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April 7, 2003 - 13,076 subscribers
Today's sponsor: ASPA
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To Remove Impediment to Conversions, IRS Withdraws Certain Proposed Cash Balance Plan Regs
Excerpt: "[C]omments have indicated that the proposed ยง 401(a)(4) regulations would make it difficult-- or, in certain cases, impossible-- for plan sponsors converting long-standing traditional pension plans to cash balance plans to provide different types of transition relief to plan participants." (Internal Revenue Service)
Commentary: Cash Balance/Age Discrimination Regulations Withdrawn
Excerpt: "The proposed regulations were not to become effective until after the publication of final regulations, and taxpayers were not granted the option to rely on the regulations anyway. The age discrimination regulations published in April 1988 remain in effect until new regulations are issued. The 1988 regulations are not nearly as specific in determining the rate of accruals being tested for age discrimination and do not specifically address cash balance plans." (TRI Pension Services)
Union Says Air Canada 'Dishonest' About Role of Pension Plan in Decision to Enter Bankruptcy
Excerpt: "Several Air Canada union leaders say the company kept them in the dark about the $1.3 billion pension shortfall that contributed to the airline's filing for bankruptcy protection. 'I was shocked when I learned the pension plan was in that much of a deficit,' Pamela Sachs, president of the union representing 8,500 Air Canada flight attendants, said in an interview." (TheStar.com)
Funding of Northwest Airlines' DB Plan with Subsidiary's Stock Still Controversial
Excerpt: "Northwest Airlines is seeking permission to shore up its pension funds with the stock of a subsidiary airline, more stock than the law generally allows. There are just two precedents for Northwest's proposed tactic. General Motors was permitted to make a similar move in 1994, while Pan Am did it in 1989 and went out of existence soon after. Some Pan Am pilots are still litigating the pension benefits they lost." (New York Times; one-time registration required)
For Employees: Frequently Asked Questions About Cash Balance Plans
Excerpt: "Federal laws, including the Employee Retirement Income Security Act (ERISA), the Age Discrimination in Employment Act (ADEA), and the Internal Revenue Code (IRC), provide certain protections for the employee benefits of participants in private sector pension and health benefit plans." (U.S. Department of Labor, Employee Benefits Security Administration)
ESOP Fiduciaries Continuing to Invest and Hold Company Stock in the Wake of a Declining Stock Value (PDF)
At pp. 1 through 5 of 8-page document Excerpt: "Since ESOP fiduciaries are exempt from the diversification requirement but remain subject to the duty of care and prudent investment requirement, ESOP fiduciaries are often forced to choose between following the terms of the plan document (which requires them to continue to invest or hold all assets in company stock) and making an investment decision to diversify the assets of the plan (sell company stock)." (Jenkens & Gilchrist)
Alabama State Pension Fund Manager Named Chairman of the Board at US Airways
Excerpt: "US Airways' new board of directors has selected David G. Bronner, chief executive of the Retirement Systems of Alabama, as its chairman. The RSA, led by Bronner, controls eight seats on the airline's board and 38 percent of the airline's stock. The retirement fund provided a $240 million investment in the airline and $500 million in financing during bankruptcy that helped the airline emerge this week after only eight months under Chapter 11 protection from creditors." (AP via SFGate.com)
In Illinois, Double-Dippers Doing Great
Excerpt: "Dozens of government workers have significantly raised their incomes by retiring under a generous plan and then using clout to land another high-paying government job that may eventually give them another pension, the Chicago Sun-Times found by examining the state's top 15 government retirement plans." (Chicago Sun-Times)
The 457(b) Commandments
Excerpt: "In many ways the 457(b) can be quite complex -- where to invest, how to invest, how to start, etc. But in many ways it can be quite simple if you follow The 457(b) Commandments." (457bWise.com)
Enrolled Actuaries Report: Spring 2003 Issue (PDF)
8 pages. Articles include: What Should Replace the 30-Year Treasury Rate?; Speak Out on Social Security. (American Academy of Actuaries)
Murder on the M&A Express: How Benefits Killed the Deal
Excerpt: "The situation described in this column is interesting and unique, not just because of the turn of events but also because of the type of benefits problem that arose and our inability to completely resolve it to the buyer's and seller's satisfaction. Furthermore, this case helps to highlight that there are some fatal gaps in the benefits laws that can preclude a concrete assessment and limitation of potential liability attributable to certain problems." (Irene Ferenczy, Esq. of Powell Goldstein Frazer & Murphy LLP)
Humor: Dave Barry Looks at Plan Restatements
Excerpt: "It's tax time in America. I know this because I'm staring at documents that make no sense to me, no matter how many beers I drink. Take, for example, my Keogh Plan. If you're wondering what a Keogh Plan is, the technical answer is: Beats me. All I know is, I have one, and the people who administer it are always sending me Important Tax Information." (Dave Barry in the International Herald Tribune)
Opinion: the Importance of Staying the Course
Excerpt: "The stock market decline that began in 2000 has led many mutual fund investors to review the importance of asset allocation.... [But the] unmistakable conclusion is that even in a bear market, market timing and actively managed mutual funds generally hurt investment performance more than they help it." (New York Times; one-time registration required)
Lifecycle Funds Become Popular for Long-Term Goals
Excerpt: "A relatively new kind of fund-- intended to eliminate investors' need to adjust the levels of stocks, bonds and cash in their portfolios periodically-- is gaining popularity." (New York Times; one-time registration required)
Links to Items on Executive Comp, Benefits in General
HP Shareholders Vote to Limit Golden Parachutes
Excerpt: "Hewlett-Packard shareholders narrowly approved a proposal that would limit the board's ability to grant generous golden parachute packages to top executives, the company said Friday. The nonbinding recommendation would require the HP board to obtain shareholder approval for any proposed severance package that is more than 2.99 times a departing executive's salary plus bonuses." (SFGate.com)
Is That Your CEO Cashing Out?
