| BenefitsLink Retirement Plans Newsletter |   |
April 4, 2003 - 13,076 subscribers
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Many Companies Cutting 401(k) Contributions
Excerpt: "A growing number of companies, searching for ways to cut costs, are suspending their matching contributions to workers' 401(k) retirement accounts. Such a move by broker Charles Schwab & Co. won wide attention in March because the company has been outspoken in its support of the investment vehicle. But Schwab is not alone." (AP via Washington Post)
Air Canada Blames Pension Funding Requirements for Its Bankruptcy
Excerpt: "Pension plan obligations-- not terrorism, disease or even war-- prompted Canada's largest airline to seek shelter from its creditors, documents filed by Air Canada say. Faced with what it describes as an 'unreasonable' demand from federal regulators to plow extra cash into underfunded employee pension plans by the end of this week, Air Canada says it could not continue operating." (The Globe and Mail)
Letting Older Workers Work: Rethinking Retirement Policies
Originally published December 2002. Excerpt: "Moderating the discussion on what might be done to encourage workers to stay in the labor force longer was Rudolph Penner [of] the Urban Institute ... He was joined by Charles Kolb, president of the Committee for Economic Development; Eugene Steuerle, a senior fellow at the Urban Institute; Pamela Perun, a lawyer and independent consultant on retirement and income policy issues; and Richard Hinz ... [of] the U.S. Department of Labor." (The Urban Institute)
Another Question is Answered in the Who's the Employer Q&A Column
We have a client organization ("CO") terminating their relationship with a Professional Employer Organization ("PEO"). The company wishes to establish a new plan. But they wish to treat the new plan as a successor plan (resulting in a forced transfer of participant assets). Is this the proper treatment for the plan assets? (BenefitsLink.com)
Coverage from Texas: House-Passed Bill Would Close Social Security Loophole for Texas Teachers
Excerpt: "Texas teachers would no longer be able to benefit from a loophole that ensured them full Social Security spousal benefits under reform legislation that the House approved Wednesday. Republicans passed legislation that includes a provision making it much more difficult for teachers and other workers not covered by Social Security to easily switch to a job that is covered by the federal program before they retire and collect full spousal benefits." (The Fort Worth [Tex.] Star-Telegram)
Florida Town to Take Out $30M Loan to Finance Firefighters' Pension Plan
Excerpt: "Saying it is the only way it can meet its firefighters' pension demands, [the city of Pembroke Pines, Florida] will borrow $30 million to be repaid over 20 years. Cities normally finance benefits for employees by raising taxes or reducing services. Mayor Alex Fekete called the financing method 'an unusual approach' but added, 'we couldn't fund the benefits any other way.'" (The South Florida Sun-Sentinel)
Keep Close Eye on Mutual Fund Fees
Excerpt: "Mutual fund fees used to be a sure way to end conversation at a party. But congressional hearings, regulatory probes and a three-year bear market have put them in the spotlight. On average, you're not paying much more to money managers than you did a decade ago. But you're paying a lot more to the people who sell funds-- and one of your best ways to control fees is by taking a close look at the options they give you." (USA Today via Yahoo! News)
My Pension Plan Ate My Money!
