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December 8, 2003 - 13,525 subscribers
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PENCHECKS, INC. MARKS 10,000th LOST PARTICIPANT IRA PenChecks, Inc. has established over 10,000 IRA accounts for missing participants. The PenChecks IRA, established just 2 years ago, is rapidly becoming the vehicle of choice to hold missing participant benefits. Penchecks, Inc. provides complete distribution services to qualified plans, including lump sum distributions, monthly annuity payments, election forms, checks, ACH transfers, tax withholding in all states, direct rollovers, and Forms 1099-R and 945.
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'Hard' 4 p.m. Close On Funds Draws Fire, But Impact on Most 401(k) Participants Not So Dire
Excerpt: "If you listen to the American Benefits Council talk about the Securities and Exchange Commission's proposal to terminate the late trading of mutual funds, the cure may be worse than the disease.... [But retirement] accounts are long-term investments that aren't supposed to be based on one-day market swings. If a financial adviser ever recommends stoking your retirement savings by frequently swapping mutual funds, run as fast and as far as you can." ([Pittsburgh] Post-Gazette)
Are Trading Overhaul Plans Bad Medicine?
Excerpt: "Vanguard founder Jack Bogle notes that if a trade is delayed by a day, history suggests it will be completed at a higher price about 51 percent of the time, and prices will move down about 49 percent of the time. What the SEC is implying with the rules proposal is that funds are for long-term investors, and big amounts of time diminish the potential impact of having a trade processed on a Tuesday instead of a Monday." (CBS Marketwatch via Nola.com)
Are Co-Workers Nibbling At Your 401(k)?
Excerpt: "Even if none of your money is in funds named in recent criminal and civil investigations, you could be losing long-term profits if other participants in your tax-deferred retirement plan trade frequently. These accounts are 'the ultimate playground for rapid trading,' says Conrad Ciccotello, a professor at Georgia State University's business school." (Christian Science Monitor)
Inside Putnam: Reform or Damage Control?
Excerpt: "In the six weeks since it was sued by regulators for securities fraud, the company has been attempting to cleanse the taint of its insider trading scandal. But behind the scenes, some current and former Putnam employees say, there appears to be a concerted effort to keep a lid on what went on at the firm during the reign of its former chief executive, Lawrence J. Lasser." (New York Times; one-time registration required)
Putnam Terminating Retirement Plan of N.Y. Boilermakers Union
Excerpt: "Across the country, customers are firing scandal-tarred Putnam Investments, as massive withdrawals led to a $32 billion, or almost 12%, drop in assets last month, Monday's Wall Street Journal reported. But Putnam has quietly done some firing of its own." (Dow Jones Business News via Hoover's Online)
Treasury Renews Campaign for Tax-Free Savings Accounts
Excerpt: "Facing continued skepticism in the White House and Congress, the Treasury Department is significantly retooling its proposal to make savings and investment virtually tax free, and it is enlisting business and conservative groups to help push the cause, congressional staffers and lobbyists say." (Washington Post)
White Paper: Lifetime & Retirement Savings Accounts-- Ending the Double Tax on Savings (PDF)
9 pages. Excerpt: "Simplified, tax-free savings accounts will encourage more participation & new savings.... Personal savings is also low due to complexity resulting from restrictive rules on eligibility, contributions amounts, and withdrawals.... Since being elected to office, President Bush has proposed and Congress has enacted a tax cut every year with the intention of strengthening the American economy and incrementally reforming the tax code." (American Shareholders Association)
Survey of Plans with "Flat Dollar QNEC" or "Flat Dollar Matching" Contribution Formula
Excerpt: "If you have a case where an employer is making a flat dollar contribution that will exceed 5% being allocated to any NHCE and who would be negatively impacted by the new proposed regulations, we would appreciate your sending the data for that case to us. We would then pass it on to the folks at Treasury. They are looking for proof, to back up the testimony, that employers using flat dollar contributions could be detrimentally impacted by the application of the proposed rules." (McKay Hochman Co., Inc.)
Online Advice Providers Try Harder To Engage 401(k) Investors
Excerpt: "In a survey of employees who had access to, but never used, Financial Engines' online advice platform through their 401(k) plan, 40% said they hadn't had time, and 38% said they didn't know it was available. Just 4% said they didn't want advice over the Internet, while 3% claimed they had no need for investment advice." (BenefitNews.com)
Shortage of Generation Xers Might Cause Employers to Rethink Early Retirement
Excerpt: "Early retirement policies and frequent cutbacks that target older workers help companies reduce costs. Ultimately, though, they could backfire when a big wave of baby boomer retirements creates a labor shortage." ([St. Paul, Minn.] Pioneer Press via St. Louis Post-Dispatch)
Italians March Over Public Pension Reform
Excerpt: "The government reform would prevent people retiring before they have made 40 years of contributions or reached a minimum age of 65 for men and 60 for women. At the moment, Italians can retire at 57 if they have paid into the system for 35 years." (CNN)
Japan Stares Into Abyss As Pension Cash Runs Low
Excerpt: "According to estimates, at least 3.3 million people in Japan, mainly students and self-employed, are not making basic pension contributions, about double the number who had dropped out of the system a decade ago.... Pensions-- one of many problems Japan has been quietly postponing for years-- have suddenly leapt towards the top of the political agenda." (Financial Times via Yahoo! News)
Pension Troubles = Savings & Loan Collapse? Some Say Bank on It
Excerpt: "The collapse of the savings and loan industry in the late 1980's is being evoked more and more to describe the possible dangers ahead for ailing pension funds. If even the sharp-eyed Alan Greenspan can fail to spot an S.&L. crisis in the making, what can be said about the way Washington is handling the $1.6 trillion in retirement money?" (New York Times; one-time registration required)
GM Might End Pension Deficit
Excerpt: "General Motors, whose $19.3 billion pension deficit was the biggest in the United States last year, may eliminate the shortfall by the end of the year because of rising stock markets, higher contributions and an asset sale, a company spokeswoman said." (Washington Post)
A Lost Retirement Dream for Boomers?
