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Today's sponsor is ASPPA

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(a) New Guidance Documents

IRS Notice 2007-101: Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
4 pages. The notice contains updates for the corporate bond weighted average interest rate for plan years beginning in December 2007, 24-month average segment rates, and funding transitional segment rates applicable for December 2007. (Internal Revenue Service)

(b) News

Pennsylvania School System Pension Perk Assailed As 'Abuse of the System'
Excerpt: "[Hundreds of school administrators and other employees - no one knows how many - ]have been 'double-dipping' since the passage of a 2004 law that allowed them to work while collecting pensions for up to a year if employers say their departure would create an emergency, or if there is a shortage of qualified replacements. The law's proponents, including the Pennsylvania School Boards Association and the state's Public School Employees' Retirement System (PSERS), say the practice is needed to staff unexpected vacancies or difficult-to-fill jobs. But PSERS, in a ruling made public Monday, said [an employee] and his board manipulated the system and broke the rules because the board had a qualified replacement. He was ordered to return the pension payments. PSERS said it was not conducting a general review but was responding to citizen complaints." (The Philadelphia Inquirer)

Boeing 401(k) Excess Fee Suit Plaintiffs Allowed to Add Charges
Excerpt: "Boeing Co. employees suing the aviation manufacturer over excessive 401(k) fees have added a trio of allegations including that the plan improperly offered more expensive and lower performing actively managed funds." (PLANSPONSOR.com; free registration required)

(c) Summaries of Guidance; Filed Comments

Overview: Treasury Department Proposed Regulations on Automatic Contribution Arrangements (PDF)
3 pages. Excerpt: "The regulations provide guidance for two types of ACAs, the Qualified Automatic Contribution Arrangement (QACA) and the Eligible Automatic Contribution Arrangement (EACA). The regulations further provide that pre-PPA ACAs may continue after 2007 without having to satisfy many of the 2008 requirements. Summarized below are the characteristics of a QACA and an EACA." (Transamerica Center for Retirement Studies)

2008 SEI Update: FAS 87 Research Series (PDF)
13 pages. Excerpt: "SEI's Pension Accounting Series (updated for 2008) intends to educate plan sponsors and corporate officers as well as address issues regarding Financial Accounting Standard No. 87 (Employers' Accounting for Pensions). Data used in this research is derived from the 2007 SEI Plan Sponsor Accounting Database. The SEI database consists of data from Standard & Poor's Institutional Market Services database as well as proprietary analysis created by the SEI's Global Institutional Group." (SEI Investments Developments, Inc.)

Overview of Private Equity Funds: Part of the ERISA Controlled Group?
Excerpt: "The Appeals Board of the Pension Benefit Guaranty Corporation ('PBGC') recently held that an undisclosed private equity fund was jointly and severally liable for a funding shortfall in a pension plan of one of its portfolio companies. The PBGC's position is that the private equity fund was a 'trade or business' and was accordingly a member of the same controlled group as the portfolio company. As far as we know, this is the PBGC's first public statement that takes this approach." (O'Melveny & Myers LLP)

Buck Comments on Proposed Guidance on Benefit Restrictions for Underfunded Defined Benefit Plans (PDF)
2 pages. Excerpt: "Buck submitted comments to the IRS on its proposed regulations implementing restrictions on the payment or accrual of benefits from underfunded single-employer defined benefit pension plans. . . . Buck noted that the proposed regulations are overly complex and probably unworkable in certain respects, and that clarification is needed in other areas." (Buck Consultants)

Overview of the Year 2007 for Plan Sponsors
Excerpt: "While there was a winding down on some aspects, for the most part plan sponsors spent 2007 waiting for the 'other shoe to drop' as we (finally) got new regulations on qualified default investment alternatives, some structure around the yield curve calculations and mortality tables for defined benefit plans, got some (more) time on 409A implementation, and braced for a second wave of revenue-sharing litigation -- and we're not done yet!" (PLANSPONSOR.com; free registration required)

Overview of Lump-Sum Pension Payments: 2008 and Beyond (PDF)
7 pages. (Milliman)

CRS Report for Congress: Lump-Sum Distributions Under the Pension Protection Act (PDF)
6 pages. Excerpt: "This report summarizes the provisions of the PPA that affect lump sums paid from defined benefit pension plans." (U.S. Congressional Research Service)

