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November 3, 2003 - 13,383 subscribers
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IRS Official Reveals Penalty-Free Ways to Fix Your Pension Plan Problems An Interactive Audio Conference, November 13, 2003, 2:00 – 3:30 p.m. ET During this audio conference, you'll learn about the recent changes to the Employee Plans Compliance Resolution System (EPCRS), the benefits of complying, as well as the penalties associated with non-compliance from an IRS official who will also answer your specific questions.
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Pennsylvania, Iowa Drop Putnam Funds
Excerpt: "In just two days, public pension funds have announced plans to pull at least $4.4 billion out of the company, which lists $272 billion in assets under management." (AP via Washington Post)
Rhode Island Drops Putnam Funds
Excerpt: "The board managing retirement funds for Rhode Island state workers has fired Putnam Investments ... The unanimous vote was made at a special meeting Friday morning." (Washington Post)
Putnam Investments CEO to Resign
Excerpt: "Lawrence J. Lasser is stepping down as chief executive of Putnam Investments in the wake of civil fraud allegations against the mutual fund company and decisions by several big state pension funds to take money out of the firm's funds." (Washington Post)
Spitzer to Question Fees Charged to Mutual Funds
Excerpt: "The New York attorney general, Eliot Spitzer, will say that mutual fund directors should be paying closer attention to the fees charged to shareholders, according to a draft of testimony he plans to make today before a United States Senate panel." (New York Times; one-time registration required)
Richard S. Strong, Chairman of the Board at the Strong Mutual Funds, Resigns from Board
Excerpt: "But Mr. Strong kept his job as chairman and chief executive of Strong Capital Management, which means he is still running the mutual fund company." (New York Times; one-time registration required)
Opinion: John Bogle on How Scandal Can Help the Mutual Fund Industry
Excerpt: "John C. Bogle, the founder and former chief executive of the Vanguard Group, talked last week about the industry's problems." (Kenneth N. Gilpin in the New York Times; one-time registration required)
Opinion: Hold On to That Mutual Fund
Excerpt: "Mutual funds are suffering the glare of regulators' high beams because some sharpies trade the funds too quickly ('market timing') or after regular business hours ('late trading').... From a mutual fund investor's point of view, however, neither the fund's redemptions nor its legal bills have any impact on the value of the mutual funds themselves. The value of a mutual fund depends only on the value of stocks in the fund." (Alan Reynolds in the Washington Times)
Opinion: Scandal Tarnishes Mutual Funds
Excerpt: "The rapidly spreading scandal over favoritism in mutual fund trading is shaking the industry and has prompted Congress and federal and state regulators to push for the biggest overhaul of the system in more than 50 years." (Washington Post)
Mutual Fund Reform Proposals Draw Fire
Excerpt: "Proposals to wipe out improper trading in the mutual fund industry could cause as much harm to some investors as the practices they aim to curb, some funds and experts said on Friday." (Reuters via Washington Post)
Are Noncash Assets Really a Smart Way to Fund Pension Liabilities?
