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February 19, 2003 - 13,067 subscribers
Today's sponsor: ASPA
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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Milliman USA Creates Online Plan Design Tutor
Excerpt: "Welcome to Plan Design Tutor created by Milliman USA, Inc. Plan Design Tutor is an interactive tool that helps you find a retirement plan that is right for you and your employees." (Milliman USA)
Ex-Pension Worker Is Charged With Identity Theft
Excerpt: "A former worker at Indiana's public pension fund has been charged with stealing the identity of a state employee. Shaunna L. Stone, 34, worked under convicted identity thief Walter Kevin Scott, who resigned from his job in August after his criminal past was revealed to state officials. At the fund, Stone had access to the personal information of more than 250,000 public employees and retirees." (The Indianapolis Star)
Former Employees Reach Settlement in ESOP Lawsuit
Excerpt: "Former employees who invested in United Companies Financial Corp.'s stock ownership plan have reached a $10 million settlement with the failed company's owners. The settlement comes three years after the workers sued the company, claiming owners continued to invest employee money in United after the stock began to collapse." (The [Baton Rouge, La.] Advocate)
The Changing Character and Dramatic Growth of Retirement Saving In the United States
This Fall 2002 publication describes certain recent economic research. Excerpt: "A new NBER study ... analyzes contributions made over 25 years to traditional pension plans and to retirement saving programs, such as IRAs and 401(k) plans. The study finds a major transition ... from traditional pensions toward individually-controlled retirement accounts, and a dramatic increase in retirement saving overall." (National Bureau of Economic Research)
How to Increase 401(k) Saving?
This Fall 2002 publication describes certain recent economic research. Excerpt: "In their decisions about 401(k) saving, employees often 'follow the path of least resistance.' This is the conclusion of ... a new NBER study entitled 'Defined Contribution Pensions: Plan Rules, Participant Decisions, and the Path of Least Resistance' ... Employees generally do whatever takes the least effort ..." (National Bureau of Economic Research)
Second Edition of the '403(b) Wise Guide' Becomes Available
Excerpt: "Featuring: expert 403(b) tips and advice; personal 403(b) stories; advice on building a Wise portfolio; details on EGTRRA, the new tax law, and how it affects the 403(b); updated for 2003." (403bWise.com)
Pension Benefits Tax California Cities' Budgets
Excerpt: "California cities and counties are bracing themselves for the fiscal equivalent of a perfect storm-- a combination of the erosion of millions of dollars from their budgets and a deluge of increases in payments to their police officers' and firefighters' pensions." (The Orange County Register via MSNBC.com)
Opinion: Padded Public Pensions Are Ticking Time Bomb in California
Excerpt: "The gold standard is the pension program affecting 'safety' workers, which allows California Highway Patrol officers, forest firefighters and those who guard prison inmates to claim pensions equal to 90 percent of their salaries after 30 years' service, and gives high benefits to their widows and widowers." (The Sacramento Bee)
Center for Retirement Research Announces New Grant Recipients
Press release. Excerpt: "[T]he Center for Retirement Research announced the new recipients of the Steven H. Sandell Grants for Junior Scholars in Retirement Research. Awardees will each receive a $25,000 grant to pursue research on important retirement policy issues. The awardees are listed below, along with their affiliation, the title of their proposal and a link to the proposal abstract." (Center for Retirement Research at Boston College)
Overview: Proposed Cash Balance Plan Guidance Is Employer-Friendly
Excerpt: "In its proposed regulations, the Treasury Department defines (for the first time) the term 'rate of benefit accrual' for purposes of the age discrimination rules.... While the proposed regulations generally confirm that many of the cash balance conversions contemplated by employers are permissible under the ADEA, there are several important issues that are not addressed by the proposed regulations, such as ..." (Ballard Spahr Andrews & Ingersoll, LLP)
