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October 29, 2008

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


Today's sponsor is SunGard

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[Guidance Overview] Interim Valuations: The Right Thing to Do?
Excerpt: "With the recent dramatic decline in the market, many plan administrators (and their third party service providers) are asking whether they should conduct an interim valuation of plan assets in a balance forward plan. Notions of 'fairness' aside, this question raises both fiduciary and tax issues and no matter what the plan fiduciary decides to do, someone is likely to be unhappy. Of course, if significant amounts are involved, the decision to re-value (or not to re-value) could result in litigation." (SunGard)


[Guidance Overview] New Question Posed in ERISA Case Before Supreme Court Regarding Divorced Spouse's Right to Pension Payments
Excerpt: "The Supreme Court on Tuesday ordered lawyers to file new briefs by Nov. 10 on a new issue in a pending case testing a divorced spouse's right to the other spouse's pension benefits. The question was posed in Kennedy v. DuPont Savings Plan Administrator (07-636) -- a case heard by the Justices on Oct. 7. The new question tests the application to the case of a part of federal benefit law that requires benefit plan administrators to operate the plan as dictated by plan documents -- an issue that the Court appeared previously to have declined to hear." (SCOTUSblog)


The IRS Pays a Call on Public Retirement Plans (PDF)
2 pages. Excerpt: "To better understand the difficulties these plans face complying with federal tax requirements, the IRS is going to survey a select group, fewer than 40 government plans. A more comprehensive survey is scheduled to go out later this fall to approximately 200 plans, based on results obtained in the pilot survey. A public report is to be issued by year end. Survey respondents are being assured that any noncompliance issues identified will not result in an IRS examination; instead, respondents will be given directions on how to correct any issues that exist." (Milliman)


EBSA's Proposed Guidance on Investment Advice for 401(k): Be Prepared Rescheduled for December 18
Excerpt: "A proposed rule from the Labor Department's Employee Benefits Security Administration provides guidance on the investment advice available to participants in 401(k) plans. Our webcast will cover Overview of the investment advice proposals and how they affect the availability and quality of professional investment advice at the participant level. How plan sponsors can best fulfill their fiduciary obligations to prudently select and periodically monitor fiduciary advisers. Steps plan sponsors should consider regarding the required 408g audits and effective documentation thereof. General areas of concern for plan sponsors contracting with service providers." (International Foundation of Employee Benefit Plans)


IRC 403(b) Phone Forum Scheduled for December 4, 2008
Excerpt: "January 1, 2009 is coming up! Are you ready for the Final 403(b) Regulations? Please join Bob Architect as he discusses the facts about it. Bob will answer questions following his presentation. Limited registration is now open until November 21, 2008." (Internal Revenue Service)


Interview with Professor Ghilarducci, and More, on Her Savings Proposal
Excerpt: "You can access a radio interview here conducted by Kirby Wilbur with Professor Teresa Ghilarducci in which she states that the goal behind her plan to 'restructure' the 401(k) is 'spreading the wealth.' Professor Ghilarducci has authored the plan which is currently under serious consideration by House Democrats." (Attorney B. Janell Grenier via Benefitsblog.com)


Individual Retirement Accounts and 401(k) Plans: Early Withdrawals and Required Distributions, Updated Oct. 27, 2008 (PDF)
19 pages. Excerpt: "This CRS Report summarizes the provisions of law that govern the taxes applicable to pre-retirement distributions from retirement accounts, and the situations in which distributions must be taken from a plan in order to avoid a tax penalty." (U.S. Congressional Research Service via American Benefits Council)


Assessing DB and DC Plans in the Current Market
Excerpt: "Plan sponsors are trying to connect the dots on how the Wall Street crash will affect their retirement plan benefits. Watson Wyatt's experts recently weighed in on the pros and cons of defined benefit and 401(k) plans amid a financial crisis." (Employee Benefit News; free registration required)


Americans under Financial Strain Abandon Retirement Plan Saving
Excerpt: "A new survey conducted by Opinion Research Corporation on behalf of TD AMERITRADE Holding Corporation found that financial strain due to the economic downturn was cited by half of those who say they have reduced or stopped contributing to their retirement plan." (PLANSPONSOR.com; free registration required)


Northern Trust Hit with Securities Lending Lawsuit
Excerpt: "The fiduciaries of BP Corp. North America Inc.'s retirement plans have accused Northern Trust Co. of breaching their fiduciary duties by not disclosing substantial securities lending losses." (PLANSPONSOR.com; free registration required)


Expanded Statement for the Record of Hearing on The Impact of the Financial Crisis on Workers' Retirement Security (PDF)
26 pages. Excerpt: "Although there is no clear definition of the time period for the 'current financial crisis,' this testimony defines it as the first nine months of 2008. During that time, major equity indexes were negative, with the S&P 500 Index losing 19.29 percent. Fixed-income investments fared much better during this period, with the Lehman Aggregate Index gaining 0.63 percent and three-month T-bills gaining 1.54 percent. The impact of the current financial crisis on defined benefit plans is impossible to quantify, but it is obvious that a marked reduction in funding ratios and/or increase in volatility may make continued sponsorship of these plans less attractive under some forms of pension accounting modifications." (Employee Benefit Research Institute)