Excerpt: "First, the assets in question can be tricky to value. If the bottom falls out on a stock the company has contributed, it's the pensioners who are left holding the bag. Second, the assets can have a big impact on the risk characteristics of the plan, especially if they are tied to the same troubled industry as the company that sponsors the plan." (CFO.com)
Some D.C.-Area Companies Avoid Retirement Funding Problem
Excerpt: "Of the top 25 publicly traded companies based in the region, 12 have defined-benefit plans. Two companies have frozen their defined-benefit plans, while four companies are overfunded. Four others say they remain committed to their defined-benefit plans even if they must put more money into them to meet minimum requirements. Two declined to comment." (Washington Post)
IRS Publishes Voluntary Annual Checklist for Grandfathered Salary Reduction SEP Arrangements (PDF)
1 page. Excerpt: "Every year it is important to review the requirements necessary to operate your Salary Reduction Simplified Employee Pension (SARSEP). This SARSEP Checklist has been designed as a quick diagnostic tool to help you keep your SARSEP in compliance with important tax rules. This Checklist is not a complete description of all the requirements and it is not a substitute for a comprehensive plan review." (Internal Revenue Service)
IRS Publishes Voluntary Annual Checklist for SEP Arrangements (PDF)
1 page. Excerpt: "Every year it is important to review the requirements necessary to operate your SEP. This SEP Checklist has been designed as a quick diagnostic tool to help you keep your SEP in compliance with important tax rules. This SEP Checklist is not a complete description of all the requirements and it is not a substitute for a comprehensive plan review." (Internal Revenue Service)
IRS Publishes Voluntary Annual Checklist for SIMPLE IRA Plans (PDF)
6 pages. Excerpt: "Every year it is important to review the requirements for operating your SIMPLE IRA plan. This SIMPLE IRA Plan Checklist has been designed as a quick diagnostic tool to help you keep your SIMPLE IRA plan in compliance with important tax rules. This SIMPLE IRA Plan Checklist is not a complete description of all the requirements and it is not a substitute for a comprehensive plan review." (Internal Revenue Service)
Aggregate Implications of Defined Benefit and Defined Contribution Systems (PDF)
51 pages; working paper. Excerpt: "We find that social welfare is maximized for small but positive levels of DB because of the redistributive value associated with these systems. On the other hand, steady-state within-DC system comparisons reveal that a zero DC tax rate maximizes social welfare.' Summary online at http://www.bc.edu/centers/crr/papers/summary/wp_2003-16.pdf (2 pages). (Francisco Gomes and Alexander Michaelides, temporarily available through the Center for Retirement Research at Boston College)
Pending Guidance on 412(i) Plans Discussed at ASPA Convention
Excerpt: "The pending guidance is expected to identify abusive, or potentially abusive 412(i) plan designs. These abusive arrangements will likely be designated as 'listed transactions' under tax shelter rules.... The really bad news for those who have adopted a plan funded with policies that fall under this scrutiny is that the pending guidance is expected to be retroactive." (Milberg Consulting LLC)
Retirement Plan Trends: Where Are We All Headed?
Excerpt: "Many trends and their underlying pressures foster or hinder the creation of adequate retirement income. Generally, these trends fall into three categories: demographic issues, retirement phase of life and changes in corporate approaches to retirement plans. In an effort to facilitate everyone's participation in creating more palatable retirement plan solutions, this article describes how the trends within those three categories affect retirement income adequacy." (Aon Consulting)
Links to Items on Executive Comp, Benefits in General
Overview: New Proposed Regulations Regarding Statutory Stock Options (PDF)
At pp. 3-5 of 7-page document. Excerpt: "The new regulations are an attempt by the IRS to provide a complete and comprehensive set of rules governing incentive stock options ('ISOs') and to update the references in the rules regarding qualified options exercised under employee stock purchase plans ('ESPPs')." (Trucker Huss LLP)
Newly Posted or Renewed Job Openings
Health & Welfare Consultant
for Towers Perrin
in Location Other Than U.S., CA, CT, MA, NY, OH, TX
Senior Plan Administrator
for JRN Benefits
in CA
Total Benefits Specialist
for Consulting Firm
in MA
Manager Health & Welfare
for Consumer Packaged Goods Company
in OH
Sr. Plan Administrator
for American National Insurance Company
in TX
Newly Posted Webcasts
(Post Yours!)
The Pension Underfunding Crisis: How Effective Have Reforms Been?
on October 29, 2003
presented by Committee on Education and the Workforce, U.S. House of Representatives
Newly Posted Conferences
(Post Yours!)
Dependent Care Decision Making Rules
in MA
December 4, 2003
Greater Boston Chapter ISCEBS
Newly Posted Press Releases
(Post Yours!)
eePulse/ U of M Study-Leaders Are More Confident in Economy But Less Confident in Themselves
(eePulse, Inc.)
Section 125 Cafeteria Module Now Available with Relius Administration
(SunGard Corbel)
ERISA Advisory Council to Hold Final Meetings for 2003
(U.S. Department of Labor)
Handy Links:
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- Using the Web for Employee Benefits Research
- Employee Benefits Library
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