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July 31, 2003 - 13,309 subscribers
Today's sponsor: Thompson Publishing Group, Inc.

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“New COBRA Notice Rules”  Now available on Tape and CD!

Are you familiar with the DOL’s new proposed COBRA notice
requirements? On May 28, the U.S. Department of Labor (DOL)
issued proposed regulations that clarify and expand group
health plans’ obligations to provide notices of COBRA
continuation coverage rights to qualified beneficiaries.
Gain insight on the DOL’s proposal by purchasing a tape or
CD of this important audio conference.

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
University of California Must Share Investing Data
Excerpt: "A state superior court judge has ruled that the University of California must disclose data on how the university's private investments for retirees are faring." (The [San Jose] Mercury News)

Principal to Buy Cigna's Retirement Plan Administration Business?
Excerpt: "The Principal Financial Group Inc. was keeping mum Wednesday on reports that the Des Moines company could be a potential bidder for another insurance company's pension-administration business." (DesMoinesRegister.com)

What Difference Does It Make If I Hire a Former 'Leased' Employee? (PDF)
At p. 3 of 6-page document. Excerpt: "[W]hen a temp converted to a regular employee, the Company counted their service for purposes of Plan eligibility and vesting only from the date they were hired as a regular employee. The failure to follow the qualified plan rules subjected the Plan to disqualification by the IRS, which could result in severe, adverse tax consequences." (Nick White of Reish, Luftman, McDaniel & Reicher)

Overview: IRS Finalizes Catch-up Contribution Rules With Few Modifications (PDF)
6 pages. Excerpt: "[T]he relief granted in IRS Notice 2002-4 with respect to plans qualified under both the Internal Revenue Code and Puerto Rico law remains unchanged. Thus, an employer plan will not fail to satisfy the universal availability requirement because one of its plans qualified under Puerto Rico law allows elective deferrals but not catch-up contributions." (Buck Consultants)

Overview: New 401(k) and 401(m) Proposed Regulations Issued
Excerpt: "Many issues were clarified, such as what constitutes a cash or deferred arrangement and what qualifies as an elective deferral. Among the major changes are a requirement to calculate interest during the gap period on an excess deferral and some safe harbor 401(k) changes including, some exceptions to the 12-month plan year requirement. As expected, the 'bottom-up' or targeted QNEC as we know it today will be severely restricted in their application." (The McKay Hochman Co., Inc.)

Investment Advisor Proposes Use of 'Custom Liability Index' for Measuring DB Funding Requirements (PDF)
38 pages. Excerpt: "Ryan Labs is honored to present our views [to the ERISA Advisory Council] on the current DB Plan Funding and Discount Rate issues ... Until a Custom Liability Index is built for each pension plan based upon the unique actuarial term structure shape of that plan and priced off real zero-coupon bonds, pension assets are in jeopardy of managing versus the wrong objective. Currently, pension assets are managed versus generic asset market indexes not liability indexes." (Ronald J. Ryan, CFA of Ryan Labs, Inc.)

Underfunded Pensions: Causes, Cures and Questions
Excerpt: "At the heart of the controversy lies the difference between the projected liabilities of corporate defined-benefit pension plans and the projected value of the assets that Fortune 500 and other businesses use to fund them.... [T]he Bush administration is staking its credibility on finding a solution to the crisis that impacts about 43 million workers and retirees in the $1.6 trillion pension funds business." (The Wharton School of the University of Pennsylvania)

Will New Lower Tax Rates Alter Longstanding Tax-Deferred Investment Practices?
Excerpt: "Despite what the skeptics say because of the new lower income tax rates, tax-deferred accounts like 401(k) and nonqualified deferred compensation plans still remain the best retirement savings vehicles. We'll show you why." (Aon Consulting)

Costs Can Make Variable Annuities a Bad Bet
Excerpt: "My beef with variable annuities isn't personal. It's the math. The primary flaw of variable annuities is that the cost of the product exceeds the value of its tax deferral.... TIAA/CREF variable annuities, along with offerings from a handful of other institutions, are unlike the typical industry product. Their expenses are very, very low. As a result, you get the benefits of tax-deferred compounding rather than having your return siphoned off by insurance company fees." (Scott Burns in the Houston Chronicle)


Links to Items on Executive Comp, Benefits in General

Public Outrage Starts to Build over Compensation for Retired CEOs
Excerpt: "First, there was the retirement fund disaster at Enron ... Then there was a stink about the benefits General Electric was providing for Chief Executive Jack Welch ... And this spring, Delta Air Lines and American Airlines created public relations nightmares big enough to mobilize the AFL-CIO. This year the national labor organization started challenging what it sees as abusive retirement packages." (The Atlanta Journal via NewsAlert.com)

A Retreat from Options: Microsoft's New Stock-Compensation Program (PDF)
Excerpt: "Microsoft's recent announcement that it will no longer grant stock options to its employees and will allow underwater options to be sold has created a great deal of interest in the business community. This letter outlines the program changes, discusses several issues and presents the pros and cons of such actions." (Frederic W. Cook & Co., Inc.)

Opinion: the Growing Gap Between Rich and Poor
Excerpt: "[P]rivate pensions are eroding at breakneck speed. Corporate pension plans lost between $300 billion and $500 billion over the past two years. The [PBGC] is currently broke. By 2031, estimates are that companies will cover less than 10 percent of retirees' health expenses. Already, 20 percent of companies have eliminated retiree medical plans for new hires, and 17 percent will require new hires to pay the full premium for coverage." (Socialist Worker ONLINE)

Stock Options: the End of the Affair?
Excerpt: "Some reports say there are as many as 9,000 'Microsoft Millionaires,' others say the number isn't quite so high.... So it was front-page news when Microsoft announced early in July that it was shutting down its options program and planning instead to award employees shares of stock, which do not offer the same potential for stupendous gains." (The Wharton School of the University of Pennsylvania)

Opinion: The Supreme Court Ruled for Privacy, Not for Gay Marriage
Excerpt: "The sodomy ruling won't lead to same-sex marriage. Despite what Scalia says, it's hard to see how it could.... It is true that the Constitution's 'full faith and credit' clause requires states to recognize each other's laws and judgments. 'However,' notes Dale Carpenter, a constitutional law professor at the University of Minnesota, 'the full faith and credit clause has never been interpreted to mean that every state must recognize every marriage performed in every other state.'" (National Journal via The Atlantic Online)


Newly Posted or Renewed Job Openings
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Newly Posted Press Releases
(Post Yours!)

Standard Insurance Company Upgrades Its Retirement Planning Center
(Standard Insurance Company)

Employee Relocation: Customized Relocation Packages Drive Cost Savings Success
(Best Practices, LLC)

412(i) Company Bootcamp Draws Participants From 13 States!
(The412iCompany)


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