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July 16, 2003 - 13,238 subscribers
Today's sponsor: Thompson Publishing Group, Inc.

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“New COBRA Notice Rules” audio conference 7/16/03 * 2:00 p.m. ET

Are you familiar with the DOL's new proposed COBRA notice requirements?
Don't miss out on the opportunity to send the DOL your questions before
the regulations are finalized!  Join us for this 90-minute interactive
audio conference – Learn the details of the DOL's proposal and still
have time to submit comments before the July 28th deadline!

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Bush Pension Interest Rate Proposal Gets Cold Reception from Congress
Excerpt: "Representatives from both parties agreed that the method needed to be changed, but they repeatedly challenged Mr. Fisher's proposal, saying it might be too harsh and cause companies to stop offering pensions." (New York Times; one-time registration required)

Dow Jones Coverage: Bush Pension Proposal Meets House Criticism
Excerpt: "Members of the House Ways and Means and Education and Workforce committees, which share jurisdiction over pension issues, asked whether the Bush plan would increase volatility in pension plan funding, thereby encouraging companies to drop traditional, defined-benefit pension plans." (Dow Jones News Wires via Yahoo! News)

Testimony of Treasury Department Official on Pension Interest Rates, Disclosure Proposals
Excerpt: "Our complicated system of funding rules has been constructed, in part, to dampen the volatility of firms' funding contributions. Yet current rules fail to do so. After years of making few or no contributions at all, many firms are facing precipitous increases in their annual funding requirements." (U.S. Treasury Department)

Testimony of Pension Actuary on Pension Interest Rates, Disclosure Proposals
Ken Steiner, Resource Actuary, Watson Wyatt Worldwide; excerpt: 'If Congress determines that additional participant disclosure concerning plan funding is necessary, it should be limited to plans sponsored by employers in bankruptcy or with below investment grade credit ratings, limiting any additional disclosure to those participants likely to need it and reducing unnecessary complication and confusion for plans that are unlikely to terminate with insufficient assets." (U.S. House of Representatives Committee on Ways and Means, Subcommittee on Select Revenue Measures)

Testimony of Economist on Pension Interest Rates, Disclosure Proposals
Christian Weller, Macro Economist, Economic Policy Institute; excerpt: 'Aside from technical questions about which bond rates to use, the proposal creates large uncertainties for plan sponsors since they may have to make assumptions about future movements of not one interest rate, but a wide range of them.... Further, economic theory says that short-term rates should be lower than long-term rates. However, during a number of periods there was an inverse yield curve ..." (U.S. House of Representatives Committee on Ways and Means, Subcommittee on Select Revenue Measures)

Testimony of Times-Picayune Newspaper Publisher on Pension Interest Rates, Disclosure Proposals
Ashton Phelps, Jr.; excerpt: 'According to my advisors, the proposed yield curve approach would likely use an unknowable 'spot rate' instead of a four-year average of interest rates, which could present employers with even greater uncertainty about their cash flow and budget decisions." (U.S. House of Representatives Committee on Ways and Means, Subcommittee on Select Revenue Measures)

Testimony of Big Business Representative on Pension Interest Rates, Disclosure Proposals
Excerpt: "We do not ... believe that the addition of a 'yield curve' concept ... has been sufficiently developed or examined, nor do we believe that it will provide the certainty and clarity in defined benefit plan funding obligations that is urgently needed to ensure the continued viability of our defined benefit pension system.... Disclosure that provides a misleading picture of pension plan finances or that is unnecessary or duplicative of other disclosures could be counter-productive." (Kenneth Porter of The DuPont Company for the American Benefits Council, ERISA Industry Committee, Other Organizations)

Testimony of EBSA Assistant Sec'y of Labor on Pension Interest Rates, Disclosure Proposals
Excerpt: "While ERISA includes a number of reporting and disclosure provisions that provide workers with information about their employee benefits, there exists a void in the law when it comes to the disclosure of pension funding information to workers." (U.S. House of Representatives Committee on Ways and Means, Subcommittee on Select Revenue Measures)

