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February 3, 2003 - 12,861 subscribers
Today's sponsor: ASPA
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ASPA. Actuaries, Consultants, Administrators, and other benefits professionals. Do you actively sell, market, support or influence the sale of 401(k) plans? Then plan to attend ASPA's 401(k) Sales Summit, February 27 - March 1, 2003, in Scottsdale, Arizona. This is a unique opportunity to learn how to sell more effectively, maximize your personal impact, and gather practical advice from the best in the business. You can also learn more about ASPA's QKA training program -- the industry's only certification program devoted exclusively to 401(k) plans. Visit http://www.asppa.org for more information.
(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay your way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)
Budget Documents Describe Administration's Retirement Plan Simplification Proposals
Excerpt: "Rules covering employer-based savings accounts are among the lengthiest and most complicated sections of the tax code and associated regulations. This complexity imposes substantial costs on employers, participants, and the government, and likely has inhibited the adoption of retirement plans by employers, especially small employers." (Office of Management and Budget)
Administration: Retirement Savings Plan is Empowering
Excerpt: "Though industry groups call the plan bold and innovative, retiree advocates are more critical because ... Expanded contribution limits would primarily help high-income workers ... Eliminating deductible IRAs could hurt low- and moderate-income workers, who favor them over Roth IRAs, which don't have an immediate tax benefit ... Generous tax-deferred savings options could discourage small businesses from offering 401(k) plans." (USA Today)
Bush Eyes New Tax-Free Savings Accounts
Excerpt: "The proposal contained in President Bush's 2004 budget is aimed at encouraging all Americans to save more, the Treasury Department said. But critics contend that poor and middle-income people struggling to pay bills and make ends meet probably wouldn't be in a position to put more money into such savings accounts, even though the contribution limits would be higher." (AP via Lycos News)
Bush Proposes Creation of New Type of Employer-Sponsored Retirement Plan, New IRAs
Excerpt: "The first [proposal] creates two new consolidated savings accounts: Lifetime Savings Accounts (LSAs) and Retirement Savings Accounts, (RSAs) ... The second proposal creates Employer Retirement Savings Accounts (ERSAs) to promote and vastly simplify employer sponsored retirement plans by consolidating 401(k), SIMPLE 401(k), 403(b), and 457 employer-based defined contribution accounts into a single type of plan that can be more easily established by any employer." (U.S. Treasury Department)
New Tax-Free Savings Plans Proposed by Bush Administration
Excerpt: "In effect, the proposal-- combined with President Bush's plan to slash taxation on investment dividends-- would make capital gains, interest and dividends income tax-free for most Americans." (Washington Post)
Commentary: In Place of IRAs, 401(k)s-- LSAs, RSAs and ERSAs?
Excerpt: "Worried you won't have enough income in retirement? Save your money tax-free. Haven't got enough income to pay your kid's college expenses? Save tax-free. Haven't got health insurance, and worry about how to pay day-to-day medical costs? Save tax-free. Notice a pattern here?" (Albert Crenshaw in the Washington Post)
Mutual Funds Trade Association Hails Bush Retirement Plan Proposal as 'True Milestone'
Press release. Excerpt: "The President has combined bold innovations with needed simplifications. The plan is not just a significant advance but also a true milestone: if Congress enacts it, long-term savings and investment opportunities will truly be within the reach of every working American." (Investment Company Institute)
Brokerage Accounts in 401(k) Plans: Who's Using Them?
