Click Here for Printable Version   Health and Welfare Benefit Reminders Medicare Part D and HIPAA Portability Regulations action required. [Full Story] Automatic Rollover Requirements Year-end deadline approaching. [Full Story] Deadline for Deferring Bonuses Year-end deadline approaching for bonuses earned in 2006 and payable in 2007. [Full Story]

As we have previously informed you, proposed regulations under Code Section 409A were issued on September 29, 2005 that supplement guidance in IRS Notice 2005-1 issued last December. This article looks at some of the issues raised by the regulations.
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A recent Seventh Circuit decision serves as a valuable reminder of the importance of including "safe harbor" language in plan documents in order to avoid unnecessary litigation over benefits decisions and the related standard of review. In Diaz v. Prudential Insurance Co. of America, the Seventh Circuit held that even though the plan at issue included some language regarding employer discretion related to benefits decisions, it simply did not go far enough. In order to largely insulate a plan administrator's decision from judicial scrutiny, a plan must contain proper language conferring discretion on the plan administrator. In its decision, the Seventh Circuit once again endorsed the following language: "Benefits under this plan will be paid only if the plan administrator decides in his discretion that the applicant is entitled to them." Only this language, or other language which clearly signals discretion on the part of the plan administrator, will suffice. If sufficient language is present, a Seventh Circuit court will uphold a reasonable plan administrator decision, even if the court would decide the question differently if it did not give deference to the plan administrator's decision.
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The IRS issued the cost-of-living adjustments applicable to dollar limitations for employee pension benefit plans for the 2006 tax year. Effective January 1, 2006, the limits are as indicated below.
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