[Opinion] Election and Retirement Security
Excerpt: "The election is now only days away and will occur within the context of a financial markets meltdown. The effect on retirement security has been significant. Public policy considerations must be addressed asap." (Pension & Benefits Blog)



Sponsored by: AIRE, LLC

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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] EESA Allows Bicycle Commuter Fringe Benefits
Excerpt: "In an effort to encourage fuel-free commuting, the recently enacted Emergency Economic Stabilization Act (EESA) includes a provision allowing fringe benefits for bicycle commuters. Under the act, employers may provide tax-free reimbursement of up to $20 a month to employees for qualified bicycle commuting expenses. Allowed expenses include 'reasonable expenses incurred … for the purchase of a bicycle and bicycle improvements, repair and storage' if the bicycle is regularly used for a substantial portion of the employees' commute to work." (Watson Wyatt Worldwide)


[Guidance Overview] Executive Compensation under the Emergency Economic Stabilization Act of 2008 - Troubled Asset Relief Program
Excerpt: "If Treasury acquires the assets through an auction process, the financial institution may not enter into any new employment contracts with senior executive officers that provide a golden parachute in the event of involuntary termination, bankrup.tcy filing, insolvency, or receivership. If Treasury purchases troubled assets at auction from a financial institution, there are limits on the ability of the institution to deduct as a business expense any compensation over $500,000 to certain executives. These auction related restrictions only apply with a financial institution that sells troubled assets under the TARP in an aggregate amount exceeding $300 million." (Troutman Sanders LLP)


[Guidance Overview] Recuperating from Nonqualified Deferred Compensation Plan Failures (PDF)
Pages 8-11 of 12 pages. (Milliman)


House Committee Chair Requests Compensation and Bonus Information for Employees of Major Banks
Excerpt: "In letters to nine major banks that will receive $125 billion of taxpayer funds, Chairman Waxman requested information on their compensation and bonus plans in 2008." (U.S. House Committee on Oversight and Government Reform)


McCain vs. Obama: The Candidates Respond to an Employee Benefit Questionnaire
Excerpt: "This year, 12 esteemed associations joined forces with the Pension Forum, Pension & Investment Magazine, and Pension & Benefit Power Magazine to create The 2008 Presidential Candidate Employee Benefit Questionnaire -- a comprehensive list of essential policy position questions for the candidates. Here, we share the series of important questions posed and we gain perspective on our candidates' vision regarding employer provided health care and retirement issues." (Pension & Benefit Power)


Are Older Men Healthy Enough to Work?
Excerpt: "In determining whether people will be able to work longer, it is not simply measuring how long they will live, but rather how much longer they will be capable of working. Life expectancy may be increasing, but can the same be said for healthy, disability-free life expectancy? This brief uses the National Health Interview Survey to estimate trends in disability-free life expectancy for men at age 50..." (Center for Retirement Research at Boston College)


Work Expectations, Realizations, and Depression in Older Workers
Excerpt: "We explore the impact on depressive symptoms of deviation in actual labor force behavior at age 62 from earlier expectations. Our sample of 4,241 observations is drawn from the Health and Retirement Study (HRS)." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)


[Opinion] Wooten and ERISA Preemption: When History and Current Desires Collide
Excerpt: "Quite simply, rulings and arguments by commentators that ERISA preemption should be read more narrowly than has been the case, and concomitant decisions like the Ninth Circuit ruling on the San Francisco act, may be understandable as an argument for or exercise in some sort of normative cum Dworkian cum Judge Hercules decision making, where the courts are to bring an aging statute into compliance with current circumstances, but they certainly cannot be justified as an accurate interpretation of congressional intent itself." (Stephen Rosenberg of The McCormack Firm, LLC)




Newly Posted Events

Mid-Sized Retirement & Pension Plan Management Conference
in Florida on January 25, 2009
presented by University Conference Services

Winds of Change - Special Strategy Forum
in Florida on November 13, 2008
presented by Employers Council on Flexible Compensation (ECFC)



Newly Posted Press Releases

NIPA Announces Distribution Administrator Certificate Program
National Institute of Pension Administrators

Reno Businessman Sentenced to Prison for Stealing from Pension Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Council’s 10-Point Plan Aids Retirement Savings, Promotes Economic Recovery, Protects Jobs
American Benefits Council



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Pension Administrator
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in CA

Retirement Plan Sales Executive
for Leggette Actuaries, Inc.
in TX

Pension Administrator
for John Mulligan & Associates
in NJ, NY

Client Relations Representative
for Decimal, Inc. (www.theonline401k.com)
in CA

Retirement Plan Administrator/Consultant
for InWest Retirement Solutions
in ANY STATE

Assistant Manager, Health Plan Operations
for Ralcorp Holdings, Inc.
in MO

Transition Manager - Retirement Services
for MassMutual Financial Group
in MA

Sr. Pension Administrator - Defined Benefits Plans
for Shore Tompkins Actuarial Resources, LLC
in IL

Senior Client Consultant, Emerging Corporate
for Prudential Financial
in IA

Sr. Manager, Benefits Design
for Wal-Mart Stores, Inc.
in AR

HR/PR Outsourcing Service Delivery Manager
for Constantin Control Associates
in MN, NC




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