---

---

[Official Guidance]
Text of SEC Proposed Regs on Political Contributions by Investment Advisers ('Pay-to-Play') (PDF)
32 pages. Excerpt: "The Securities and Exchange Commission is proposing for comment a new rule under the Investment Advisers Act of 1940 that would prohibit an investment adviser from providing advisory services for compensation to a government client for two years after the adviser or certain of its executives or employees make a contribution to certain elected officials or candidates. The new rule would also prohibit an adviser from providing or agreeing to provide, directly or indirectly, payment to any third party for a solicitation of advisory business from any government entity on behalf of such adviser. Additionally, the new rule would prevent an adviser from soliciting from others, or coordinating, contributions to certain elected officials or candidates or payments to political parties where the adviser is providing or seeking government business. The Commission also is proposing rule amendments that would require a registered adviser to maintain certain records of the political contributions made by the adviser or certain of its executives or employees. The new rule and rule amendments would address 'pay to play' practices by investment advisers." (Securities and Exchange Commission)


[Guidance Overview]
Public Pension Funds Lose Effort to Stop Chrysler Sale
Excerpt: "The 2nd U.S. Circuit Court of Appeals has decided that a U.S. Bankrup.tcy Court judge properly allowed the sale of Chrysler LLC's assets to Fiat SpA to move forward despite objections from three pension funds. The latest 2nd Circuit ruling follows up an earlier move by the appellate court allowing the deal to move forward without issuing an opinion. The 2nd Circuit appellate panel said in its latest pronouncement that The Indiana State Police Pension Trust, the Indiana State Teachers Retirement Fund, and the Indiana Major Moves Construction Fund were wrong to argue that Chrysler's disputed auto manufacturing asset sale actually represented an impermissible bankrup.tcy reorganization plan . . . ." (PLANSPONSOR.com; free registration required)


[Guidance Overview]
Towers Perrin Monthly Retirement Regulatory Round-Up, July 2009 (PDF)
4 pages. Excerpt: "The Monthly Regulatory Round-Up is a high-level summary of legal and regulatory developments that occurred during July 2009 that may be relevant to large employers. Developments are sorted according to federal legislative developments, federal regulatory guidance, other developments (e.g., significant litigation, studies, select state law developments)." (Towers Perrin)


[Guidance Overview]
Multiple Employer Plans: The Platinum Standard
Excerpt: "The acceptance by a full-scope ERISA section 3(21) fiduciary of [the] duties with respect to a qualified retirement plan such as a 401(k) plan is the gold standard of delegation of fiduciary responsibility (and liability) by a plan sponsor because it encompasses all other fiduciary duties. The only liability retained by the sponsor in these circumstances would be a residual oversight monitoring duty. . . . But what if a plan sponsor could jettison even its residual oversight monitoring duty of the full-scope ERISA section 3(21) named fiduciary? That kind of power would represent the platinum standard of delegation of fiduciary responsibility (and liability) by a plan sponsor. In fact, ERISA allows a plan sponsor to do exactly that. A plan sponsor can do so by joining a multiple employer plan (MEP) pursuant to section 413(c) of the Internal Revenue Code (IRC)." (Morningstar, Inc.)


[Guidance Overview]
Retirement Plans Work Differently for Highly Compensated Employees
Excerpt: "Most people are not aware that highly compensated employees (HCE) are not protected under ERISA the same as non-highly compensated employees (NHCE), Fraasa said. 'For one, HCEs can be excluded from the plan altogether,' Fraasa said. 'The regulations define an HCE by compensation. The limit is adjusted for inflation each year. If you earned $105,000 or more in 2007, you would be an HCE for 2008, and if you earned $110,000 or more in 2008, you will be an HCE for 2009.'" (NJ.com)


Cutting Employer 401(k) Plan Contributions Is not the Whole Story
Excerpt: "Though the economic downturn has forced many plan sponsors to reduce their 401(k) contributions or cut them entirely, a new survey suggests those sponsors are still contributing to their employees' retirements in other ways. Diversified Investment Advisors' Report on Retirement Plans -- 2009, a survey of corporations with 1,000 or more employees, finds that 46% of plan sponsors are planning to reduce or eliminate employer contributions to their 401(k) plans or have already done so; however, the survey also revealed that cash balance and 401(a) plan offerings are on the rise." (PLANSPONSOR.com; free registration required)


Investment Firms Launch an Alternative to Annuities to Attract Retirees
Excerpt: "Investment managers are developing lower-cost alternatives to annuities to help customers -- and advisors -- spend their savings after retirement. Fidelity Investments and Vanguard Group have both rolled out products designed to manage retirement savings and parcel them out in monthly increments, and Brinker Capital is working on one. . . . Fidelity began offering 11 income replacement funds in 2007. Vanguard introduced three managed payout funds in May 2008. The funds use three-year averages to make distributions that are paid monthly. The funds have collected about $320 million in assets, according to John Ameriks, a principal at Vanguard." (American Banker via On Wall Street)


The Economics of Providing 401(k) Plans: Services, Fees, and Expenses, 2008 (PDF)
27 pages. Excerpt: "Key Findings: 401(k) plans are a complex employee benefit to maintain and administer, and they are subject to an array of rules and regulations. Employers offering 401(k) plans typically hire service providers to operate these plans, and these providers charge fees for their services. Employers and employees generally share the costs of operating 401(k) plans. As with any employee benefit, the employer typically determines how the costs will be shared." (Investment Company Institute)


