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December 19, 2008

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

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[Official Guidance]
Winter 2009 Issue of IRS 'Employee Plan News' (PDF)

Excerpt: "This edition contains the following articles: * Adopting a Pre-Approved Plan? No Need for a Determination Letter Application; * Under Consideration: Determination Letters without Amendment Dates; * Form 8905 - Certification of Intent to Adopt a Pre-Approved Plan; * Has Your Client's Plan Merged with Another Plan? Keep All Plan Documents! * New Address for EP Determination Applications; * Common Plan Language Errors; * Tips for Quick Processing of Employee Plans Determination Letter Applications; * Sound Off about the Self-Correction Program . . . ." (Internal Revenue Service)

[Official Guidance]
Rev. Rul. 2009-2: Permitted Disparity in Employer-Provided Contributions or Benefits Under Tax-Qualified Pension Plans (PDF)

Excerpt: "This revenue ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code . . . for the 2009 plan year. . . . . Section 401(l)(5)(E)(i) defines covered compensation with respect to an employee, as the average of the contribution and benefit bases in effect under section 230 of the Social Security Act . . . for each year in the 35-year period ending with the year in which the employee attains social security retirement age." (Internal Revenue Service)

[Guidance Overview]
PPA Technical Corrections and Pension Funding Relief Enacted (PDF)

2 pages. (Milliman)

[Guidance Overview]
Technical Questions and Answers Regarding The SPARK Institute's 403(b) Plans Information Sharing (Q&A Last Updated - December 18, 2008)

Excerpt: "Following the release of Version 1.01 of The SPARK Institute's Information Sharing - Minimum and Comprehensive Data Elements (the 'Data Elements'), The SPARK Institute received a number of technical questions. The SPARK Institute has formed a standing panel, made up of representatives from various member companies that played a significant role in developing the Data Elements. The SPARK Institute and the panel reviewed the questions and developed answers which are posted . . . . This information is being made widely available in order to assist all others that are adhering to the Data Elements Best Practices. ' (The SPARK Institute)

[Guidance Overview]
FAQs: 403(b) Plan Terminations

Excerpt: "Note: [SunGard has] revised the FAQs regarding 403(b) plan termination to reflect recent conversations with a representative of the IRS National Office. The IRS clarified that in some circumstances the investment product may not provide the employer with sufficient legal control to effect a plan termination." (SunGard)

Frequently Asked Questions About the Enrolled Retirement Plan Agent Designation
Excerpt: "To assist ERPA candidates, AIRE has put together a list of answers to commonly asked questions about ERPA-SEE registration through ERPA enrollment and practice. ERPA candidates may also submit questions not addressed . . . to and a response will be posted to the ERPA-SEE Candidate FAQ log . Please note ERPA candidates should review the ERPA-SEE Licensure Information Bulletin as it entails all information relating to the ERPA program." (American Institute of Retirement Education)

Ongoing Yield Curve Downshift Pushing Pension Liabilities Higher
Excerpt: "This article below updates the Nov. 13, 2008 commentary 'Pension Storm Reprise With a Twist.'" (Delaware Management Holdings, Inc.)

IRS/Treasury Keep Rule Requiring Retirees to Withdraw Their Retirement Savings
Excerpt: "The Treasury Department and Internal Revenue Service decided not to change a rule that requires seniors to withdraw money from their individual retirement accounts and 401(k) plans by the end of the year." (The Washington Post; free registration required)

Save Your 401(k) Before It's Too Late
Excerpt: "Along with some needed regulatory changes, there are some important steps you can take to seize control of your 401(k) future -- which is why we've presented [linked from the target page] an article package detailing how you can save your 401(k) from high fees, indifferent or ignorant plan management, and the common blunders that plague many plans. . . ." (The Motley Fool)

Strategies for the Retirement Income Landscape
Excerpt: "In this report, we describe the current state of the retirement income landscape. The marketplace is in a period of rapid innovation, as new strategies are devised by asset managers, insurers, and banks to meet the retirement income needs of the baby boom generation. We begin with an overview of the issue using a risk, return, and cost framework. We then consider traditional strategies for generating income as well as new approaches. We conclude with recommendations for individuals, advisors, plan sponsors, and policymakers." (The Vanguard Group, Inc.)

