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September 18, 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

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Be Smart by Association with the International Foundation

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.

[Guidance Overview] Another Question is Answered in the 401(k) Plans Q&A Column
What should plan fiduciaries do, if anything, about the recent AIG news? (

[Guidance Overview] New Proposed Disclosure Requirements for Retirement Plan Fees and Investment Expenses: Part II (PDF)
2 pages. Excerpt: "The U.S. Department of Labor ('DOL') proposed ERISA 404(a) and (c) regulations would require disclosure in two main categories: plan information and investment information. The first part of this Alert discussed the onerous plan information disclosures. Here, we discuss the investment information disclosures. The DOL's new proposed regulations would require detailed disclosure of investment expenses in participant directed individual account plans like 401(k) plans and IRAs. Investment expense disclosures would be required upon eligibility, and at least annually, to each participant . . . ." (Holme Roberts & Owen LLP)

How Does the Wall Street Meltdown Affect My Pension?
Excerpt: "In the past few days, large companies on Wall Street have been closing left and right, making the people who work at these companies jittery about many issues, including their retirement security. The good news for these employees is that the money in their pension and 401(k) plans is protected from creditors, so that even when a company goes into bankrup.tcy, they don't have to worry about their retirement money being used to pay back debts instead." (Pension Rights Center)

Identifying Local Differences in Retirement Patterns (PDF)
18 pages. Excerpt: "This paper investigates how local labor market and other economic conditions affect retirement transitions, a question that has until recently been overlooked in the retirement literature. In particular, local unemployment rates will affect both involuntary exits from jobs and the opportunity after either voluntary or involuntary exits to find bridge jobs that allow phased retirement. As another example, low or declining house prices may restrict a worker's ability to relocate." (Center for Retirement Research at Boston College)

9th Annual Transamerica Retirement Survey: Single Women in the U.S.A. (PDF)
37 pages. Excerpt: "The 9th Annual Transamerica Retirement Survey reveals a significant disconnect between single women's dreams of retirement versus their actions and behaviors when saving and planning for future retirement. While many single women dream of traveling, pursuing hobbies, and spending more time at home with family and friends, the survey found that many are unlikely to achieve these dreams or financial security in retirement unless they take action now." (Transamerica Center for Retirement Studies)

IRS Eases Pre-Approved Plans Letter Procedure
Excerpt: "The Internal Revenue Service (IRS) on Wednesday announced it had decided to relax previously announced restrictions on how the agency would issue opinion and advisory letters for pre-approved plans." (; free registration required)

Regulator Warns Senators Not to Impede DOL Fee Disclosure Rulemaking
Excerpt: "A federal regulator on Wednesday urged U.S. Senate lawmakers not to interfere with the U.S. Department of Labor's (DoL) regulatory scheme for retirement plan fees through additional legislation. The warning came from Bradford Campbell, the Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA) and the Bush Administration's point person on fee disclosure reform, during testimony before the U.S. Senate Committee on Health, Education, Labor and Pensions." (; free registration required)

Single Woman Far Behind the Retirement Savings Curve
Excerpt: "Many single women are ill-prepared and unlikely to achieve a financially secure retirement if they don't take action now, according to the Ninth Annual Transamerica Retirement Survey." (; free registration required)

Retirement Benefits Planning - What Not to Do
Excerpt: "The following is an excerpt from 'Ten Common Errors,' part of a special report on retirement benefits that ran in the September issue of Trusts & Estates, a sister publication to Registered Rep. For many clients, retirement benefits are their largest asset. For others, they are important even if not determinative. For all, the rules governing retirement benefits are complicated. There's also a potential for tension between income tax planning and estate tax planning. So let's at least be sure to avoid these 10 common errors when planning for retirement benefits . . . ." (Registered Rep)

