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December 23, 2008

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

Today's sponsor is DATAIR Employee Benefit Systems, Inc.

(Click on company name or banner to learn more.)
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[Guidance Overview]
How the Worker, Retiree, and Employer Recovery Act of 2008 Affects Government Retirement Plans (PDF)

3 pages. Excerpt: "This GRS memorandum summarizes changes to the Internal Revenue Code [and other laws] resulting from the Worker, Retiree, and Employer Recovery Act of 2008 as applied to state and local government retirement plans." (Gabriel Roeder Smith & Company)

[Guidance Overview]
Fact Sheet: The Saver's Tax Credit (PDF)

1 page. Excerpt: "The federal Saver's Tax Credit is a non-refundable tax credit for contributions to qualified retirement plans such as 401(k) plans, IRAs and others. The tax credit is targeted to lower and middle income taxpayers and provides a credit between 10% and 50% of the retirement plan contribution each year, up to a $2,000 contribution." (Women's Institute for a Secure Retirement)

What If Boomers Don't Retire?
Excerpt: "What happens when the most expensive, longest tenured, most experienced, and, some would say, most devoted contributors won't, or can't, leave their positions? What happens to the emerging generation of leaders and managers who discover that the people to whom they report won't be departing any time soon? And what happens to the generation of workers after them? Is the US workforce headed for a multi-generational train wreck within organizations large and small?" (The Florida Times-Union)

If You Are Close to Retirement and Lost Big in the Market, Should You Sell Now?
Excerpt: "A 71-year-old Arkansas woman looking to retire in a few months is worried about her financial security after watching her investment portfolio plunge more than 55 percent in the recent market collapse. She can't decide whether to cash in everything now or wait for a rebound." (ABCNews Internet Ventures)

Missouri Bill Would End Tax on Military Pensions
Excerpt: "As members of the military retire, a growing number of state legislators want to pass tax relief to entice those servicemen and women to relocate to Missouri. Rep. Don Ruzicka, R-Mount Vernon, is among 26 legislators co-sponsoring a bill to exempt military retirement pensions from state income taxes." (Springfield News-Leader)

Teacher Pensions -- A Background Paper (PDF)
66 pages; a detailed treatment of the issues involved in the DC-vs.-DB debate, with a lengthy appendix summarizing contribution rates and benefit formulae of the prinicipal teachers' pension plans in the U.S.; Originally published May 2008. Excerpt: "In an increasingly competitive world where employees are more mobile than ever, pension policies that were designed in the last century may be out of step with the needs of both individuals and schools. This background paper aims to foster understanding and informed discussion of public education pensions. It describes the current system; examines concerns about funding, sustainability, equity, and effectiveness; and discusses pension plan structures and some options for pension plan redesign." (Committee for Economic Development)

The Future of DB Plan Funding Under PPA and Relief Legislation and Proposals
Excerpt: "The overlay of the dramatic decline in asset values of the last few months on the incipient tougher funding requirements of the Pension Protection Act of 2006 (PPA) has prompted widespread concern about the magnitude of the required contributions to single-employer defined benefit (DB) plans in 2009 and 2010. In this analysis, Watson Wyatt estimates contribution amounts using a comprehensive and realistic model of plan funding under four scenarios: PPA; provisions in the Worker, Retiree, and Employer Recovery Act of 2008 (H.R. 7327) (passed by Congress on Dec. 12, 2008, and awaiting the President's signature); and two other major relief proposals, individually and in combination. Our calculations are based on market conditions as of Dec. 12, 2008 (see appendix for further details)." (Watson Wyatt Worldwide)

Vacation Benefit Is Used to Increase Salaries and Pensions of Workers at a Massachusetts Independent Agency
Excerpt: "In an arrangement that is extremely rare throughout the rest of state and local government, officials at the Port Authority of Massachusetts can take advantage of a little-known benefit to add as much as 6 percent to their paychecks by 'selling back' up to three weeks of unused vacation time. About 300 Massport employees cash in some vacation time each year, including both management and union workers, costing the agency about $750,000 annually. And it is a benefit popular among those contemplating retirement, because by boosting their income, they also increase their pensions." (The Boston Globe)