401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2007 (PDF)
52 pages. Excerpt: "The bulk of 401(k) assets continued to be invested in stocks. On average, at year-end 2007, about two-thirds of 401(k) participants' assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. About one-third was in fixed-income securities such as stable value investments and bond and money market funds. Although these relative shares have changed little over the past 12 years, the underlying fund composition has changed over time." (Employee Benefit Research Institute)

McGraw-Hill Investigated for Company Stock-Related Fiduciary Breach
Excerpt: "The McGraw-Hill Companies, Inc. could find itself facing a participant lawsuit as the Cincinnati law firm of Statman, Harris & Eyrich, LLC has announced an investigation of its retirement plans. The firm said it is looking for potential violations of the Employee Retirement Income Security Act (ERISA) relating to the McGraw-Hill 401(k) Savings and Profit Sharing Plan and its subsidiary's Standard & Poor's 401(k) Savings and Profit Sharing Plan for Represented Employees." (; free registration required)

IRS Releases 2009 Covered Compensation Figure
Excerpt: "For purposes of determining contributions to defined benefit plans and permitted disparity in defined contribution plans for the 2009 plan year, the taxable wage base is $106,800, up from $102,000 last year, according to the Internal Revenue Service (IRS)." (; free registration required)

SEI Provides Guidance on FAS 87 Disclosure Assumptions
Excerpt: "Despite current market conditions and returns for 2008, plan sponsors should not drastically adjust Return On Asset (ROA) assumptions for 2009, according to SEI's 2009 update of an annual research study on Financial Accounting Standards No. 87 (FAS 87)." (; free registration required)

FedEx Cuts Pay, Suspends Retirement Plan Payments
Excerpt: "Package delivery giant FedEx Corp (FDX.N: Quote, Profile, Research) said it was cutting pay for all salaried personnel by 5 percent and suspending retirement plan contributions as it slashes costs because of a bleak U.S. economic outlook. The company, which said its cost-cutting measures would reduce expenses by $800 million by the end of its fiscal-2010 year, said CEO Fred Smith would take a 20 percent pay cut and other senior executives would take pay cuts of 7.5 to 10 percent as of January 1." (Reuters)

Pension Rights Center Publishes Consumer Agenda for Retirement Security

Excerpt: "[T]he Pension Rights Center has prepared this Consumer Agenda for Retirement Security, which includes five initiatives: Promote a more adequate and secure private retirement income system; Empower workers to promote their own retirement security; Improve retirement savings plans; Improve traditional and hybrid pension plans; Make retirement plans fairer for workers and their spouses." (Pension Rights Center)

Will 2009 Be the End of the Road for Pensions?

Excerpt: "For years, workers have seen their pension coverage at work get scaled back in favor of alternatives like 401(k) plans. But the final nail in the coffin for pensions may come from 2008's terrible stock market performance." (The Motley Fool)

ASPPA and IRS (Sponsor)

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Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
Executive Compensation and Equity Compensation Plans Year-End Checklist (PDF)

3 pages. Excerpt: "The . . . checklist describes 2008 year-end action items with respect to executive compensation and equity compensation plans. Though not exhaustive, this list is intended to provide a reminder of the general set of issues facing us at year end." (Morgan, Lewis & Bockius LLP)

Five Common Mistakes in Nonqualified Deferred Compensation Plans
Excerpt: "[One mistake is underestimating the importance of investments since] NQDC plans are not subject to all the rules and regulations of ERISA and do not carry the weight of fiduciary liability. There is little push to regularly monitor the investments within a plan and/or create an investment policy. For ease, many organizations opt to mirror the investment of their 401(k) plans. This leads to two issues. First, many organizations fail to update the investment options on the NQDC side when they amend their 401(k) offerings, leaving the NQDC plan with subpar investment options. Second, key executives are typically looking for greater diversification." (Employee Benefit News; free registration required)

Organized Labor 'Thrilled' with Obama's Pick for Labor Secretary
Excerpt: "Labor unions Thursday praised President-elect Barack Obama's selection to head the Labor Department, Rep. Hilda Solis. Rep. Hilda Solis is viewed as a strong advocate for working men and women by organized labor. A Washington-based labor official for a major union told CNN's John King that the California Democrat was Obama's choice for labor secretary. Obama is expected to officially announce his nomination of Solis during a press conference on Friday." (Cable News Network. Turner Broadcasting System, Inc.)

