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(a) New Guidance Documents

Text of Corrections to IRS Proposed Regs on PPA Rules for Underfunded Single-Employer Pension Plans (PDF)
Federal Register version; 2 pages. Quite a few items. Excerpt: "This document contains corrections to a notice of proposed rulemaking (REG-113891-07) that was published in the Federal Register on Friday, August 31, 2007 (72 FR 50544) providing guidance regarding the use of certain funding balances maintained for defined benefit pension plans and regarding benefit restrictions for certain underfunded defined benefit pension plans." (Internal Revenue Service)

Plan Now to Get Full Benefit of Saver's Credit; Tax Break Helps Low- and Moderate-Income Workers Save for Retirement
Excerpt: "The saver's credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Formally known as the retirement savings contributions credit, the saver's credit is available in addition to any other tax savings that apply." (Internal Revenue Service)

(b) News

Defined Benefit Plan Investment Suit Cleared for Trial
Excerpt: "A federal judge has cleared the way for a legal battle between a defined benefit plan sponsor and its former investment manager over whether the plan was too heavily invested in certain stocks." (PLANSPONSOR.com; free registration required)

GE Bumps Retiree Pension Payments
Excerpt: "More than 130,000 eligible GE retirees will see hikes in their pension benefits of up to 20% Chairman and CEO Jeff Immelt announced this week." (PLANSPONSOR.com; free registration required)

401(k) Participant Accuses Wells Fargo of Self-Dealing with Affiliated Service Providers
Excerpt: "A participant in the Wells Fargo & Company 401(k) Plan has sued the financial services company and a number of its executives over allegations the plan improperly did million of dollars in plan business with Wells Fargo-affiliated entities." (PLANSPONSOR.com; free registration required)

IRS Plans Early 2009 Start for New Enrolled Retirement Plan Agent Designation
Excerpt: "Individuals should be able to secure the new IRS enrolled retirement plan agent (ERPA) designation in less than two years, Debi Lohning, the IRS's ERPA project manager, told CCH on October 19, 2007. The ERPA designation is a new but limited classification of practitioner under recently published final Circular 230 regulations." (Wolters Kluwer Financial Services)

Puerto Rico Plans--Taxes on Lump-Sum Distributions Likely to be Reduced
Excerpt: "A recently-introduced bill, Puerto Rico House Bill No. 3750 (HB 3750), would set a 10% tax rate on lump-sum distributions. This 10% rate would apply to all plans qualified in Puerto Rico, whether defined benefit or defined contribution, qualified only in P.R. or dual qualified, or funded with a P.R. trust or a U.S. trust, and regardless of whether they invest in P.R. property." (BNA Tax Management Inc.)

(c) Summaries of Guidance; Filed Comments

Overview; Final Regulations on Default Investment Alternatives in Participant-Directed Individual Account Plans (PDF)
4 pages. Excerpt: "This briefing addresses the information needed to comply with recently released Department of Labor regulations on 'qualified default investment alternatives' which become effective on December 24, 2007." (Winston & Strawn LLP)

Overview: IRS Issues Proposed Regulations on Automatic Contribution Arrangements
Excerpt: "The IRS regulations don't add a lot of surprises, but they pull the requirements together clearly to allow plan sponsors to design an automatic contribution feature. But with January 1, 2008 fast approaching, there isn't much time for calendar-year plan sponsors to digest these rules and put them into effect. And don't forget that existing 401(k) plans that are adding a QACA will need to provide the safe harbor notice to eligible employees at least 30 days before the first day of the plan year. The IRS has indicated that a sample notice will be posted on the IRS website soon." (Employee Benefits Institute of America)

ERISA Provides No Remedy for Employer's Fiduciary Misrepresentations About Actively-at-Work Rule
Excerpt: "EBIA Comment: Remarking that the facts of this case 'scream out for a remedy beyond the simple return of premiums,' the concurring judge nevertheless acknowledged that the court had correctly applied controlling precedent. Although in many fiduciary misrepresentation cases, ERISA provides no remedy, vigilance in employee communications should still be the goal, particularly with actively-at-work and similar eligibility provisions that have the potential for significant adverse consequences." (Employee Benefits Institute of America)

NC Court Calls for Clarity on Pension Impact on Disability Calculation
Excerpt: "The North Carolina Court of Appeals threw out a ruling by the North Carolina Industrial Commission that U.S. Airways could ignore its 401(k) and pension contributions in the benefit calculations. Appellate Judge Martha A. Geer, writing for the court, said the case turned on the definition of 'average weekly wage,' noting that no other North Carolina appellate court had previously considered the question presented in the case involving U.S. Airways ramp worker Curry Shaw who suffered a back injury in 2000 while lifting luggage." (PLANSPONSOR.com; free registration required)

