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November 12, 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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Bush Administration Warns of Pension 'Gamble'
Excerpt: "The Bush administration Tuesday criticized a Senate proposal to give a pension funding break to airlines, automakers and other industries with underfunded plans, calling it a 'dangerous gamble.'" (Reuters via Forbes.com)
The Growing Mutual Fund Scandal: a Practical Guide for ERISA Fiduciaries (PDF)
Excerpt: "Amidst the avalanche of information regarding the growing mutual fund scandal, retirement plan fiduciaries are once again facing tough choices as to how the scandal affects a retirement plan's investment offerings. The following issues are relevant to ERISA retirement plans as well as any state pension fund or Section 403(b) or Section 457 plan." (Attorney Jeff Robertson of Bullivant Houser Bailey, P.C. via BenefitsLink)
Mutual Fund Scandal Has Plan Sponsors' Hands Tied
Excerpt: "Not knowing which plans are safe, plan sponsors may be flying blind in deciding whether to pull assets from certain funds. 'Who's to say they haven't gone from the frying pan to the fire?' ... wonders [Ed Ferrigno, vice president of the Profit Sharing/401(k) Council of America]. Further, pulling assets from a fund brings with it new concerns, he says." (BenefitNews.com)
Fund Boards' Divided Loyalties Strain Duties
Excerpt: "Shareholder advocates, regulators and lawmakers say that if fund directors knew of questionable trading practices, they let investors get scammed. And if they didn't know, they should have." (USA Today)
Mutual Fund Trustees: Guard Dogs Without Teeth?
Excerpt: "For some critics, the Strong case highlights a major flaw in the mutual fund system. How could accomplished trustees not know that their chairman was trading fund shares in a way the company had discouraged other investors from trying?" (New York Times; one-time registration required)
Cash Balance Restrictions Might Be Unconstitutional, Legal Study Finds
Press release with link to Prof. Epstein's opinion letter. Excerpt: "The cash balance amendments to the pending Treasury/Transportation Appropriations bills are 'substantively and constitutionally unsound,' writes distinguished law professor Richard A. Epstein in a legal opinion commissioned by the American Benefits Council." (American Benefits Council)
How Much Choice is Too Much? Contributions to 401(k) Retirement Plans (PDF)
21 pages. Excerpt: "Using data from nearly 800,000 employees, we tested the hypothesis that employee 401(k) participation rates fall as the number of fund options increase. Our results confirm that participation in 401(k) plans is lower in plans offering a handful of funds, as compared to plans offering ten or more options." (Pension Research Council Working Paper)
Opinion: New York Teachers Union Has It Both Ways When It Comes to Retirement Plans
Excerpt: "[R]ather than endorsing a low-cost provider and communicating the endorsement through union paid [media,] the union decided to endorse the high-cost provider and collect advertising revenue instead. I think this is a critical breach of trust on the part of NYSUT." (Joel L. Frank on 403bWise.com)
Failed Pensions: a Painful Lesson in Actuarial Assumptions
Excerpt: "[C]ompanies have great leeway to tweak certain crucial assumptions about the future-- when their workers will retire, how long they will live, and which way interest rates will move, among others." (New York Times; one-time registration required)
Milwaukee County Pension Board Members Could Face Pension Lawsuit
Excerpt: "The claim contends that past and present Pension Board members breached their fiduciary duties and legal obligations by failing to independently gauge the pension deal's cost, by giving preferential treatment and by using the pension fund-- instead of the Milwaukee County budget-- to pay the costs of managing the fund." (Milwaukee Journal-Sentinel)
Make Sure Employment Truly Severed Before Making Distributions
Excerpt: "While it may seem axiomatic that distributions from qualified plans may be made upon separation from service or severance from employment, the determination of whether an employee has actually terminated employment, sufficient to warrant a distribution can prove problematic, especially where employees transfer within a controlled group or are rehired, after receiving distributions, as full-time employees or as independent contractors." (CCH News & Information Library)
Employee Ownership Update for November 11, 2003
NCEO Executive Director Corey Rosen discusses three studies on whether broad-based equity compensation will survive expensing; a bill to allow S corporation ESOPs to use all distributions to pay for loans; and the likely implementation date for mandatory expensing of equity compensation. (National Center for Employee Ownership)
Retiring School Superintendent Gets $20,000 Salary Hike, to $180,000; Who'll Pay for Higher Pension?