(d) Trends, Surveys, Research

As Financial Pressures Rise, Employee Confidence Regarding Retirement Continues to Fall
Excerpt: "Participants in 401(k) plans are becoming increasingly distracted from the process of saving for retirement as more immediate financial pressures take priority, according to the 2007 results of the fifth annual Mercer Workplace SurveyTM, a national study of employee attitudes and behaviors related to their company sponsored benefits." (Mercer LLC; free registration required)

How the Big 401(k) Funds Are Faring
Excerpt: "Retirement portfolios very likely took a hit in November, with stock returns across all mutual fund categories in the red. Domestic equity categories fell by 5.4% on average, with precious metals specialty funds plummeting by 10.1%. That's no surprise, given that all the major benchmark indexes lost value last month." (Financial Week; free registration required)

Members of Ministry Rich in Spirit, Poor in Funds for Retirement
Excerpt: "A SOCIOLOGIST'S STUDY cites low pay, little savings and church-owned homes as factors contributing to ministers' bleak financial outlooks." (The Christian Chronicle)

TIAA-CREF to Launch Online Retirement Community for Participants
Excerpt: "TIAA-CREF announced the upcoming launch of an online community exclusively for the company's participants to discuss their retirement-related interests, experiences, and concerns." (PLANSPONSOR.com; free registration required)

ANC Foundation Issues Call for Retirement Research Papers -- Deadline March 7, 2008 (PDF)
Excerpt: "We are seeking paper submissions on retirement issues as outlined . . . . Submissions will be narrowed to two papers to be included in a special journal issue of the Financial Services Review (FSR). Visit the FSR website at http://www.drsm.org/FSR_journal/Financial_Services_Review_home.htm. The papers will be reviewed through the normal FSR process. A $500 cash reward will be given to the top two papers." (Arthur N. Caple Foundation)

Special Report: The Most Successful Retirement Plan Advisers
Excerpt: "PLANSPONSOR's Retirement Plan Adviser of the Year and Retirement Plan Adviser Team of the Year are based on qualitative as well as quantitative criteria and, as a result, may not appear in our 'most successful' lists." (PLANSPONSOR.com; free registration required)

Evaluating the 'Right' Information in the 'Right' Way -- A Prudent Process
Excerpt: "I recently served as an expert witness on prudent process. My testimony focused on what a 'prudent process' is and what fiduciaries do to satisfy that requirement. To prepare for that testimony, I outlined the steps required for a prudent process -- based on my experience and observations." (Fred Reish via PLANSPONSOR.com; free registration required)

The $4 Billion Trade-Off: PBGC Misses Out by Eschewing Stocks in Favor of LDI
Excerpt: "The Pension Benefit Guaranty Corp. could have grabbed an extra $4 billion during the past three years if the agency had maintained a higher equity allocation and hadn't adopted a liability-driven investment policy." (Financial Week; free registration required)

Retirement Income Investment Market Now Provider Focus
Excerpt: "Many people have expected this market to come along faster than it has, Lipper's Tjornehoj says, but the outlook has improved recently with the new second-generation products, as more viable steady-income alternatives to high-fee products emerge. Expect the annuity industry to fight back with its own hybrid product innovations, Tjornehoj says, likely within the next year." (PLANSPONSOR.com; free registration required)

CitiStreet to Field Fiduciary Web Site
Excerpt: "CitiStreet has announced plans for a new Web site around which its lineup of fiduciary services will be organized called PlanFIRST." (PLANSPONSOR.com; free registration required)

Striking a Balance Between High-Tech and High-Touch Enrollment
Excerpt: "'Open enrollment today, whether you're large or small, really is moving towards the paperless environment and that's really through the Web,' says Brad Flipse, sales VP at BeneTrac. While paperless enrollment is a huge help to advisers and their clients, it can be intimidating for employees who desire high-touch assistance from an adviser." (Employee Benefit Advisor; free registration required)

Defined Benefit Plan Funds -- the Mantra Today Is Risk, Risk, and Risk Again
Excerpt: "Across thousands of plans, large and not so large, plan sponsors, treasurers, and chief financial officers are navigating how they move from one pension accounting and regulatory regime to another. The upside of outperforming the markets has been stripped away -- the danger of volatility in plan funding status now trumps all. Pension plan risk is now firmly on the balance sheet . . . ." (PLANSPONSOR.com; free registration required)