Opinion: The Pension Time Bomb is Ticking-- Massive Underfunding of Corporate Pensions
Excerpt: "The pension time bomb is ticking -- and could ultimately explode in a savings-and-loan-like crisis. An aging workforce and the collapse of the stock market have combined to create massive underfunding of traditional corporate pensions." (Robert Samuelson in the Washington Post)

Opinion: Workers Deserve To Know When Pensions Are At Risk
Excerpt: "[G]etting accurate and timely financial information about pension plans is virtually impossible for millions of U.S. employees.... Congress is focusing on the problem this week, as it begins considering a pension reform bill proposed by the Bush administration that would more accurately measure pension obligations and improve disclosure rules." (USA TODAY)

Opinion: Avoid Pension Information Overkill
Excerpt: "Giving pension plan participants more information seems like good policy-- but not the disclosure of misleading information. And, unintentionally, the federal government is proposing just that. The Treasury Department's proposed disclosure standards would mislead workers, retirees, shareholders and the financial markets." (James Klein in USA Today)

Even Automatic-Enrollment 401(k) Plans Require Decisions on Investments
Excerpt: "The problem is that most automatically enrolled employees stay with the contribution rate and investment options selected by the company, called defaults, rather than increasing their contributions and taking on more risk to get a better return on their investment. These defaults are deliberately ultraconservative, and usually not the best choices for a long-term investor." (Bankrate.com)

Federal Update, Prepared for Teachers' Retirement Systems (PDF)
3 pages; July 15, 2003. Items include 'Action on Pension Bill Expected Soon, Medicare Rx Issue Bogs Down, EEOC Proposes ADEA Exemption for Retiree Health Care Plans." (National Council on Teacher Retirement)


Links to Items on Executive Comp, Benefits in General

Overview: New Listing Rules, Accounting Developments for Stock Options (PDF)
5 pages. Excerpt: "The new rules cover material plan changes and repricings, can affect the desirability of different plan arrangements, and come while the FASB moves ahead on accounting for stock options, targeting an exposure draft in the fourth quarter of 2003, with an effective date possibly as early as 2004. This edition of Defining Issues describes the major provisions of the new listing requirements and the major developments in the FASB's project on employee stock compensation." (KPMG)

A Non-Technical Resource Guide to the Uniformed Services Employment and Reemployment Rights Act (PDF)
19 pages. Excerpt: "The Department of Labor's Veterans' Employment and Training Service provides this guide to enhance the public's access to information about the application of the Uniformed Services Employment and Reemployment Rights Act (USERRA) in various circumstances. Aspects of the law may change over time." (U.S. Department of Labor, Veterans Employment and Training Service)

Are Microsoft Options Sellers Being Lowballed?:
Excerpt: "Have Microsoft Corp. and J.P. Morgan Chase & Co. struck a deal by which Microsoft employees who sell their underwater options to the bank end up being even more under water? Microsoft isn't talking, at least to me." (Graef Crystal on Bloomberg.com)


Newly Posted or Renewed Job Openings
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Pension Plan Administrator
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Benefits Coordinator
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in TX

Defined Benefit Plan Administrator
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Senior Marketing Communications Consultant
for IFS Financial Services
in OH

Pension Consultant
for Swerdlin & Company
in GA

Compliance Manager
for BISYS
in PA

Marketing Group Benefits
for American Chamber of Commerce Executives
in VA

Paralegal, Retirement Services
for Sixty year old mid-size retirement and health plan administration firm
in IN

Senior Benefits Analyst
for Manpower Inc
in WI
Newly Posted Webcasts
(Post Yours!)

Deemed IRAs
on August 28, 2003
presented by ASPA

Cafeteria Plan Update
on August 5, 2003
presented by SunGard Corbel
Newly Posted Press Releases
(Post Yours!)

Treasury and IRS Issue Final Regulations for '10 Or More Employer' Welfare Benefit Funds
(Internal Revenue Service)

A.M. Best Affirms Pan-American Life’s A- (Excellent) Rating
(Pan-American Life Insurance Co.)


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