Excerpt: "In 1995, the U.K. resident enrolled in a pension plan. Although he contributed a total of 3,227 pounds, his account is now worth only 1,700 pounds.... Mr. Kirby documents his experiences in hilarious fashion on his website, badpension.com." (The Motley Fool; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Full Text of Dow Chemical COLI Case (PDF)
140 pages (!). (U.S. District Court for the Eastern District of Michigan)
Taxpayer Victory in Leveraged COLI Litigation Ends IRS Winning Streak
Excerpt: "The IRS appears to have suffered a setback in its campaign against corporate owned life insurance (COLI) plans. A federal district court in Michigan recently rebuffed the government's claims to paint a taxpayer's multi-million dollar COLI plans as elaborate ruses created solely to generate huge and illegitimate deductions." (HR.CCH.com)
IRS Notice Cracks Down on Offshore 'Leasing' Deferred Compensation Arrangements
Excerpt: "This notice alerts taxpayers and their representatives that the tax benefits purportedly generated by these arrangements are not allowable ... [Typically, the] Taxpayer ... purports to enter into an employment relationship with a foreign corporation ... that is incorporated and managed in a country with which the United States has an income tax convention. Foreign Leasing Corporation purports to lease the right to Taxpayer's services in the United States to a domestic corporation ..." (Internal Revenue Service)
US Airways President: Many Airline Execs Are Overpaid, Especially Delta's
Excerpt: "Executive compensation in the airline industry deserves scrutiny, but a congressional proposal to freeze pay would merely reward those who are already overpaid, US Airways president David Siegel said Thursday. In his remarks, Siegel singled out Leo F. Mullin-- chief executive of US Airways rival Delta Air Lines-- as an executive whose pay package is excessive." (AP via StarTribune.com)
Delta CEO Cuts Salary, Compensation Package After Criticism
Excerpt: "Delta Air Lines chairman and CEO Leo F. Mullin will reduce his salary by 15 percent and not accept incentive payments after the company endured harsh criticism of a compensation package that paid him nearly $13 million last year." (AP via Las Vegas Sun)
Delta Airlines Chooses Secular Trust to Protect Supplemental Pensions for Execs
Excerpt: "Delta Air Lines chose a rarely used vehicle to protect the retirement benefits of 33 top executives. But so-called secular trusts, guaranteeing the largest chunk of the retirement incomes of Delta's executives, come at a high price, since payments must be made upfront and taxes paid." (The Atlanta Journal-Constitution via NewsAlert.com)
As Workers Face Pension Cuts, Executive Supplemental Pensions Get Beefed Up
Excerpt: "At a time when pension plans at many companies are increasingly in peril, employers have been taking steps to protect the jumbo pensions promised to top executives." (Ellen E. Schultz in the Wall Street Journal via The San Francisco Chronicle)
Bonuses for Executives Anger Delta Airlines Rank-and-File
Excerpt: "Many employees are steamed over disclosures that the Atlanta company paid out almost $43 million for executive bonuses and pension protections in 2002, a year in which it lost $1.3 billion and shed thousands of jobs. Flight attendant Darlene Lahasky dismisses the company's contention that the perks will help keep good executives amid industry turmoil." (Cox News Service via the International Foundation of Employee Benefit Plans)
Newly Posted or Renewed Job Openings
Part-time Employee Benefits Attorney
for D'Ancona & Pflaum
in IL
401K Plan Benefits Analyst
for AECOM Technology Corporation
in CA
Assistant Vice President, Operations
for ICMA Retirement Corporation (www.icmarc.org)
in DC
Qualified Plan Supervisor
for Lane Gorman Trubitt, L.L.P.
in TX
Retirement Plan Sales Professional
for RSM McGladrey, Inc.
in AZ, CT, FL, IA, MA, NC, NV, NY
Special Services Administrator (legal)
for Northern Trust Retirement Consulting
in GA
Provider Service Specialist
for HEREIU Welfare/Pension Funds
in IL
New Business Accounts Manager
for HEREIU Welfare/Pension Funds
in IL
Newly Posted Webcasts
(Post Yours!)
2002 Form 5500 and Related Compliance Issues
on April 29, 2003
presented by ASPA
Newly Posted Conferences
(Post Yours!)
Creating and Implementing Deferred Retirement Option Programs
in LA
June 19, 2003
World Research Group
The HIPAA Crisis
in GA
April 24, 2003
WEB Atlanta Chapter
Northeast Area Employee Benefits Conference
in MA
June 12, 2003
ASPA
Northeast Area Employee Benefits Conference
in NY
June 13, 2003
ASPA & IRS
Mountain States Benefits Conference
in CO
September 11, 2003
ASPA & IRS
Administering Retirement Plans in Uncertain Times: Strategies for Minimizing the Risks and Maximizing the Rewards
in CA
May 15, 2003
Western Pension & Benefits Conference - Orange County Chapter
Newly Posted Press Releases
(Post Yours!)
Fifth Third Bank Investment Advisors Expand 401(k) Plan Services for Businesses and Their Employees
(Fifth Third Bancorp)
eePulse Study Shows Workers Stressed About War But Want To Help
(eePulse, Inc.)
Handy Links:
- View Today's Active Message Threads
- Search BenefitsLink
- Using the Web for Employee Benefits Research
- Employee Benefits Library
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