Survey: Nonprofits Outpace Businesses in Pension Offerings
Excerpt: "Employees at nonprofits are more likely to have pensions than their for-profit counterparts. And, there's a chance that the nonprofit offers a choice in retirement savings plans. Those are among the results of a NonProfit Times/Flynn Research survey of 239 nonprofits across the country." (The NonProfit Times)
Legislation In Illinois Would Cap Statehouse Pensions
Excerpt: "Support may be growing for a plan to take the air out of the golden parachutes that Illinois lawmakers enjoy. State Sen. Bill Brady, R-Bloomington, is drafting legislation. And a Democratic lawmaker from Schuyler County has introduced a measure that would bar legislators from collecting pensions that are larger than their final salaries." (The Pantagraph)
Catch-Up Contributions to Federal Thrift Savings Plan to Start in July
Excerpt: "The change will allow employees over the age of 50 to contribute up to $2,000 more per year than the standard limit on TSP contributions. The standard limit per pay period is 13 percent of pay for Federal Employees Retirement System employees and 8 percent for Civil Service Retirement System employees ..." (GovExec.com)
Out of the Firehouse, Into a Richer Retirement
Excerpt: "With at least 20 years of civil service to their credit, the firefighters were eligible to leave with a full pension of half their salary. And since that pension is based on a person's last 12 months of pay, anyone who put in a lot of extra hours raking through debris at ground zero ... would get a fatter pension by retiring within a period that includes that overtime. For some it was an extra $9,000 a year; for others, $15,000 or more." (New York Times; one-time registration required)
Bush Savings Proposal is 'Investors' Dream Act of 2003'
Excerpt: "Too good to be true? Probably. Congressional support for the President's tax proposals is weak, and no doubt they will change much between now and enactment. Still, even if the proposals are scaled back considerably, they will dramatically reshape how we save and invest." (BusinessWeek Online)
Webcast: Subcommittee on Employer-Employee Relations Hearing on the Pension Security Act
Available for viewing online until approximately mid-April 2003. (U.S. House of Representatives, Committee on Education and the Workforce, Subcommittee on Employer-Employee Relations)
Accounting Board to Address Issue of Pension Reporting
Excerpt: "The board that sets corporate accounting rules may be ready to pick a fight that it once would have lost. The Financial Accounting Standards Board is soliciting discussions about pension accounting, a complicated and controversial issue with huge implications: Critics say some companies manipulate the current rules to boost profits and hide problems." (The Dallas Morning News via NewsAlert.com)
Calculating Benefits For Employees Who Work After Normal Retirement Age
Excerpt: "The Treasury Department recently issued proposed regulations regarding the manner in which additional benefit accruals for employees who continue to work after normal retirement age may be offset by in-service pension payments and/or actuarial increases." (Ballard Spahr Andrews & Ingersoll, LLP)
The Pensions Landscape in the United Kingdom
Excerpt: "The Pensions Policy Institute published The Pensions Landscape on 14 February 2003. The report is co-authored by Alison O'Connell, Director and Chris Curry, Research Director and provides a full fact-based analysis of the prospects for pension provision in the UK." (Pensions Policy Institute)
Nonprofit Organization Publishes Description of Pensions in the United Kingdom
Excerpt: "The PPI has published a description of the UK's pensions system intended for people wanting to learn about UK pensions policy." (Pensions Policy Institute)
Links to Items on Executive Comp, Benefits in General
Another Question is Answered in the Stock Options, Restricted Stock and Other Long-Term Employment Incentives Q&A Column
Question: I was granted 3,750 non-incentive stock options at hire for $6.50/share. The stock is now trading at $10/share. According to my agreement I am able to exercise 1/4 of these options in 3/03, then 1/4 in 9/03, then 1/4 in 9/04 and 1/4 in 9/05. My question is, how do I exercise the first quarter in March, and can this be done as a cashless transaction? Also, will I be paying any tax on this for tax year 2003? (BenefitsLink.com)
