Retirement Plans

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December 31, 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.)
Banner ad for DATAIR Employee Benefit Systems, Inc.

DATAIR’s TWO for ONE sale*

*The Best TPA Software *The Best Support *The Best Price
  • DC/401(k) Administration
  • DB Administration
  • 5500 series, 5300 series, 1099Rs
  • Documents – DC, DB plans plus Cash Balance, 403(b) and Cafeteria
  • Cafeteria and HRA Administration
*Limited time offer: 2 DATAIR systems for 1 license fee... plus 0% financing. Restrictions apply, contact DATAIR’s sales department:   (888) 328-2474

Note: the newsletter will not be published on Thursday, January 1 or Friday, January 2.
Happy New Year from BenefitsLink!

[Press Release]
U.S. Department Of Labor Finalizes Civil Penalty Rules Under The Pension Protection Act of 2006

The regulations will appear in the Federal Register on January 2. (U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

[Guidance Overview]
401(k) Plan Sponsors: More Disclosures to Help You Meet Your Fiduciary Responsibilities (PDF)

4 pages. (Milliman)

[Guidance Overview]
Fiduciary Compliance Reviews for Your Defined-Contribution Plan (PDF)

5 pages. (Milliman)

[Guidance Overview]
Another Question is Answered in the 401(k) Plans Q&A Column

I understand that Code Section 402(g) limits elective deferrals based on the taxable year which for most individuals is the calendar year. Can you provide a cite? (

Save Now to Retire Comfortably
Excerpt: "How much will you need to retire comfortably? A good resource on this is the U.S. Department of Labor's Employee Benefits Security Administration's 'Savings Fitness: a guide to your money and your financial future,' free at or by calling (202) 693-8664 or TTY (202) 501-3911." (Tulsa World)

Chart on 401(k) Plans and Employer Stock
Excerpt: "A look at the trend in 401(k) investment options over the past two decades shows a steady move away from employer stock as an investment vehicle." (U.S. Bureau of Labor Statistics)

Joint Life Expectancy and the Retirement Distribution Period
Excerpt: "Based on the research conducted for this paper, a sustainable withdrawal rate based on a joint expectancy period results in a 1?2 percent higher withdrawal rate for the same probability of failure than one based on a comparable fixed period. Using a target end date such as age 90, 95, or 100 is a simple method that can be used to determine an appropriate length for a distribution period for a retiring couple." (Financial Planning Association)

Employees Choosing Safer 401(k) Investments, Hewitt Survey Finds
Excerpt: "The Hewitt study found that, despite the recent market upheaval and poor investment returns, employees are staying the course and maintaining a long-term focus on retirement saving by continuing to invest in their 401(k) plans. However, some are reacting by moving 401(k) assets into less risky investment funds. Further, tight economic times are prompting more employees to tap into their retirement savings in the form of hardship withdrawals." (Wolters Kluwer)

Recent Market Turmoil Brings More Urgency to Considering Liability-Driven Investing?
Excerpt: "The current market volatility, combined? with the Pension Protection Act (PPA) mandate to curb smoothing? of pension? plans' assets and liabilities?, apparently? have motivated some corporate? sponsors? to explore liability-driven investing? (LDI). . . . Some employers still hesitate with liability?-driven investing, not least because they fear a shift away from equity's? potential? big gains and toward fixed income's modest returns as ultimately guaranteeing higher contribution requirements. LDI helps with downside protection, 'but pure LDI takes away the possibility of an upside,' says Judy Schub, Managing Director of the Bethesda, Maryland-based Committee on the Investment of Employee Benefit Assets (CIEBA). The current low interest-rate environment exacerbates that concern, she adds." (; free registration required)

University Conference Services (Sponsor)

(Click on company name or banner to learn more.)
Banner ad for University Conference Services

The Keys to Successful Plan Management in Today’s Challenging Environment

Today’s volatile financial market, battered economy and changing regulatory environment have many plan sponsors trying to unlock the secrets to effectively managing their retirement plans. The Orlando Mid-Sized Retirement & Pension Plan Management Conference, January 25–28, 2009, gives you access to expert speakers and valuable information that will help you find the keys to managing your retirement program in today’s challenging environment.