(d) Trends, Surveys, Research

Employers Are Continuing To Automate 401(k) Plans, Hewitt Finds
Excerpt: "From Spencer's Benefits Reports: Despite employers' increased adoption of automated 401(k) plan features such as automatic enrollment, employees continue to struggle with proactively saving and investing for retirement, according to a survey recently conducted by Hewitt Associates." (Wolters Kluwer Financial Services)

More 401(k) Fee Lawsuits Expected -- Service Providers Could Be Named in Next Wave
Excerpt: "Pension attorneys expect Schlichter, Bogard & Denton, St. Louis -- the law firm that filed the first 13 lawsuits against 401(k) plan sponsors for allegedly paying excessive fees -- to target service providers in its next wave of litigation. Sources said Schlichter Bogard is preparing another 15 lawsuits against plan sponsors and providers, but Jerome Schlichter, the firm's founding partner, refused to confirm or deny any upcoming lawsuits." (Pensions & Investments)

DC or Hybrid Plans Common as Pension Add-Ons Globally
Excerpt: "A new study from Mercer has found that most employers use a defined contribution or a hybrid retirement plan to supplement government-sponsored pension programs." (PLANSPONSOR.com; free registration required)

In Search of Savers: 401(k) Rules Are Changing
Excerpt: "Under the new rules, if employees do not give their own guidance about how they want their money invested within four months of enrollment, companies will have to roll their accounts into mixed portfolios of stocks and fixed-income investments. The allocation mix should also reflect the employees' investment time horizons. The rules do not apply only to new hires. They also could be used to require automatic enrollment in 401(k) plans for the millions of American workers who are now eligible to participate, but have not done so." (The New York Times; free registration required)

Fixed Income Annuities Increase Retirement Savings Growth Potential
Excerpt: "A new study from MassMutual Financial Group indicates incorporating a fixed income annuity in a retirement income account yielded greater long-term wealth for an investor -- along with more income security -- than a portfolio of equity and bond investments alone." (PLANSPONSOR.com; free registration required)

Can Public Pensions Follow the lead of Corporate Pensions?
Excerpt: "State and local governments have been forced to act more like Corporate America now that they're required to account for retiree medical benefits on an accrual rather than pay-as-you-go basis under the Governmental Accounting Standards Board's (GASB) Statement 45. However, a larger question remains about whether the public sector could be under the gun to follow the lead of private enterprise when it comes to transitioning from the stalwart defined benefit (DB) pension model to the more transparent and nimble defined contribution (DC) approach. If so, the trick would be to offer retirement benefits that are still palatable enough to recruit and retain top talent without a high price tag that might anger taxpayers." (PLANSPONSOR.com; free registration required)

Merging Pension Plans Yield Opportunities
Excerpt: "Just as many thought the defined benefit world was past tense, the growing momentum behind pension plan mergers may mean the DB market is reinventing itself. Employers could be calling upon advisers to help manage the consolidation of assets and liabilities of one or more pension plans to establish one plan. This strategy can involve multiemployer plans combining together or a single employer plan merging with a multiemployer fund." (Employee Benefit Advisor; free registration required)

Decoding the Markets 101, for the Soon-to-Retire
Excerpt: "The idea, according to a Finra statement, is to help the retirees of the near future as well as the more than 70 million Americans who will retire by 2030, with an estimated $15 trillion in retirement savings, to plan now for their financial futures. Finra said that more than half of those over 65 failed a basic financial literacy test that it recently conducted." (The New York Times; free registration required)

Fixed-Income Annuities Perform Well, According to MassMutual Financial Group Study
Excerpt: "Using a fixed-income annuity in a retirement income account resulted in greater long-term wealth for an investor than a portfolio of equity and bond investments -- even in an 'up' market, according to a study released today." (Investment News; free registration required)

(e) Policy, Opinion, Advocacy

Employer Groups Urge Congress to Defer Action on 401(k) Plan Fee Limits
Excerpt: "Representatives of several major employer groups, speaking at a House Ways and Means Committee hearing on October 30, 2007, urged Congress to defer legislative action on 401(k) plan fees until the Department of Labor completes its regulatory work on this issue." (Wolters Kluwer Financial Services)

Opinion: A Response to the Article: 'Time for Employers to Cut Cord to 401(k) Plans'
Excerpt: "[T]he thing we would lose most with an employer-lite 401(k), IMHO, is the oversight of a trusted fiduciary. Granted, many employers don't fully understand that role or the responsibility -- too many don't have the expertise, and far too many are willing to place those decisions in the hands of providers and advisers undeserving of that trust." (PLANSPONSOR.com; free registration required)

U.S. Chamber of Commerce Statement for Hearing on Securing Retirement Coverage for Future Generations (PDF)
7 pages. Excerpt: "In order to secure retirement coverage for the future, it is necessary to remember that there are several components to the retirement 'stool.' While this has often been referred to as a 3-legged stool consisting of Social Security, individual savings, and employer-provided pensions, we believe that there may be a potential fourth leg -- phased retirement. For a variety of reasons, many Americans are remaining in the workforce beyond what was traditionally thought of as retirement age. Thus, phased retirement should also be considered when discussing retirement security." (U.S. Chamber of Commerce)