ESOP Planning 2008: Plan Documents and Disclosures
Excerpt: "One of your most important responsibilities is to ensure that your plan documents are updated as required by law and are consistent with the way the plan is actually being administered. Plan documents include, but are not limited to, the plan document, trust document, summary plan description (SPD), and loan documents." (The One-Stop ESOP Blog)

Feds Sue Defunct San Jose Firm Over Abandoned 401(k) Assets
Excerpt: "The U.S. Department of Labor sued Power & Data Technology, a defunct San Jose manufacturer of electrical components, and its president, Gilroy resident Michael Williams, to recover and distribute $39,325 in assets remaining in the company's abandoned 401(k) profit-sharing plan." (

PBGC Hires Firms To Help Manage Private Equity and Real Estate Portfolio
Excerpt: "The U.S. Pension Benefit Guaranty Corp. tapped three investment firms to help manage $2.5 billion in real-estate and private-equity assets, segments the pension insurer's board approved earlier this year for expansion into. BlackRock Inc. (BLK), Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) were selected to manage the investments, provide support to PBGC's in-house investment staff and help build the corporation's institutional capacity." (

The Changing Nature of Corporate Pensions in the UK: 2008 Survey Results (PDF)
16 pages. Excerpt: "This report is the fourth edition of Towers Perrin's biennial survey of company pension plans at large private-sector organisations in the UK." (Towers Perrin)

Remarks at the National Press Club: Staying the Course in Turbulent Times

Excerpt: "In the short term, we endorse the proposals enacted by Congress last week and supported by President-elect Obama to allow retirees to postpone required minimum distributions from 401(k)s and IRAs. Congress also should give workers--particularly older workers--the opportunity to contribute more, to help them make up for ground lost in the last year." (Investment Company Institute)

AIRE, LLC (Sponsor)

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Links to Items on Executive Comp, Benefits in General

Underwater Stock Options and Repricing Strategy (PDF)
18 pages. Excerpt: "This article updates the discussion of repricing strategy in Underwater Stock Options and Repricing Strategy: Is Your Company Drowning in Confusion? and reviews the current usefulness of repricing alternatives. This article appears as a chapter of Selected Issues in Equity Compensation (2009)." (National Center for Employee Ownership via Janich Law Group)

Solutions to Underwater Equity (PDF)
Excerpt: "For most companies, the last several months have been a period of tremendous share price volatility and unprecedented decline in market value. The drop in the stock market has made underwater stock options a major topic of concern and conversation. It is a troubling problem for management and the board of directors when equity compensation vehicles initially granted to provide incentive and address retention and engagement issues among employees have lost their value. The problem is more acute as many companies over the past few years, often to mitigate the prospect of underwater options, have supplemented or replaced stock options with other forms of equity-based compensation which have lost most or all of their value and taken on the 'underwater' label as well." (Buck Consultants)

Newly Posted Events
(Post Yours!)

January 2009 Monthly Luncheon - Fee Audits for Defined Contribution Plans
in Colorado on January 13, 2009
presented by Western Pension and Benefits Conference-Denver Chapter

Newly Posted Press Releases
(Post Yours!)

PSCA Publishes 2008 403(b) Plan Survey
Profit Sharing/401(k) Council of America (PSCA)

Health & Welfare Self Audit Guide Available
ERISAdiagnostics, Inc.

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Pension Administrator
for Pension Administration Firm located in Westchester, NY
in NY

Senior Investment Consultant
for The Newport Group
in FL

Actuarial Consultant
for Hewitt Associates

Manager, Retirement Plan Specialist
for Diversified Investment Advisors
in FL

Implementation Specialist
for ExpertPlan, Inc.
in NJ

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