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March 24, 2003 - 13,088 subscribers
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Bankruptcy Pension Protection Measure Moves to Senate
Excerpt: "The U.S. House of Representatives has approved a sweeping reform of U.S. bankruptcy laws that includes protection for employee retirement funds." (PLANSPONSOR.com; registration required)
Judge Says Pension Administration Fees Must Be Paid from Plan Assets
Excerpt: "The federal judge overseeing the bankruptcy of Enron ruled on Friday that the company could not pay fees to an independent overseer of three retirement plans for current and former employees. Instead, the judge said, participants in the plans must pick up the costs themselves.... According to Enron, employees would pay an average of about $320 a year for the administration of the plan, although that amount could rise as the company continues to reduce its work force." (New York Times; one-time registration required)
US Airways, Pilots Reach Agreement On Pension Plan
Excerpt: "US Airways and its pilots union have reached an agreement on an underfunded pension plan, clearing a critical hurdle to the air carrier's emergence from bankruptcy to free more than $1 billion in financing." (The Boston Globe)
New 401(k) Design Aims to Court Procrastinating Investor-Participants
Excerpt: "A new kind of 401(k) savings plan, developed by behavioral economists, aims to boost participants' savings rates without nagging them to give up their procrastinating ways. In fact, the human tendency to put off tough decisions is its guiding principle. Rather than fight inertia, the plan's architects built it into the program." (BenefitNews.com)
Form 5500 for 2002 Asks About Late Deposit of 401(k) Plan Deferrals
Excerpt: "For employers maintaining 401(k) plans, the Department of Labor (DOL) has made a significant modification in the Form 5500. The modification relates to question 4a on Schedules H and I. Question 4a inquires as to whether the employer has deposited the employee's elective deferrals within the regulatory time period." (SunGard Corbel)
American Academy of Actuaries Files Comment Letter with PBGC on Withdrawal Liability (PDF)
2 pages, dated March 12, 2003. Excerpt: "Members of the task force appreciate the opportunity to provide comments on two issues that have been identified with respect to the calculation of withdrawal liability under [ERISA]. Both have come about largely because of the behavior of the financial markets since MPPAA was enacted." (American Academy of Actuaries)
Directed Trustee's 'Handling' of Investment Made It a Fiduciary With Respect to That Investment
Srein v. Frankford Trust Co. (3d Cir. 2003). Excerpt: "The dissent in this case presented a fairly convincing argument, at least to us, that the directed trustee's limited act of accepting insurance proceeds and crediting them to the other plan as directed by the seller was not a fiduciary act. Nevertheless, this case serves as a reminder that a directed trustee can be a fiduciary with respect to a plan investment to the extent it takes actions that go beyond mere custodial duties." (EBIA Weekly)
IRS Publishes Spring 2003 Issue of Employee Plans News
Excerpt: "Interview with Mark O'Donnell; Do You Know USERRA and SSCRA?; IRS/ASPA 2003 Webcast; 2003 IRS Nationwide Tax Forums; White Paper Follow-up; DOL Corner; Form 5500 Non-Filer Compliance; New Schedule SSA Requirement; New Retirement Plan Products; The Corner of Forms & Pubs; Published EP Guidance; Quick Hits; Calendar of EP Benefits Conferences." (Internal Revenue Service)
Budget Cutters Leave Federal Employee Pensions Alone
Excerpt: "Federal pension benefits no longer appear to be targets for drastic cuts as Congress puts together a wartime budget plan." (Washington Post)
Bush Savings Proposal Draws Fire
Excerpt: "President Bush's new savings proposals are radical, controversial and, if enacted, likely to change the way most Americans manage their money." (AARP Bulletin)
Opinion: Retirement Savings Accounts In the Bull's-Eye
Excerpt: "The Administration's proposal is compelling and one of the most significant changes to the tax system and retirement savings incentives since 401(k) legislation was introduced." (mPower Cafe)