Excerpt: "Such 'golden parachutes' for retiring school administrators have been criticized by some state lawmakers for draining the state's Teachers' Retirement System and putting an additional financial burden on taxpayers. The system is the state's only public pension plan. Taxpayers throughout the state pay into the system, yet pension rates are set by local public bodies." ([South Chicago Suburbs] StarNewspapers.com)
State Retirement Officials Fight Ohio Bill That Would Restrict Use of Non-Resident Inv. Managers (PDF)
Press release. Excerpt: "HB 227 would severely restrict the pool of investment advisors and securities traders eligible to manage State retirement system trust funds by requiring that 50% to 70% of such business arrangements be directed to companies located in Ohio." (National Association of State Retirement Administrators)
Saving and the Effectiveness of Financial Education (PDF)
45 pages. Excerpt: "In this paper, I examine the financial situation of older households. In addition, I examine whether employers' initiatives to reduce planning costs via retirement seminars have an effect on workers' saving.... [The] evidence suggests that retirement seminars can foster wealth accumulation and bolster financial security in retirement." (Pension Research Council Working Paper)
Implications of Information and Social Interactions for Retirement Saving Decisions (PDF)
28 pages. Excerpt: "[E]nrollment decisions can be influenced by peer decisions, as well as information provided by the employer. We also identify gaps in existing knowledge and propose new randomized experiments which could be conducted in the workplace, that would fill important gaps in our understanding of the determinants of retirement savings." (Pension Research Council Working Paper)
Employee Investment Decisions about Company Stock (PDF)
29 pages. Excerpt: "We study the relationship between past returns on a company's stock and the level of investment in that stock by participants in that firm's 401(k) plan.... [H]igh past returns on company stock do induce participants to allocate more of their NEW contributions to company stock. By contrast, high company stock have the opposite effect on REALLOCATIONS of portfolio holdings: high returns produce portfolio shifts away from company stock and into other forms of equity." (Pension Research Council Working Paper)
'Money Attitudes' and Retirement Plan Design: One Size Does Not Fit All (PDF)
36 pages. Excerpt: "Our analysis suggests that a significant group of workers lacks the psychological attitudes or interests needed to maximize retirement security. Our results have important implications for the degree of participant direction in retirement programs; the role of negative elections and default options in plans, and the design of programs to enhance worker financial literacy." (Pension Research Council Working Paper)
2003 Year-end Planning Checklist for Advisors, Employer/Plan Sponsors and Fiduciaries
Excerpt: "A December 2, 2003 deadline applies to the 'Safe Harbor' nonelective contribution 'supplemental notice' for those employers who elected the 'wait and see' nonelective contribution approach for calendar year 2003 plans." (Milberg Consulting LLC)
Behavioral Portfolios: Hope for Riches and Protection from Poverty (PDF)
Excerpt: "Behavioral portfolio theory is a useful description of the behavior of investors and a basis for good prescriptions. In particular, this theory posits that investors construct their portfolios as layered pyramids, where the bottom layers are designed for downside protection, while top layers are designed for upside potential." (Pension Research Council Working Paper)
Newly Posted or Renewed Job Openings
Employee Benefits Account Manager
for The Protector Group Insurance Agency, Inc.
in CT, MA, NH, RI
Employee Benefits Analyst - Marsh - Reno
for Marsh Risk & Insurance Services
in NV
Benefits Administrator
for Independent Benefit Services
in MD
Senior Retirement Plan Consultant
for Invesmart
in TX
Plan Administrator
for PenSys, Inc.
in NC, SC
Retirement Plan Consultant
for Invesmart
in ME
Defined Contribution Plans - New Business Account Manager
for Standard Insurance Company
in OR
Newly Posted Events
2005 401(k) Sales Summit
in California on March 17, 2005
presented by ASPA - the American Society of Pension Actuaries
ERISA's Fiduciary Requirements in Today's Investment Turmoil: The Enron Decision and Mutual Fund Misconduct
Nationwide on December 2, 2003
presented by Thompson Publishing Group, Inc.
Advanced Pension Conference
in Illinois on September 8, 2004
presented by SunGard Corbel
SunGard Corbel Client Conference
in Florida on June 7, 2004
presented by SunGard Corbel
Disease Management: Employer/Employee Benefits
Nationwide on November 19, 2003
presented by International Foundation of Employee Benefit Plans (IFEBP)
IRS/ASPA Mid-Atlantic Benefits Conference
in Pennsylvania on May 24, 2004
presented by ASPA & IRS
Financial Education is VITAL to Your Company - Learn Why
Nationwide on November 19, 2003
presented by EDSA Group, Inc.
Fundamentals of Employee Benefits Law
in California on February 26, 2004
presented by ALI-ABA (American Law Institute-American Bar Association)
Pension, Profit-Sharing, Welfare, and Other Compensation Plans
in California on March 17, 2004
presented by ALI-ABA (American Law Institute-American Bar Association)
Representing the Professional and Closely Held Business - Qualified Plans, Welfare Benefits, and Tax Planning
Nationwide on February 12, 2004
presented by ALI-ABA (American Law Institute-American Bar Association)
Newly Posted Press Releases
(Post Yours!)
Ceridian Launches Comprehensive Retirement Plan Services
(Ceridian)
PERFORMAX Launches Consumer-Driven Health Plan
(PERFORMAX)
Great-West Retirement Services Announces Strategic Relationship With Wells Fargo & Co.
(Great-West Retirement Services)
Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
(Post Yours!)
Jeanette C. Lucadano (R.J.L. Pension Services, Inc.)
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