April 17, 2007

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Sponsored by: ASPPA and WP&BC

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Comment on Issues Presented by IRC Section 401(a)(36) as Added by PPA of 2006 (PDF)
4 pages. Excerpt: "[The Council comments] under Notice 2007-8 on the issues presented by Section 401(a)(36), as added by the Pension Protection Act (PPA), which permits in-service distributions to be made by a defined benefit plan to an employee who has attained at least age 62." (American Benefits Council)

Partial Pension a Way to Keep Baby Boomers on the Job
Excerpt: "A brief provision buried deep in last year's mammoth Pension Protection Act lets workers 62 or older receive payments from their traditional defined-benefit pension plans even if they are still working." (San Francisco Chronicle)

401(k) Plan Fee Lawsuits Continue to Grow; Defensive Measures Involve Procedures and Disclosure
Excerpt: "From Spencer's Benefits Reports: Litigation concerning fees paid by 401(k) plans is expanding, and plaintiff's lawsuits now number more than one dozen . . . ." (Wolters Kluwer Law & Business)

Online Tools Increasingly Tailored to Different Life Stages Can Help Increase 401(k) Participation
Excerpt: "Automatic enrollment may solve the problem of how to get employees started participating in a 401(k) plan, but it does not ensure that they participate enough. 'Default savings rates are used to impede the force of inertia and prevent a savings rate of 0%. A default savings rate is a good first step,' . . . ." (PLANSPONSOR.com; free registration required)

A Review of a New Survey of the 403(b) Market
Excerpt: "The 2006 NTSAA (National Tax Sheltered Accounts Association) & Cerulli Associates 403(b) Vendor Survey notes a couple of key movements: a continuing trend toward open architecture ('more investment choices from a variety of well-respected asset managers') and a trend toward single/limited vendor selection." (PLANSPONSOR.com; free registration required)

Fidelity Only Latest Firm to Make Move to Defined Contribution or Cash Balance Plan
Excerpt: "Fidelity and Citigroup are joining the ranks of several other money management firms, including Old Mutual Asset Management and Franklin Templeton Investments Inc., that do not or no longer offer defined benefit plans to new employees. Other money managers have cut costs by converting to a cash balance plan while some managers and consultants have opted to keep their traditional DB plans up and running." (Pensions & Investments)

OPM Suggests Retirement Reforms for Federal Workers
Excerpt: "The idea of phasing in retirement is a key feature in proposals recently sent to Congress by the Office of Personnel Management, which is concerned that federal agencies will need to hold on to their baby boomers if they are unable to attract skilled replacements in an increasingly competitive labor market." (The Washington Post; free registration required)

Employee Ownership Update for April 16, 2007
NCEO Executive Director Corey Rosen discusses a proposal from Kirk Kirkorian to use an employee ownership plan in a buyout of Chrysler. Robert Willens of Lehman Brothers says ESOPs are the wave of the future in M&A transactions. New 409A deferred compensation rules have been issued, affecting equity compensation plans. The Certified Equity Professional Institute has released the second installment of its research study on risks and controls for equity compensation. (National Center for Employee Ownership)

American Benefits Council Comment Letter on IRS Notice 2007-6, Regarding Cash Balance Guidance (PDF)
24 pages. Excerpt: "[The American Benefits Council . . . comments on] issues affecting cash balance plans, pension equity plans, and other hybrid defined benefit plans. Our comments relate to issues addressed by IRS Notice 2007-6, issues with respect to which comments were requested by Notice 2007-6, and additional important issues relating to hybrid plans." (American Benefits Council)

Securities and Exchange Commission Calls Revision of 12b-1 Rule a 'High Priority'
Excerpt: "Corporate executives already struggling to keep up with regulatory changes related to their 401(k) plans may be getting just a taste of what's to come, as the movement to revise mutual fund 12b-1 fees gathers steam." (Financial Week; free registration required)

DC Plans Not a Sufficient Alternative to DB, Preliminary Results of Recent Report Suggests.
Excerpt: "The report - Building the Foundations for New Retirement Systems - by The Society of Actuaries (SOA) and the SOA Pension System Council argues that old pension models are becoming irrelevant as the retirement landscape in the U.S. changes." (PLANSPONSOR.com; free registration required)

How to Evaluate Your Mindset About Social Security Benefits
Excerpt: "Say your Social Security income started out as $1,000/month and increased every year by 3 percent to compensate for inflation. You receive this income for 25 years. If you wanted to duplicate this on your own you could purchase an immediate 'life' annuity. It would cost you -- sitting down? -- roughly $363,500! That's the 'investment value' of your Social Security benefit." (SmartMoney via FoxNews.com)

