November 8, 2006

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Today's sponsor: www.ftwilliam.com

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Lucent Technologies Inc. Retirement Plan -- The Gold Standard for Retirement
Excerpt: "By most measures, Lucent Technologies Inc.'s 401(k) retirement plan was a very good one: an employee participation rate of almost 90% -- well above the industry norm of 66%; an array of cost-effective, professionally managed, institutional-quality investment options; and an award-winning participant education effort -- '401(k) cafes' -- where employees could gather and learn about Lucent's 401(k) plan. But for Lucent, 'very good' was just not good enough." (Treasury & Risk)

Comments on Recent Articles about Public Employee Pensions At Risk
Excerpt: "Interesting article from the New York Times yesterday about how state and local governments are working behind the scenes to reduce their pension burdens. The story highlights, for instance, the steps that San Diego (a city that has had it share of pension problems) is taking to minimize its retiree burden. Of course, it is probably just as difficult to cut-back on pension benefits in the public sector as under ERISA . . . ." (Workplace Prof Blog)

Improving Pension Liability Management with Liability Benchmarks (PDF)
6 pages. (Mellon Asset Management)

Overview: The PPA and 2007 Pension Funding
Excerpt: "Concerning the Pension Protection Act and certainty, there are two related misconceptions: Misconception #1: Now that PPA is law, we finally have clarity on pension funding rules. Misconception #2: PPA extends current rules through 2007. So, if we don't have all the details of the new law, at least next year is clear enough." (CCA Strategies, LLC)

Overview: Prohibited Transaction Exemption for Lending Securities to Banks and Broker-Dealers
Excerpt: "Subject to ERISA's general fiduciary standards, employee benefit plans may lend securities in their portfolios to banks or broker-dealers. However, except for PTE 2006-16 the prohibited transaction rules generally would prevent a plan from making such loans to banks or broker-dealers that are parties in interest with respect to the plan, even if the loan otherwise is in the best interests of the plan and its participants." (Deloitte)

Editorial: New Glimmer of Public Pension Sanity for California
Excerpt: "Billions of dollars in unfunded civil service retirement benefits are hanging over California public budgets like time bombs waiting to blow apart the state's economy. Happily, what came out of negotiations for the proposed Belmont-San Carlos Fire Department in San Mateo County is a hopeful portent for other Bay Area jurisdictions." (The San Francisco Examiner)

Portlanders Back Public Pension System Overhaul
Excerpt: "Money for the Portland public safety fund comes from property taxes, making it the only municipal pay-as-you-go pension system in the country. Each year, the city levies a tax in an amount equal to the fund's expenses and benefit costs." (The Oregonian)

Overview: PBGC Announces Inflation-Adjusted Flat-Rate Premiums for 2007
Excerpt: "[T]he Single-Employer Program's inflation adjusted flat-rate premium will be $31.00 per participant in 2007, up from $30 this year. The Multiemployer Program's flat-rate premium, which also is subject to inflation adjustment, will nonetheless remain at $8.00 per participant next year. . . . Effective for 2006 the Deficit Reduction Act (DRA) of 2005 (P.L. 109-171) increased the Single-Employer Program's flat-rate premium from $19 to $30 per participant . . . ." (Deloitte)

Age Discrimination Lawsuits Still Haunting Cash Balance Plan Sponsors
Excerpt: "On the day before Halloween cash balance plan sponsors were greeted with a 'trick' at the doorstep of the courthouse. Less than two months after the Seventh Circuit Court of Appeals ruled that cash balance plans do not inherently violate federal age discrimination prohibitions, the U.S. District Court for the Southern District of New York . . . issued a frightening reminder that these age discrimination suits are still viable in the rest of the federal circuits." (Deloitte)

Opinion: Social Security Problem Not Going Away
Excerpt: "So what is the problem? It's actually simple - one government has made promises a future government has to keep. Since Social Security is a pay-as-you-go system - current benefits are paid from current receipts. Instead of paying only retiree pensions, it includes death insurance, disability, and other benefits." (Knoxville News Sentinel)

Survey Shows 23% of Americans See Social Security As Main Retirement Income
Excerpt: "The survey also found 61% of nonretired Americans believe they will need to save $500,000 or more by the time they retire, while 59% believe that they are likely to reach their savings goals." (National Underwriter Life & Health; free one-time registration or paid subscription required)

Private Pension Plan Bulletin: Abstract of 2003 Form 5500 Annual Reports (PDF)
59 pages. Excerpt: "The total number of pension plans fell by 4.5% in 2003, to 700,000 plans. DB plans fell by less than 1%, while DC plans fell by 4.8%. Money purchase plans decreased by 34% from 2002 to 2003." (U.S. Employee Benefits Security Administration)

