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Today's sponsor is RELIUS Education - Seminars and Conferences for Pension Professionals

(Click on company name or banner to learn more.)

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(a) New Guidance Documents

Proposed PBGC Regs: Disclosure of Termination Information Upon Request by Affected Parties, Per New PPA Rules (PDF)
7 pages. Excerpt: "[Pension Protection Act] provisions allow an affected party to request information related to a plan termination from the plan administrator in the case of a distress termination under section 4041, and from the plan administrator, plan sponsor, and PBGC in the case of a termination under section 4042. 'Affected party' is defined . . . to include each participant in the plan, each beneficiary under the plan, each employee organization representing plan participants, and PBGC." (Pension Benefit Guaranty Corporation)

(b) News

Florida Governor Reluctant to Put State Pension Fund Behind $14 Billion Frozen Investment Pool
Excerpt: "Gov. Charlie Crist remains reluctant to put the state of Florida behind $14 billion in frozen city, county and school funds. 'What I think is mandatory and most important is we protect the pension fund for people rather than this municipals fund in essence for local governments,' Crist said Monday. 'So my priority is with the pension fund.'" (The News-Press)

$90M Plan Would Restore Maine's State Retirement Benefits
Excerpt: "The Legislature could be asked to restore some of the retirement benefits to state workers and teachers that were reduced during a budget crisis in 1993, under a plan costing an estimated $90 million." (State House News Service via keepMEcurrent.com)

Congressional Research Service Report Says Post-PPA Lump Sum Payouts Will Be Lower
Excerpt: "That was one conclusion of new Congressional Research Service (CRS) research which calculated the approximate size of DB lump sums issued under the PPA rules. The CRS worked out the present value of an immediate annuity of $12,000 per year for participants age 65, 60, and 55 and the present value of a deferred annuity of $12,000 per year for ages 60, 55, and 50." (PLANSPONSOR.com; free registration required)

Supreme Court Denies AT&T Benefits Interference Case
Excerpt: "The U.S. Supreme Court has declined to review a federal appellate court ruling that a group of former AT&T Corp. employees had no remedy under the Employee Retirement Income Security Act for its alleged interference with their pension benefits, according to BNA." (PLANSPONSOR.com; free registration required)

(c) Summaries of Guidance; Filed Comments

Overview: IRS Defines Salary Reduction Agreement for Purposes
Excerpt: "Payments public educational institutions and 501(c)(3) tax-exempt organizations make to purchase 403(b) annuity contracts for their employees generally are not included in wages for purposes of the Federal Insurance Contributions Act (FICA) rules. However, this FICA exception is not available for payments made under a 'salary reduction agreement.' The breadth of the IRS's proposed definition of 'salary reduction agreement' has been criticized by some since the IRS issued it in 2004. But the IRS has just issued its 2004 proposed definition in final form, without changes. 72 FR 64939 (November 19, 2007)." (Deloitte via BenefitsLink.com)

IRS Issues Final Regs on 403(b) Salary Reduction Agreements Subject to FICA Tax
Excerpt: "The final regulations adopt without change temporary and proposed rules issued in November 2004 that apply to agreements requiring employers to reduce employee salaries and make contributions to a 403(b) tax-sheltered annuity." (Wolters Kluwer Financial Services)

The PPA -- Changes for Defined Benefit Plans and Giving Life to Cash Balance Plans
Excerpt: "Changes wrought by the Pension Protection Act of 2006 (PPA) are sweeping through the defined benefit (DB) industry, requiring just about every plan to rethink plan design and funding. The new PPA funding rules for DB plans will become effective on January 1, 2008. Therefore, by the end of this year, sponsors need a clear strategy for funding, and dealing with the ramifications of the plan's funded status . . . ." (PLANSPONSOR.com; free registration required)