Excerpt: "There has certainly been no shortage of alarms sounded recently about the financial status of future American retirees, especially the giant baby boom generation, which begins turning 65 in 2011. But a big new study released last week has now put some numbers on the shortfall -- and they are grim." (Washington Post)
CFO Association, Many Employers Urge Congress to Address Pension Funding Issues Before Adjourning for 2003
4 page letter dated 12/4/03. (Financial Executives Institute)
A Sneak Peek at the 2003 Form 5500
Excerpt: "EFAST already is busy processing filings received on October 16, 2003! This is far earlier than ever before and is evidence that many of the processing difficulties have been overcome. Those of us who mailed filings on October 15 without audit reports should expect to hear from DOL very soon about this deficiency!" (Form5500Help.com)
Delayed Delivery Fatal to QDRO
12/8/03. Excerpt: "A signed qualified domestic relations order was too little, too late, after a plan participant had already remarried and retired, according to a ruling out of a federal district court in Western Kentucky. The effect of the ruling is that there was no longer a plan interest against which the former spouse of the participant could enforce her ruling." (National Underwriter's TaxFacts fx)
Eligible Domestic Relations Orders in Michigan (PDF)
4 pages. Excerpt: "The purpose of an EDRO is to require a Michigan public employee retirement system (MPERS) to pay to a participant and alternate payee shares of certain benefits that have been or will be earned by the participant in the retirement system. In other words, an EDRO is a court order defining the terms under which a MPERS must pay a portion of the benefits earned by one of its participants to another person, who is known as an alternate payee." (Gabriel, Roeder, Smith & Company)
Go Directly to Jail, and Collect Your State Pension
Excerpt: "Legally, there is nothing untoward about paying pensions to public employees who committed crimes while on the clock. Though New York State's Retirement and Social Security Law does not endorse the practice, it also does not forbid it. After all, many legal experts and labor lawyers point out, pensions are not handouts but deferred salary ..." (New York Times; one-time registration required)
Controversy Brews in New York State Over Pensions for Public Employees Convicted of Crimes
Excerpt: "Under current state law, only transit workers convicted of stealing agency property or on-duty drunkenness can lose their pensions." (AP via Newsday)
Overview: IRS Amplifies Relief for Defined Contribution Plans of Professional Employer Organizations
Excerpt: "Rev. Proc. 2003-86 now responds to common inquiries by providing further guidance on transitional issues. A plan sponsor may elect to rely on the transitional rules set forth in this guidance only if it adopts conforming plan amendments no later than the last day of the plan's EGTRRA remedial amendment period. The new transitional rules can be summarized as follows: ..." (Employee Benefits Institute of America (EBIA))
Pension Benefits Slashed by Teamsters Central States Pension Fund
Excerpt: "Retirees are not affected by the federally administered pension fund's reduction of future benefit payouts, but active workers were told recently to expect cuts in their anticipated benefits when they retire. Fund officials said the reductions were court-mandated to meet the fund's regulatory obligations, but the fund is not in danger of insolvency." ([St. Paul Minn.] Pioneer Press)
Newly Posted Events
Medicare and Prescription Drugs: What's Next?
Nationwide on December 5, 2003
presented by Alliance for Health Reform
Health Care Cost Surveys for 2004
Nationwide on December 11, 2003
presented by IFEBP (International Foundation of Employee Benefit Plans)
Employee Benefits Update for 2004
Nationwide on February 11, 2004
presented by American Bar Association (ABA)
New HSAs in Medicare Act Boost CDHC for All Employers -- A 90-Minute Interactive Audio Conference
Nationwide on December 18, 2003
presented by Thompson Publishing Group
Mutual Fund Trading Scandal - What's a Plan Sponsor to Do?
Nationwide on December 1, 2003
presented by PLANSPONSOR
Newly Posted Press Releases
Businesses Using IRS.gov to Get Employer Identification Numbers
(Internal Revenue Service (IRS))
Washington Business Group on Health Changes Name to National Business Group on Health
(National Business Group on Health)
Newly Posted or Renewed Job Openings
Retirement Plan Coordinator
for Independent Insurance Agents and Brokers of America
in DC, MD, VA
401(k)/Pension Administrator
for Contemporary Pensions, Inc.
in CA
Account Manager
for Silicon Valley Employee Benefits Brokerage
in CA
Research and Technical Advisor
for Atlanta-Based Company
in GA
Qualified Retirement Plan Administration Specialist
for RSM McGladrey, Inc.
in MN
Senior Actuarial Analyst
for RSM McGladrey, Inc.
in IL
Consulting Actuary
for RSM McGladrey, Inc.
in IL
Manager, Retirement Plan Administration
for APB Financial Group, Ltd.
in PA
Actuary
for Blomquist and Company
in IL
Defined Benefit Implementation Specialists
for Constantin Control Associates
in IL, NJ, NY, PA
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