PPA Will Trigger Hundreds of Guidance Items -- Mostly from Treasury
Excerpt: "The Pension Protection Act of 2006 (PPA; P.L. 109280) requires government agencies to issue guidance or perform some task in 407 instances, according to a word search of the PPA conducted by W. Thomas Reeder, benefits tax counsel with the Treasury Department." (CCH Pension and Benefits)

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Links to Items on Executive Comp, Benefits in General

Human Resources Going Virtual with Online Benefits Fairs
Excerpt: "When employees log on to the site, they take a virtual tour of the company's program, selecting at their leisure what they'd like to read up on. They can virtually leave their business card or contact information to enter any drawings for prizes, or to request follow-up information from a human resource official." (Employee Benefit News)

G.ay Union Debate Spreads to Northern Mexico State
Excerpt: "Mexico's northern border state of Coahuila is considering a law to allow homose.xual civil unions, just days before Mexico City could legalize g.ay partnerships for the first time in the world's second-biggest Catholic nation. . . . The law would give g.ay couples pension, property and other rights but falls short of allowing them to adopt children." (Reuters via The New York Times; one-time registration required)

Overview: Changes to Form 8-K Take Effect November 7, 2006 (PDF)
3 pages. Excerpt: "[T]he Securities and Exchange Commission ('SEC') adopted changes to Form 8-K related to the disclosure of executive and director compensatory arrangements. These revised requirements are applicable for Form 8-K triggering events occurring on or after November 7, 2006. The four business day filing deadline remains unchanged." (Gardner Carton & Douglas LLP)

Democrats Take Control of House, Changing Labor and Benefits Oversight Dynamics
Excerpt: "As Democrats gained a majority of seats in the House late Tuesday night, with Senate leadership still in the balance, federal employee groups and industry associations were preparing to tilt their strategies toward a more labor-friendly 110th Congress." (GovExec.com)

EBN/Forrester Research 2006 Benefits Strategy & Technology Study Examines Portal Penetration & Usage
Excerpt: "This year's Employee Benefit News/Forrester Research 2006 Benefits Strategy and Technology Study reveals that approximately one-third of U.S. employers offer portals to their employees. While this overall percentage has not changed significantly in the past year, companies of different sizes adopt employee portals at different rates and for different business reasons." (Employee Benefit News)

Consider Boomer Subgroup When Targeting Communication
Excerpt: "To help marketers more accurately target the baby boomer generation, the market research firm of Chadwick Martin Bailey (CMB), in conjunction with Arnold Worldwide, concluded a study by identifying five distinct subgroups of boomers." (PLANSPONSOR.com; one-time registration required)

In Italy, New Rules May Increase Tax on Many Stock Option Plans
Excerpt: "New rules the Italian government has approved will require many employees to pay more tax on stock options. The difference between the exercise price and the normal market value of the shares will be taxed at the capital gains rate, rather than the higher income tax rate, only if a number of conditions are met." (Watson Wyatt Worldwide)

Benefits Costs Outpace Salaries, Says BLS Report
Excerpt from Spencer's Benefits Reports: 'Benefits costs rose more quickly than salaries for the period June 2006 to September 2006, according to the most recent Employment Cost Index from the Department of Labor's Bureau of Labor Statistics (BLS). This continues a trend broken only once in the last five years, when in June 2006 benefits costs rose less quickly than salaries." (Wolters Kluwer Law & Business)

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Newly Posted Events

2007 Benefits Fair and Trade Show
in Massachusetts on May 23, 2007
presented by New England Employee Benefits Council

Ask the Experts: Open Enrollment for Medicare Part D
Nationwide on November 14, 2006
presented by Kaiser Family Foundation

The Pension Protection Act of 2006 From the Tax Practitioner's Perspective
Nationwide on November 10, 2006
presented by CCH Incorporated

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Newly Posted Press Releases

Free Online Service from NCOA Helps Caregivers Identify and Claim benefits
(National Council on Aging (NCOA))

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Newly Posted or Renewed Job Openings


Sales Manager (Disability) Life Insurance
for BISYS Life Insurance
in CA

Relationship Manager
for Fidelity Investments
in MA

Employee Benefits Marketing Coordinator
for Employee Benefits Institute of America Inc. (EBIA)
in WA

Benefits Program Manager
for Blue Cross Blue Shield North Carolina
in NC

Administrative Assistant / Data Input Clerk
for Creative Benefit Strategies, Inc.
in OH

Pension Consultant
for CDM, a Leading TPA Firm
in MD

ERISA Attorney
for Reid and Riege, P.C.
in CT

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Handy Links:

• View Today's Active Message Threads
• Using the Web for Employee Benefits Research (hypertext article)
• Employee Benefits Library

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