Excerpt: "Until recently, brokerage accounts in retirement plans have been limited to small companies. By last year, 11 percent of large companies-- those with 5,000 or more employees-- included brokerage accounts in their 401(k)'s, according to a survey by the council. That compares with 5 percent in 1997." (New York Times; one-time registration required)
Actuaries Ask IRS for Funding Relief for Multiemployer Plans (PDF)
Excerpt: "We are asking you to promulgate guidance on the alternative funding relief provisions in the Internal Revenue Code and regulations. Specifically, many of these provisions require individual plans to apply for approval of funding method changes or offer few regulations providing guidance on their application." (Society of Actuaries)
Society of Actuaries Says PBGC is Not In 'Crisis' (PDF)
Excerpt: "Ron Gebhardtsbauer, senior pension fellow for the American Academy of Actuaries, said [on January 30, 2003] that the federal agency that insures private pension plans is 'not in crisis, but is facing the 'perfect storm' of declines in the stock market, low interest rates and an increase in large bankruptcies.' He was commenting on the annual report of the Pension Benefit Guaranty Corporation (PBGC) ...'" (Society of Actuaries)
Does PBGC Rate Structure Need Overhaul?
Excerpt: "With so many bankruptcies, however, it's fair to ask: What will PBGC do if the economy keeps dragging? Perhaps it's time to raise the $19 rate ..." (The Christian Science Monitor)
Former Chief of Federal Thrift Savings Plan Sues Board Members, Alleges Breaches of Fiduciary Duty
Excerpt: "At issue is the TSP board's litigation with American Management Systems, the Fairfax, Va.-based company hired in 1997 to modernize the TSP computer system [in order to implement daily valuation for the TSP's participants]." (GovExec.com)
Over 200 Members of Congress Urge President Bush to Withdraw Proposed Cash Balance Regs
Press release. Excerpt: "Reflecting a deep and growing concern about Americans' retirement security, more than 200 bipartisan members of the House and Senate wrote to President Bush Thursday calling on him to withdraw proposed regulations that, if allowed to go into effect, would permit companies to cut long-time employees' pensions by as much as 50 percent." (Democratic Staff, U.S. House Education & the Workforce Committee)
Longtime Employees Eye Treasury's New Cash Balance Conversion Rules
Excerpt: "More than 300 corporations are waiting in the wings to make the pension switch, according to IRS spokesman Bruce Friedland. And that's what worries people like Durbin and Harkin - who elicited Snow's assurances Thursday that he'd be fair to older workers in reviewing the rule." (St. Louis Post-Dispatch)
Eighth Circuit Affirms Dismissal of Breach of Fiduciary Duty Claims Against ESOP Trustees
The Eighth Circuit U.S. Court of Appeals has affirmed the dismissal of plaintiffs' claims that certain corporate officers breached their fiduciary duties under ERISA in connection with their administration of the company's employee stock ownership plan. The case is Eckelkamp, et al. v. Beste, et al. (No. 02-1824). (SpencerNet)
Analysis: IRS OKs Novel Approach to Securing Divorce Obligations
February 3, 2003 article. Excerpt: "The use of a husband's qualified retirement plan account to secure his obligations in a divorce was approved in a recent private ruling from the IRS. The Service determined that under the facts of the ruling request, a prohibited alienation would not take place, because the assignment was incorporated into one of two QDROs." (National Underwriter)
Employee Ownership Update for January 31, 2003
A new survey of finance professors at 30 leading business schools shows they tend to think that--contrary to popular expectations--expensing employee stock options will have little effect on a company's share price. In other news, retirement plan reform is afoot again in Congress, but it will have little effect on ESOPs. Finally a new bill would permanently exempt gains from exercises of incentive stock options and employee stock purchase plan options from payroll taxes. (National Center for Employee Ownership)
Connecticut State Auditors Want Change in State Policy on Rehiring Retirees in Pay Status
Excerpt: "[I]t is common practice for state agencies to rehire retirees as consultants or for special projects, or for retirees to refill their original job until a replacement is found." (TheDay.com)
Retirement in Canada and the United States: No Mirror Image
Excerpt: "In many organisations based outside of North America, there is a commonly held perception that one pension policy will suffice for the whole continent. As far as the United States and Canada are concerned, however, this is far from being the truth." (Watson Wyatt's Multinational)
French Protest Planned Changes to Pension System
Excerpt: "Like several European countries, France is facing a looming pension crisis because of its aging population.... 78 percent of those questioned ... said the threshold before a worker could earn a full pension should be 40 years for everyone. Under the current system, public sector employees need only work for 37.5 years before earning a full pension, compared with 40 years in the private sector." (New York Times; one-time registration required)
Social Security Investment Accounts Off Congressional Agenda
Excerpt: "This year's congressional agenda doesn't include taking action on President Bush's plan to create personal savings accounts as part of Social Security." (The Washington Times)
Links to Items on Executive Comp, Benefits in General
PWBA Formally Changes Name to Employee Benefits Security Administration (EBSA)
Excerpt: "Changing the agency's name to the Employee Benefits Security Administration (EBSA) will more clearly communicate the agency's mission of protecting private sector employee benefits.... This order is effective upon the date of publication in the Federal Register." (U.S. Department of Labor, Office of the Secretary)
Dealing With Aging Executives Who Just Won't Quit
Excerpt: "As retirement begins to look less appealing and often less feasible, many older but still vibrant Americans want to hang on to their jobs longer. Corporations, on the other hand, usually encourage workers to retire at 65 or younger because they generally cost more in wages and health benefits." (New York Times; one-time registration required)
Stock Options Becoming Pay Plan Dinosaurs?
