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November 25, 2008

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

Today's sponsor is AIRE, LLC

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AIRE, LLC offers Study Supplements for ERPA Exams

Studying to become an ERPA? Make sure you are prepared. Take advantage of everything that is available to you, including study guides that supplement the official exam syllabus and online review courses at The initial exam period begins January 6, 2009. Donít wait, obtain your materials today.

[Official Guidance] IRS Schedules Hearing on Options Issued Under Section 423 Employee Stock Purchase Plans
Excerpt: "The subject of the public hearing is the notice of proposed rulemaking . . . . that was published in the Federal Register on Tuesday, July 29, 2008 . . . . Persons who wish to present oral comments at the hearing that submitted written comments by October 27, 2008, must submit an outline of the topics to be addressed and the amount of time to be denoted to each topic. . . . A period of 10 minutes is allotted to each person . . . ." (Internal Revenue Service)

[Guidance Overview] Fiduciary Duties: What Are They, and How Are You Affected as a Governmental Retirement Plan Sponsor? (PDF)
3 pages. Excerpt: "Generally, the members of a defined contribution plan's governing board or committee ('plan board'), particularly when they are determining the plan's investment array, default investment, etc., are plan fiduciaries, while 'plan sponsor' activities in establishing, amending and terminating a plan do not involve fiduciary duties. The issue of whether the staff who are involved in the day to day operation of the plan and/or who provide administrative support to the plan board are plan fiduciaries is less clear cut." (National Association of Governmental Defined Contribution Administrators)

[Guidance Overview] Text of 'SIMPLE IRA Plan Fix-It Guide' Published by IRS (PDF)
From,,id=96907,00.html -- includes an overview of SIMPLE IRA Plans, an overview of the Employee Plans Compliance Resolution System, and tips on how to avoid various specifically described mistakes. (Internal Revenue Service)

[Guidance Overview] PBGC Issues Final Rule on Disclosure of Distress Termination Filing Requirements
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) issued a final rule on November 18 that requires pension plan administrators to disclose information related to distress termination filings and plan administrators or plan sponsors to disclose information related to PBGC-initiated terminations. The final rule implements Section 506 of the Pension Protection Act of 2006 . . . ." (Hewitt)

[Guidance Overview] Year-End Heads Up: Qualified Plans May Require Discretionary or Interim Amendments
Excerpt: "Qualified plan sponsors need to identify, prepare and timely adopt any amendments that may be required for 2008. For a calendar-year plan, discretionary changes that became effective in 2008 must be adopted no later than December 31. Non-discretionary changes must be adopted by March 15 (or by the extended due date for filing the sponsor's federal income tax return, if applicable) assuming that the plan sponsor is also on a calendar tax year." (Deloitte)

[Guidance Overview] Chart of PBGC's Maximum Guaranteed Benefit; Depends on Age of Participant
Excerpt: "As illustrated by the following table, the maximum guaranteed benefit is higher for individuals who start receiving benefits after age 65, and lower for those who start receiving benefits before age 65 or who elect survivor benefits. The 2009 limits apply to all plans terminating in 2009, even if a participant does not begin collecting benefits until a later year." (Deloitte)

[Guidance Overview] Declining Asset Values in Defined Benefit Plans Could Invoke Benefit Restrictions and Deferred Compensation Concerns
Excerpt: "Single-employer defined benefit plans that fail to reach specified funding attainment levels will trip increasingly severe benefit restrictions (e.g., prohibitions against plan amendments, against payment of amounts in excess of single life annuity payments, and eventually against benefit accruals). At-risk defined benefit plans will also restrict the ability of publicly-traded corporations to set aside amounts for the purpose of paying deferred compensation to the executive officers." (Deloitte)

New Vanguard Report Analyzes Target-Date Funds
Excerpt: "The paper focuses on two types of investors: pure investors holding a single target-date fund, often as a result of the plan's default designation; and mixed investors, who choose to combine a target-date fund with other plan options on their own. The paper analyzes the characteristics of pure and mixed investors and the benefits that target-date funds offer both groups." (Vanguard Center for Retirement Research)

Are There Opportunities to Increase Social Security Progressivity despite Underfunding?
Excerpt: "This paper reviews why Social Security fails to lift more aged low-wage workers and people of color out of poverty. It examines the payroll tax and benefit formula and reviews literature about OASDI outcomes by race, gender, and earnings level. . . . The paper then [examines] lifetime OASDI redistribution under current law and a trust fund-neutral reform package that would enhance system progressivity and improve outcomes for some vulnerable to retirement poverty. " (Urban Institute)

Distributional Effects of Proposed Reductions in Social Security Cost-of-Living Adjustments
Excerpt: "The effect of the COLA reductions would be cumulative over time, causing benefit reductions to increase the longer benefits are received. Certain groups of beneficiaries who tend to receive benefits for longer than average -- including older beneficiaries, women, whites, widow(er)s, those with higher levels of education and income, and retired disabled individuals -- will experience larger benefit reductions." (Office of Policy, U.S. Social Security Administration)