Full Text: Joint Committee on Taxation Report on Enron Tax and Compensation Issues (PDF)
745 pages (!) Excerpt: "The specific qualified plan issues addressed ... are: (1) the phase out of the ESOP offset under the Enron Retirement Plan; (2) the conversion of the Enron Retirement Plan into the Enron Cash Balance Plan; (3) investment of the ESOP in Enron stock; (4) a change in recordkeeper under the Enron Savings Plan shortly before the bankruptcy that resulted in a blackout period during which investment changes could not be made, including selling Enron stock ..." (Joint Committee on Taxation, U.S. Congress)
Materials Available from Recent Conference: Employee Benefits Update for 2003
Conference was held on February 11, 2003; details at http://www.abanet.org/cle/programs/s03ebu1.pdf - Excerpt: "Top officials from the Internal Revenue Service, the Treasury Department, the Labor Department, the Pension Benefit Guaranty Corporation, the Department of Health and Human Services, and the Equal Employment Opportunity Commission, together with experienced practitioners discuss what these new developments mean to employers, plan administrators, and participants." (Joint Committee on Employee Benefits, American Bar Association)
Commentary: At Enron, the Compensation Kept Paying
Excerpt: "Not only did the company manage to pay its executives -- some 200 of them-- $1.4 billion in 2000, but it used those payments to wipe out nearly all of its tax liabilities that year. And it did so by using perfectly ordinary and widely used devices, the kind employed by almost every large corporation." (Albert Crenshaw in the Washington Post)
Mercer Submits Comments to FASB On Stock Option Expensing
Excerpt: "We support a safe harbor approach that would treat as noncompensatory all broad-based, tax-favored equity plans, such as Section 423 plans in the US and Save-As-You-Earn plans in the UK.... We support a standard that would permit more flexibility in determining valuation approaches. Specifically, companies should be permitted to select the type of option pricing model that can most reliably measure the value of their employee stock options." (Mercer Human Resource Consulting)
Ernst & Young Turnaround on Stock Options Irritates Technology Firms
Excerpt: "Some of Silicon Valley's largest technology companies are disappointed that accounting firm Ernst & Young flip-flopped its opinion on expensing employee stock options, but none appears upset enough to start looking for a new accounting firm." (SmartPros)
Option Math: Why So Many to So Few?
Excerpt: "Among corporate executives, there are wealth spreaders and wealth hoarders. The spreaders disperse millions of stock options among their employees, not just to top executives, allowing many to benefit when the company's stock rises. Spreaders remain very much in the minority ..." (New York Times; one-time registration required)
Newly Posted or Renewed Job Openings
Implementation Specialist
for The Paragon Consulting Group
in VA
Pension/401(k) Plan Administrator
for First Actuarial Corporation
in CA
Researcher Needed: Regulation and Supervision of Conflict of Interest Concerns in Pension Funds
for Organisation for Economic Co-operation and Development (OECD)
in ALL STATES
Trust/EB Administrator
for Glenview State Bank
in IL, IN, WI
Defined Benefit/Defined Contribution Account Manager
for National Retirement Services, Inc.
in NC
Newly Posted Conferences
(Post Yours!)
Introduction to ESOPs
in TN
April 9, 2003
National Center for Employee Ownership
Introduction to ESOPs
in WI
April 8, 2003
National Center for Employee Ownership
Introduction to ESOPs
in CA
May 6, 2003
National Center for Employee Ownership
Introduction to ESOPs
in CA
May 13, 2003
National Center for Employee Ownership
Putting Your Retirement House in Order: How to Maximize Value and Reduce Risks
in ALL STATES
February 26, 2003
Hewitt Associates
Introduction to ESOPs
in CA
May 15, 2003
National Center for Employee Ownership
Introduction to ESOPs
in OR
May 20, 2003
National Center for Employee Ownership
Introduction to ESOPs
in WA
May 21, 2003
National Center for Employee Ownership
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