Excerpt: "Even though stock now constitutes the crux of executive pay-- as it has for more than a decade-- the sale of shares does not appear in companies' annual listing of executive pay." (New York Times; one-time registration required)
Money Still Follows the Pinstripes
Excerpt: "Shareholders hoping for a revolution that would spell the end of the imperial chief executive will have to wait until next year at the soonest, according to some investors and compensation consultants.... [O]ptions accounted for most of the pay, and the true value of those options will not be known for years. If stocks surge again, the generous options grants of 2002 may lead to the kind of individual windfalls that characterized the late 1990's and spurred calls for reform ..." (New York Times; one-time registration required)
United Chief Takes Pay Cut But Retains Other Compensation
Excerpt: "United Airlines said [April 4] that Glenn F. Tilton, its chief executive, would take a 14 percent cut in his base salary this year, though Mr. Tilton's much more significant stock and cash bonuses and other compensation, worth millions, will remain intact." (New York Times; one-time registration required)
Executive Perks Still Flow, But With Less Fizz
Excerpt: "[C]ertain lifestyle perks, like memberships at elite golf and health clubs and payments for second homes, appear to be less common, though they have not disappeared, according to recent regulatory filings and compensation experts." (New York Times; one-time registration required)
USERRA: Employment and Retirement Rights and Obligations
Excerpt: "Employers only have obligations towards applicable veterans who terminated employment and seek reemployment in accordance with the provisions of the Uniform Services Employment and Reemployment Rights Act (USERRA). Even then, employers are not required to rehire those veterans, but only to do so when it would be reasonable." (Lowell J. Walters, Esq. of GrayHarris)
Unions Taking on Issue of Stock Option Expensing
Excerpt: "The labor unions leading the shareholder attack on corporate stock-option policies this spring could be reshaping shareholder activism for years to come. The unions are taking aim at stock options because they contend lavish executive option plans contributed to corporate scandals, forcing union pension plans to swallow staggering investment losses." (The [San Jose, Calif.] Mercury News)
Welcome to new BenefitsLink advertiser the Paragon Consulting Group, Inc.
Excerpt: "The Paragon Consulting Group is a 'boutique consulting' firm serving the benefits community since 1994. We provide nationwide resource solutions that encompass the entire spectrum of benefits administration and management. Our Professional staff offers short or long-term project assistance during peak work periods, staff shortages or when there is a need for specialized skill sets. We operate like a virtual SWAT team, with consultants all over the U.S. ."
Newly Posted or Renewed Job Openings
401(k) Administrator
for Administrative Retirement Services, Inc.
in IL
Actuary
for Benetech, Inc.
in CA
Pension Analyst
for Pension Resource Group, Inc.
in GA
Web Strategist
for Transamerica
in CA
Pension Plan Administrator
for Manager Of Managers, Inc. - Encino, California
in CA
Newly Posted Webcasts
(Post Yours!)
Purchasing Health Care Services in a Competitive Environment
on April 3, 2003
presented by U.S. Senate, Committee on Finance
Newly Posted Conferences
(Post Yours!)
HIPAA and Other Health Laws: Compliance Assistance Seminar by the U.S. Department of Labor
in TN
April 10, 2003
U.S. Department of Labor, Employee Benefits Security Administration
HIPAA and Other Health Laws: Compliance Assistance Seminar by the U.S. Department of Labor
in MT
May 8, 2003
U.S. Department of Labor, Employee Benefits Security Administration
HIPAA and Other Health Laws: Compliance Assistance Seminar by the U.S. Department of Labor
in IN
June 12, 2003
U.S. Department of Labor, Employee Benefits Security Administration
HIPAA and Other Health Laws: Compliance Assistance Seminar by the U.S. Department of Labor
in UT
July 17, 2003
U.S. Department of Labor, Employee Benefits Security Administration
HIPAA and Other Health Laws: Compliance Assistance Seminar by the U.S. Department of Labor
in PA
September 8, 2003
U.S. Department of Labor, Employee Benefits Security Administration
HIPAA and Other Health Laws: Compliance Assistance Seminar by the U.S. Department of Labor
in TX
September 18, 2003
U.S. Department of Labor, Employee Benefits Security Administration
Educational Workshop
in FL
April 24, 2003
Florida West Coast Employee Benefits Council
Newly Posted Press Releases
(Post Yours!)
SYNHRGY Healthcare Estimator Saves Employees
(Synhrgy HR Technologies)
HIPAA and Other Health Laws: Compliance Assistance Seminar from the U.S. Department of Labor
(U.S. Department of Labor, Employee Benefits Security Administration)
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