Overview: PBGC Guidance for Terminations and Lump Sum Distributions Straddling January 1st, 2008
Excerpt: "For plan years beginning on or after January 1, 2008, the Pension Protection Act amended Code section 417(e)(3), changing the applicable interest rate and applicable mortality table. For single employer defined benefit plans terminating before January 1, 2008, this change created a potential lump sum valuation issue because a plan could be terminated before January 1, 2008, but not distribute until after January 1, 2008, meaning the plan could terminate under the old definition of actuarial equivalence, and distribute under the new definition of actuarial equivalence. The PBGC has clarified this situation . . . . " (Pension Protection Act Blog)

New Web Site: PensionLitigationData.com
Excerpt: "[PensionLitigationData.com (PLD) is a subscriber searchable database of pension litigation events.] Inspired by a need to provide information to the plan sponsor and legal communities about the growing number of financial fiduciary cases, PLD is a premier searchable database of pension cases from January 1, 2005 and on." (Pension Governance, LLC and The Michel-Shaked Group)

(d) Trends, Surveys, Research

ETFs Coming Soon to a 401(k) Plan Near You
Excerpt: "As plan sponsors and service providers in the legal, accounting and investment fields adapt to the new responsibilities and opportunities created by the Pension Protection Act [PPA] of 2006, index-based ETFs should gain ground in the 401(k) marketplace. Why? Because they serve the objectives . . . . They're inexpensive, they generate near-market returns by definition and they fit comfortably in the 'managed portfolio' framework envisioned and encouraged by the PPA. " (Seeking Alpha)

High Court Hears Case of Lost 401(k) Money in LaRue vs. DeWolff, Boberg & Associates
Excerpt: "Although U.S. workers can invest money in a retirement fund sponsored by their employer, it is not clear whether they can sue to recover money lost because of mistakes by the fund's administrator. That issue came before the Supreme Court on Monday in a case that could shape the pension rights of 70 million employees." (Los Angeles Times via Investment News Net)

Future Bright for the Already Popular Lifecycle Funds
Excerpt: "Now that target date funds have been selected as a QDIA, industry observers predict the number of target date funds will mushroom. As it stands now, total assets in these funds were at $167.8 billion as of September 30, 2007, according to Financial Research Corp. (FRC) in Boston. Some estimate that as many as 40% of all 401(k) plans have or will be offering target date funds as an investment option in the near term . . . . " (Investment Advisor)

How Does Your Pension Plan Measure Up? A Framework for Assessing and Improving Your Plan's Competitive Risk Profile
24 pages. Excerpt: "In this paper, we introduce our U.S. Corporate Pension Plan Peer Group Analysis (PGA) tool . . . ." (JPMorgan)

Retirement Plans Comparison Chart for Small Businesses -- 2007 (PDF)
4 pages. Excerpt: "This chart provides a high level comparison of the features and benefits of the plans that are included." (Appleby Consulting Inc.)

Early Retiring Boomers Are Urged to Watch Out for 72(t) Fees
Excerpt: "As baby boomers transit middle age, many are retiring early -- and in many cases, they're using 72(t) procedures. It's easy to make costly mistakes -- and advisors need to be on their guard, according to a new white paper, 'Understanding 72(t) Distribution Planning,' by Securities America in Nebraska." (Financial-Planning)

UK Sponsors Chart Move from Pensions to DC
Excerpt: "UK pension plan sponsors have begun to construct the investment framework through which they will manage existing final salary plans down to zero over the next generation while transitioning employees to defined contribution structures, Greenwich Associates said in a press release." (PLANSPONSOR.com; free registration required)

(e) Policy, Opinion, Advocacy

Opinion: 401(k) Plan Automation and Employee Choice
Excerpt: "[W]hat do you do about distributions? Conventional wisdom holds that lump sums are not the wisest distribution form and that, one way or the other, a retiring employee should do something to insure against the possibility of outliving his or her lump. Some kind of annuity is the obvious solution to this problem, but annuity distributions are almost unheard of in the 401(k) world and, even in the defined benefit (DB) world, the trend is away from them." (PLANSPONSOR.com; free registration required)

