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March 10, 2003 - 13,085 subscribers
Today's sponsor: Actuarial Systems Corporation
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ASC - QUALITY SOFTWARE FOR THE PENSION INDUSTRY FOR OVER 20 YEARS ASC provides complete automation for the pension office, including: DC/401(k) and DB administration and valuation systems, sophisticated Compliance Testing, DV Direct Daily Valuation, Advanced Information Manager Database (AIM), and Single-Step Processing. All ASC Technical Support Members were experienced Pension Administrators or Actuaries before joining ASC -- and most have been with ASC for over 10 years.
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
House Committee Approves Bipartisan Pension Security Act
Press release. Excerpt: "The House Education & the Workforce Committee [on Mar. 6, 2003] gave bipartisan approval to the Pension Security Act (H.R. 1000), the comprehensive pension protection bill backed by President Bush and passed by the House last year that would give millions of Americans new tools to help them better manage and expand their retirement savings. The Committee passed the bill with bipartisan support by a vote of 29-19." (U.S. House of Representatives, Committee on Education and the Workforce)
Text of H.R. 1000 as Reported Out of Committee
Excerpt: "Title: To amend title I of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 to provide additional protections to participants and beneficiaries in individual account plans from excessive investment in employer securities and to promote the provision of retirement investment advice to workers managing their retirement income assets." (U.S. House of Representatives, Committee on Education and the Workforce)
401(k) Sponsors Turn to Investment Companies for Help in Advising Participants
Excerpt: "Much like offering a 401(k) was a lure a decade ago, providing advice is now a way for companies to attract, satisfy and retain good employees.... While few knock the concept of advice, some skeptics wonder whether employees will use the services offered.... Last year, after Enron's collapse ... Congress hoped to entice even more employers to offer advice by relaxing the liability rules. The proposals went nowhere, but Republican leaders promise to try again this year." (The [Minneapolis] Star Tribune)
Employees Invest In Company Stock At Their Own Risk
Excerpt: "What particularly angered US Airways stockholders such as [401(k) plan participant Debby Weiss] was that once the airline emerges out bankruptcy, their stock would be canceled and new players would own the airline.... [U.S. Bankruptcy Judge Stephen] Mitchell acknowledged that 'the absolute priority rule was formulated in an age well before the phenomenon of employee retirement savings plans funded with company stock.'" (The [Pittsburgh] Post-Gazette)
PBGC Moves to Assume Responsibility for WHX Corp. Pension Plan
Press release. Excerpt: "The WHX Pension Plan is 68 percent funded, with roughly $300 million in assets to cover more than $443 million in benefit liabilities. Of the $143 million in total underfunding, the PBGC estimates that it will be liable for about $65 million. However, the federal pension insurance program is at risk of incurring an additional loss of as much as $378 million for unfunded 'shutdown benefits' if the pension plan is not terminated now." (Pension Benefit Guaranty Corporation)
PBGC Takes Over Pension Plan of Wheeling-Pittsburgh Steel Corp.
Excerpt: "The federal government on Friday took over WHX Corp.'s pension plan, which covers 9,400 current or retired workers at two subsidiaries, including bankrupt Wheeling-Pittsburgh Steel Corp., the nation's eighth biggest integrated steel producer.... Wheeling-Pitt president James G. Bradley said Friday that the federal government acted too hastily and did not notify the company of its plans." (AP via the [Minneapolis] Star Tribune)
SEC Filings Show How Companies Are Reacting to Drops in Pension Fund Values
Excerpt: "Some companies opt to address the growing gap by propping up their funds now with stock and cash, and taking a large charge against their earnings. But it's the other companies that may cause investor concern: They, in effect, ignore the deficit and bet their pension funds' returns will rebound sharply." (USA Today via Yahoo! News)
UAL Workers Lose Majority Rights as Stake Declines
Excerpt: "The experiment in majority employee ownership at United Airlines came to an end after labor's stake in the beleaguered carrier fell below 20%, triggering governance changes that ended workers' majority voting power and super-majority rights on the company's board, Monday's Wall Street Journal reported." (Dow Jones Business News via Yahoo! News)
Advocacy Group Suggests Text of Comment Letter on Proposed Cash Balance/Age Discrimination Regs
Excerpt: "Large corporations have schemed and lobbied for years for a way to confiscate employee's [sic] pensions.... Congressman Sanders ... has a bill requiring corporations to let each worker choose whether to keep the old plan or go with the cash-balance plan. If such legislation is passed, over ninety percent of the cash balance controversy would be resolved, overnight." (Duke Energy Employee Advocate)