Excerpt: "Executive compensation consultants say corporate boards are eager to avoid further revelations of exorbitant pay packages. But the consultants also say board members continue to embrace the cult of the indispensable chief executive and fear that any big cutbacks could reduce their chances of keeping or landing a star." (Washington Post)
Fiduciary Liability Insurance: What Limit, What Price and What's Next? (PDF)
4 pages. Excerpt: "What limit of liability should a plan purchase? What premiums should a plan pay? What premium increase should a plan expect at its next renewal? This Newsletter provides information trustees can use to formulate answers to these and other questions. The source of this information is Segal's proprietary and confidential fiduciary liability database, which Segal believes is the most comprehensive database of its kind." (The Segal Company)
New Fight Over Options Accounting
Excerpt: "FASB Chairman Robert H. Herz has made it clear that he agrees with the International Accounting Standards Board that the value of stock-based compensation should be subtracted from a company's bottom line. The FASB has said it will decide by the end of March whether to again take up the options issue." (Washington Post)
Accounting for Pensions and Other Postretirement Benefits 2002
Excerpt: "In this report, Watson Wyatt Worldwide analyzes disclosures under Financial Accounting Standards Board (FASB) Statements 87 and 106 (FAS 87 and FAS 106), as amended by FASB Statement 132 (FAS 132). The disclosures are from the most recent annual reports or financial statements of the nation's largest industrial and service companies." (Watson Wyatt)
Newly Posted or Renewed Job Openings
Pension Administrator
for EBC, Inc.
in CA
Group Health Insurance Sales/Account Management
for Great West Life & Annuity
in CA
Administrator, Daily Valuation
for Growing Sacramento, Ca pension administration firm
in CA
Pension Manager
for Grice, Lund & Tarkington LLP
in CA
Qualified Plan Supervisor
for Lane Gorman Trubitt, L.L.P.
in TX
ERISA Paralegal/Pension Analyst
for Aris Corporation
in PA
Pension Plan Administrator
for The Angell Pension Group, Inc.
in RI
Director Benefits Services & Administration
for Peabody Energy
in MO
Group Benefits Product Manager
for National Rural Electric Cooperative Assoc.
in VA
Newly Posted Conferences
(Post Yours!)
Time and Recordkeeping Requirements in Wage and Hour Law
in ALL STATES
February 10, 2003
Thompson Publishing Group
Troubleshooting Common Errors in Flexible Spending Accounts
in ALL STATES
February 19, 2003
Thompson Publishing Group
2003 Update on Pension Activity
in ALL STATES
February 27, 2003
Thompson Publishing Group
Newly Posted Press Releases
(Post Yours!)
President's Budget Proposes Bold Tax-Free Savings and Retirement Security Opportunities for All Americans
(U.S. Treasury Department and Internal Revenue Service)
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