC
in PA

Plan Compliance Specialist
for Lincoln Financial Group
in IL

Handy Links:

Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too!

Sign-up form is at (free).

This newsletter is sent to you each workday except federal holidays.

This email has been published by:, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

David Rhett Baker, J.D., Editor

Copyright 2008, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.

Anyone can receive these emails; just have them sign up at this web page:

Other useful links: