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November 10, 2003 - 13,440 subscribers
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Learn About Retirement Planning Opportunities & Challenges Facing the Tax-Exempt Employer An Interactive Audio Conference, November 18, 2003, 2:00 – 3:30 p.m. ET Recent changes in the law and regulations now give tax-exempt employers new opportunities to maximize retirement benefits for their employees. Learn from an expert in the field how to design a program that complies with the new requirements while also obtaining the most benefits for your employees. Register today and get the chance to ask your own specific questions!
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Audio Report: Ethics Probe Jars Mutual Fund Industry
Excerpt: "Allegations that a number of mutual fund companies have engaged in unethical and illegal activities stir concern about an area of the investment industry that had until now enjoyed a sterling reputation. Hear NPR's Scott Simon and Joe Nocera, editorial director of Fortune magazine." (National Public Radio)
Putnam Pledges Reform In Full-Page Advertisement
Excerpt: "In a full-page ad in Monday's New York Times and Wall Street Journal, Putnam, in a statement signed by its new chief executive, chairman and vice chairman, pledged to 'restore accountability, integrity, and confidence' and review its compliance system." (Reuters via SignOnSanDiego.com)
Opinion: 'Little Guy' Is Big Loser in Fund Scandals
Excerpt: "Those with access to compound interest tables will see that $10,000 a year for 20 years compounding at 15 percent will add up to $1.3 million. At 14 percent (thanks to the 1 percent of missing earnings) the total would have been just $1.1 million. For most people, the cost of this missing 1 percent was as much as half what the falling market ultimately took from them." (Steve Butler in the Contra Costa [Calif.] Times)
Financial Planners Deal with Mutual Fund Probe Questions
Excerpt: "What [financial planner Clay] Russell told [one inquiring investor] is the same advice he's been giving a handful of concerned clients: Stay or leave the fund at your own risk. It's hardly a groundbreaking revelation, but the response reflects the tight spot that more financial planners are finding themselves in as the mutual fund probe expands and more clients are asking advisers what to do." (AP via New York Times; one-time registration required)
Putnam Crisis Raises Sticky Questions
Excerpt: "A number of large public pension funds in Iowa, New York State, Pennsylvania, Rhode Island, Massachusetts and Vermont have already made a choice: they plan to fire Putnam, a unit of insurance broker Marsh & McLennan Cos. Inc. Still, such decisions are not easy ones for the individual investor who may have put money in the fund for tuition bills, retirement or a rainy day -- especially since other funds are also under investigation." (Reuters via New York Times; one-time registration required)
Market Timing: a Longtime Practice Comes Under New Scrutiny
Excerpt: "Market timing is a misnomer, of course. What these traders were doing was trying to capitalize on pricing anomalies or discrepancies in securities the fund held. This is also known as securities arbitrage." (New York Times; one-time registration required)
Scandal Unnerves Investors
Excerpt: "Katharine McGregor was on a treadmill last week when CNN's bottom-of-the-screen ticker reported that Putnam Investments and two of its former mutual fund managers had been charged with securities fraud. 'I nearly had a panic attack,' said the 30-year-old family-law attorney, who'd invested in Putnam funds since leaving college." (Washington Post)
Mutual Funds: Tossing Out the Proxy Voting Rubber Stamp
Excerpt: "[S]tarting next year, funds must reveal exactly how they voted in the preceding proxy season by Aug. 31 each year.... A big reason for the SEC's move: fears that money managers are failing as fiduciaries. Instead of voting in the best interests of the shareholders they represent, they're backing company managements that could reward them with new business such as handling billions of 401(k) retirement money, the SEC believes." (Business Week)
Retirement Is Second-Biggest Issue in California Grocery Labor Dispute
Excerpt: "After health care, pensions are the second-biggest issue dividing the union and the stores involved in the 28-day work stoppage." (The Orange County [Calif.] Register via NewsAlert.com)
Pension Expense Likely To Become Even More Volatile As Global Accounting Standards Converge (PDF)
8 pages. Excerpt: "Accounting standards boards around the world, including the Financial Accounting Standards Board (FASB) in the United States, are working toward a 'convergence' of their standards. One probable consequence of convergence ... will be an increased volatility in reported earnings. Companies that sponsor defined benefit plans should review the potential effects of anticipated changes in accounting standards on plan design, funding and asset allocation strategies." (Mellon’s Human Resources & Investor Solutions)
How Proposed Retirement Savings Accounts Would Fit Retirement Strategies
Excerpt: "Adding yet another layer of confusion for retirement savers, President Bush is said to be planning to revive a proposal for two new types of extraordinarily generous savings accounts.... [T]here's no guarantee that they will be enacted this time or that the provisions won't change. But with Republicans in control in Washington, the prospects seem good if the President decides this will be the focus of his next tax-cut push." (The Philadelphia Inquirer)
401(k) Cost-shifting Bears Close Scrutiny
Excerpt: "A legal though costly practice that shifts certain 401(k) expenses from your employer to you bears scrutiny because it may be depleting your retirement funds." (Bloomberg News via Pittsburgh Tribune-Review)
U.S. Attorneys Seeking To Levy Against Qualified Plan Assets Under 1977 Debt Collection Act
Excerpt: "At the ALI-ABA Annual Fall Employee Benefits Law and Practice Update mentioned in a previous post, Jim Holland, Employee Plans Group Manager (Actuarial 1) for the IRS, discussed a new phenomena in the benefits world--how U.S. attorneys are seeking to levy against qualified plan assets pursuant to the Federal Debt Collection Procedures Act of 1977 ('FDCPA')." (Attorney Janell Greiner on BenefitsBlog.com)
Independent Fiduciaries Help Limit Pension Risks
Excerpt: "Independent fiduciaries are taking on more decisionmaking responsibilities for ERISA retirement plans to uphold the interests of plan participants and prevent potential conflicts of interest for in-house fiduciaries and trustees. Much of the activity of the independent fiduciaries is prompted by a wave of lawsuits by ERISA plan participants against employers over investment losses within the plans, notes Nell Hennessy, president of Fiduciary Counselors Inc...." (BenefitNews.com)
Participants Undermining Their Own Retirements
Excerpt: "Despite years of reasoning, wheedling and sermonizing from financial advisers and retirement planners, nearly half of all workers who change jobs cash out their 401(k) plan savings instead of leaving them to grow, either there or in some other form of tax-deferred account, according to a new study." (Washington Post)
Fighting 401(k) Phobia: Workers Need Expert Advice, But Employers Fear Offering It
Excerpt: "The late, great bull market made investing seem easy. But the downturn in 2000 demonstrated that do-it-yourself pension saving, like fixing cars or plumbing, requires knowledge and practice. Experts are now conceding that many workers can't, or won't, learn to make investment decisions on their own." (The Philadelphia Inquirer)
Opinion: Tell 401(k) Participants What To Do, They'll Be Happy
Excerpt: "A new era is dawning in 401(k)s -- the hand-holding era. Recognizing that as many as half the nation's workers are 'reluctant investors' who want little to do with managing their retirement accounts, the financial services industry is rushing into the $1.7 trillion 401(k) market with services that cater to workers who save too little, invest poorly and ignore their portfolios for years at a time." (Knight Ridder Tribune via Houston Chronicle)
Links to Items on Executive Comp, Benefits in General
Text of Restated List of 'Listed Transactions' Issued by IRS (PDF)