Fact Sheet: EBSA Achieves Nearly $12 Billion in Total Monetary Results in Last Eight Years
Excerpt: "In FY 2008, [the Employee Benefits Security Administration] closed 3,570 civil investigations, with 2,696 (75.52%) resulting in monetary results for plans or other corrective action. Since 2001, EBSA has closed 32,338 civil cases, with more than two-thirds (68.31%) resulting in monetary results or corrective action." (U.S. Employee Benefits Security Administration)

Jobs and Benefits: Grim Outlook
Excerpt: "According to a survey to be released Thursday by consulting firm Watson Wyatt Worldwide Inc., 7% of 117 respondents plan to reduce matching employee 401(k) and 403(b) contributions, and 3% already have done so. In addition, 17% of respondents plan to raise employee contributions to health-care premiums, and 20% already have raised them. 'When benefits are cut back or contributions are decreased, people look at it as if you cut their pay,' says Jeanne Hand, senior account executive of United Benefit Consulting Inc., a benefit consulting firm that is a division of HUB International." (The Wall Street Journal)

Newly Posted Events
(Post Yours!)

Beneficiary Distributions
Nationwide on February 18, 2009
presented by Convergent Retirement Plan Solutions, LLC

Employer-Sponsored Retirement Plan to IRA Rollovers
Nationwide on March 4, 2009
presented by Convergent Retirement Plan Solutions, LLC

IRA Conversions and Recharacterizations
Nationwide on March 11, 2009
presented by Convergent Retirement Plan Solutions, LLC

IRA Fundamentals - Cost-Effective IRA Training Solution
Nationwide on January 21, 2009
presented by Convergent Retirement Plan Solutions, LLC

IRA Plan Establishment & Funding
Nationwide on January 21, 2009
presented by Convergent Retirement Plan Solutions, LLC

IRA Required Reporting
Nationwide on March 18, 2009
presented by Convergent Retirement Plan Solutions, LLC

IRA to IRA Rollovers and Transfers
Nationwide on February 25, 2009
presented by Convergent Retirement Plan Solutions, LLC

Roth IRA Distributions
Nationwide on February 11, 2009
presented by Convergent Retirement Plan Solutions, LLC

Traditional IRA Distributions
Nationwide on January 28, 2009
presented by Convergent Retirement Plan Solutions, LLC

Traditional IRA Required Minimum Distributions
Nationwide on February 4, 2009
presented by Convergent Retirement Plan Solutions, LLC

Newly Posted Press Releases
(Post Yours!)

Recession Forcing More Companies to Make Changes to HR Programs, Watson Wyatt Survey Finds
Watson Wyatt

PBGC Assumes Pascack Valley Hospital Pension Plan
Pension Benefit Guaranty Corporation (PBGC)

Newport Named `Best in Class’ in Plansponsor Annual Survey
Newport Group, The

EBRI/ICI Study: Seven Percent of 401(k) Assets in Lifecycle Funds
Employee Benefit Research Institute (EBRI)

Employers Continue to Consider Bold Changes to Retiree Medical for 2009 and Later
Towers Perrin

Pension Rights Center Submits a Consumer Agenda for Retirement Security to Obama Transition Team
Pension Rights Center

The SPARK Institute Answers More Technical Questions Regarding 403(b) Plans Information Sharing
SPARK Institute

FedEx Cuts Workers' Retirement Compensation While CEO Rakes in Multimillion-Dollar Pension
International Brotherhood of Teamsters

CPI Introduces The Auditor's Toolbox
CPI Qualified Plan Consultants, Inc.

SEI Releases 2009 Update of FAS 87 Disclosure Assumption Research for Pension Plan Sponsors

Multiple Generations Look to Employers for Benefits Education

Ascensus Expands Fee-Based Services

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Pension Administrator
for Retirement Benefit Solutions, LLC
in VA

Broker / Insurance / Benefits Plan Administrator / 401K Specialist / Acct Mgr.
for Insurance Broker - Southern California
in CA

Sales Support Consultant
for MassMutual Financial Group
in FL

Compliance Consultant
for Milliman, Inc.
in TX

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