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December 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 ASPPA and IRS

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Los Angeles Benefits Conference - January 29-30 - Los Angeles, CA

Pension Legislation just passed, why not kick-off 2009 by staying current! Get the latest news by attending the Washington Update. Ask questions directly to the IRS and DOL and hear about fee and participant disclosure from the nations most prominent speakers. Don't wait, register NOW, discounts apply!

[Guidance Overview]
Extension of Deadline for 403(b) Plan Document Compliance

Excerpt: "However, in that operational compliance under the 'reasonable interpretation' standard is required as of January 1, 2009, 403(b) plan sponsors should still be considering the following open issues . . . ." (Groom Law Group)

[Guidance Overview]
Bill's Provisions Provide Multiemployer Pension Relief (PDF)

2 pages. Excerpt: "Trustees of multiemployer pension plans must decide whether to elect the zone-status freeze described in the Bulletin, a much more complicated question than it appears at first blush. Similarly, those that are in or will go into the red zone must decide whether to add the extra three years in their rehabilitation plan. This, too, will often require more analysis than appears on the surface, since for many plans recovery from critical status could take longer than the extended 13-year period." (The Segal Group, Inc.)

Escaping the PPA Red Zone - A Case Study of a Multiemployer Plan
Excerpt: "In a mutual effort to improve a Taft-Hartley multiemployer plan's funded status, the employers and the union had agreed in May 2006 on a contract with significant annual contribution increases extending into 2009. Then on August, 17, 2006, the Pension Protection Act of 2006 (PPA) was enacted. Under PPA rules, this plan would be considered in critical status, or in the 'red zone.' The trustees of a plan in critical status are required to work with their actuary to develop optional 'rehabilitation' plans that will allow the actuary to certify that the plan is projected to emerge from critical status." (Milliman)

Dynamic Lifecycle Strategies for Target Date Retirement Funds
Excerpt: "Lifecycle funds offered to retirement plan participants gradually reduce their exposure to stocks as they approach the target date of retirement. This movement away from equities and towards less volatile assets like bonds and cash is done to emphasize growth of the portfolio in the initial years and preservation of capital in the later years. We show that such deterministic switching rules produce inferior wealth outcomes for the investor compared to strategies that dynamically alter the allocation between growth and conservative assets based on cumulative portfolio performance relative to a set target." (Social Science Research Network)

Motorola Cuts Benefits to Boost $800 Million Savings
Excerpt: "Embattled cell-phone maker Motorola Inc . . . is suspending its contributions to its 401(k) worker retirement plan, stopping some pay increases and reducing the salaries of its two top executives to cut costs. The company, whose money-losing cell-phone division has been hemorrhaging market share, also said Wednesday it will permanently freeze its U.S. pension plans as it looks to boost savings beyond the $800 million cost cuts it announced October 30." (Reuters via The New York Times; free registration required)

Motorola Freezes Pension Plans and Cuts Co-CEOs' Pay
Excerpt: "Financially stressed Motorola Inc. disclosed plans to cut costs by cutting the pay of its co-CEOs and freezing its U.S. pension plans and ending its practice of matching employees' 401(k) contributions. The company didn't spell out how much money it expects to save from what it characterized as 'difficult but necessary steps.' Effective March 1, the company said, it will freeze its U.S. pension plans, which are the older-style plans that pay employees a fixed amount monthly for life after they retire." (Chicago Tribune)

Underfunded Public Pensions?
Excerpt: "The swooning stock market has left many public employees' pension funds with unfunded liability issues. The government employers may opt to increase the vesting period, or resort to hiring freezes, layoffs or attrition to cut overall costs." (Human Resource Executive Online)

What You Need to Know about 401(k) Plans
Excerpt: "If your employer happens to go kaput, your 401(k) plan would most likely be terminated. But your money is protected -- and cannot be touched by your bankrupt employer. If you leave your job, it might make sense to roll your 401(k) funds over into an individual retirement account. If your balance is less than $5,000, your former employer may require that you do so anyway." (The New York Times; free registration required)

Ohio Teachers' System Opposes Mandatory DC Enrollment
Excerpt: "The board of the State Teachers' Retirement System of Ohio (STRSOH) voted unanimously to oppose House Bill 645 and any future legislation that would impose mandatory enrollment in a defined contribution plan for public employees." (; free registration required)