Opinion: Candidate Thompson and Social Security
Excerpt: "Like so many before him, Mr. Thompson has fallen into the trap that the objective is to preserve and save Social Security rather than to provide retirement income cost effectively." (The Washington Times)

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Links to Items on Executive Comp, Benefits in General

Labor Force Projections to 2016: More Workers in Their Golden Years (PDF)
20 pages. Excerpt: "As the U.S. population ages, the labor force will grow more slowly during the next decade; the older labor force is projected to grow more than 5 times faster than the overall labor force . . . ." (U.S. Bureau of Labor Statistics)

PricewaterhouseCoopers Global Report Reveals 'Millennials'' Career Expectations
Excerpt: "A new global report from PricewaterhouseCoopers, 'Managing Tomorrow's People: The Future of Work to 2020,' illustrates how organizations need to adapt to the demands of a rapidly changing world and provides scenarios of future business models to help companies anticipate change and address how they will attract, retain, and motivate the people they will need in the future." (SmartPros Ltd.)

Hearing to Examine Executive Pay and Compensation Consultants
Excerpt: "On Wednesday December 5th the Committee will hold a hearing to examine the role played by compensation consultants in determining the pay packages of senior executives at the largest publicly traded corporations. Corporate governance experts, institutional investors, and compensation consulting firms will testify regarding the role of consultants in setting executive pay, efforts to prevent and manage conflicts of interest, and the adequacy of the information available to shareholders and the public." (U.S. House Committee on Committee on Oversight and Government Reform)

The SEC Targets 10b5-1 Plans -- Ten Things Executives and Boards Should Be Doing
Excerpt: "In striking similarity to the analysis that precipitated the option backdating cases, recent SEC attention is focused on reports of seemingly fortuitous returns generated by executives selling shares under automatic trading or 'Rule 10b5-1 Plans.' The heightened scrutiny follows an earlier study by a Stanford University School of Business professor that suggested returns under Rule 10b5-1 trading plans were substantially better than would be expected if the trading were truly automatic." (Paul, Hastings, Janofsky & Walker LLP)

Reporting a One-Time Tax-Free Movement of IRA Assets to an HSA
Excerpt: "IRA custodians/trustees report a qualified HSA funding distribution based on an individual's age, either younger than age 59-1/2 or already age 59-1/2." (Wolters Kluwer Financial Services)

IRS, Treasury Open Window to Correct Unintentional Deferred-Comp Errors
Excerpt: "The new relief gives taxpayers the chance to correct any mistakes made in complying with the rules -- known as 409A -- within the same year to avoid being penalized. Under 409A, employees themselves are punished, with any plan deemed not in compliance resulting in an immediate tax on the vested amount, plus a 20% penalty.' (Financial Week; free registration required)

New book: The Decision-Maker's Guide to Equity Compensation
The NCEO presents excerpts from its new book, The Decision-Maker's Guide to Equity Compensation. This book describes the full spectrum of equity compensation plans available to private and public companies. Unlike most books on equity compensation, it focuses on helping decision-makers decide what kinds of equity to choose, and who should get how much and when. The book also includes a CD-ROM with an audiovisual presentation by coauthor Corey Rosen on sharing equity with employees. (National Center for Employee Ownership)

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Newly Posted Press Releases

The SPARK Institute Asks DOL to Clarify QDIA Regulations
SPARK Institute

Health Level Seven, America's Health Insurance Plans, And The Blue Cross And Blue Shield Association Sign MOU To Collaborate On Portability Standards For Personal Health Records
Blue Cross and Blue Shield Association

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

Senior Pension Administrator
for Milliman, Inc.
in CA

Health and Welfare Plan Manager
for The George Washington University
in DC

Field Service and Underwriting Manager
for Standard Insurance Company
in CA

Assistant 401(k) Administrator
for Huntingdon Valley, PA, third party administration firm
in PA

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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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