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Sponsored by: ASC & The ASC Institute

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Links to Items on Executive Comp, Benefits in General

Fed. Register Version of Final Regs on Application of Sec. 409A to Nonqualified Deferred Comp Plans (PDF)
93 pages. (Internal Revenue Service)

GASB 45: New Standards in Reporting OPEB (PDF)
2 pages. Excerpt: "The Governmental Accounting Standards Board's new standard, GASB 45, relates to Other Post Employment Benefits (OPEB) provided to retirees and other former employees. The pronouncement applies to every state, city and county government, as well as specialized public organizations such as school districts, hospitals, colleges and universities. Examples of OPEBs are medical, dental, vision, hearing, prescription drugs, life insurance, long-term care . . . ." (National Association of Government Defined Contribution Administrators, Inc.)

Podcast about the U.S. Tax System and Tax Returns
At the target page, click on the 04.11.2007, entry titled: Stupid Tax Tricks. Briefly noted are retirement savings accounts and the Tribune/ESOP deal. (The Urban Institute)

Extensive Q&A Analysis of Final 409A Regulations (PDF)
26 pages; excellent. Excerpt: "This Legal Alert contains a series of Q&As highlighting key topics addressed in the final regulations that we hope will facilitate your consideration of how to finalize your implementation of section 409A. We will follow up shortly with additional analysis of the myriad issues surrounding the final regulations." (Sutherland Asbill & Brennan LLP)

Turning Executives Into Shareholders: Alternatives to Share Ownership Guidelines
Excerpt: "For corporations considering how best to proceed in today's environment, we provide an overview of share ownership guidelines and then examine alternative methods of encouraging executive ownership of company stock." (Hay Group)

IRS Issues Report on Tax-Exempt Executive Compensation Compliance Initiative
Excerpt: "On March 1, 2007 the Internal Revenue Service issued a report of findings from auditing tax-exempt organizations for compliance with the special reasonable compensation standards applicable to such employers. The initiative examined Form 990 compliance, intermediate sanctions imposed under Internal Revenue Code Section 4958, and private foundation self-dealing." (Hay Group)

EBRI Notes Article on Employee Tenure, 2006 (PDF)
Pages 1-11 of 12 pages. Excerpt: "Perception vs. reality: A widely held belief about past generations of American workers was that typical workers held career jobs, staying with the same employer for most of their working years. However, the data on employee tenure -- the amount of time an individual has been with his or her current employer -- show that career jobs never existed for most workers and have continued not to exist for most workers." (Employee Benefit Research Institute)

Employee Retention Has Nosed Out Cost Control As Employers' No. 1 Benefits Objective
Excerpt: "More than half of employers (55%) now rank 'retaining employees' as their top benefits goal, according to the fifth annual MetLife Study of Employee Benefit Trends." (Employee Benefit News)

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Newly Posted Events

7 Questions To Use When Disciplining And Terminating Employees 1:00 pm - 2:30 pm Eastern
Nationwide on May 1, 2007
presented by HRTrainingCenter.com

A Public Sector Perspective: Employee Benefit Plans
in California on May 2, 2007
presented by International Society of Certified Employee Benefit Specialists - Orange County Chapter

Challenged By Taft Hartley Plans An Overview of Today's Hottest Issues
in Minnesota on May 1, 2007
presented by Felhaber Larson Fenlon & Vogt

PPA Changes to Form 5500 - What You Need to Know
in Illinois on April 26, 2007
presented by WEB - Chicago West

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Newly Posted Press Releases

Deloitte & Touche USA Survey Finds Strong Relationship Between Work-Life Balance and Ethical Behavior
Deloitte

Actuaries and Key Stakeholders Convene for First Time to Re-Envision Retirement; Society of Actuaries Releases Building the Foundations for New Retirement Systems
Society of Actuaries

The National Tax Sheltered Accounts Association and Cerulli Associates has partnered to develop a 403(b) Vendor Survey
National Tax Sheltered Accounts Association

Wal-Mart Sees Medical Clinic Boom in Retail Stores
Wal-Mart Stores, Inc.

American Business Sees Retirement Crisis Looming; Taking Steps to Engage Workers
Buck Consultants, an ACS Company

Commuter Survey Reveals Tax-Free Commuter Benefits Drastically Underutilized in New York City
Accor Services North America

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Newly Posted or Renewed Job Openings


Manager Client Relationships
for Mutual of Omaha
in NE

Pension Recordkeeper
for Iris Bashi Associates, LLC
in NJ

ERISA Partner
for The Advocates, A Premier Search Firm
in CA, CO

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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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