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October 10, 2008

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

Today's sponsor is Employee Benefits Institute of America (EBIA)

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EBIA's 401(k) Plans Manuals and Seminars!

Since the enactment of the Pension Protection Act of 2006 (PPA), the IRS and DOL have been issuing significant guidance interpreting numerous PPA changes affecting 401(k) plans. EBIA's 401(k) Plans manual, written and edited by five experienced employee benefits attorneys, analyzes and explains the PPA and other new guidance and provides practical guidance on how to comply. If you are not a current subscriber, now is the time to add 401(k) Plans to your library. And don't forget to check out our popular in-person 401(k) plans seminars, which will be presented in several cities this fall.

[Guidance Overview] Improving Plan Diversification Through Reenrollment in a QDIA (PDF)
8 pages. Excerpt: "As a result of PPA, a new plan design strategy to improve portfolio diversification has emerged. Under this approach known as reenrollment, the holdings of current participants are transferred into the plan's qualified default investment alternative (QDIA), with the right to opt out available for participants who prefer to retain their existing asset allocations. Such a strategy has the dual benefit of improving diversification of plan assets and limiting fiduciary liability." (The Vanguard Group)

[Guidance Overview] Industry Groups Seek Modifications to Proposed Fee Disclosure Regs
Excerpt: "The ERISA Industry Committee (ERIC), the American Society of Pension Professionals and Actuaries (ASPPA) and the Council of Independent 401(k) Recordkeepers (CIKR), representing plan sponsors, service providers and recordkeepers, have submitted comments to the Department of Labor (DOL) outlining the changes they seek to the regulations proposed on July 23, 2008 regarding the disclosure of plan and investment-related information to participants in participant-directed plans . . . ." (Wolters Kluwer)

[Guidance Overview] Towers Perrin U.S. Legislative Tracking Charts -- Retirement -- Updated October 7, 2008 (PDF)
13 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

[Guidance Overview] Hewitt Federal Legislation Quick Guide Updated October 8, 2008, for Retirement Plans (PDF)
2 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding retirement plans. (Hewitt Associates)

Treasury Expands Money-Market Guarantee Program
Excerpt: "The U.S. Treasury Department on Wednesday announced a technical correction that would permit additional money market funds to participate in its Temporary Money Market Fund Guarantee Program. Funds that have a policy of maintaining a stable net asset value or share price that is greater than $1.00 and had such policy on September 19, 2008, are now eligible to participate, provided the fund meets all of the original program requirements . . . . The enrollment deadline for funds that are now eligible as a result of this technical correction is 11:59 p.m. EST on October 10, 2008." (; free registration required)

Impact of Economic Crisis on Your Pension Plans (PDF)
2 pages. Excerpt: "The economic crisis brought about by the credit crunch resulting from aggressive lending practices and the even more aggressive packaging of debt instruments will have an impact on corporate and other employers in many different ways. Here are some of the implications on employer-sponsored defined benefit pension plans." (Findley Davies, Inc.)

48 Percent of U.S. Workers Target Age 67 for Retirement, According to a Survey Released by Sun Life Financial
Excerpt: "The data also showed that only 46 percent of those surveyed are 'very confident' they will have enough money to take care of basic living expenses at 67, and 28 percent are 'very confident' they will be able to take care of medical expenses." (Workforce Management; free registration required)

EBSA Schedules Advice Rule Public Hearing
Excerpt: "The U. S. Department of Labor's Employee Benefits Security Administration (EBSA) has scheduled an October 21 public hearing on its proposed regulation for providing retirement plan investment advice." (; free registration required)

The Case for Marking Public Plan Liabilities to Market
Excerpt: "State and local U.S. pension plans hold an estimated $3 trillion in assets, with market values regularly disclosed in plan financial statements. By contrast, public defined benefit pension liabilities are routinely reported at actuarial values which may differ substantially from market values. We propose that a more accurate way to value plan liabilities measures the present value of accrued benefits discounted at market interest rates for fixed income investments that are (or are nearly) default-free. We illustrate the difference between these measures for a set of public sector pensions using publicly available information." (Pension Research Council; registration required to download fulltext of paper)

Thinking About Funding Federal Retirement Plans
Excerpt: "Most U.S. Federal retirement plans are now fully funded, but since plan assets must legally be invested in Federal securities, fund surpluses are used to reduce overall Federal budget deficits. As a result, current taxpayers are not charged with the cost of future Federal retirement obligations. Nevertheless, Federal rules do require the employing Federal agency to budget for current personnel's accruing liability of retirement promises. Therefore policy decisions regarding the number of Federal civilian and military personnel and the design of their retirement benefits may be made with a better understanding of the costs." (Pension Research Council; registration required to download fulltext of paper)

Total Retirement Income at Large Companies: The Real Deal 2008
Excerpt: "The Hewitt survey . . . examined the projected retirement levels of nearly 2 million employees at 72 large U.S. companies using actual employee data and behaviors. The study measured projected retirement income and retirement needs, and also quantified the impact of longevity risk, different employer plan structures, and gender. [The 5-page survey report is at]" (Hewitt Associates)