Links to Items on Executive Comp, Benefits in General

[Official Guidance]
Advisory Opinion on Behalf of Empresas Fonalledas, Inc. re: 'Top Hat' Plan

Excerpt: "[DOL was asked w]hether, in the case of a plan covering a 'controlled group of corporations' or a 'group of trades or businesses under common control' within the meaning of section 414(b) and (c) of the Internal Revenue Code (Code), filing a single registration statement for the plan will satisfy the alternative method of compliance in 29 C.F.R. ? 2520.104-23 for the participating employers." (U.S. Employee Benefits Security Administration)

[Guidance Overview]
Valuing Stock Options: Is It Time to Reconsider Binomial Lattice Models?

Excerpt: "Valuation models were the subject of intense debate during the drafting of 'Statement of Financial Accounting Standards (SFAS) No. 123(R) -- Share-Based Payment.' The exposure draft would have required companies to use a binomial lattice model (or something similar) to value employee stock option awards, but the final standard has allowed companies to use either a binomial lattice or a closed-form model, such as Black-Scholes, without preference. Companies overwhelmingly have selected the Black-Scholes model. Most consider Black-Scholes easier to use and understand, its use is comparable with peers and its results were generally consistent with a binomial lattice approach. This article examines why those advantages might hold less true today and why companies might want to reconsider their model selection." (Watson Wyatt Worldwide)

Money Moves to Make, and Avoid, in 2009
Excerpt: "Between the Wall Street meltdown, gas and oil price fluctuation, auto industry fallout, and housing and credit crises, many of us were on a financial roller coaster in 2008. So, what burning questions do you have as we enter the new year with the economy in such perilous shape? Financial planner Jill Schlesinger, executive vice president of StrategicPoint Investment Advisors, answered some key ones on The Early Show Wednesday." (CBS News)

How to Handle Beneficiary Designations
Excerpt: "The decision about how to designate beneficiaries for your company retirement plan, life insurance policies, and other assets might seem like a no-brainer. Chances are you would like those near and dear to you to inherit any money you've accumulated during your lifetime, so making sure that happens should be as simple as writing their names on the appropriate forms, right? Not so fast. Naming beneficiaries is a more nuanced decision-making process than you might think, and it's one that may have significant repercussions for your loved ones." (Morningstar)

Benefits Were 30.3% of Total Compensation in September 2008, BLS Finds
Excerpt: "Employer-provided benefits costs for civilian workers in private industry and state and local governments in September 2008 averaged $8.74 per hour worked, accounting for 30.3% of total compensation costs, which averaged $28.87 per hour worked. Benefits as a percentage of compensation have risen in the past three years from 27.4% of total compensation, although that percentage has been stable in the last year. These are among the findings of the September 2008 Employer Costs for Employee Compensation report, produced quarterly by the Bureau of Labor Statistics (BLS)." (Wolters Kluwer)

The Opinions of Florida Workers Aged 40+ About Their Jobs, Employers, and Retirement
Excerpt: "Key Findings: 7 in 10 workers say they are very satisfied with their job overall, and about 2 in 3 are very satisfied with their work hours and their boss; 7 in 10 say their employer provides a defined contribution plan, but only 3 in 10 say their employer automatically enrolls employees into such a plan; 9 in 10 full-time workers and 6 in 10 part-time workers receive health insurance; 51% have calculated how much money they will need when they retire, and 6 in 10 of these respondents say they are saving enough for retirement; and, 6 in 10 respondents plan to work beyond the normal Social Security retirement age." (AARP)

Newly Posted Events
(Post Yours!)

2008 Form 1099-R Preparation: Roth, PPA, and HEART - Oh My!
Nationwide on January 6, 2009
presented by SunGard Relius

Future Care 2009 Healthcare Web Summit
Nationwide on January 22, 2009
presented by MCOL

International PPO's – Secrets to the Next Emerging Market
Nationwide on February 12, 2009
presented by MCOL

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

The Roth Factor
Nationwide on January 20, 2009
presented by Convergent Retirement Plan Solutions, LLC

Newly Posted Press Releases
(Post Yours!)

Watson Wyatt Data Services' Latest Report Covers Trends in Board of Directors Compensation Policies & Practices
Watson Wyatt Data Services

U. S. Department Of Labor Finalizes Civil Penalty Rules Under The Pension Protection Act
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Principal Group Earns Top Ranking for Plan Sponsor Website
Principal Financial Group

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Employee Benefits Administration
for Primary Consulting, Inc.

Defined Benefits Implementation Supervisor
for Milliman, Inc.
in TX

Implementation Specialist
for Milliman, Inc.
in TX

Benefits Specialist II
for CVS Caremark
in RI

Client Relationship Manager
for Benefit Systems, Inc.
in TX

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