What If Legislators Had to Shift to a Cash Balance Plan? Almost All Lose Out
Excerpt: "Virtually every senator and representative would lose out, the study found-- in some cases by hundreds of thousands of dollars-- if their current Congressional pensions were switched to a controversial variant called a cash-balance pension." (New York Times; one-time registration required)
Minnesota Accounting Firm Sold to ESOP
Excerpt: "Under last week's sale, 100 percent of the ownership shares in the firm will be redistributed among 85 employees. In exchange, the former owners plan to continue working at the firm and will be paid an undisclosed sum over the next 15 years for the shares they sold." (The [Minneapolis] Star Tribune)
Massachusetts Governor Plans to Phase Out Defined Benefit Retirement Plan for State Employees
Excerpt: "The existing system, which bases pension checks on years of service and wages, would be replaced by a 401(k)-style plan, in which retirement benefits accumulate mostly from workers' own contributions." (The Boston Globe)
Massachusetts Teachers Balk at Proposal to Replace DB Plan with DC Plan
Excerpt: "Ralph White, president of the Massachusetts Retired State, County and Municipal Employees Association ... said the current pension plan for state workers, which guarantees a certain level of benefits during retirement, is one of the main attractions for people who come to work for the state." (The Boston Globe)
Opinion: Bush Plan Would Radically Shift Nation's Tax Burden
Excerpt: "The Bush administration argues that these vehicles would encourage vast new levels of saving and investment. In reality, however, the Bush plan, by encouraging such lavish do-it-yourself savings plans, could sound the death knell to employer-sponsored plans, which are the cornerstone of today's system." (Meade Emory in the Puget Sound Business Journal via bizjournals.com; one-time registration required)
EBRI Projects Impact on Retirement Plans of Proposal to End 'Double Taxation' of Dividends (PDF)
5 pages. Excerpt: "It is likely to have only a limited impact in any direction on most current retirement and savings plan participants. Once the Roth 401(k) is in place in 2006, under current law, this becomes even more the case.... It is unlikely the administration's proposal will cause a large number of people to change the way they invest. It appears more to be just a tax 'break' for stock owners, and for many it will be quite small." (Employee Benefit Research Institute)
Welcome to new BenefitsLink advertiser K&W Benefit Consultants, Inc.
Excerpt: "Management Consulting and Project Management SPECIALIZING in: ---ERISA plan compliance ---Daily Valuation for Defined Contribution plans ---Pre-Audit review and correction assistance ---Trust Administration and Operations EXPERTISE For over ten years, K&W Benefit Consultants, Inc. have been providing expert management consulting to qualified plan fiduciaries and service providers, and to corporate Plan sponsors.
Links to Items on Executive Comp, Benefits in General
Sprint to Begin Expensing Stock Options
Excerpt: "Sprint Corp. will begin counting stock options for employees as a normal business expense, an accounting practice that will trim the company's profits this year." (The Kansas City [Mo.] Star via NewsAlert.com)
GAO Report: Policies of Other Nations to Increase Participation of Older Persons in the Workforce (PDF)
59 pages. Excerpt: "GAO identified three nations-- Japan, Sweden, and the United Kingdom-- that had displayed high levels of older worker labor force participation in the past and were now implementing policy reforms that continued to emphasize the importance of older workers." (U.S. General Accounting Office)
It Will Be a Smaller World After All, Actuarially
Excerpt: "In the United Nations' most recent population report, the fertility rate is assumed to be 1.85, not 2.1. This will lead, later in this century, to global population decline. In a world brought up on the idea of a 'population explosion,' this is a radical notion." (New York Times; one-time registration required)
Median Job Tenure Hovers Around 5 Years
Press release. Excerpt: "[T]he median tenure for workers over 25 is now 4.4 years for women and 4.9 years for men. For all workers in this age group, median job tenure declined from 5 years to 4.7 between 1983 and 2002." (Employee Benefit Research Institute)
Newly Posted or Renewed Job Openings
Director, Compensation and Benefits
for Infirmary Health System
in AL
Pension Administrators
for Alliance Benefit Group of Illinois, Inc.
in IL
Data Processing Manager
for A well-established Dallas-based ERISA Third Party Administration Firm
in TX
Regional Sales Director
for HFI
in IL
Pension Administrator
for Central Jersey Pension Consulting Firm
in NJ
401(k) Client Relationship Manager
for Great West Life & Annuity
in MN, PA, TN, WA
Newly Posted Conferences
(Post Yours!)
Annual Legal and Regulatory Update
in OH
March 20, 2003
WEB (Worldwide Employee Benefits Network) - Cleveland Chapter
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