Large Los Angeles Union of Public Employees Threatens to Block Retirement Plan That Could Ease City Budget Shortfall
Excerpt: "One of L.A.'s largest municipal employee unions is threatening to sue over the $250-million plan to provide early retirement to 2,400 city workers, saying it does not rely on a sound financial footing. The Engineers and Architects Assn., which represents 7,800 public employees, said today that an actuarial analysis of the early-retirement plan wrongly assumed that its members have agreed to contribute additional money to pay for that plan. 'That has not happened, nor have we agreed to change those contribution rates,' union President Robert Aquino told the pension board this afternoon. After his testimony, Aquino also distributed a copy of a letter stating that his union would file a lawsuit if city officials attempt to force its members to pay more for early retirement." (Los Angeles Times)


Judge in Seattle Hears Arguments Over WaMu 401(k) Plan
Excerpt: "Lawyers for JPMorgan Chase & Co. and for Washington Mutual Inc. fund managers, directors and a former chief executive asked a federal judge Thursday to dismiss a lawsuit by WaMu employees whose retirement accounts have vaporized. Steve W. Berman, a lawyer for former employees of what was once the nation's largest savings bank amount argued that his clients should have been warned to dump WaMu stock from their 401(k) plans and that the liability should pass to JPMorgan, which bought the bank after it was closed by federal regulators." (AP via The New York Times; free registration required)


Impact on ESOP Participants of S Corporation Status
In her latest column on the NCEO's site, Nancy Dittmer discusses the impact of the S corporation provisions of the Internal Revenue Code on ESOP participants. (National Center for Employee Ownership)


The ESOP Company Board Handbook
Serving on any corporate board is a serious responsibility. Serving on an ESOP company board adds the additional responsibility of understanding how ESOP law and best practices interact with corporate law and best practices. Special ESOP issues such as valuation, the repurchase obligation, S corporation anti-abuse rules, monitoring fiduciaries, executive pay considerations, and responding to takeover bids demand at least a working knowledge of ESOPs. This new book addresses all this and more. (National Center for Employee Ownership)


[Opinion]
Will SEC Ban Pension 'Pay to Play'? Rules Should Also Govern 457 and 403b Plans
Excerpt: "With its new proposed regulations, the SEC is once again following behind the trailblazing enforcement work of the New York attorney general's office, this time Andrew Cuomo's Pension Fund Code of Conduct ,which has been signed by several investment firms seeking to achieve settlements on placement agent investigations. With billions of dollars to invest, public pension funds are attractive targets for investment managers. If they can find a way to win votes on the pension board by 'influencing' a public official with campaign contributions (or even worse, outright bribes), the profits from managing multi-millions of dollars can easily cover the costs of a little baksheesh. So the SEC is dead right to put a stop to this practice." (Governing.com)


[Opinion]
ERIC Urges Appeals Court to Uphold District Court Ruling Against Alleged 401(k) Fiduciary Breach Claims (PDF)
139 pages. Excerpt: "The ERISA Industry Committee (ERIC), the Washington, D.C.-based trade association representing America's major employers, . . . filed with the U.S. Court of Appeals for the Second Circuit an amicus brief urging the court to uphold an earlier ruling that United Technologies Corp. did not breach its fiduciary duties under the Employee Retirement Income Security Act (ERISA) in selecting and managing investment options for its Section 401(k) plan (Taylor v. United Technologies Corporation)." (The ERISA Industry Committee)

---

---

Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
Towers Perrin Monthly Regulatory Round-Up on Executive Compensation, July 2009 (PDF)
4 pages. Excerpt: "The Monthly Regulatory Round-Up is a high-level summary of legal and regulatory developments that occurred during July 2009 that may be relevant to large employers. Developments are sorted according to federal legislative developments, federal regulatory guidance, other developments (e.g., significant litigation, studies, select state law developments)." (Towers Perrin)

---

Webcasts and Conferences

Everything You Wanted to Know About Cash Balance Plans
in New York on August 13, 2009
presented by ASPA Benefits Council of New York

( Click to post your webcast or conference )

---

Press Releases

Business Manager of Alabama Anesthesia Practice Sentenced for Failure to File Required Annual Report for Profit-sharing Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

ERIC Urges Appeals Court to Uphold District Court Ruling Against Alleged 401(k) Fiduciary Breach Claims
ERIC (ERISA Industry Committee)

( Click to post your press release )

---

Employee Benefits Jobs

401(k) Wholesaler
for Howard Simon & Associates, Inc.
in IL

Senior Plan Administrator
for The Newport Group
in FL

( Click to post your job opening | View all jobs | RSS feed of all jobs )

---

EmployeeBenefitsJobs.com (Sponsor)

(Click on banner to learn more.)

---

Handy Links:

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

---

---

Subscribe to the BenefitsLink Health & Welfare Plans Newsletter, Too!

Sign-up form is at https://benefitslink.com/newsletter (free).

---

This email has been published by:
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

David Rhett Baker, J.D., Editor

Copyright 2009 BenefitsLink.com, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.

Anyone can receive these emails; just have them sign up at this web page: https://benefitslink.com/newsletter/

Other useful links:

• How to Sponsor an Issue
• Privacy Policy
• Archive of Previous Newsletters