PSCA's Annual Survey of 401(k) and Profit-Sharing Plans Finds Increase in Automatic Enrollment
Excerpt: "The Profit Sharing/401k Council of America (PSCA) has released its 51st Annual Survey of Profit Sharing and 401(k) Plans, which provides up-to-date information on current practices and trends in profit-sharing and 401(k) plans. The survey reports on the 2007 plan year experience of 1,011 plans with 7.4 million participants and more than $730 billion in plan assets." (Wolters Kluwer)

Social Security Recipients to Get Benefit Hike Soon, But Steep Costs Eat Up Checks
Excerpt: "Amidst all the volatility and uncertainty in the financial markets these days, one thing is definite: Come October 16, Uncle Sam will announce the cost-of-living adjustment for 34 million Americans who now receive Social Security benefits. Unlike in years past, however, that adjustment is expected to be among the largest increases in 25 years" (MarketWatch)

[Opinion] ERIC Files Comments on DOL Proposed Regulation on Investment Advice
Excerpt: "ERIC on October 6 submitted to the Department of Labor comments on a proposed regulation and proposed class exemption on investment advice. DOL on August 22 published in the Federal Register the proposed rule under the Pension Protection Act (PPA) along with the proposed class exemption allowing fiduciary advisers to provide investment advice to participants in 401(k) type plans and individual retirement accounts (IRAs). ERIC's comment letter addresses a number of areas of concern . . . ." (The ERISA Industry Committee)

Sponsored by: Financial Research Associates

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The Plan Sponsor Defined Contribution Summit: For Public and Private Plan

FRA's Plan Sponsor DC Summit is truly a one-of-a-kind conference designed specifically to bring together public and private pensions who either have a defined contribution plan or are looking to add one to their benefit offerings. For the first time, private and public pensions will come together and make headway in unifying the voice of defined contribution/401k plans to drive the future of employee benefits in the right direction.

(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] Employee Benefit Changes Included in Financial Bailout Law
Excerpt: "The massive financial bailout law, H.R. 1424, enacted on October 3, 2008 includes a number of extensions of tax provisions due to expire. Provisions of H.R. 1424 and other new laws affect employee benefits, including an extension and expansion of the mental health parity rules, health coverage for college students on medical leave, and rules for bicycle commuting. The law also has several executive compensation changes targeted at affected financial institutions that will be covered in a separate WorkCite edition." (McGuireWoods LLP)

[Guidance Overview] The Emergency Economic Stabilization Act of 2008 Extensively Regulates Executive Compensation; Leaves Many Unanswered Questions
Excerpt: "The Emergency Economic Stabilization Act of 2008 (the 'Act'), signed into law by President Bush on October 3, 2008, contains several provisions affecting executive compensation. Ambiguities in the Act, however, create questions as to the scope of the Act's provisions and permissible avenues of compliance." (Littler Mendelson P.C.)

[Guidance Overview] IRS Clarifies Section 409A Calculation of Grandfathered Amount in Non-Account Balance Plans
Excerpt: "For taxable years after December 31, 2004, the grandfathered amount may increase based on 'reasonable actuarial assumptions.' Reasonable assumptions used under the plan as of December 31, 2004 or assumptions used under a qualified plan whose benefits are part of the benefit formula of the plan are presumed reasonable for purposes of determining the post-2004 grandfathered amount." (Deloitte via

[Guidance Overview] Towers Perrin U.S. Legislative Tracking Charts -- Human Resources -- Updated October 7, 2008 (PDF)
15 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

[Guidance Overview] Hewitt Federal Legislation Quick Guide Updated October 8, 2008, on Human Resources & Employment Law (PDF)
2 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates)

Financial Education Is Vital to Navigate Today's Tough Times (PDF)
3 pages. Excerpt: "More and more employees . . . are demanding financial education services at the workplace, and companies are answering their call. 'There are some highly intelligent, wise business leaders who recognize that basic financial education is good for the employees, and [the company's] bottom line,' says Thomas Garman, president of the Personal Finance Employee Education Foundation (PFEEF)." (Investment Adviser via Financial Finesse)

Newly Posted Press Releases
(Post Yours!)

ABG Unveils Interactive, Video Based Participant Engagement System
Alliance Benefit Group

U.S. Labor Department Seeks Comments On Genetic Nondiscrimination Requirements
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

ERIC Urges Ninth Circuit To Overturn Panel Ruing That ERISA Does Not Preempt San Francisco Health Ordinance
ERIC (ERISA Industry Committee)

ERIC Files Comments on DOL Proposed Regulation on Investment Advice
ERIC (ERISA Industry Committee)

Recall of Most of Nation's 401k Plans
Benchmark Financial Services, Inc.

Alliance Benefit Group of Illinois Joins Select Group of ASPPA Certified Firms
Roland|Criss Fiduciary Services

Guardian Program Designed to Reduce Costs of Employee Absences and Simplify Administration for Complying with Family and Medical Leave Act

The Standard Offers Web-Based Tool to Simplify Enrollment and Administration
The Standard

401kDIRECT Launches New 401k Program

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Defined Benefit Pension Administration Manager
for Milliman, Inc.
in NJ

Defined Benefit Pension Administration Team Leader
for Milliman, Inc.
in NJ

Consultant, Defined Contribution/401(k)
for Aon Consulting
in NJ, NY

Senior Compliance Analyst
for Administaff
in TX

Retirement Services Consultant
for Administaff
in TX

Manager, Retirement Services Consulting
for Administaff
in TX

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