University of California Workers Want Larger Role in Governing Pension Plan
Excerpt: "The union representing about 20,000 UC service employees announced today it would pursue a ballot measure creating a board of trustees for the retirement fund. The group said it will start gathering signatures next month. The drive to amend California's constitution follows a failed legislative attempt to do the same thing earlier this year. The pension fund's flagging performance and other concerns make it imperative employees have more of a role, said Sen. Leland Yee, D-San Francisco, who co-sponsored the failed amendment with Assemblyman Anthony Portantino, D-La Can.ada Flintridge." (Contra Costa Times via San Jose Mercury News)

Putting an ESOP and Newspapers on Trial
Excerpt: "Leading the charge from the LA Times newsroom, [Dan] Neil and his cadre of plaintiffs are claiming various violations of Federal ERISA laws. Essentially, they allege that as members of Tribune's Employee Stock Option Plan--which became the legal owner of Tribune during a complicated buyout in April of 2007--Zell has breached his duty of loyalty to Tribune's employees. The group has asked the court to certify the case as a class action." ( LLC)

[Opinion] Pension Rights Center Testimony on Improving the Disclosure of 401(k) Fees (PDF)
5 pages. Excerpt: "For fee disclosure to truly benefit plan participants, it must occur at two levels: disclosures from service providers to plan sponsors on fees assessed to the plan, and from plan sponsors to plan participants on the fees participants are paying. Disclosure to sponsors at the plan level is critically important to participants because it is the sponsor who makes the determination of what services to provide and what investment alternatives to include in the plan. The sponsor has a fiduciary duty to ensure that these decisions are made prudently and for the sole and exclusive benefit of the participants." (Pension Rights Center)

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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] IRS Examples of Excluding Recurring Part-Year Compensation in 457 and 409A Deferred Comp Rules
Excerpt: "The possibility of exceeding the 457 and 409A compensation limits occurs when nine or ten months of compensation is paid over a 12-month period and extends into another tax year." (Wolters Kluwer)

[Guidance Overview] Impact of the Heroes Earnings Assistance and Relief Tax Act of 2008 on Employee Benefit Plans (PDF)
6 pages. Excerpt: "The IRS has yet to issue guidance clarifying the provisions of the HEART Act and their impact on employee benefit plans, although it has identified this guidance as a high priority. Since plan amendments incorporating the mandatory provisions of the HEART Act are not required until the last day of the plan year beginning on or after January 1, 2010, you can wait for further guidance from the IRS before amending your plans. Nonetheless, you must be careful to operate your plans in accordance with the provisions of the HEART Act that are effective retroactively or that will take effect as of January 1, 2009." (Harter Secrest & Emery LLP)

Wall Street Turmoil Tainting Stock Option Plans
Excerpt: "Stock options long have been a core part of the compensation packages of many mid- to high-level employees in financial services. But the recent turmoil on Wall Street may make options a hard sell to potential recruits -- at least for the next several months, compensation experts say." (Workforce Management; free registration required)

Still-Rising Gas Prices Encourage Employers to Think Outside the Box
Excerpt: "As gas prices nationwide climb north of $4 per gallon, most consumers cringe as they fill up. Although Louis Basso, president of The Alcott Group, a New York-based HR consulting firm, regrets he can't take away 'the whole pain' of rising prices for his employees, he's trying to do all he can to help. 'This is going to be our second round with offering our employees help with gas prices,' he says. About a year and a half ago, when gas prices hit $3 a gallon, the company, which employs 43 workers, gave each employee $100 via payroll to help ease the burden. [Originally published August 1, 2008.]" (Employee Benefit News; free registration required)

Newly Posted Events
(Post Yours!)

Health Savings Accounts
Nationwide on November 10, 2008
presented by Lorman Education Services

HRAs and HSAs for Rookies: Basic Training in Consumer-Driven Health Care
Nationwide on October 16, 2008
presented by EBIA / Thomson Reuters

Recognizing and Addressing COBRA
Nationwide on November 14, 2008
presented by Lorman Education Services

Newly Posted Press Releases
(Post Yours!)

Pension Rights Center Calls for Increased 401(k) Fee Disclosure
Pension Rights Center

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Director, Plan Services
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