Retirement Angst Global, Says the Hartford Financial Services Group Study
Excerpt: "Four out of five U.S. respondents said that they were concerned on some level about whether they would have enough money in retirement. Britains echoed that sentiment -- as 65.6% of those surveyed agreed. That anxiety spans the globe, as numerous Asian respondents voiced their worries on funding their retirement." (Investment News; free registration required)

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Links to Items on Executive Comp, Benefits in General

IRS to Publish Reporting Forms for Corporate-Owned Life Insurance (PDF)
2 pages. The target document basically indicates as a technical matter that the IRS at some point will be issuing forms for the reporting of employer-owned life insurance contracts as prescribed by the Pension Protection Act; the forms are not included in the document. Excerpt: "These temporary regulations provide that the Commissioner may prescribe the form and manner of satisfying the reporting requirements imposed by section 6039I on applicable policyholders owning one or more employer-owned life insurance contracts issued after August 17, 2006. The regulations are effective on November 13, 2007, and apply to taxable years ending after that date." (Internal Revenue Service)

Summary of FASB Statement 123R Share-Based Payment: Revised 11/09/07 (PDF)
14 pagesl Excerpt: "[Along with a background overview, this paper] summarizes the most pertinent provisions of Statement 123R and related staff guidance provided by the FASB and the Securities and Exchange Commission (SEC)." (Frederic W. Cook & Co., Inc.)

Working Paper: Estimating the Health Effects of Retirement (PDF)
36 pages. Excerpt: "We estimate the magnitude of any direct effect of retirement on health. Since retirement is endogenous to heath, it is not possible to estimate this effect by comparing the health of individuals before and after they retire. As an alternative we use institutional features of the pension system in the United Kingdom that are exogenous to the individual to isolate exogenous variation in retirement behavior. Data used will include both vital statistics and survey data that include both 'objective' physical measurements and respondent self-reports. We find no evidence of negative health effects of retirement and some evidence that there may be a positive effect, at least for men." (University of Michigan Retirement Research Center)

Working Paper: The Effects of Health Insurance and Self-Insurance on Retirement Behavior (PDF)
89 pages. Excerpt: "This paper provides an empirical analysis of the effect of employer-provided health insurance and Medicare in determining retirement behavior." (University of Michigan Retirement Research Center)

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Newly Posted Events

Employee Benefits Legal Update
in Pennsylvania on November 15, 2007
presented by Central Pennsylvania Chapter - ISCEBS

Recent Trends in Employer-Sponsored Retiree Health Benefits and the Early Impact of Medicare part D
in Illinois on November 14, 2007
presented by The Center for Tax Law and Employee Benefits at The John Marshall Law School in Chicago

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Newly Posted Press Releases

NIPA Business Management Conference Expected to be the Largest Ever
National Institute of Pension Administrators

Financial Engines Reaches $15 Billion in Managed Accounts
Financial Engines, Inc.

Ben Stein to All Americans: Firm-up Retirement Years with a "Financial Fitness Plan" During National Retirement Planning Week 2007
National Retirement Planning Coalition (NRPC)

Metrics Partners Announces 401kAds
Metrics Partners

Prudential Helps Take the 'Work' Out of Work Site Benefits Enrollment
Prudential Financial, Inc.

National Survey Finds Employers are Challenging Health Plans to Better Use Resources to Prevent Illness and Improve Patient Safety
National Business Coalition on Health

NCQA Online Tool Demonstrates How Better Health Care Costs Less
National Committee for Quality Assurance (NCQA)

Gift Cards Rival Cash As Employee Incentive
First Data

Wolf Popper LLP Files 401k Class Action Against Citigroup
Wolf Popper LLP

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Newly Posted or Renewed Job Openings
( Post a Job | View All Jobs | RSS Feed )

Defined Benefit Administration Software IT Consultant
for Winklevoss Technologies
in CT

DC Compliance Specialist
for Trinity Pension Consultants
in OH

Plan Administrator/Specialist
for Major LA TPA
in CA

Defined Contribution Plan Administrator
for Pension Plan Professionals, Inc.
in FL

Retirement Services District Manager
for ADP
in CA, FL, IL, MI, MN, NM, TN

401(k)/DC Administrator (Junior)
for Columbia Benefits Consultants, Inc.
in MD

Pension Analyst
for REPTECH
in CO

Billing Analyst
for Republic National Distributing Company, Atlanta, GA (www.rndc-usa.com)
in GA

Director, Compensation and Benefits
for Benchmark Assisted Living
in MA

Operations Liaison/Supervisor
for Associated Pension Consultants
in CA

Pension 401(k) Administrator
for Actuaries and Associates
in TX

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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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