(e) Policy, Opinion, Advocacy

The Decline in the U.S. Personal Saving Rate: Is It Real and Is It a Puzzle? (PDF)
Excerpt: "Since the mid-1990s, the national income and product accounts personal saving rate for the United States has been trending down, dropping into negative territory for three months during the past two years. This paper examines measurement problems surrounding two of the standard definitions of the personal saving rate. The authors conclude that, despite these measurement problems, the recent decline of the U.S. personal saving rate to low levels seems to be a real economic phenomenon and may be a cause for concern for several reasons." (Federal Reserve Bank of St. Louis)

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Links to Items on Executive Comp, Benefits in General

Overview: DOL Final Form 5500 Regulations (PDF)
Excerpt: "The DOL, IRS and PBGC have released final annual reporting and disclosure regulations which, among other things, postpone the mandatory electronic filing requirement for Form 5500 for an additional year. They have also revised the 2009 forms to accommodate e-filing by ERISA covered pension and welfare benefit plans." (Buck Consultants)

Employee Benefits Can Spring Costly Surprises in M&A
Excerpt: "You've scrutinized the deal until your eyes hurt, but if you haven't carefully examined employee benefits, you haven't done your job in M&A due diligence, Patrick J. Haraden, director of employee benefit services at Longfellow Benefits, told the Boston Bar Association . . . ." (Market Wire via InsuranceNewsNet.com)

Headlines in Employee Benefits Law, December 2007 (PDF)
8 pages. This issue covers select compliance deadlines, retirement plan developments, and health and welfare plan developments. (Reinhart Boerner Van Deuren s.c.)

Overview: SEC Amendment of Rule 144 and Rule 145 to Allow More Flexibility in Reselling Securities (PDF)
2 pages. Excerpt: "On December 6, 2007, the Securities and Exchange Commission (SEC) issued final amendments to Rule 144 to shorten the holding periods for restricted securities. The SEC also made changes to ease the burdens to resell securities under Rule 144 and amended Rule 145 to eliminate presumptive underwriter status in most cases." (Reinhart Boerner Van Deuren s.c.)

Analyzing the 'Next Social Contract': Are Employment-Based Benefits Really Dead?
Excerpt: "Proponents of reforms affecting health insurance and retirement -- particularly removing such programs from employment-based systems -- should get their facts straight before proposing massive changes." (Human Resource Executive Online; free registration required)

Overview: Proposed Labor Regs Would Require Greater Disclosures of Fees, Compensation and Conflicts of Interest for Employee Benefit Plan Service Providers (PDF)
Excerpt: "It is unlikely that any plan sponsors have obtained contractual obligations of the type that would be required by these proposed regulations. However, the proposed regulations could be cited by defendants who would argue that such procedures and disclosures are not required under current law." (Alston & Bird LLP)

Participant Seeking Benefits Due Cannot Claim Fiduciary Breach
Excerpt: "The U.S. District Court for the District of Columbia has ruled a plan participant cannot move forward with fiduciary breach claims against her former employer when she has adequate remedy under her claim for additional benefits due to her." (PLANSPONSOR.com; free registration required)

IRS Notice 2008-8: Waiver of Requirement to Make 2007 Information Return for Certain Stock Transfers Under Code Sec. 6039 (PDF)
3 pages. Excerpt: "Section 403 of the Tax Relief and Health Care Act of 2006 (Act) amended the information reporting requirements of § 6039. . . . As amended by the Act, § 6039 requires corporations to make an information return with the IRS, in addition to providing employees with an information statement, following a [transfer of stock pursuant to the employee's exercise of an incentive stock option or a transfer of stock by the employee where the stock was acquired pursuant to the exercise of an option described § 423(c)]. . . . Because regulations under § 6039 have not yet been issued, the IRS is waiving the obligation to make an information return for 2007 stock transfers . . . ." (Internal Revenue Service)

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Newly Posted Events

COBRA Compliance Workshop
in California on January 17, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

HIPAA And Other Health Benefits Laws: Compliance Assistance Seminar
in Massachusetts on March 19, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Report Release On Estimated Savings From Specific Health Reform Options
Nationwide on December 21, 2007
presented by KaiserNetwork.org

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Newly Posted Press Releases

SEI Releases 2008 Update of FAS 87 Disclosure Assumptions Research for Pension Plan Sponsors
SEI

Study Offers Counties Help for GASB 45 Rule Compliance
National Association of Counties

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

Pension Plan Operations Representative
for Transamerica Retirement Services
in CA

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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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