Defined Contribution Retirement Plans Encounter the Storm Surge
Excerpt: "Vendors are working with sponsors to reach out to participants so that they do not make bad decisions in response to bad financial news." (; free registration required)

Text of ASPPA's Comments to IRS Requesting Clarification of Pension Provisions in HEART Act (PDF)
4 pages. Excerpt: "These key clarifications involve the treatment of (1) differential pay as plan compensation, (2) the special withdrawal right for military employees, (3) life insurance held under a qualified plan, and (4) the timing of plan amendments." (American Society of Pension Professionals & Actuaries)

Audio: Experts Discuss the Economy and Its Effect on Pensions
Excerpt: "Diane [Rehm] and her guests discuss what the financial crisis means for retirement accounts, including pressures on employers, workers, and retirees. . . . David Wessel, economics editor, The Wall Street Journal; Mark Iwry, a nonresident Senior Fellow at the Brookings Institution, a Principal of the Retirement Security Project, Research Professor at Georgetown University, and former Benefits Tax Counsel at the U.S. Treasury Dept. from 1995-2001; Karen Friedman, policy director, Pension Rights Center; [and] James Klein, president, American Benefits Council." (WAMU 88.5 American University Radio)

Treasury Extends Money Market Guarantee Program
Excerpt: " The U.S. Treasury Department has extended their Temporary Guarantee Program for Money Market Funds until April 30, 2009 to 'support ongoing stability in this market'." (; free registration required)

G.M.'s Pension Fund Stays Afloat, Against the Odds
Excerpt: "Whatever its ultimate fate, the G.M. fund may illustrate, against the odds, that it is still possible to offer traditional, defined-benefit pensions even in a historic bear market." (New York Times; free registration required)

Sponsored by: IRS & AIRE, LLC

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The Enrolled Retirement Plan Agent Program is now available!

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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] FASB Agrees to Three Additional Disclosures of Fair Value of Asset Valuation
Excerpt: "At its October 29, 2008, meeting, the Financial Accounting Standards Board (FASB) approved revisions to Financial Accounting Statement (FAS) 132(R)-a, Employers' Disclosures about Postretirement Benefit Plan Assets. In addition to setting an effective date of fiscal years ending after Dec. 15, 2009, the FASB approved three additional items of disclosure. Employers will have to disclose separately the following for each major category of plan assets: . . . ." (Wolters Kluwer Law & Business)

[Guidance Overview] Participant Not Entitled to Additional Review of Denied Disability Claim
Excerpt: "In denying the participant's request for an additional review of her claim, the court was satisfied that although the conclusions in the initial denial and appeal denial were not the same, the participant had been provided the opportunity to submit evidence in support of her disability claim, and that this evidence was considered in the appeal denial." (Employee Benefits Institute of America)

Managing Workforce and Benefit Program Risks during an Economic Downturn (PDF)
Excerpt: "The eligibility status of any dependent population is in a constant state of change. [Dependent Eligibility Audits] identify ineligible dependents and remove them from benefit plans, and also educate employees regarding the plan's eligibility guidelines. Identifying and removing an ineligible child or former spouse can produce several years of savings. . . . [With regard to retirement plans, in-plan annuities] haven't yet become widely popular but the ability to guarantee an income stream in retirement might be increasingly appealing to participants worried about their savings eroding." (Buck Consultants)

More Commentary on Pending U.S. Supreme Court Death Benefit Waiver Case
The dispute, in Kennedy v. DuPont Savings Plan Administrator, concerns a $402,000 death benefit that was waived by the participant's ex-wife in a divorce decree; the plan asserts it must pay the benefit to the ex-wife because she was the person named in the plan's beneficiary designation as of the date of the participant's death. The participant's daughter, who would otherwise receive the funds, disagrees. (Workplace Prof Blog)

Newly Posted Events
(Post Yours!)

Down to the Wire: The Final 403(b) Regulations!
Nationwide on December 3, 2008
presented by American Society of Pension Professionals & Actuaries (ASPPA)

ERPA Boot Camp
in Illinois on December 15, 2008
presented by The Center for Tax Law and Employee Benefits at The John Marshall Law School in Chicago

Fee Disclosure Issues: Special Considerations for Trust Organizations
Nationwide on December 11, 2008
presented by Goldleaf Partners

Newly Posted Press Releases
(Post Yours!)

CAHI Stands by Its Principles for Health Insurance Reform
Council for Affordable Health Insurance

The Hartford Re-Aligns Employer Markets Group
The Hartford

Doctors Receive Bonuses for Providing Optimal Care to Patients through Bridges to Excellence
Bridges to Excellence (BTE)

Health Insurance Deductible of $1,000 Becomes the Norm in 2008, Mercer Survey Finds

Free Online Health Record Launched for BlueCross Medicare Advantage Members
BlueCross BlueShield of Tennessee

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DC Plan Administrator
for Orange County California Firm
in CA

Consulting Plan Actuary
for July Business Services
in TX

Plan Administrator
for The Newport Group
in WI

Plan Administrator
for The Newport Group
in NC

Client Relations Representative
for Decimal, Inc. (
in CA

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

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