4 pages; to be published in the I.R. Bulletin on 12/8/2003. Excerpt: "Transactions that are the same as or substantially similar to transactions described in the list below have been determined by the Service to be tax avoidance transactions and are 'listed transactions' ... [T]axpayers may need to disclose their participation in these listed transactions ... and promoters (or other persons responsible for registering tax shelter transactions) may need to register these transactions ..." (Internal Revenue Service)
House OKs Simultaneous Receipt of Disability, Retirement Checks for Veterans
Excerpt: "The House voted yesterday to allow 250,000 veterans to collect both disability and retirement benefits at the same time, a compromise solution to a problem that has affected veterans since 1891." (Washington Times)
Text of IRS First Quarterly Update to 2003-2004 Priority Guidance Plan (PDF)
26 pages; 11/3/2003. Excerpt: "Retirement Benefits ... 1. Guidance on phased retirement arrangements. 2. Guidance on distribution rules for rollover contributions. 3. Guidance updating Rev. Rul. 81-100. 4. Proposed regulations under section 401(a)(4) for cash balance plans. 5. Regulations under section 401(a)(9) on required minimum distributions.... [more.]" (Internal Revenue Service)
Text of Minor Correction to Final Regs Under Code sec. 482 on Compensatory Stock Options (PDF)
2 pages. Excerpt: "On page 51173, column 3, in the preamble, under the paragraph heading 'Other Comments', paragraph 2, line 5, the language 'account for in the context of QCSAs is' is corrected to read 'account in the context of QCSAs is'." (Internal Revenue Service)
TIAA-CREF CEO to Get $9 Million in 2003
Excerpt: "Pension fund giant TIAA-CREF revealed its chief executive's total pay package for the first time Friday, saying Herbert M. Allison Jr. will earn at least $9 million this year." (AP via Washington Post)
Boston Globe Scrutinizes Benefits Provided for Part-Time Directors of Non-Profit Organizations
Excerpt: "A survey taken earlier this year by the Council on Foundations, a Washington trade group, found that about 15 percent of independent and family foundations pay health care benefits, retirement benefits, or both to board members. The council said the 'vast majority' of board members who take such benefits are part timers." (Boston Globe)
Older Workers Soon Might Be In Big Demand
Excerpt: "With the baby boomers approaching retirement, more will be leaving the nation's workforce than there are young people to replace them, creating worries of a critical worker shortage that could enhance the value of old-timers." (The Philadelphia Inquirer)
Newly Posted or Renewed Job Openings
Retirement Plan Specialist
for Diversified Investment Advisors
in MI
Pension Administrators
for Alliance Benefit Group of Illinois, Inc.
in IL
Employee Benefits Consultant
for Plante & Moran, PLLC
in MI
Compliance Analyst
for Transamerica-The Winning Organization
in CA
Plan Service Team Specialist
for ICMA Retirement Corporation
in DC
401(k) Pension Administrator
for Penservco, Inc.
in FL
Newly Posted Webcasts
(Post Yours!)
Financial Education is VITAL to Your Company - Learn Why
on November 19, 2003
presented by The EDSA Group, Inc.
Disease Management: Employer/Employee Benefits
on November 19, 2003
presented by International Foundation of Employee Benefit Plans
Newly Posted Events
(Post Yours!)
B3: Health Care and Insurance Plans - Design and Management
in Virginia on August 2, 2004
presented by WorldatWork
B3: Health Care and Insurance Plans - Design and Management
in Arizona on November 3, 2004
presented by WorldatWork
B3A: Health Care and Insurance Plans - Financial Management
in Illinois on November 18, 2004
presented by WorldatWork
Newly Posted Press Releases
(Post Yours!)
MK Recruiting Sees an Increase in Candidate Searches
(MK Recruiting)
Employers gain online reporting access for their 125 FSA and or HRA plans
(BusinessPlans, Inc. - myCafeteriaPlan.com)
Consumer Group Announces Contest for Health Care Cost-Savings Strategies
(Foundation for Taxpayer and Consumer Rights (FTCR))
Nearly One-Half of Americans Polled Believe Obese Workers Are Discriminated against on the Job; Employment Law Alliance Survey Reflects Attitudes toward the Working Overweight
(Employment Law Alliance)
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