Contribution to Defined Benefit Plan Is On Account of Prior Tax Year
Excerpt: "A recent PLR highlights a planning opportunity to accelerate deductions for retirement plan contributions. In PLR 200311036, the IRS ruled that a contribution to a defined benefit plan made in 2002 was a contribution on account of the 2001 tax year and therefore deductible under IRC Section 404(a)(6) on the company's 2001 tax return. The plan year was a calendar year, and the company was a calendar year taxpayer." (Deloitte & Touche Human Capital Advisory Services)
Why Did the Pension Sponsor Cross the Road? To Get Another Service-Provider
Excerpt: "Relatively few large pension plan sponsors bundle outsourcing with actuarial services, according to a recent analysis of the Fortune 100 by Watson Wyatt Worldwide. Among the 100 companies, 84 sponsor a defined benefit plan, but only 18 plan sponsors obtain outsourcing services from the same firm that provides actuarial services, according to the survey." (CFO.com)
GAO Report: Improvements to Retirement Income Data Needed
87 pages; GAO report no. GAO-03-337. Excerpt: "The Congress should consider directing Labor to obtain from plan administrators electronic filings of SPDs and summaries of material modifications and make them publicly available. In addition, GAO recommends that the Secretary of Labor direct the Bureau of Labor Statistics to prepare a plan to improve data for analyzing retirement income and wealth in coordination with other agencies and obtain copies of summary plan descriptions ..." (U.S. General Accounting Office)
Old-Age and Survivors Insurance and Disability Insurance Trust Funds: 2003 Trustees' Projections
Excerpt: "While the combined trust funds are sufficient to pay full benefits for the next 39 years, the Trustees also report that both OASI and DI programs continue to face long-term deficits." (AARP Research)
Analysis of the 'First Plan Year' Rule for 401(k) Plans
A technical tip, from the IRS Q&A Session at the 2001 ASPA Annual Conference. (Reish, Luftman, McDaniel & Reicher)
Links to Items on Executive Comp, Benefits in General
Changes Afoot for Nonqualified Deferred Compensation Plans
Excerpt: "The Administration's budget plan, a Senate pension reform bill, and a new Congressional staff report on Enron all include reform proposals. The target is deferred compensation plans that operate outside the qualified retirement plan rules.... Reform may not be the only concern; the IRS has announced an initiative to audit NQDC plans." (Mercer Human Resource Consulting)
Election to Contribute Unused Vacation Pay Is Not an Elective Deferral
Priv. Ltr. Rul. 200311043 (Dec. 18, 2002). Excerpt: "EBIA Comment: [C]ontributed vacation pay would be subject to the nondiscrimination rules of Code Sections 401(a) and 410(b). If it turned out that more highly compensated employees than non-highly compensated employees neglected to take vacation and therefore utilized the vacation-plan contribution program, then there might be a discrimination problem." (EBIA Weekly)
Preliminary Observations Related to Income, Benefits, and Employer Support for Reservists
GAO report no. GAO-03-549T; testimony of B. Stewart, director, defense capabilities and management. Excerpt: "[T]oday I would like to present preliminary observations based on our review in three areas: (1) income protection for reservists called to active duty, (2) family support programs, and (3) health care access.2 All three of these issues are potential areas of concern to a reservist called to active duty for a contingency operation." (U.S. General Accounting Office)
Newly Posted or Renewed Job Openings
Junior Administrator
for Florida Pensions, LLC
in FL
Pensions/401(k) ERISA Compliance Specialist
for Dalton Associates, Inc.
in NJ, NY
Pension Plan Administrator
for Alliance Benefit Group
in NH
Benefits Administrator
for Coty & Bruce Benefits, Inc.
in CA
Actuary
for Vinings Mellon
in GA
Newly Posted Webcasts
(Post Yours!)
HIPAA Privacy for Multiemployer Plans
on April 3, 2003
presented by International Foundation of Employee Benefit Plans
Newly Posted Conferences
(Post Yours!)
Managing Benefit Costs Through Strategic Planning
in CA
April 15, 2003
ArlenGroup
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