Move to Trim New York State Public Pension Plans
Excerpt: "Gov. David A. Paterson on Tuesday proposed a steep rollback of some of the generous pension benefits that have been an alluring feature of government work for decades, initiating a contentious reckoning with public employee unions. The governor is proposing to reduce benefits for newly hired state and municipal workers, including those in New York City, by placing them in a new pension category. The New York City portion of the plan was developed by Mayor Michael R. Bloomberg." (The New York Times; free registration required)

Dollar Thrifty Automotive Group Reinstating 401(k) Match in 2009 - The 'Right Thing to Do'
Excerpt: "According to the announcement, the company will match 100% of employee contributions up to 2% of pay beginning in January 2009. Tulsa-based Dollar Thrifty Automotive Group cut its match in January due to worsening economic conditions and the Company's expected performance in 2008 . . . ." (; free registration required)

Defined Benefit Plan Survival of Hard Times Means Better Risk-Return Judgments
Excerpt: "A new Hewitt Associates global survey found that companies need to do a lot more to manage their pension risk and potentially weak returns during tough economic times." (; free registration required)

401(k) Repair Kit: Our Targeted 401(k) Checkup Will Help You Make All the Right Moves
The 'repair kit' provides tools for five decades of working life starting with the 20s. (Fortune)

SunGard's Relius Education (Sponsor)

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Banner ad for SunGard's Relius Education

2009 Orlando Advanced Pension Conference

Disney’s Contemporary Resort, February 9-11. As a new president and Congress take office, more legislative and regulatory changes affecting retirement plans are expected. Stay current, attend this important conference. Our agenda will reflect the latest updates, including: EGTRRA update, 403(b) plans, fee and expense issues in 401(k) plans, engagement contracts after the Final DOL regulations, new participant disclosure requirements, EPCRS and Rev. Proc. 2008-50. Plus, "Ask the Experts" workshop, concurrent sessions, and over 900 minutes of CE credits. Register by January 9 and save $150.

Relius Education by SunGard.

Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
ERISA Plan Claims Dismissed As Jurisdictionally Flawed

Excerpt: "Is a plan a proper plaintiff to assert breach of fiduciary claims? That was the issue before the district court in the Harter case. The facts involved various allegations of misfeasance and professional malpractice against a set of consultants and insurance brokers." (Health Plan Law blog by Attorney Roy F. Harmon III)

Results from The Wall Street Journal/Hay Group 2007 CEO Compensation Study
Excerpt: "In 2008, Hay Group partnered with The Wall Street Journal for the first time to conduct the newspaper's annual CEO Compensation Study. This year's study is an analysis of Fiscal Year (FY) 2007 CEO pay from the first 200 US companies with FY 2007 revenue of at least $5 billion that filed their proxy statements electronically between October 2007 and late March 2008. Some of the findings included in this report were originally published in The Wall Street Journal on April 14, 2008, and cover companies from ten broad industry groups." (Journal of Compensation and Benefits via Hay Group)

[Guidance Overview]
Reporting and Wage Withholding under Section 409A

Excerpt: "Until the Treasury Department and the IRS issue further guidance, compliance with the provisions of the proposed regulations with respect to the calculation of the amount includible in income under IRC ? 409A(a) and the calculation of the additional taxes under IRC ? 409A will be treated as compliance with the requirements of this notice." (Deloitte via

Newly Posted Events
(Post Yours!)

Medicare Secondary Payer Mandatory Reporting Requirements Webcast
Nationwide on December 17, 2008
presented by ALI-ABA (American Law Institute-American Bar Association)

Steps Employers Can Take to Prevent Health Care Fraud and Improve Quality Webcast
Nationwide on January 8, 2009
presented by International Foundation of Employee Benefit Plans

Newly Posted Press Releases
(Post Yours!)

Hewitt Survey Reveals Most Global Companies Missing the Mark in Managing Pension Risk
Hewitt Associates LLC

Benefit Software Releases Fringe Facts® Communicator 8.0 with New Design Options to Produce Custom, High-impact Total Compensation Statements
Benefit Software Inc.

Diversified Investment Advisors, Inc. Sees Multi-Vendor Approach as Contributing Factor to IRS 403(b) Compliance Deadline Extension
Diversified Investment Advisors

Northern Trust Launches Improved Online Benefit Payments Reporting for Pension Plan Sponsors
Northern Trust

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Retirement Plan Specialist
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